Canada's finance minister calls inflation rate dropping within target range a 'milestone moment'

Canada's inflation rate dropping to 2.8 per cent in June is a 'milestone moment' that Canadians should find some relief in, according to Deputy Prime Minister and Finance Minister Chrystia Freeland.

Canada's inflation rate dropping to 2.8 per cent in June is a "milestone moment" that Canadians should find some relief in, according to Deputy Prime Minister and Finance Minister Chrystia Freeland.

Down from 3.4 per cent in May, the annual inflation rate has not been within the Bank of Canada's target range of between one and three per cent since March 2021.

"That is a significant moment. It should provide a lot of relief to Canadians," Freeland said, speaking via teleconference with reporters from Delhi, following her participation in a G20 finance ministers' meeting. "And I really want to thank Canadians, it has been a really tough time economically since COVID first hit, since we had a recession, followed by all the strains of reopening. And this is really a good moment."

The current rate is the lowest that inflation has been in more than two years, down from a high of 8.1 per cent in June of last year. And as Freeland pointed out, inflation in Canada is now lower than in every other G7 country, where rates range from 8.7 per cent in the UK to 3.2 per cent in Japan.

"It has been a real struggle for Canadians and the Canadian economy to get back down to 2.8 per cent, and I am really grateful to everyone who has sort of [stayed] the course," Freeland said.

Asked whether she shares the Bank of Canada's outstanding concern—identified when the central bank raised interest rates again last week—that inflation will stall out above 2 per cent until 2025, Freeland declined to "make predictions or forecasts." 

"I do not have a crystal ball," Freeland said. "I do think that today is a milestone moment."