Inflation hits 3.1% in September as gas jumps 27.8%

Canada’s annual inflation rate rose to 3.1 per cent in September from 3.0 per cent in August, driven by a 27.8 per cent jump in gasoline prices, Statistics Canada said.

The agency’s consumer price index, released Oct. 19, showed prices up 0.1 per cent from August before seasonal adjustment. Gasoline rose faster than the 22.8 per cent annual gain recorded in August, even as retailers switched to a cheaper winter blend, according to the agency’s release.

Grocery prices were far calmer. Food bought from stores rose 1.7 per cent from a year earlier, down from 2.8 per cent in August, which The Canadian Press reported was the smallest annual increase since May 2024. Fresh vegetables fell 2.9 per cent, while beef was still up 8.7 per cent, a slower pace than the 11 per cent seen in August.

Shelter costs rose 1.8 per cent, up from 1.5 per cent in August, and rent was up 2.8 per cent, unchanged from the month before. Statistics Canada said rent rose fastest in Atlantic Canada. The Canadian Press reported that inflation topped 5 per cent in all three Maritime provinces, while Ontario had the lowest rate at 2.5 per cent.

Strip out gasoline and the picture looks milder. The Canadian Press reported that the consumer price index excluding gasoline rose 2.2 per cent, down from 2.4 per cent in August. The Bank of Canada’s preferred core measures also eased, with CPI-trim at 1.8 per cent and CPI-median at 1.9 per cent, the news agency reported. Airfares rose 19.4 per cent on higher jet fuel costs, and fuel oil and other fuels were up 57.8 per cent.

BMO chief economist Douglas Porter said the run-up in prices “really is not spreading far and wide beyond the gasoline pump,” and that the report on its own “does nothing to advance the case for interest rate hikes,” The Canadian Press reported.

For households, the numbers mean fuel and heating costs are doing most of the damage, while the weekly grocery bill is rising more slowly than it has in more than two years. Grocery prices are still about 33 per cent higher than in September 2020, The Canadian Press reported.

The Bank of Canada announces its next interest rate decision Oct. 28. Our earlier coverage looks at whether the central bank will raise rates and how market odds of a hike have moved. Our Money Week roundup has the other dates coming up, and the November benefit payment dates are listed in our guide. The next consumer price index, for October, is due in mid-November, and readers can find the full tables on the Statistics Canada website.

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