Toronto, Ontario – Inflation Report: September 14, 2026
The latest consumer price index report from Statistics Canada reveals that annual inflation remained steady at 3% in August, indicating that rising energy costs have not yet significantly impacted overall consumer prices.
Economists had anticipated this figure, which may ease concerns about a potential interest rate hike by the Bank of Canada next month. Benjamin Reitzes, managing director of Canadian rates and macro strategy at BMO, suggested that the report does not provide enough evidence to warrant an interest rate increase, potentially calming market expectations for October.
While current inflation figures appear manageable, Reitzes warned that rising oil prices pose a significant threat, raising concerns among policymakers about their future impact on overall inflation. The ongoing conflict in the Middle East has led to a 22.8% increase in gasoline prices in August, although this growth was slower than the 25.7% rise recorded in July.
Excluding gasoline, consumer prices rose by 2.4% last month. Higher costs for housing, travel tours, and air travel have countered the slowdown in gas price inflation, with Canadians facing increased travel expenses due to rising fuel surcharges and changes in travel patterns.
Rents have also shown upward trends, rising 2.8% year-over-year in August, up from 2.5% in July.
On a positive note, the grocery sector provided some relief, as food prices increased by only 2.8% year-over-year—the slowest rise since July 2024. The deceleration in grocery inflation was driven by a modest 0.7% rise in dairy prices, particularly cheese and yogurt.
In the clothing sector, consumers benefitted from lower prices, with a 1.1% annual decline due to decreases in both men’s and children’s clothing prices.
Andrew Grantham, a senior economist, noted that while the Bank of Canada’s next interest rate decision is several weeks away, recent economic indicators suggest that the central bank is likely to maintain the current interest rates.
This summary distills the key points regarding inflation trends and potential implications for monetary policy in Canada.
