End of tax break results in inflation rate spike

Statistics Canada says the inflation rate jumped sharply to 2.6 per cent in February as the federal government’s temporary tax break came to an end mid-month.

That marks a sizeable boost from the 1.9 per cent increase seen in January, when we saw GST and HST taken off a variety of household staples, common gifts and restaurant bills for the entire month.

February’s figures are well ahead of the consensus among economists, which called for 2.2 per cent inflation in the month.

StatsCAN calculations show that, without the tax break in place for half a month, inflation would have come in at three per cent in February.