Canada’s annual inflation rate accelerated to 1.9% in August, up from 1.7% in July, Statistics Canada said Tuesday.
The increase was largely due to gasoline, which fell 12.7% from a year earlier compared to a steeper 16.1% drop in July, providing less drag on the overall Consumer Price Index (CPI). Excluding gasoline, the CPI rose 2.4% in August, after increasing 2.5% in each of the previous three months.
Lower travel tour and fresh fruit costs helped offset some of the upward pressure.
The smaller year-over-year decrease in gasoline prices was partially a result of a base-year effect. In August 2024, prices declined 2.6% month over month, as concerns about slower economic growth began to emerge. In August 2025, prices rose 1.4% on a monthly basis due in part to higher refining margins, offsetting lower crude oil costs, StatsCan said.
Food costs continued to climb, with grocery prices up 3.5% year over year. Meat led the increase, rising 7.2% after a 4.7% gain in July. Fresh and frozen beef surged 12.7%, while processed meats were up 5.3%. Ground beef and several packaged categories were among the biggest drivers amid record high cattle prices
Not all food categories moved higher. Fresh fruit prices fell 1.1% from last year, after rising nearly 4% in July, with grapes, berries, and cherries leading the decline. Produce prices remain volatile, heavily influenced by weather and supply chains.
The report generally reinforced expectations that the Bank of Canada will trim interest rates at its policy meeting on Wednesday. The central bank’s benchmark rate has stood at 2.75% since March, when it was last cut by 25 basis points. Economists widely anticipate another quarter-point reduction.
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