Gasoline and Travel Costs Push Canada’s Inflation Rate to 3.0% in July

Canada’s inflation rate moved higher in July, with the Consumer Price Index rising 3.0% year over year, up from 2.8% in June, says Statistics Canada in its monthly report.

Credit: Krish Parmar /Unsplash

If you filled up your car last month, you likely felt one of the biggest pressures. Gasoline prices were 25.7% higher than a year earlier, accelerating from a 20.5% increase in June. The release says conflict in the Middle East, including the blockade of the Strait of Hormuz and partial closure of Red Sea shipping routes, pushed gasoline prices upward.

Travel also became more expensive. Tour prices jumped 15.2% year over year, while air transportation rose 12.0%. Higher hotel and flight costs to U.S. destination cities hosting World Cup matches contributed to the increase, along with more expensive jet fuel.

At the grocery store, the picture was a little different. Food purchased from stores rose 3.1%, down from 3.9% in June. Still, grocery inflation has now exceeded headline inflation for 18 consecutive months.

Fresh vegetables increased 3.9% and fresh or frozen chicken edged up 0.3%, while cereal products fell 1.7%. Fresh fruit stood out, rising 6.1% year over year and 4.7% in July alone, the largest July monthly increase since 2011.

Nova Scotia recorded the highest provincial inflation rate at 5.0%. Alberta reached 4.2%, while Ontario remained at 2.0%, the lowest among the provinces.

Overall, the CPI rose 0.5% from June to July. Excluding gasoline, inflation held at 2.2% for a third straight month.

The Bank of Canada’s preferred core inflation measures showed a slight shift, with CPI-trim holding steady at 1.9%, while CPI-median rose to 2.0% from 1.9%. The central bank considers these measures, along with other economic indicators, when setting interest rates.

CPI-trim and CPI-median are core inflation measures that exclude extreme price changes. CPI-trim removes the outer 40% of the data, while CPI-median focuses on the median price change.

The next scheduled date for announcing the bank rate is September 2, 2026.

Consumer Price Index, July 2026