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Ottawa's Parliament Hill, where the Carney government is rolling out Canada's largest fiscal stimulus package since 1980. / Photo: Unsplash. MoneySavings.ca  ·  Economy & Policy Monday, April 13, 2026  ·  Daily Edition Canada at a crossroads: oil shock, frozen rates, and a trade deal on the clock Canada's economy is navigating a uniquely complicated moment in 2026. A Middle East conflict has sent oil prices surging past US$104 a barrel, a once-in-a-generation fiscal stimulus package is being rolled out in Ottawa, and the clock is ticking on a renegotiation of Canada's most important trade agreement. For everyday Canadians, this means uncertainty at the gas pump, a central bank with limited room to cut rates, and a federal government betting big on public spending to kick-start growth. Here is what you need to know about the forces shaping the Canadian economy right now. 1. The Bank of Canada is stuck — and oil is why The Bank of Canada has held it...
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Canada’s Inflation Drops to 1.8% as Tax Effects Fade and Prices Stabilize

 

Stable core inflation measures should give the Bank of Canada space to "play down its concern around higher energy prices" caused by the war in Iran, CIBC economist Katherine Judge said. 


A Shift Toward Price Stability

Canada’s annual inflation rate eased to 1.8% in February, marking a sharper-than-expected slowdown and bringing inflation below the Bank of Canada’s 2% target for the first time in months. 

Why Inflation Fell

Several factors contributed to the decline:

  • Base-year effects: Prices were unusually high last year after a federal sales tax holiday ended, making this year’s comparisons look softer. 
  • Cooling consumer prices: Excluding indirect taxes, the Consumer Price Index rose a modest 1.9% year over year.
  • Stable core inflation: Economists note that steady core inflation gives the Bank of Canada more room to ease concerns about energy-driven price pressures. 

What This Means for Canadians

With inflation dipping below 2%, households may feel some relief from rising costs, though the full impact will depend on how quickly price moderation spreads across categories like food, housing, and services. The Bank of Canada’s upcoming interest rate decisions will likely reflect this new data, potentially shifting toward a more accommodative stance if the trend continues.


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