Canada Inflation Rises to Over 2-Year High

The headline inflation rate in Canada fell to 2.8% in June of 2026 from the over-two-year high of 3.2% in the previous month, slightly under market expectations of 2.9%. The drop was consistent with a slower surge in prices of gasoline (20.5% vs 33.2% in May), trimming inflation for overall transportation (6.7% vs 9.0%), as the momentary restoration of energy exports from the Middle East had eased wholesale fuel prices. Price growth also eased for food (3.5% vs 3.8%) amid softer inflation in grocery stores. Meanwhile, the median core (1.9% vs 2.1%) and the trimmed-mean (1.8% vs 2%), both key core rates tracked by the BoC, fell more than expected to their lowest in over five years. Inflation fell for shelter (1.5% vs 1.7%) and health and personal care (2.5% vs 2.7%), while prices dropped for household operations, furnishings, and equipment (-0.2% vs -0.2%). From the previous month, the Canadian CPI fell by 0.4% amid a 10.2% drop in gasoline prices.

The headline inflation rate in Canada rose to 3.2% in May of 2026 from 2.8% in the previous month, ahead of market expectations of 3% and the 2.8% rate from the previous month to mark the fastest inflation rate since December 2023. The increase was largely due to a surge in gasoline inflation (33.2% vs 22.8% in April) as the war in the Middle East suspended energy exports from the key region, lifting broader energy costs in Canada by 9% (vs 7.6%). Meanwhile, food inflation picked up to 3.8% from 3.5% amid a 5.3% jump for fresh fruit and 9% increase for vegetables, aligned with higher prices for fertilizers. Still, underlying inflation rates tracked by the BoC remained steady, with the trimmed-mean core rate at 2% and median core rate at 2.1%. Inflation edged lower for shelter (1.7% vs 1.8%) and health and personal care (2.7% vs 3.3%), and prices dropped for household operations (-0.2% vs 0.4%). The Canadian CPI rose 1% from the previous month.

The headline inflation rate in Canada rose to 2.8% in April of 2026 from 2.4% in the previous month, the highest in two years, albeit firmly under the market consensus of 3.1%. The increase extended the jump from the previous month as the disruption of energy supply from the Middle East, due to the war in the region, raised prices of fuel and power. Transportation inflation surged to 7.6% from 3.7% in March amid 19.2% surge in energy prices (vs 3.9% in March). In turn, prices for core sectors of the economy grew at a more moderate pace, aligned with the Bank of Canada's note that it did not see higher energy prices spread into inflation expectations so far. The trimmed-mean and median core inflation rates followed by the BoC fell to 2% and 2.1%, respectively, below market expectations to their lowest in five years. Food inflation eased to 3.5% from 4%, and shelter inflation inched marginally higher to 1.8% vs 1.7%.