Gas prices are displayed at a gas station in Carleton Place, Ontario, a town just west of Ottawa, on May 17, 2022. Sean Kilpatrick/The Canadian Press
Canada’s inflation rate rose to 3.1 percent in September due to higher prices at the pump, according to
Statistics Canada.The agency said the acceleration in prices was driven by higher gasoline prices, which rose by 27.8 percent in September compared to 22.8 percent in August. That month, the inflation rate was at 3 percent.
The Oct. 19 report said crude oil prices rose in September amid ongoing uncertainty surrounding conflicts in the Middle East, contributing to higher gasoline prices. Prices for fuel oil and other fuels rose 57.8 percent year over year in September, following a 43.7 percent increase in August.
Excluding gasoline, the inflation rose by 2.2 percent, compared to 2.4 percent in August.
Inflation excluding energy was 3.3 percent in Nova Scotia, 2.6 percent in Prince Edward Island and New Brunswick, and 2.4 percent in Newfoundland and Labrador, compared with the national rate of 2.1 percent.
Prices for food rose 1.7 percent year-over-year in September, after rising by 2.8 percent in August, which marked the second consecutive month where grocery price growth increased at a slower pace than the all-items Consumer Price Index.
The slower price increase was driven by a 2.9 percent decline in the price for fresh vegetables, and a 2.7 percent fall in sugar and confectionery prices. Fresh and frozen beef prices rose by 8.7 percent.
StatCan noted that despite slower grocery price growth, prices had risen by 33 percent overall since September 2020.
Shelter prices also rose by 1.8 percent year-over-year, compared to a 1.5 percent increase in August. In addition to fuel oil prices driving the acceleration, homeowners’ home and mortgage insurance rose by 4.9 percent, while homeowners’ maintenance and repairs rose by 1.2 percent.
Tuition fees, which are priced annually in September, increased by 2.4 percent in 2026, compared to 1.7 percent in 2025. Students from Prince Edward Island saw the largest increase this year, at 4.9 percent, while Newfoundland and Labrador had the smallest increase of 0.6 percent, which coincided with a freeze on tuition fees.
The Bank of Canada held its key interest rate steady at 2.25 percent for a seventh consecutive meeting on Sept. 2. Governor Tiff Macklem said the risks of higher inflation had increased as elevated oil prices and refinery margins could push up the prices of other goods and services. He added that the Bank would adjust monetary policy as needed.
“The longer oil prices and refinery margins stay high, the greater the risk that higher energy prices spill over and turn into persistent inflation. In addition, the new U.S. tariffs and the Canadian counter-tariffs could add costs for some businesses and feed into consumer prices over time,” Macklem said.
In its July Monetary Policy Report, the Bank of Canada assumed Brent crude would average about US$75 per barrel in the third quarter of 2026, declining to around US$70 by the end of 2027. Renewed fighting between the United States and Iran has since pushed Brent crude to nearly US $110 per barrel as of Oct. 19.
The Bank of Canada will announce its next decision on interest rates on Oct. 28.
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