Statistics Canada says consumer prices rose sharply in February compared with the previous month, although the annual inflation rate actually dropped to 1.1 per cent.
Canada's annual inflation had been expected to drop in February because of a sudden jump in gasoline prices in the same month last year, but Statistics Canada reported a smaller decline than expected.
The consumer price index also rose more between January and February than the estimate.
Statistics Canada says the month-over-month increase to CPI was 0.8 percentage points in Februarydue to higher prices for travel tours, hotels, autos and gasoline.
Economists had estimated the month-over-month increase would be 0.6 percentage points and that annualized inflation would be below 1.0 per cent, which is at the low end of the central bank's target range.
Instead, the rate is now in line with what the Bank of Canada believes is the trend inflation rate after volatility is discounted, although still well below the bank's ideal target of 2.0 per cent.
Regionally, inflation was strongest at 2.7 per cent in Prince Edward Island and weakest in British Columbia, where prices declined by 0.3 per cent.