Canada Inflation Rate and CPI

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Current Canada Inflation Rate: 7%

Updated on September 20, 2022: Canada’s inflation rate continues to cool as it slowed to 7.0% in August 2022, down from 7.6% in July 2022. The largest contributors were falling transportation and shelter prices. Gasoline prices fell 9.6% compared to last month, the largest decline since April 2020. Meanwhile, Canada’s cooling housing market is bringing down the price of new homes. Countering that is the rising cost of mortgage interest, which Statistics Canada says has risen at the fastest pace since January 2020. Persistently high food prices, especially groceries, have also continued to put upward pressure on Canada’s inflation rate. Stripping out volatile energy and food prices, inflation decreased to 5.3% for August 2022, down from 5.5% in July 2022. Core inflation is also down to 5.2%, bringing some relief from last month's reading of 5.4%.

Canada Inflation Rate Overview

Data for July 2022
Canada Inflation Rate
All (Excluding Energy)
All (Excluding Food and Energy)

Canada Inflation Rate Statistics (CPI)

Data for July 2022
Monthly Change
Quarterly Change

Canada Inflation Chart

Historical Canada Inflation Rates

January 20172.13%
February 20172.05%
March 20171.56%
April 20171.64%
May 20171.32%
June 20171.01%
July 20171.16%
August 20171.40%
September 20171.55%
October 20171.39%
November 20172.10%
December 20171.87%

Source: Statistics Canada

What’s Driving Inflation?

Here are the contributions of each CPI category to Canada’s July 2022 inflation rate.
12-Month Change (CPI)Basket Weight (% of CPI)Contribution to July 2022's Inflation Rate
Alcohol, Tobacco, and Cannabis Products3.8%x4.63%0.2%

Contribution to This Month's Inflation Rate

Food (1.5%)Shelter (2.1%)Household (0.7%)Clothing (0.1%)Transport (2.4%)Health (0.2%)Recreation (0.6%)Alcohol (0.2%)
  • Food
  • Shelter
  • Household
  • Clothing
  • Transport
  • Health
  • Recreation
  • Alcohol, Tobacco, and Cannabis Products

Food Inflation Rate Statistics (CPI)

Data for July 2022
Food CPI
Monthly Change
Annual Change (Inflation Rate)

Food Inflation Rate Statistics (CPI)

Historical Food Inflation Rates

January 20225.74%
February 20226.68%
March 20227.72%
April 20228.75%
May 20228.81%
June 20228.80%
July 20229.20%

Shelter Inflation Rate Statistics (CPI)

Data for July 2022
Shelter CPI
Monthly Change
Annual Change (Inflation Rate)

Shelter Inflation Rate Statistics (CPI)

Historical Shelter Inflation Rates

January 20226.20%
February 20226.59%
March 20226.80%
April 20227.43%
May 20227.45%
June 20227.07%
July 20226.97%

Household Inflation Rate Statistics (CPI)

Data for July 2022
Household CPI
Monthly Change
Annual Change (Inflation Rate)

Household Inflation Rate Statistics (CPI)

Historical Household Inflation Rates

January 20221.93%
February 20222.65%
March 20224.53%
April 20224.09%
May 20225.45%
June 20225.61%
July 20225.02%

A Guide to Inflation in Canada

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Inflation is a measure of how fast prices are rising. It's important to pay attention to inflation, because it can have a big impact on your standard of living.

Inflation affects you in two ways. First, it reduces the purchasing power of your money. This means that if prices are rising, your dollar will buy less and less over time. Second, inflation can lead to higher interest rates, which can impact your ability to borrow money or make investments.

In general, a low and stable inflation rate is good for the economy. It encourages spending and investment, which leads to economic growth. But too much inflation can be a bad thing. It can lead to uncertainty and higher interest rates, which can hurt borrowers and slow down the economy.

This page will take a look at inflation in Canada, how it's measured, and what it means for you.

What Is Inflation and How Is It Measured?

Inflation is the rate at which prices for goods and services rise. With inflation, you won't be able to buy the same amount of goods and services in the future as you did in the past with the same amount of money. This means that inflation reduces your purchasing power over time.

Inflation is usually measured as a 12-month percentage change in the Consumer Price Index (CPI). The CPI is a basket of common goods and services that Canadians purchase. It's created by Statistics Canada based on their Survey of Household Spending (SHS), and it includes goods and services such as food, shelter, clothing, transportation, and recreation.

The CPI is used to measure inflation because it shows how much Canadians are paying for a typical basket of goods and services. If the CPI increases, this means that prices that Canadians are paying are increasing. Data is collected across the country, however, this is proportional to the population of each region. For example, 40% of the CPI basket is from Ontario, while close to 40% of Canada’s population can be found in Ontario. This allows CPI to be representative of the average Canadian.

