Canada inflation June 2026 slowed to 2.8% year over year, down from 3.2% in May, as gasoline prices fell sharply during the month.
The Consumer Price Index declined 0.4% from May, while gasoline prices dropped 10.2% month over month. The softer headline offers some inflation relief, but groceries, rent, insurance and energy remained more expensive than a year earlier.
Why Canada Inflation Fell in June 2026
Lower gasoline prices were the main reason Canada’s headline inflation rate moved back below 3%.
Despite falling sharply from May, gasoline remained 20.5% more expensive than in June 2025. That annual increase was lower than the 33.2% surge recorded in May, but fuel remained one of the largest sources of household price pressure.
The broader energy category increased 14.3% year over year. Inflation excluding gasoline held steady at 2.2%, showing that much of the headline improvement came from lower monthly fuel prices rather than a broad decline across the consumer basket.
Source: Statistics Canada, Consumer Price Index, June 2026. All figures shown are year-over-year changes unless otherwise noted.
Groceries and Essential Bills Stayed High
Grocery prices increased 3.9% year over year, easing from 4.3% in May. June marked the 17th consecutive month in which grocery inflation exceeded the overall CPI rate.
Food purchased from restaurants rose 2.7%, while other recurring household expenses also remained elevated:
- Rent: up 3.5%
- Passenger vehicle insurance: up 6.0%
- Mortgage interest costs: down 0.3%
The decline in mortgage interest costs provided some relief, but renters, drivers and grocery shoppers continued to face higher everyday bills.
Core Inflation Eased in June
The Bank of Canada’s preferred measures of underlying inflation both moved lower.
CPI-median slowed to 1.9% from 2.1%, while CPI-trim fell to 1.8% from 2.0%. These readings suggest underlying inflation pressure eased during June, even as energy prices remained volatile.
The Bank of Canada held its overnight rate at 2.25% on July 15, five days before the June CPI report was released. The new inflation figures will now form part of the data policymakers assess ahead of the next rate decision on September 2, 2026.
