Canada Inflation Slows to 2.8% as Core Measures Drop Below 2% Target
Updated
Updated · Mortgage Professional · Jul 20
Canada Inflation Slows to 2.8% as Core Measures Drop Below 2% Target
3 articles · Updated · Mortgage Professional · Jul 20
Summary
Canada’s annual inflation rate fell to 2.8% in June from 3.2% in May, coming in slightly below economists’ 2.9% forecast and reinforcing expectations for a prolonged Bank of Canada pause.
A 10.2% monthly drop in gasoline prices drove most of the slowdown, while CPI-median eased to 1.9% and CPI-trim to 1.8%—their 1.85% average was the lowest since September 2020.
Excluding gasoline, CPI held at 2.2% year over year, suggesting broader price pressures remained contained and that higher energy costs had not spread through the economy.
Some categories stayed hot: grocery inflation was 3.9%, marking a 17th straight month above headline CPI, while accommodation prices in Toronto and Vancouver rose about 20% and airfares climbed 9.6%.
The Bank of Canada held rates at 2.25% for a sixth straight meeting on July 15, and economists now largely expect it to stay on hold through the rest of 2026 unless energy-driven inflation worsens.