Inflation Statistics in Canada

Inflation, which refers to the rate prices of general goods and services in an economy increase, is an important economic indicator. The rate of inflation can affect people’s everyday lives because when inflation is high, it generally leads to a higher cost of living.

In this article, we explore the inflation rates in Canada as well as what causes higher inflation rates and how it affects the people in Canada. We have also included information on strategies the Canadian Government and the Bank of Canada use to try to manage and control the changes in inflation rates.

Inflation Statistics for Canadians

• Inflation rate in Canada was close to 2% in late 2024 and remained near that into 2025.
• CPI growth moderated by 2024.
• Energy prices stabilised in 2024.
• Food prices in Canada continued to rise in 2024, but at a slower pace.
• Cost of shelter remained one of the largest contributors to inflation in 2024–2025.
• Prices of durable goods levelled off in 2024 and 2025.
• Service prices remained high in 2024.
• The rate of inflation has been easing since late 2022 and stabilised through 2024–2025.
• Globally, Switzerland and Japan continued to record some of the lowest inflation rates in 2024–2025.

What is Inflation?

The term inflation refers to the rate prices of goods and services rise within an economy. High inflation means a higher cost of living as the currency buys fewer goods and services than it did before.

Many factors contribute to inflation, which include a decreased supply of goods and services, increased demand for goods and services, higher production costs, actions by the central bank, and changes in government policies. When inflation is high, it can lead to economic instability and prices spiralling out of control. A moderate rate of inflation is considered a sign of a healthy economy.

Inflation Rate in Canada

In November 2025, the rate of inflation in Canada was 2.2%, up from earlier in the year but still within the Bank of Canada’s target range of 1% to 3%. This is higher than the 1.8% recorded in December 2024 but considerably lower than in December 2022, when it was 6.3% during the peak of recent inflationary changes.

What is the Consumer Price Index?

The Consumer Price Index (CPI) is used to measure the average change in the prices paid by consumers for a basket of services and goods. It is a way to track how much the cost of living is changing for a typical household.

It is calculated by measuring the changes in the price of a range of commonly purchased goods and services such as clothing, food, housing, transportation, education, and healthcare. The CPI is used by policymakers, economists, and businesses to gauge economic health and inflation. It can also be used to adjust benefits and income for inflation.

The CPI in Canada

According to Statistics Canada, the CPI rose 6.8% in Canada in 2022, following a 3.4% and 0.7% rise in 2021 and 2020 respectively. The increase in 2022 was the largest increase since 1982 when the CPI rose by 10.9%. The CPI rose again in **2023, this time by 5%, showing more moderate growth, and slowed further in 2024 to 3.4%. By 2025, annual CPI growth had eased to around 2.2%, reflecting a return closer to long-term inflation targets.

Canadians have felt the impact of the rising CPI as the prices of basic goods and services have gone up, including transportation at 10.6%, food at 8.9%, and shelter at 6.9%. The annual average for goods was up 8.7% in 2022. Food purchased from stores was up 9.8% and gasoline was up 28.5%.

Prices for services increased on average by 5% in 2022. Costs associated with shelter rose, too. Replacement costs rose 9.5% and other accommodation expenses for homeowners rose 10%.

Year-on-year price growth accelerated every month in the first half of 2022 and reached a record high in June at 8.1%. However, it slowed down in the second half of 2022 and continued to decelerate through 2023, 2024, and into 2025.

Energy Prices in Canada

Energy prices were up 22.5% in Canada according to Statistics Canada and this made the biggest contribution to the annual average inflation in 2022. Prices rose because of Russia’s invasion of Ukraine as well as the higher demand that followed the lifting of COVID-19 restrictions. In 2023 and 2024, energy price growth slowed significantly, and by 2025, energy prices were broadly stable.

Fuel oil and other fuel prices rose by 59.6% based on annual averages and the price of gasoline went up by 28.5% in 2022. By 2024–2025, fuel oil and gasoline prices had fallen from their 2022 peaks, with annual changes fluctuating between small increases and declines. 

Food Prices in Canada

The cost of food purchased from stores went up by 9.8% in 2022, following a 2.2% increase in 2021. Food prices continued to rise in 2023 and 2024, but at a slower rate, and by 2025, annual food price inflation had eased further, but still remaining elevated compared to pre-pandemic levels. 

The prices of cereal products rose by 13.6%, bakery products by 11.5%, fresh fruit by 10.4%, food preparations by 10.1%, processed meat by 9.6%, dairy products by 8.6%, and fresh vegetables by 8.3% in 2022. By 2024–2025, price growth in these categories had moderated, with some items experiencing smaller increases and occasional declines.

