Canada Inflation: The 2.3% Signal and What It Means for Alberta

CALGARY, AB — Canada's year-over-year inflation rate ticked down to 2.3% in January 2026, a modest drop from December's 2.4%, according to data released today by Statistics Canada.

The dip keeps inflation closer to the Bank of Canada's 2% target, though pressure points remain. Gasoline prices fell 16.7% year-over-year, partly thanks to the federal government's removal of the consumer carbon tax last April.

The GST Ghost in the Machine

Strip out gasoline, and the picture shifts. National inflation sat at 3.0% in January, skewed by the now-expired temporary GST/HST exemption that covered restaurant meals, alcohol, and children's clothing in January 2025 but not this year.

Food purchased from stores climbed 4.8% year-over-year. Rent jumped 4.3%. Both categories remain more than double the Bank's target.

Alberta's 2% Advantage

Alberta clocked in at 2.0% inflation, lower than the national average. The province's lack of a sales tax meant it dodged the statistical whiplash from the GST/HST exemption reinstatement.

Restaurant meal prices in Alberta rose 6.9% year-over-year with GST back in place. Nationally, the jump hit 12.3% as both federal and provincial sales taxes returned.

Larger drops in natural gas and gasoline prices helped Alberta's number. Offsetting that: electricity, rent, and clothing all saw sharper price bumps.

What the Bank Does Next

The Bank of Canada's trendsetting policy rate remains at 2.25%. Two key measures of core inflation—CPI-trim and CPI-median—both fell in January, a signal the central bank will likely read as encouraging.

The Bank reiterated last week that future rate moves depend on incoming data. Economists at ATB Financial project the rate will hold steady through the rest of 2026.

Translation for Calgary households: borrowing costs stay flat, but your grocery bill and rent aren't easing anytime soon.