Canadian Inflation Holds Steady at 3% in August, Despite Rising Rent and Travel Costs
The annual inflation rate in Canada remained steady at 3% in August, according to Statistics Canada. This stability was due to a slowdown in rising gas prices being offset by higher rent and travel costs.
Gasoline prices continued to rise, but at a slower pace of 22.8%, compared to a 25.7% increase the previous month. The conflict in the Middle East is affecting prices, Statistics Canada said.
Excluding gasoline, consumer prices rose by 2.4% last month. Consumers found some relief at the grocery store as food prices rose more slowly than overall inflation for the first time since July 2024, climbing 2.8% year over year. Dairy products led the deceleration in grocery prices, with a 0.7% rise in August compared to a 3.1% increase in July.
On the other hand, Canadians paid more for travel amid rising fuel surcharges and as airlines adjusted to the sharp decline in Canadian travel to the United States in 2025. Rent prices also trended higher, increasing 2.8% year over year in August, up from 2.5% in July.
Across Canada, the Atlantic provinces had the highest rates of inflation in August, with prices accelerating in Nova Scotia, Prince Edward Island, and Newfoundland and Labrador. CIBC Economics' Senior Economist Andrew Grantham said that while the Bank of Canada's next interest rate decision is still more than a month away, they expect the central bank to keep rates unchanged.