Price of gasoline, decreased travel influence major changes over March
StatCan’s latest year-over-year inflation figures unexpectedly fell from 2.6 per cent in February to 2.3 per cent in March due to declining gas prices and decreased air travel to the US.
Tuesday’s announcement comes ahead of the Bank of Canada’s April 16 interest rate announcement, though StatCan warned that the key factors behind inflation remain as the full effects of US President Donald Trump’s tariffs creep into the Canadian economy.
March saw a drop in global crude oil prices due to concerns over the impact of Trump’s tariffs, with Canadians paying 1.6 per cent less for gasoline compared to February, according to StatCan. OPEC+ also announced it will increase production, another factor keeping gasoline prices low.
The report claims that without the dip in gas prices, inflation would have only dropped to 2.5 per cent over March, a caution that inflation is unlikely to keep dropping over the coming months.
“The year-over-year slowdown in the all-items CPI was driven by lower prices for travel tours and gasoline in March,” read StatCan’s April 15 report. “Excluding gasoline, the CPI rose 2.5% following a 2.6% increase (excluding gasoline) in February.”
Fewer Canadians have been travelling to the US, causing air travel prices to dip by 12 per cent year-over-year, while travel tour prices dropped 4.7 per cent compared to last year.
March was the first month of 2025 without the December to mid-February sales tax holiday, seeing an increase on food and alcoholic beverages prices by 3.2 and 2.4 per cent on an annual basis.
Cell phone plans also dropped by 8.8 per cent year-over-year, with StatCan attributing the decline to recent promotions across the industry.
