Canadian Inflation Holds at 3% in August; Energy Costs Remain Elevated
Statistics Canada reported inflation at 3.0% in August 2026, flat from July but remaining above the Bank of Canada's 2% target due to Middle East conflict driving energy prices higher. Core inflation stayed contained, and grocery price growth cooled.
The all-items Consumer Price Index rose 3.0% year-over-year in August 2026, after dipping to 1.8% in February 2026, according to Statistics Canada release on September 14, 2026.
What's Driving the Inflation?
The increase is not broad-based: it is concentrated in energy (up 15.4%) and transportation (up 7.5%), while shelter (1.5%) and food (2.8%) inflation are much lower, and food inflation has cooled from 7.3% in January 2026. Gasoline inflation stood at 22.8% in the month, slowing slightly from the 25.7% increase in the previous month, while groceries prices rose 2.8% from the 3.1% increase in July, falling below the headline inflation rate for the first time in over two years.
Core Inflation Remains Anchored
Core inflation rates that are tracked by the Bank of Canada remained close to their target. Core CPI (all-items excluding food and energy) stood at 2.1%, signalling that underlying price pressures outside volatile sectors remain moderate.
For expats and newcomers: If you drive regularly, gas costs remain your biggest price shock—budget accordingly. Grocery shoppers, however, should see some relief, with food inflation now cooling. Rent inflation ticked up to 2.8% in August, so apartment hunters may face slightly higher asking prices month-over-month. Foreigners on fixed salaries indexed to inflation should note the 3% headline rate when renegotiating wages or cost-of-living adjustments.
Sources
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