Canada’s annual inflation rate slowed to 2.8% in February

Canada’s annual inflation rate cooled to 2.8 per cent in February, helped by slower growth in the cost of cellular services, groceries and internet access services, Statistics Canada said Tuesday.

Economists had largely expected the rate to rise and undo some of the year’s early progress.

Rent and mortgage interest costs continued to be primary drivers of the inflation rate, the agency said. Meanwhile, gas prices ticked up 0.8 per cent in February year-over-year after a four per cent decline in January.

Canadians who signed up for a new cell phone plan in February paid 26.5 per cent less than they would have at the same time last year — this was due to lower prices for new plans and increases in data allowances.

For the first time in more than two years, grocery prices increased at a slower pace than the headline inflation rate, StatsCan said.

This was thanks to what economists call a base-year effect (the impact of comparing prices in a given month to the same month a year earlier).

But slower price growth doesn’t mean that food isn’t getting more expensive. While the inflation rate for fresh fruit (-2.6 per cent), processed meat (-0.6 per cent) and fish (-1.3 per cent) all declined, groceries prices are still rising.