The federal government’s move to lower the consumer carbon tax rate to zero will temporarily reduce Canada’s inflation rate by around 30 percent, according to the Bank of Canada.
Removal of the tax on April 1, also known as the federal fuel charge, will pull down the annual consumer price index inflation by about 0.7 percentage points for one year, from April 2025 to March 2026, according to the bank’s monetary policy report released April 16. Canada’s annual inflation rate was at 2.3 percent in March.
