Canada’s annual inflation rate rose to 3.1% in September, with gasoline leading the increase, while two core measures eased ahead of the Bank of Canada’s Oct. 28 rate decision.
Statistics Canada said the consumer price index was 3.1% higher than a year earlier, compared with 3.0% in August. The monthly increase was 0.1% before seasonal adjustment. The annual result was below the 3.2% forecast in a Reuters poll.
Gasoline prices rose 27.8% year over year, following a 22.8% increase in August. Inflation excluding gasoline slowed to 2.2% from 2.4%. CPI-median eased to 1.9% from 2.0%, and CPI-trim fell to 1.8% from 1.9%. Grocery inflation also slowed, reaching 1.7% after 2.8% in August.
The higher fuel costs did not affect all households equally. Statistics Canada said fuel-oil price increases had a greater effect on consumers in Atlantic Canada, where the fuel is more widely used. In its business survey, the Bank of Canada said high oil prices supported some firms’ export-sales outlooks.
About half of the surveyed businesses said they planned to charge customers for at least part of the added expenses they linked to the Middle East conflict and tariffs. The Bank said stronger demand and efforts to recover compressed margins were among the factors behind some firms’ plans. Roughly three-quarters of the survey interviews took place before Canada-U.S. trade talks broke down. The survey also compared current business sentiment with conditions during the height of trade tensions in 2025.
In currency trading, the Canadian dollar was up 0.3% against the U.S. dollar, near C$1.4095 per U.S. dollar in early afternoon trading on Oct. 19, after reaching C$1.4071 earlier. Reuters reported that hawkish comments from Bank of Canada Governor Tiff Macklem overshadowed the inflation figures. The update follows earlier coverage of the Canadian dollar’s gain after the September inflation report.
The Bank held its policy rate at 2.25% on Sept. 2. Its inflation target is 2%, the midpoint of a 1% to 3% range. The next rate decision and Monetary Policy Report are scheduled for Oct. 28 at 9:45 a.m. ET (13:45 UTC); Statistics Canada’s next inflation release, covering October, is due Nov. 16.
