Canada’s annual inflation rate accelerated to 3.1% in September, up from 3% in August, as sharply higher gasoline and other energy costs more than offset slowing food price increases, Statistics Canada reported Monday.
The September reading pushed inflation back above the 3% upper limit of the Bank of Canada’s target range for the first time in four months, although it was slightly below analysts’ expectations for a 3.2% increase.
Energy prices surged 19% year over year in September, accelerating from a 15.4% increase in August. Gasoline prices climbed 27.8% compared to a year earlier, up from a 22.8% annual increase in August.
Higher crude oil prices, driven by continued uncertainty surrounding conflicts in the Middle East, were largely responsible for the increase, StatsCan said. Prices for fuel oil and other fuels jumped 57.8% annually, compared to a 43.7% increase in August.
Meanwhile, grocery price inflation continued to ease, with food purchased from stores rising just 1.7% annually in September, down from 2.8% in August. That represented the slowest annual increase since May 2024.
Fresh vegetable prices declined 2.9% from a year earlier, while sugar and confectionery prices fell 2.7%. Beef prices remained elevated, rising 8.7%, although that was slower than August’s 11% increase.
Despite the slowdown in grocery inflation, Canadian consumers were still paying 33% more for groceries than in September 2020.
Excluding gasoline, overall inflation slowed to 2.2% in September from 2.4% in August.
Shelter costs increased 1.8% annually, accelerating from 1.5% in August, partly reflecting higher home insurance and maintenance costs. Rent prices rose 2.8%, matching August’s pace.
On a monthly basis, the overall consumer price index edged up 0.1% in September, while the seasonally adjusted index increased 0.4%.
Inflation accelerated in five provinces, primarily reflecting higher gasoline and fuel oil costs.
