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Canada's Inflation Falls to 1.7% in April, Core Measures Hit 13-Month Highs

The removal of the carbon tax drove headline inflation lower, but persistent core inflation complicates the Bank of Canada's rate decision ahead of June 4.

Statistics Canada data will show the impact of removing the consumer carbon price in April inflation data released Tuesday. A woman gasses up at a gas station in Mississauga, Ont., Tuesday, February 13, 2024. THE CANADIAN PRESS/Christopher Katsarov
People shop for fruits and vegetables at a supermarket in Ottawa, Ontario, Canada , March 27, 2023. REUTERS/Patrick Doyle
People walk on Oxford Street in London, Britain, May 15, 2025. REUTERS/Maja Smiejkowska/ File Photo

Overview

  • Statistics Canada reported headline inflation dropped to 1.7% in April, down from 2.3% in March, largely due to the removal of the federal consumer carbon tax.
  • Gasoline prices fell 18.1% year-over-year, and natural gas prices declined 14.1%, contributing to the sharp dip in energy costs.
  • Core inflation measures, which exclude volatile items like energy, rose to over 3%, their highest levels in 13 months, signaling ongoing price pressures.
  • The Bank of Canada faces a challenging decision for its June 4 meeting, with falling headline inflation but rising core inflation reducing the likelihood of a rate cut.
  • Regional disparities persist, with Alberta's inflation rate at 1.5% and New Brunswick's nearly flat, while grocery prices nationwide surged 3.8% year-over-year.