Canada's Inflation Rises to 3.1% as Fuel Oil Prices Jump 58%
Gasoline and fuel oil pushed Canada's annual inflation rate to 3.1% in September, up from 3.0% in August, as the war in the Middle East kept fuel prices high, Statistics Canada said on Monday.
Gasoline prices rose 27.8% from a year earlier, up from 22.8% in August, despite the switch to the cheaper winter blend. Fuel oil and other fuels rose 57.8%, up from 43.7%, with the heaviest burden in Atlantic Canada, where many homes are heated with oil. The overall energy index climbed 19%, up from 15.4%, and transportation costs rose 8.4%.
Grocery prices rose 1.7%, the smallest annual increase since May 2024, as fresh vegetables fell 2.9% and sugar and confectionery fell 2.7%. Beef prices rose 8.7%, down from 11% in August. Grocery prices are still up 33% since September 2020.
Shelter costs rose 1.8%, up from 1.5%, led by a 4.9% rise in home and mortgage insurance and a 1.2% rise in home maintenance and repair. Rent rose 2.8%, unchanged from August, and mortgage interest costs fell 0.2%. Excluding energy, Nova Scotia posted the fastest price growth in Atlantic Canada, at 3.3%.
The headline number came in below the 3.2% that forecasts had called for. On a seasonally adjusted basis, prices rose 0.4% from August.
The Bank of Canada sets rates on October 28, with its policy rate at 2.25%. Ahead of the data, markets were pricing in nearly a quarter-point hike by year-end. In July, the central bank projected inflation would ease to about 2.5% in the second half of 2026. Governor Tiff Macklem warned over the weekend that sustained high global energy prices will push up Canada's expected inflation.