The change in the CPI over a 12-month period is the annual inflation rate. This is based on a rolling 12-month period, which means the 12-month period ending in the month that is being reported on. For example, the September 2022 inflation rate would be based on the change in the CPI from September 2021 to September 2022.

Can Past CPI Data Be Revised?

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A CPI revision is a change that is made to the Canadian Consumer Price Index (CPI) after it has been released. Revisions can be made for a number of reasons, such as errors in the data, changes in methodology, or updates to the CPI basket.

Statistics Canada does not revise past CPI data, unless there has been an error in the Canadian CPI. This follows the International Labour Organization (ILO) Resolution II - Resolution concerning consumer price indices, which says that retrospective revisions to the CPI should be avoided.

However, while past data can’t be revised, the calculation of future inflation data can. That’s because Canada’s CPI basket weightings are revised every year. This is to ensure that the CPI still tracks the consumption habits of Canadians accurately.

The Consumer Price Index

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by Canadian consumers for a basket of goods and services. The CPI measures price changes from month-to-month and year-to-year. It is designed to represent the spending patterns of a typical Canadian household, and it is used by governments, businesses, and individuals to make economic decisions.

Statistics Canada releases CPI data by province and territory, and even by city. This means that the CPI can also be used to compare changes in the cost of living in different areas. For example, the CPI can be used to compare the cost of living in Toronto with the cost of living in Vancouver.

The CPI is an index, which means that it is made up of various components, each of which has a specific weight. This weighting is updated annually based on the previous year's household expenditures, found through the Household Final Consumption Expenditure report. The more Canadians spend on a specific category, the more price changes in that category will affect Canadians. That’s why the CPI is weighted based on actual spending on specific categories.

The line chart below compares how Canada’s CPI basket weights have changed over time.

CPI Basket Weights (1968-Present)

CPI Basket Weights (1968-Present)

Household Operations10.0310.7610.5811.111.5512.6613.1412.9712.814.8914.5
Health and Personal Care4.214.354.64.524.734.954.934.7354.794.684.62
Recreation, Education, and Reading9.0410.3511.2511.9612.211.210.9610.8910.8910.249.49.29
Alcohol, Tobacco, and Cannabis Products5.914.53.544.133.072.912.792.862.633.214.84.63

The pie chart below shows the current CPI basket composition for 2022, based on 2021 expenditures.

Current CPI Basket Composition (2022)

Food (15.94%)Shelter (29.8%)Household Operations (14.5%)Clothing and Footwear (4.31%)Transportation (16.91%)Health (4.62%)Recreation (9.29%)Alcohol (4.63%)
  • Food
  • Shelter
  • Household Operations
  • Clothing and Footwear
  • Transportation
  • Health
  • Recreation
  • Alcohol, Tobacco, and Cannabis Products
CategoryCPI Basket Weights
Household Operations14.5%
Clothing and Footwear4.31%
Alcohol, Tobacco, and Cannabis Products4.63%

Are Services Becoming More Important Than Goods in Canada's CPI?

In recent years, services have become an increasingly important part of Canada's economy, as the Canadian economy becomes more service-oriented. The following chart and table compares the share of goods versus services as part of the CPI basket. As the table shows, services have become a larger share of the CPI basket over the past few decades. The share of services in the CPI basket peaked prior to 2020’s COVID-19 pandemic and subsequent lockdowns.

CPI Basket Weights (Goods vs. Services)

CPI Basket Weights (Goods vs. Services)


Over the past two decades, services have also been a greater source of inflation than goods in Canada. From 2002 to 2022, the 20-year change in the price index for goods was 42.5%. In comparison, the 20-year change in the price index for services was 62.7%. This means that the average annual inflation rate for goods over the past 20 years has been 1.79%, while the average annual inflation rate for services has been 2.46%.

From 2002 to 2022:

  • Annual Inflation Rate for Goods: 1.79%
  • Annual Inflation Rate for Services: 2.46%

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Recently, the COVID-19 pandemic has changed the make-up of Canada’s economy. Services are making up less of Canadians’ spending, which is reflected in a lower basket weighting. This shift in spending is likely due to a combination of factors, including changes in consumer behavior as a result of the pandemic, as well as temporary disruptions to the supply of certain goods and services. For example, travel services have been severely impacted by the pandemic, while there has been an increase in spending on groceries and other household items.

In a reversal of the past two decades, the inflation rate of goods over the past year is now almost double that of services. For June 2022, the annual inflation rate for goods was 11.2%, while the same 12-month period saw an annual inflation rate for services at just 5.2%.

