Despite signs of a cooling economy, inflation remains a challenge
Canada’s consumer price index rose 3.1% year over year in September 2026, up from 3.0% in August, according to Statistics Canada data released October 19, 2026.
The acceleration was driven primarily by gasoline prices, which rose 27.8% year over year in September, compared with 22.8% in August. Statistics Canada attributed the increase to higher crude oil prices, which reached their highest level since May 2026 amid ongoing uncertainty related to conflicts in the Middle East. Excluding gasoline, the CPI rose 2.2%, down from 2.4% in August. The CPI rose 0.1% month over month and 0.4% on a seasonally adjusted monthly basis.
Energy prices overall rose 19.0% year over year in September, up from 15.4% in August. Fuel oil and other fuels rose 57.8% year over year, following a 43.7% increase in August. Statistics Canada noted the fuel oil increase had a greater impact on consumers in Atlantic Canada, where that fuel source is more widely used.
Grocery prices continued to slow. Food purchased from stores rose 1.7% year over year in September, down from 2.8% in August and the smallest yearly gain since May 2024, when prices rose 1.5%. Declines in fresh vegetables (-2.9%) and sugar and confectionery (-2.7%) contributed to the moderation. Despite the slowdown, grocery prices have risen 33.0% since September 2020, according to Statistics Canada.
Shelter costs rose 1.8% year over year in September, up from 1.5% in August. Rent rose 2.8% year over year, matching the August figure. Homeowners’ replacement costs fell 1.9% and mortgage interest costs declined 0.2%.
Regionally, prices rose at a faster pace in five provinces compared with August, largely due to higher energy costs. Excluding energy, inflation was highest in Nova Scotia (3.3%), Prince Edward Island (2.6%), New Brunswick (2.6%), and Newfoundland and Labrador (2.4%), all above the national figure of 2.1%.
Tuition fees, priced annually in September, rose 2.4% in 2026, up from 1.7% in 2025. Students in Prince Edward Island saw the largest increase at 4.9%, while those in Newfoundland and Labrador had the smallest at 0.6%, coinciding with a provincial tuition freeze. Ontario tuition rose 2.1% year over year, the largest increase since 2018, after the province ended its tuition freeze.
