Canadian Consumer Price Index (September 2026)

Canadian inflation remained contained in September 

• Headline CPI inflation was 3.1% year-on-year (y/y) in September, up from 3.0% in August. This was one tick below market expectations.   
• Energy prices boosted headline inflation as the highest crude oil prices since May lifted gasoline prices up 27.8% y/y in September from 22.8% in August. Statistics Canada cited that this uptick was moderated by a reversal in inflation pressures for travel tours.  
• Grocery inflation continued to moderate. Prices for food purchased from stores rose 1.7% y/y in September, down from 2.8% in August.    
• Shelter inflation ticked up again in September, but remained fairly benign at 1.8% y/y (1.5% in August). Statistics Canada cited an increase in fuel oil costs, which is used to heat homes in some parts of the country, along with higher homeowners' home and mortgage insurance costs (+4.9% y/y). Inflation for rent and owned homes matched August's pace.    
• Echoing the benign inflation theme, the Bank of Canada's preferred core inflation metrics (median and trim) were surprisingly soft. Median and trim averaged 1.9% y/y in September, down from 2.0% in August. 

Key Implications

• No jump scares in Canada's inflation in September, in contrast to higher inflation south of the border. The hottest inflationary categories remain those most directly related to the spike in oil prices this year: energy and airfares. Looking at the Bank of Canada's preferred inflation metrics over the past six months, inflation is only two tenths above their 2% target (2.2%). Surprisingly the 2-Year yield is only off slightly since the release.  
• Today's number supports our view that the Bank of Canada can remain on hold this year. There is little evidence higher energy costs are bleeding through to broader price pressures, which remain mild. On top of that, the Canadian economy faces downside risks due to tariffs and the volatile trade relationship with the U.S., a relatively soft job market, and now higher bond yields. We expect the combination of these forces will lead the Bank to stay on the sidelines this year.

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