Canada Inflation Heats Up in September With Jump in Gas Prices — Update

By Robb M. Stewart

OTTAWA--Canadian inflation ticked higher last month as prices at the pump jumped again, though underlying price pressures look to be holding steady.

The consumer-price index accelerated to 3.1% in September compared with a year earlier, Statistics Canada said Monday. That pushes the pace slightly above top end of the 1% to 3% window the Bank of Canada aims for, after inflation held steady at 3% in August.

Economists were expecting annual inflation of 3.2%.

The data offers a final inflation reading before the Bank of Canada's next policy meeting late this month. The central bank, which has left its policy interest rate unchanged seven times in a row, has so far been willing to look through elevated gasoline prices as the economy shows signs of picking up despite a rise in uncertainty and fresh stresses in the Canada-U.S. trade relationship.

Stripping out gasoline, inflation cooled to 2.2% in September from 2.4% the month before.

Core prices excluding volatile food and energy costs rose a steady 2.1% from a year earlier. The trimmed mean and weighted median measures of inflation preferred by the Bank of Canada eased modestly to the slowest in six years, averaging 1.85% annually after remaining unchanged at 1.95% in August.

The central bank is set to update its economic projections when it next decides on interest rates later this month. Its most recent forecast had anticipated inflation would cool to about 2.5% in the third quarter of the year and the average of its preferred measures would come in at a softer 2.1%.

Bank of Canada Gov. Tiff Macklem at a conference in Bangkok last week said he was concerned that energy prices could keep rising and affect other prices more broadly, a worry shared by every major central bank.

There are few signs inflation broadening has broadened so far. The share of the consumer basket that has seen annual price growth above 3% narrowed to 29.2% in September from 37.9% the month before and 37.3% a year earlier.

Energy prices in September rose 19% on a year earlier as crude oil prices climbed to their highest level since May amid the ongoing conflict in the Middle East. Gas prices rose by a hotter 27.8%, though that was moderated in September by the switch to the less expensive winter blend.

Canadians continue to see some relief on grocery bills, with the price of food bought at stores increasing 1.7%, the smallest rise since May 2024, following a rise of 2.8% in August.

Shelter prices were up 1.8% compared with a year ago, picking up from August's 1.5% rise. Student tuition fees also increased, rising 2.4% compared with a 1.7% increase in 2025.

Write to Robb M. Stewart at robb.stewart@wsj.com

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October 19, 2026 08:56 ET (12:56 GMT)