From June 2021 to June 2022:

  • Inflation Rate for Goods: 11.2%
  • Inflation Rate for Services: 5.2%

Regional CPI Basket Weights

Prices used in Canada’s Consumer Price Index are collected across the country. Regional differences in prices can occur, but in aggregate, they provide a national picture of inflation. In order to ensure that the CPI is representative of prices paid by Canadians, the weight of prices of each province and territory is based roughly on population. For example, Ontario accounts for 40.46% of the CPI basket, while Ontario accounts for 38.8% of Canada's population.

The figure below shows the regional CPI basket weights by province and territory, and then compares it with the proportion of the country’s population in each province and territory.

CPI Basket Weights by Province/Territory

N & L 1.3%Nova Scotia 2.39%New Brunswick 1.91%Quebec 20.23%Ontario 40.46%Manitoba 3.18%Saskatchewan 2.84%Alberta 11.47%British Columbia 15.67%
  • Newfoundland and Labrador
  • Nova Scotia
  • New Brunswick
  • Quebec
  • Ontario
  • Manitoba
  • Saskatchewan
  • Alberta
  • British Columbia
CPI Basket Weights% of Canada’s PopulationDifference (CPI vs. Population)
Newfoundland and Labrador1.3%1.36%-0.06
Nova Scotia2.39%2.6%-0.21
New Brunswick1.91%2.07%-0.16
British Columbia15.67%13.66%2.01
Whitehorse, Yukon0.08%0.11%-0.03
Yellowknife, Northwest Territories0.08%0.12%-0.04
Iqaluit, Nunavut0.03%0.1%-0.07
Prince Edward Island0.37%0.43%-0.06

Source: Statistics Canada (Basket weights of the All-items Consumer Price Index by geography and Population estimates)

Most provinces and territories have a relatively lower CPI basket weighting compared to their population. The exception to this is Ontario and British Columbia, which have a larger CPI basket weighting than their proportion of Canada's population.

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How to Calculate Inflation Rate

To calculate the inflation rate, you need to know two things:

1. The price of a good or service in the current year
2. The price of the same good or service in the previous year

In general, the inflation rate for any good or service is calculated using the following inflation rate formula:

When calculating Canada’s inflation rate, you would use the CPI value in the current year with the CPI value in the previous year. As the inflation rate is usually stated as an annual rate, but based on monthly CPI data releases, you would use the same month between years. For example, the September 2022 inflation rate would be based on the September 2021 CPI value and the September 2022 CPI value.

Let’s calculate the inflation rate for June 2022. To do so, you would need to know the CPI values for June 2022 and June 2021. They can be found by using Statistics Canada’s Consumer Price Index Portal. You can also find updated CPI data on this page.

  • June 2021 CPI: 141.4
  • June 2022 CPI: 152.9

Using the inflation rate formula, plugging in the values would give you an inflation rate of 8.1%.

There are other ways to calculate inflation too. You might want to find the inflation rate for a specific good or service over a certain period of time. This might not be over a one-year time period. Instead, it might be over multiple years, or even just one month. The section below will take a look at other ways to calculate inflation.

What is Deflation?

Brrrr Acronym

When prices go down, it's called deflation. Deflation is bad for an economy, as it can lead to a downward spiral. For example, if prices keep on falling, people might want to wait to make purchases later rather than buying now. This can lead to less spending in the near term, which hurts businesses and can lead to layoffs.

A low level of inflation is a sign of a healthy economy. Central banks usually have an inflation rate target. The Bank of Canada has an inflation-control target of 2%, in between their target range of 1% to 3%. If inflation goes outside of this target, the Bank of Canada will conduct monetary policy, such as increasing or decreasing its policy interest rate, so that inflation returns within this target range within 2 years.

Calculating Inflation Rate with Prices

Brrrr Acronym

Gas prices have been a major inflation topic over recent years. According to Statistics Canada, the average price for a liter of gasoline in Canada in June 2021 was $1.33. In June 2022, the average price is now $2.07 per liter. What would be Canada’s gasoline inflation rate?

To calculate the inflation rate, you would subtract the 2022 price from the 2021 price ($2.07 - $1.33 = $0.74) and then divide by the 2021 price ($0.74/$1.33 = 0.5564). The answer would be expressed as a percentage, so you would multiply by 100 to get 55.6%. This means that the price of gasoline increased by 55.6% from June 2021 to June 2022!

Month-to-month inflation can also be calculated. For example, the average retail price for a kilogram of apples in Canada was $5.58 in May 2022 and $5.69 in June 2022. Using the same inflation rate formula:

1. $5.69 - $5.58 = $0.11 increase
2. ($0.11 / $5.58) x 100 = 1.97%

The monthly inflation rate for apples in Canada was 1.97% in June 2022. In comparison, the price of a dozen eggs fell from $4.24 in May 2022 to $4.19 in June 2022. Prices don't always go up from month-to-month, which means that negative price changes are more likely to be seen when looking at the monthly inflation rate for certain items. This usually includes food and energy prices.

