Canada’s annual inflation rate held steady at three per cent in August as slower gasoline price growth was offset by higher rent and travel tour costs.
Statistics Canada said Monday that the Consumer Price Index matched July’s three per cent increase.
In B.C., the annual inflation rate was also three per cent, up from 2.9 per cent in July.
Excluding gasoline, consumer prices rose 2.4 per cent year over year in August, after increasing 2.2 per cent in July.
The CPI fell 0.1 per cent on a monthly basis, while the seasonally adjusted monthly index rose 0.2 per cent.
Gasoline prices continued to climb sharply, but at a slower pace than the month before.
Statistics Canada said gasoline prices rose 22.8 per cent year over year in August, down from a 25.7 per cent increase in July.
Despite the slowdown, the agency said gasoline prices remained elevated as the conflict in the Middle East continued through August.
The biggest upward pressure came from travel tours and rent.
Prices for travel tours rose 26.1 per cent year over year in August, up from a 15.2 per cent increase in July.
Statistics Canada said the increase was partly due to a base-year effect.
Canadian travel to the United States declined sharply in 2025, putting downward pressure on prices for airfares and travel tours at that time.
The agency said that decline has now stopped affecting the 12-month price movement.
Higher jet fuel prices and fuel surcharges also put upward pressure on the travel tours index.
On a monthly basis, travel tour prices fell 2.9 per cent in August.
Rent prices also accelerated, rising 2.8 per cent year over year in August after a 2.5 per cent increase in July.
Statistics Canada said higher rent prices in Manitoba and Ontario drove the national acceleration.
Consumers found some relief at the grocery store.
Food purchased from stores rose 2.8 per cent year over year in August, down from 3.1 per cent in July.
It was the first time since July 2024 that grocery price growth was below the all-items inflation rate.
Dairy products led the slowdown in grocery inflation.
Dairy prices rose 0.7 per cent year over year in August, compared with a 3.1 per cent increase in July.
Statistics Canada said cheese and yogurt were the top contributors to the slowdown in dairy prices.
Smaller price increases for fresh or frozen pork, condiments, spices, vinegars and fresh fruit also contributed to the deceleration.
But grocery prices remain far above levels seen several years ago.
Statistics Canada said prices for groceries have increased 29 per cent since August 2021.
Consumers also paid less for clothing in August.
Clothing prices fell 1.1 per cent year over year, after rising 0.9 per cent in July.
The decline was driven by lower prices for men’s clothing, down 2.3 per cent, and children’s clothing, down 1.9 per cent.
Women’s clothing prices were unchanged from a year earlier.
Across the country, prices rose at a faster pace in six provinces in August compared with July.
The Atlantic provinces had the highest rates of inflation.
Statistics Canada said price growth accelerated in Prince Edward Island, Newfoundland and Labrador and Nova Scotia.
Fuel oil and other fuels rose 43.7 per cent year over year in August, up from 29.5 per cent in July, putting pressure on prices in provinces where fuel oil is more commonly used.
CIBC Economics said the headline number remained high, but underlying inflation showed few signs that higher energy costs were pushing prices up more broadly.
Senior economist Andrew Grantham said the Bank of Canada still has more inflation, employment and economic growth data to consider before its next interest rate decision.
“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,” Grantham said in a client note.
The September CPI report is scheduled to be released on Oct. 19.
