Canada's annual inflation rate rose to 3.1% in September from 3% in August, as the Middle East war kept pushing up gasoline prices, which were up 27.8% from a year earlier. Excluding gasoline, consumer prices rose 2.2%, while fuel oil and other fuels surged 57.8%, hitting Atlantic Canada hard. Grocery inflation slowed to 1.7%, the smallest annual increase since May 2024, as fresh vegetable prices fell 2.9%. Shelter prices accelerated to 1.8% from 1.5%, and economists had broadly expected inflation at 3.2%. CIBC's Andrew Grantham said the report suggests policymakers have little rush to raise rates before assessing U.S. trade relations and new tariffs, while Governor Tiff Macklem warned that persistent energy prices raise the risk of broader inflation.
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Related tickers and likely impact
USD/CAD
▼ Likely negativeRelevance: medium
| Market | Currencies |
|---|---|
| Close on 10/16/2026 | 1.41389 |
| Change that session | -0.32% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Higher gas prices drove inflation up to 3.1% in September: StatCan
Statistics Canada reported that annual inflation rose to 3.1% in September from 3% in August, led by a 27.8% jump in gasoline prices as the Middle East war continued, while fuel oil and other fuels surged 57.8%. Excluding gasoline, consumer prices rose 2.2%. Grocery inflation slowed to 1.7%, its smallest annual gain since May 2024, mainly due to a 2.9% drop in fresh vegetable prices, though groceries are still up 33% since September 2020. Shelter prices rose 1.8%, up from 1.5% in August, driven by higher mortgage insurance and home maintenance costs. The figure came in below the 3.2% economists had broadly expected and is the Bank of Canada's last price report before its Oct. 28 rate decision; CIBC's Andrew Grantham said it suggests little rush to hike rates, while Governor Tiff Macklem warned high energy prices raise inflation risks.
- CP NewsAlert : Higher gas prices drove inflation up to 3 . 1 % in September : StatCan
Statistics Canada said annual inflation rose to 3.1% in September, led by a 27.8% jump in gasoline prices from a year earlier as the Middle East war kept pushing up gas prices, despite the switch to cheaper winter gas. Excluding gasoline, consumer prices rose 2.2%, while fuel oil surged 57.8%, hitting Atlantic Canada hard where many homes are heated with oil. Grocery inflation slowed to 1.7%, its smallest yearly increase since May 2024, as fresh vegetables fell 2.9% and sugar and confectionery dropped 2.7%, while beef rose 8.7% after 11% in August. Shelter prices rose 1.8%, up from 1.5% in August, with mortgage insurance up 4.9% and home maintenance and repair costs up 1.2%.
- Canada inflation : StatCan to release September figures today
Canada's annual inflation rose to 3.1% in September, driven by a 27.8% jump in gasoline prices from a year earlier, even with the switch to a cheaper winter blend. Excluding gasoline, consumer prices rose 2.2%, while fuel oil and other fuels surged 57.8%, hitting Atlantic Canada hard. Grocery prices rose 1.7%, the smallest yearly increase since May 2024, though they are up 33% since September 2020. Shelter prices rose 1.8%, up from 1.5% in August, largely due to a 4.9% increase in mortgage insurance.
- Financial markets betting on BoC rate hike next week despite subdued inflation data
Financial markets have begun pricing in a Bank of Canada rate hike next week, giving more weight to Governor Tiff Macklem's hawkish remarks than to September inflation that came in better than expected. Statistics Canada reported annual inflation rose to 3.1% from 3%, driven by a 6.1% monthly jump in gasoline prices, while excluding energy it eased to 2.2%. Swap markets priced about an 80% chance of a quarter-point hike at the Oct. 28 decision, up from roughly 35% on Friday, and several Bay Street forecasters switched to calling for a hike, though it remains a minority view. Royce Mendes of Desjardins said central bankers can no longer look through the inflationary impact of high energy prices, while the BoC's two preferred core measures fell to 1.9% and 1.8%. Macklem said that if oil stays around US$100, inflation would gradually drift up from 3%, and the bank will weigh whether inflation returns to target on its own or whether rates must rise.
- Businesses expect Canada inflation rate to remain above 3 %
The Bank of Canada's quarterly Business Outlook Survey, released Monday, shows many businesses expect Canada's inflation rate to stay above 3% over the next two years, and about half plan to pass on some or all cost increases linked to the Iran war and tariffs. Inflation rose to 3.1% year over year in September from 3% in August, mainly due to higher energy prices. In the companion Canadian Survey of Consumer Expectations, households' median expectations were 4.03% for the next year and 3.88% for the next two years, with tariffs cited as the top factor. Firms' outlooks worsened and inflation expectations rose after trade talks with the U.S. broke down on Aug. 22, but they are not expected to return to levels seen at the start of the trade conflict in March 2025 or the April oil-price peak. The Bank of Canada will announce its interest rate decision on Oct. 28, and these surveys are among the inputs for that decision.
- Canada inflation rate rises above 3 % on higher energy prices
Statistics Canada reported that consumer prices rose 3.1% year over year in September, up from 3% in August, mainly because energy prices were 19% higher than a year earlier. Grocery prices rose 1.7%, the smallest annual increase since May 2024, and shelter prices rose 1.8%. Core measures were steady, with CPI-median at 1.9% and CPI-trim at 1.8%, a bit softer than economists expected. Bank of Canada Governor Tiff Macklem warned that the risk of inflation broadening and becoming more persistent has risen, while BMO and TD still expect rates to stay on hold through 2027, though BMO's Robert Kavcic said a rate hike is possible.
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