Annual Inflation Rate Eases; Food Prices Higher

Canada’s inflation rate eased slightly in 2025, but food costs were still higher, according to new annual data from Statistics Canada on Monday. 

The Consumer Price Index increased 2.1% on an annual average basis in 2025, down from a 2.4% rise in 2024. While that marked the smallest annual increase since 2020, StatCan said prices remained historically high, with overall consumer costs nearly 20% higher than five years ago. 

Food inflation was one of the most persistent pressure points for Canadian households. On an annual average basis, grocery prices rose 3.5% in 2025, accelerating from a 2.2% increase the year before.  

Canadians paid 20.3% more for coffee and 7.1% more for confectionery products, reflecting global supply challenges and trade-related costs. 

Meat prices also climbed at a faster pace. On an annual average basis, meat prices increased 5.8% in 2025, following a 3% rise in 2024. The biggest contributor was fresh or frozen beef, which jumped 13.5% year over year. The agency attributed much of that increase to historically low cattle inventories across North America, which tightened supplies. 

Fresh fruit prices rebounded in 2025, rising 2.5% after declining the previous year.  

Beyond food, inflation trends were mixed across the economy. Prices for services rose 3.1% in 2025, slower than the 4.1% increase recorded in 2024. Goods inflation, meanwhile, picked up modestly. Prices for goods rose 0.8% on an annual average basis, compared with a 0.3% increase in 2024. 

Energy prices provided some relief for consumers. On an annual average basis, energy prices declined 5.7% in 2025, led by an 8.6% drop in gasoline prices. StatCan said the removal of the consumer carbon price in April played a significant role, also contributing to an 8.4% decline in natural gas prices.