Canada Producer Inflation Accelerates in January

Canadian producer prices rose by 0.4% month-over-month in February 2026, slowing from an upwardly revised 2.8% advance in January and below market forecasts of a 1.1% increase. A significant increase in energy and petroleum products (+7.8%), of which diesel fuel (+10.5%) and finished motor gasoline (+5.7%), was offset by lower prices for primary non-ferrous metals (-3.7%) and meat, fish and dairy products (-5.9%). On a yearly basis, producer prices advanced by 5.4%, after an upwardly revised 5.6% surge in the prior month. Meanwhile, prices of raw materials purchased by manufacturers operating in Canada, increased by 0.6% month over month and rose 8.6% year over year.

Canadian producer prices surged 2.7% month-over-month in January 2026, sharply reversing a 0.9% decline in the prior month and far exceeding forecasts of 0.2%. The headline increase was driven primarily by a steep 18.2% jump in primary non-ferrous metal products. Additional upward pressure came from energy and petroleum products (+1.7%), chemicals and chemical products (+2.2%), motorized and recreational vehicles (+0.7%), and lumber and other wood products (+1.4%). On an annual basis, the Producer Price Index rose 5.4% in January, marking the 16th consecutive month of year-on-year gains.

Producer prices in Canada fell 0.6% month over month in December 2025, the steepest decline in seven months, following an upwardly revised 1.1% increase in November and compared with market expectations for a 0.3% rise. The drop was driven primarily by lower prices for energy and petroleum products (-7.2%), notably refined petroleum energy products (-8.2%), including motor gasoline (-9.6%) and diesel fuel (-7.5%). Prices for lumber and other wood products also declined (-3%). Offsetting some of the downward pressure, prices for primary non-ferrous metal products rose 7.1%, led by sharp increases in unwrought silver and silver alloys (+25.4%), unwrought platinum group metals and their alloys (+15%), and unwrought gold and gold alloys (+3.4%). On a year-on-year basis, producer prices increased 4.9% in December, easing from a 5.9% rise in the previous month.