A New CPI Report Highlights 3% Inflation as House Rents and Travel Prices Rise.
Monday, September 14, 2026 — Toronto, Ontario. The consumer price index report Statistics Canada released today shows annual inflation held steady at 3% in August, suggesting higher energy costs have yet to affect broader consumer prices significantly.
This inflation figure aligns with economists’ forecasts and may alleviate speculation regarding a potential interest rate hike by the Bank of Canada next month, according to Benjamin Reitzes, BMO’s managing director of Canadian rates and macro strategy.
Reitzes noted that the inflation report contains little to prompt the central bank to raise interest rates, which could temper market expectations for an October increase.
However, he emphasized that rising oil prices continue to pose a substantial challenge, potentially creating concerns among policymakers that it is only a matter of time before these prices impact overall inflation. The ongoing conflict in the Middle East has contributed to higher gasoline prices, which rose 22.8% in August, though more slowly than the 25.7% increase in July, according to StatCan.
Excluding gasoline, consumer prices climbed by 2.4% last month.
Higher costs for housing, travel tours, and air travel have offset the slowdown in gas price inflation. Canadians faced higher travel costs due to rising fuel surcharges, while airlines adjusted to the significant decline in Canadian travel to the United States in 2025.
Rents also trended upward, rising by 2.8% year-over-year in August, up from 2.5% in July.
On a brighter note, consumers found some relief in the grocery sector, with food prices rising more slowly (not to be confused with prices falling) than overall inflation for the first time since July 2024. Food prices rose 2.8% year over year, according to StatCan.
The report indicated that dairy product prices, particularly cheese and yogurt, contributed to this deceleration in grocery inflation, with dairy prices rising just 0.7% in August, down from a 3.1% increase in July. Smaller price hikes for condiments, spices, and vinegars also contributed to the year-over-year slowdown in grocery inflation.
In August, consumers paid less for clothing, with annual prices decreasing by 1.1% due to a 2.3% drop in men’s clothing prices and a 1.9% decline in children’s clothing.
Senior economist Andrew Grantham stated that while the Bank of Canada’s next interest rate decision is still more than a month away, and with new inflation, employment, and economic growth data forthcoming before then, the central bank is likely to keep rates unchanged.
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