It’s a bit complicated. Technically, Canada is currently in a period of inflation. The Bank of Canada uses the Consumer Price Index (CPI) to measure the rate of inflation, which combines the cost of many goods and services including food, shelter, clothing, transport and more.   Each month Statistics Canada releases new data on the current CPI, the most recent of which measured at 3.1% for November 2023. This was a repeat of the rate of inflation from the previous month, representing some relative stability, although we’re still a long way off from the Bank of Canada’s ideal rate of 2% inflation.   But while the CPI is still above the target rate of 2%, it’s much lower than the peak of 8.1% experienced in June 2022. That period of inflation was a result of pandemic-era recovery measures introduced by the government that included emergency response benefits and near-rock bottom rate cuts, as well as pent-up demand in sectors like tourism and restaurant dining.   To combat that inflation, the BoC began a series of interest rate hikes, which slowed the pace of lending on things like mortgages, business loans and more, by increasing the cost of borrowing. For a few seemingly interminable months, many Canadians found themselves squeezed by both high interest rates on their mortgages and the rising price of goods.   Keep reading: How your credit score affects the loans you apply for  This madness is not without method – in the BoC’s eyes, the harder it is for Canadians to borrow money, the less demand there would be for household goods and thus, less inflation happening. To that end, the hikes might be working.   To sum up, Canada is actually in a period of disinflation right now, where the rate of inflation has been slowing down — although you and your wallet may be well aware it’s still relatively high.  In any case, if you were hoping that a future period of deflation might save you from your ever-increasing grocery bill, it’s best to go ahead and burst that particular bubble. What we can hope for, however, is more price stability down the line as the Bank of Canada holds interest rates in a bid to curb the rate of inflation long-term.   Read next: 3 things you can expect to spend more money on in 2024