Canada Inflation Research Brief

Price pressures persist. Canada inflation edged up 20 basis points to 1.9 per cent in June. Although the headline reading is still below the Bank of Canada’s 2.0 per cent target amid the removal of the consumer carbon tax, when excluding energy, CPI inflation held steady at 2.7 per cent in June. Meanwhile, the three-month average annualized pace of CPI-trim and CPI-median hit a six-month high of 3.5 per cent. Gains were broad-based, as tariffs renewed upwards pressure on goods prices after two months of decline. Clothing and footwear prices rose 0.7 per cent monthly, while the index for health and personal care increased 0.3 per cent. Together, these factors suggest that costs pressures persist in Canada’s economy, likely stemming from the earlier depreciation of the loonie and the impact of retaliatory tariffs.