Higher February Inflation Rate Clouds Interest Rate Outlook

Mar 19, 2025

Canadian inflation ran hotter than expected in February, even before the impacts of a potential trade war with the US are felt.

Statistics Canada reported Tuesday the consumer price index was up 2.6% year-over-year in February. That followed a 1.9% increase in January and exceeded the expectations of most analysts and economists. The increase also comes before consumers face the likelihood of higher prices caused by the imposition of US tariffs and Canadian retaliatory tariffs.

The higher inflation rate also casts considerable uncertainty over what course the Bank of Canada will now chart with interest rates. The Bank last week cut its key overnight lending rate by 25 basis points to 2.75%, partly due to economic jitters caused by the possible trade war. However, a trade war could also further increase consumer prices while also dampening economic growth, putting the Bank in a difficult position. Typically, the Bank will increase interest rates to control inflation and reduce rates to stimulate economic growth.

In its report today, StatsCan said the end of the federal government’s tax break on certain items, as of Feb. 15 contributed to last month’s higher inflation rate. For example, prices for food purchased from restaurants declined at a slower pace year over year in February (-1.4%) compared with January (-5.1%). In fact, it was restaurant food prices that contributed the most to the acceleration in the all-items CPI in February, StatsCan said.

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Video: Winter Canola Trial in Mississippi | Can It Work for Double Cropping? | Pioneer Agronomy

Can winter canola open new opportunities for growers in the Mid-South? In this agronomy update from Noxubee County, Mississippi, Pioneer agronomist Gus Eifling shares an early look at a first-year winter canola trial and what farmers are learning from the field.

Planted in late October on 30-inch rows, the crop is now entering the bloom stage and progressing quickly. In this video, we walk through current field conditions, fertility management, and how timing could make this crop a valuable option for double-cropping soybeans or cotton.

If harvest timing lines up with early May, growers may be able to transition directly into another crop during ideal planting windows. Ongoing field trials will help determine whether canola could become a viable rotational option for the region.

Watch for:

How winter canola is performing in its first season in this Mississippi field

Why growers chose 30-inch rows for this trial

What the crop looks like as it moves from bolting into bloom

Fertility strategy, including nitrogen and sulfur applications

How canola harvest timing could enable double-cropping with soybeans or cotton

Upcoming trials comparing soybeans after canola vs. traditional planting

As more growers look for ways to maximize acres and diversify rotations, experiments like this help determine what new crops might fit into existing systems.