What is Core CPI?

Brrrr Acronym

Food and energy prices are volatile, with prices also being influenced by seasonality, and this can affect the overall CPI. That’s why the core CPI is often used to look at the long-run trend that inflation is heading. The core CPI excludes food and energy prices, to measure core inflation.

Calculating Inflation Rate Using a Base Year

In Canada, the CPI is referenced with 2002 as the base year. This means that the CPI value for 2002 is equal to 100. When calculating inflation, you might want to select your own base year. Let’s take a look to see how that is done.

Let's say that you want to use January 2020 as the base year to calculate the inflation rate of oranges between January 2021 and January 2022. The average retail prices for a kilogram of oranges in Canada is as follows:

  • January 2020: $3.52
  • January 2021: $3.69
  • January 2022: $4.17

Next, you will need to set January 2020 as the base year, and then adjust the other values to account for this index. This is done by dividing the other values by the base year price.

  • January 2020: ($3.52/$3.52) x 100 = 100
  • January 2021: ($3.69/$3.52) x 100 = 104.83
  • January 2022: ($4.17/$3.52) x 100 = 118.47
  • Now that we have the price index values, calculating the inflation rate is the same steps as above. For the January 2022 inflation rate, compared to January 2021’s prices:

    1. 118.47 - 104.83 = 13.64 increase
    2. (13.64 / 104.83) x 100 = 13.01%

    The annual inflation rate of oranges in January 2022 was 13.01%.

    Why Use a Reference Base Period?

    A reference base period is used to easily compare CPI of different categories over a certain period of time. It’s easier to compare than looking at average prices on its own. From the example above, we can easily see that the price of oranges in January 2022 is 18.47% higher than the prices in the January 2020 base period. This can then be quickly compared with other categories with the same base period.

    Brrrr Acronym

    How Does Inflation Impact You?

    What does inflation mean for you and your money? When it comes to your personal finances, inflation can have both positive and negative impacts. Traditionally, the winners of inflation are borrowers and debtors, while the lowers are savers. That's because if you have money saved up, inflation will decrease the purchasing power of that money over time. When prices go up due to inflation, your money will be worth less and less. On the other hand, if you have a lot of debt, inflation can actually help you out because it will decrease the real value of your debt to a certain extent.

    Winners and Losers of Inflation

    Borrowers (with a fixed interest rate)Borrowers (with a variable interest rate)
    Certain asset ownersFixed-income earners

    More specifically, inflation benefits borrowers that have a fixed interest rate. Borrowers with a variable interest rate, such as a variable mortgage rate, can be hurt by inflation as interest rates rise in response to high levels of inflation. Borrowers with a fixed interest rate won't see their cost of borrowing increase until their loan term is over, and so they benefit from their debt being worth less and less. Governments benefit in the short term by having the value of their debt eroded, while their tax revenue increases.

    Negative Real Interest Rates

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    Real interest rates take inflation into account, while nominal interest rate is the rate that you are paying. A simple way to calculate the real interest rate is subtracting the inflation rate by the nominal interest rate.

    Real Interest Rate = Nominal Interest Rate - Inflation Rate

    For example, if your line of credit interest rate is 5% and the current inflation rate is 8%, then your real interest rate is -3%. A negative real interest rate occurs when the inflation rate is higher than your stated interest rate. In other words, the value of your debt is decreasing!

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    Inflation can also impact your ability to save money. If you’re trying to save up for a big purchase, like a house or a car, inflation can make it harder to reach your goal because prices will be rising as you’re saving. For seniors and retirees on a fixed income, such as a pension, inflation can also be a problem because their income doesn’t increase to keep up with the rising prices. The high cost of living in Canada doesn’t help with affordability.

    Savers will need to earn an interest rate or return that matches or exceeds the inflation rate in order to not lose money to inflation. That can be difficult for savers with low risk tolerances, as savings account interest rates and GIC rates are often far below the inflation rate. In order to beat inflation, savers and investors would need to move into equities and real estate, which has higher risk. While buying stocks is easy with various trading platforms in Canada, inflation can also have an impact on stock markets.

    Inflation Rates by Province and City

    Prices in Canada can vary dramatically from region to region. That's why CPI is calculated for provinces and cities across the country. This section will take a look at inflation rates by province and territory, as well as a few major Canadian cities.

    Current Inflation Rates Across Canada

    ProvinceInflation RateProvinceInflation Rate
    British Columbia7.88%Nova Scotia9.29%
    Quebec7.99%New Brunswick9.12%
    Manitoba9.44%Newfoundland and Labrador8.17%
    CityInflation RateCityInflation Rate
    Calgary9.56%Saint John9.00%
    Edmonton8.48%St. John’s7.46%
    Quebec City7.42%Yellowknife8.29%