No evidence of generalized inflation despite May price hikes: BoC’s Macklem

Jennifer Tozser, senior wealth advisor & portfolio manager at National Bank Financial Wealth Management, joins BNN Bloomberg to discuss Canada's economic data.

Bank of Canada governor Tiff Macklem says he’s not seeing evidence of generalized inflation even as price pressures surged in May.

Statistics Canada said Monday that inflation jumped to 3.2 per cent last month, reaching its highest level since late 2023 and rising past the central bank’s target band of one to three per cent.

The energy price spike from the war in Iran has been the primary driver of inflation over the past three months in Canada.

Macklem has said previously that the central bank will look through the initial bout of inflation tied to higher gas prices, but will act to make sure inflation doesn’t spread to other parts of the consumer basket and become entrenched.

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Speaking to reporters from Paris on Tuesday, he said that most areas where prices are rising have a direct line to the global oil shock. While services like air transportation saw costs rising in May, that largely reflects jet fuel surcharges imposed by airlines in response to higher energy prices.

The spread of goods and services with prices rising above three per cent annually is also still close to historical norms, Macklem noted.

“There’s no evidence of generalized inflation. So far, the rise in inflation is very much reflecting the rise in global energy prices related to the war in Iran,” he said.

The recent peace agreement between the United States and Iran is already helping to drive down global oil prices and that’s reining in risks of higher inflation, Macklem added.

Stubborn food inflation, which appeared to be easing at the start of 2026, flared up again in May. The cost of food from the grocery store rose half a percentage point to 4.3 per cent year-over-year.

Fresh fruit and vegetables were driving the increase in May. StatCan pointed to reduced supply and fuel costs to explain the price hikes.

Macklem said that food inflation is still a persistent concern and officials at the bank are digging into whether that’s being driven by weather effects or higher transportation costs.

“But yes, there is no question that we are very aware that higher food price inflation is impacting many Canadians,” he said.

The Bank of Canada will release updated forecasts for the economy and inflation alongside its next scheduled interest rate decision on July 15.

Macklem made the comments in Paris where he was giving a speech that warned finance and business leaders about the consequences of global imbalances.

This report by The Canadian Press was first published June 23, 2026.

Craig Lord, The Canadian Press