Inflation Holds at 3% in August as Grocery Price Growth Slows

Canadian inflation held steady in August, with easing gasoline and grocery price growth offset by higher travel tour and rent costs. 

Statistics Canada reported Monday that the Consumer Price Index rose 3% year over year in August, matching July’s increase. On a monthly basis, the CPI fell 0.1%, while the seasonally adjusted index increased 0.2%. 

Gasoline prices remained a major source of inflation but rose at a slower annual pace, increasing 22.8% from a year earlier compared with 25.7% in July. Excluding gasoline, inflation accelerated to 2.4% from 2.2%. 

Travel tour prices were one of the biggest upward contributors, jumping 26.1% year over year after rising 15.2% in July. Statistics Canada attributed part of that increase to a base-year effect, as well as higher jet fuel costs and fuel surcharges. 

Grocery inflation continued to cool. Food purchased from stores rose 2.8% from a year earlier, down from 3.1% in July and below the headline inflation rate for the first time since July 2024. 

Dairy products were a major contributor to the slowdown, with prices rising just 0.7% year over year compared with 3.1% in July. Smaller increases for pork, condiments and fresh fruit also helped moderate food inflation. Even so, grocery prices remain 29% higher than in August 2021. 

Clothing prices also eased, falling 1.1% year over year, led by lower prices for men’s and children’s clothing.