The annual rate of inflation was unchanged at three per cent in August as a slowdown in rising gas prices was offset by higher rent and travel tour costs, Statistics Canada said Monday. Gasoline costs continued to rise in August but at a slower pace, with prices up 22.8 per cent compared with 25.7 a month earlier, as the conflict in the Middle East continued to affect prices, the agency said. Excluding gasoline, consumer prices rose 2.4 per cent last month. Consumers found some relief at the grocery store as food prices rose more slowly than overall inflation for the first time since July 2024, climbing 2.8 per cent year-over-year, according to StatCan. Prices for dairy products like cheese and yogurt led the deceleration in grocery prices. StatCan said dairy prices rose 0.7 per cent in August compared with a 3.1 per cent rise in July. Smaller price hikes for pork, condiments, spices and vinegars also added to the year-over-year slowdown in grocery inflation. Consumers paid less for clothing in August, with annual prices edging down 1.1 per cent last month due to a 2.3 per cent drop in men’s clothing prices and a 1.9 per cent decline in children’s clothing. But Canadians paid more for travel amid rising fuel surcharges and as airlines adjusted to the sharp decline in Canadian travel to the United States in 2025, the agency said. Rent prices also trended higher, increasing 2.8 per cent year-over-year in August, up from 2.5 per cent in July. Across Canada, the Atlantic provinces had the highest rates of inflation in August, with prices accelerating in Nova Scotia, Prince Edward Island and Newfoundland and Labrador, Statistics Canada said. CIBC Economics said the headline number remained high in August, but underlying inflation showed few signs that higher energy costs were pushing up prices more broadly. Senior economist Andrew Grantham said that while the Bank of Canada’s next interest rate decision is still more than a month away — with new inflation, employment and economic growth data due before then — the central bank is expected to keep rates unchanged. “We continue to expect the bank will remain on hold at that time despite a possible energy-driven re-acceleration in headline inflation, due to the downside risks to growth emanating from U.S. trade policy and with core measures of inflation giving policymakers comfort that higher energy prices are not translating into widespread inflationary concerns,” he said in a client note. --- Brett Bundale, The Canadian Press This report by The Canadian Press was first published Sept. 14, 2026.
