Canada’s annual inflation rate rose to 1.9 per cent in June, up slightly from 1.7 per cent in May.
The monthly Consumer Price Index (CPI) showed continued moderation in overall price growth, with consumer prices increasing 0.1 per cent in June and 0.2 per cent on a seasonally adjusted basis. While inflation remains below the Bank of Canada’s two per cent target, the June data underscores a gradual shift in price dynamics after months of slowing growth.
Gasoline prices fell 13.4 per cent year-over-year in June, following a 15.5 per cent decline in May. Although still significantly lower than a year ago, the slower pace of decline exerted upward pressure on the headline inflation rate. The change reflects a base-year effect and a combination of lower refining margins and higher crude oil prices linked to global geopolitical tensions.
Excluding energy, the CPI rose 2.7 per cent from a year earlier, highlighting continued inflationary pressure in non-energy sectors. Part of the divergence is attributed to the removal of consumer carbon pricing in April, which temporarily reduced energy-related costs.
Durable goods saw notable price increases in June. Passenger vehicle prices climbed 4.1 per cent annually, with new vehicles up 5.2 per cent and used vehicles rising 1.7 per cent. The increase in used car prices points to tightening inventories in the auto sector.
Furniture prices also rose more sharply, increasing 3.3 per cent year-over-year compared to 0.1 per cent in May. However, prices for household appliances declined 0.4 per cent after a 2.6 per cent increase in the previous month.
In the apparel category, prices for clothing and footwear increased 2.0 per cent in June, following a 0.5 per cent rise in May. The shift was driven largely by women’s clothing, which held steady after a significant drop in May. Rising input costs and uncertainty related to international trade and tariffs contributed to the upward movement.
Grocery prices continued to grow, but at a slower pace. Food purchased from stores increased 2.8 per cent compared to a 3.3 per cent annual rise in May. Notably, prices for cucumbers and onions fell by 18.3 and 10.3 per cent, respectively.
Shelter costs, which make up a significant share of household spending, rose 2.9 per cent annually. While the report did not provide a detailed breakdown, housing remains a key contributor to overall inflation.