Canada's Inflation Rate Hits 3% Amid Rising Gas Prices

Canada's inflation rate rose to 3% in July, according to a report from Statistics Canada. This is up from June's 2.8%, and is at the high end of the Bank of Canada's tolerance for raising its overnight rate.

The main contributor to this increase was higher gasoline prices, which rose 25.7% year-over-year due to renewed hostilities in the Middle East and disruptions to energy markets.

Economists at RBC Economics don't think this data will force the Bank of Canada to raise its overnight rate on September 2, saying that the inflation rate remains close to target.

Conservative Party leader Pierre Poilievre criticized Prime Minister Carney for telling Canadians in March that affordability was at a decade-long high. He pointed out that since then, energy costs have risen by 16.6%, and prices for fresh fruit, vegetables, and beef are up compared to last year.

Carney has announced plans to impose an additional 10% per liter gas tax hike after Labour Day, which Poilievre argues will only increase economic hardships for Canadians.