The West Coast was not spared the “massive” leap in inflation that hit Canadian consumers last month.
B.C.’s inflation rate reached three per cent in February, up from 2.2 per cent in January, according to Tuesday’s Statistics Canada data.
That exceeds the national rate of 2.6 per cent, up from 1.9 per cent in January.
Those increases were boosted by the federal government’s GST/HST tax holiday coming to an end, according to Benjamin Reitzes, BMO's managing director of Canadian rates.
The economist said these gains will reinforce the Bank of Canada’s “cautious tone” on cutting its central rate to mitigate the impact of tariffs.
“There's plenty of noise still to come on inflation, complicating policymakers' job,” Reitzes said in a note, describing February’s gains as “massive.”
He said the economy will still have to wait and see what April brings on the tariff front.
“But if the economic outlook doesn't deteriorate further, the BoC will be considering a pause after cutting at seven straight meetings,” Reitzes said.
CIBC economist Katherine Judge echoed those sentiments about the central bank’s likely next steps. She said in a note the upward pressures on the Bank of Canada’s core measures are right now “worrisome.”
The country saw notable annual gains in the following categories:
- Gasoline, +5.1 per cent
- Shelter, +4.2 per cent
- Recreation, +3.7 per cent
- Food, +1.3 per cent
- Clothing/footwear, +1.4 per cent
“This puts the BoC in a difficult place,” TD senior economist Leslie Preston said in a note. “Canadians' inflation expectations have risen, but the hit to demand from uncertainty and the tariffs themselves are already weighing on demand. How tariffs play out remains highly uncertain.”
Unlike Reitzes and Judge, she’s forecasting rate cuts from the Bank of Canada at its next two interest rate announcements.
