CALGARY — Canada's inflation rate hit 3% in July, mostly attributable to higher gasoline prices, says a Statistics Canada (StatsCan) report released Monday.
The number is at the high end of the Bank of Canada’s tolerance to raise its overnight rate and is a slight increase from June’s 2.8%.
The price of gasoline rose 25.7% year-over-year, compared to a rise of 20.5% in June, due to renewed hostilities in the Middle East and the blockade of the Strait of Hormuz continued to squeeze energy markets.
Adding upward pressure was the partial closure of Red Sea shipping routes in late July as well as travel tours, with Canadians paying more for hotels and flights to United States cities hosting the FIFA World Cup.
Food costs offered limited relief in July, rising 3.1% annually, down from 3.9% in June and driven by slower price growth for fresh vegetables, chicken, and cereal products.
Nationally, rents and mortgage interest costs rose 1.3% year-over-year, however, July marked the 18th consecutive month that grocery price inflation outpaced the all-items CPI, according to the StatsCan report.
Economists at RBC Economics wrote they don’t think the data will force the Bank of Canada to raise its overnight rate on Sept. 2.
“Overall, the July report remains consistent with a relatively favourable combination of firming economic growth and underlying inflation close to target. The approaching US tariff deadline adds uncertainty, and the proposed measures would have significant consequences for some affected industries and regions,” the note reads.
“But their narrow coverage means they are unlikely to derail the broader economic recovery, with most Canadian exports to the US still protected by CUSMA exemptions. Against that backdrop, we continue to expect the Bank of Canada to keep the overnight rate unchanged through the remainder of 2026.”
Conservative Party leader Pierre Poilievre admonished Prime Minster Carney for telling Canadians in March affordability was the best in over a decade.
“Since then, the costs of Carney have kept climbing with inflation rising to 3%, 50% above the Bank of Canada’s target,” said Poilievre. “Energy is driving the surge: Gas prices have skyrocketed 25.7% in the past year, while energy costs are up 16.6%.
“Higher energy costs do not stop at the pump. They raise the cost of growing, making and moving everything Canadians buy,” he added.
“Compared to last year, when Carney took office, Canadians are paying 6.1% more for fresh fruit, 3.9% more for fresh vegetables and 12.4% more for beef. Lettuce is up 18.8%, carrots 15.6% and ground beef 13.5%. Pork is up 6.6% and even fish costs are up 5.2%.
Carney plans to pile more economic hardships on Canadians, said Poilievre.
“After driving up the cost of food and fuel, Carney plans to impose another 10% per litre gas tax hike after Labour Day,” he said.
"He should cancel the hike and accept the Conservative plan to take all federal taxes off gas until Canada Day, saving Canadians 25 cents per litre and a family as much as $1,200 a year."
“Mark Carney has doubled the deficit that Justin Trudeau left behind. Deficits bid up demand for goods and services, inflating the cost of living. Conservatives will keep fighting to axe taxes, lower inflation and bring down prices."
“We will unleash our economy, unblock our resources and get projects built to bring home powerful paycheques and restore the promise of a Canada that is affordable at home, safe at home and strong at home.”
