Canada’s inflation rises to 3.1% as gasoline prices surge in September

ASM, Philippine Canadian Inquirer
October 20, 2026

Photo courtesy: The Globe and Mail

OTTAWA, Canada – Canada’s annual inflation rate climbed to 3.1 percent in September, driven largely by higher gasoline prices as households continue to face pressure from the cost of living.

Statistics Canada reported Monday, October 19, that inflation rose from 3.0 percent in August, pushing the rate slightly above the Bank of Canada’s target range of one to three percent.

Gasoline prices increased by 27.8 percent compared with September 2025, accelerating from the 22.8-percent annual increase recorded in August.

The rise was linked to higher global crude oil prices amid continued uncertainty surrounding conflicts in the Middle East.

Gasoline and energy costs drive inflation higher

Energy prices rose 19 percent year over year in September, compared with 15.4 percent in August.

Fuel oil and other fuels recorded an even sharper increase of 57.8 percent, placing additional pressure on households that rely on these products for heating.

The impact was particularly noticeable in Atlantic Canada, where fuel oil is more widely used.

Transportation costs also increased by 8.4 percent from a year earlier.

However, inflation outside gasoline showed signs of easing. Excluding gasoline, consumer prices increased by 2.2 percent annually, down from 2.4 percent in August.

Grocery inflation slows, but food remains expensive

While fuel costs pushed overall inflation higher, grocery prices increased at a slower pace.

Statistics Canada reported that food purchased from stores rose 1.7 percent year over year in September, compared with 2.8 percent in August.

This marked the smallest annual increase in grocery prices since May 2024.

Prices for fresh vegetables declined by 2.9 percent, while sugar and confectionery prices fell by 2.7 percent.

Fresh or frozen beef prices continued to rise, but at a slower annual rate of 8.7 percent, compared with 11 percent in August.

Despite the slowdown, groceries remained considerably more expensive than in previous years.

Statistics Canada noted that grocery prices have increased by 33 percent since September 2020.

Shelter costs continue to rise

Housing-related expenses also contributed to inflation.

Shelter prices increased by 1.8 percent year over year in September, following a 1.5-percent rise in August.

Although shelter inflation remained below the overall inflation rate, housing costs continued to affect household budgets.

Meanwhile, tuition fees rose 2.4 percent in 2026, compared with a 1.7-percent increase in 2025.

Ontario recorded a 2.1-percent rise in tuition fees after ending its provincial tuition freeze.

Bank of Canada faces another interest rate decision

The latest inflation figures come ahead of the Bank of Canada’s next interest rate announcement on October 28.

The central bank held its benchmark interest rate at 2.25 percent during its September 2 policy meeting.

Although higher gasoline prices have pushed inflation above the bank’s target range, underlying price pressures remain more contained.

The latest data showed that prices excluding gasoline rose more slowly than in the previous month.

The Bank of Canada will consider the September inflation report, along with economic and employment conditions, when reviewing its monetary policy.

For Canadian households, the figures point to continued pressure from energy costs, even as grocery price increases show signs of slowing.

Statistics Canada’s next inflation report will provide a clearer picture of whether the increase in September continues or begins to ease.