Canada's Inflation Rate Holds Steady at Three Per Cent

Canada's annual inflation rate held steady at three per cent in August, according to Statistics Canada. The Consumer Price Index (CPI) matched July's three per cent increase, with slower gasoline price growth offset by higher rent and travel tour costs.

Excluding gasoline, consumer prices rose 2.4 per cent year over year in August, after increasing 2.2 per cent in July. Gasoline prices continued to climb sharply, but at a slower pace than the month before, rising 22.8 per cent year over year in August, down from a 25.7 per cent increase in July.

The biggest upward pressure on inflation came from travel tours and rent, with prices for travel tours rising 26.1 per cent year over year in August, up from a 15.2 per cent increase in July. This was partly due to a base-year effect, as Canadian travel to the United States declined sharply in 2025.

However, consumers found some relief at the grocery store, with food purchased from stores rising only 2.8 per cent year over year in August, down from 3.1 per cent in July. Dairy prices led the slowdown in grocery inflation, rising only 0.7 per cent year over year in August.

Meanwhile, clothing prices fell 1.1 per cent year over year in August, after rising 0.9 per cent in July. The decline was driven by lower prices for men's and children's clothing.

Across the country, prices rose at a faster pace in six provinces in August compared with July, with the Atlantic provinces having the highest rates of inflation. Fuel oil and other fuels rose 43.7 per cent year over year in August, putting pressure on prices in provinces where fuel oil is more commonly used.