Multiple factors led to higher food prices, including supply chain disruptions, higher input costs, extreme weather, and Russia’s invasion of Ukraine. The war in Ukraine has had an especially big impact on the prices of wheat with both countries being among the top ten wheat producers in the world.

Cost of Shelter in Canada

The cost of shelter rose 6.9% in 2022, driven by higher replacement costs at 9.5%, which relates to the price of new homes. Other accommodation expenses, including commission on sales of real estate, rose by 10%. The Mortgage Interest Cost Index in Canada rose by 2.6% in 2022. In 2023 and 2024, shelter inflation remained high, largely driven by higher interest rates. By 2025 the Mortgage Interest Cost Index continued to be one of the largest reasons behind overall inflation.

Nationally, the prices for rental accommodation increased by 4.6% in 2022, after a rise of 1.6% in 2021. Rental prices continued to rise sharply in 2023 and 2024, and remained high in 2025, reflecting population growth, low vacancy rates, and continuous demand in major urban centres.

Cost of Durable Goods in Canada

The cost of durable goods such as cars, furniture, and household appliances has remained high in Canada. In 2022, the average price of durable goods increased by 6.2%. The cost of furniture was up by 11.6%, the cost of household appliances by 9%, and passenger vehicles by 7.2%. In 2023 and 2024, price growth for durable goods slowed down, and by 2025 average prices had largely stabilised.

Cost of Services in Canada

The prices for services rose by 5% in 2022 following the reopening of the economy. Prices for accommodation for travellers increased by 29.3% in 2022, compared to 2.2% in 2021. Increases were the highest in Ontario at 42.7% and Nova Scotia at 34.6%. Food prices in restaurants rose on average by 6.7%.

In 2023, service price inflation slowed to around 4%, and by 2024–2025 growth had moderated further, with annual increases closer to 3%. Prices for traveller accommodation remained high but rose at a slower pace, while restaurant food prices continued to increase at a more moderate pace of around 4%r.

Inflation in Canadian Provinces

The inflation rates across Canadian provinces reflected changes in the national rate during 2024 and early 2025. According to the latest available provincial CPI data, inflation eased across most provinces: by early 2025, annual inflation rates in all provinces were generally within the 2% to 3% range, reflecting cooling price growth compared to the peaks of 2022 and early 2023.

Manitoba continued to show one of the larger declines, with inflation falling to around 2.5% in early 2025. Alberta also experienced a considerable slowdown, with inflation falling to roughly 2.3%, supported by lower energy prices. Other provinces, including Ontario and British Columbia, recorded similar changes, broadly in line with the national inflation trend.

Why Has the Rate of Inflation Been High in Canada?

There are a range of reasons why inflation in Canada has been high in recent times.

• Disruptions to supply chains following the COVID-19 pandemic have led to shortages of raw materials as well as higher production costs for companies.
• Demand has increased following the easing of restrictions and reopening of the economy. The increased demand has been especially high for services and goods that were restricted during the pandemic lockdowns.
• Many industries face labour shortages, which has led to increases in wages as employers try to compete for workers.
• Monetary and fiscal policies implemented by the Canadian government and the Bank of Canada. These have led to increased money supply and lower interest rates, which can contribute to higher rates of inflation.

What is the Bank of Canada Doing About Inflation?

The Bank of Canada (BoC) has implemented a monetary policy to target the overnight interest rate and support economic recovery. It may also raise interest rates if inflationary pressures continue.

The BoC regularly updates its forecasts for the economy, which it uses to inform monetary policies. If the forecast indicates that inflation is most likely to remain high, the bank may adjust its policy. The BoC will also promote financial stability by monitoring risks in the financial system and taking actions to mitigate them when necessary.

What is the Government of Canada Doing About Inflation?

Similarly to the BoC, there are several things the Government of Canada can do to try to manage inflation. The government can implement fiscal policies, such as support measures during COVID-19, to support individuals and businesses. Often these measures are used to stimulate economic activity. However, they can lead to an increased money supply, which may result in higher inflation.

The government can take measures to manage the supply chains, for example by diversifying them, investing in domestic production, and improving the transportation infrastructure. They can also implement regulations to cap fees, for example, what food delivery companies can charge, to keep prices more affordable for consumers.

Since the state of the world economy will have an impact on Canada’s economy and inflation rate, the government works with other countries to coordinate global responses to economic challenges and inflation.

Which Country Has the Lowest Inflation?

Based on the latest available inflation data from early 2025, Switzerland has one of the lowest inflation rates in the world, with inflation at around 1.3%. Japan’s inflation rate was approximately 2.0%, while inflation in the euro area was around 2.8%.

Which Countries Have the Highest Inflation?

According to data from the International Monetary Fund, countries with the highest inflation rates include Venezuela, Argentina, and Sudan. In Venezuela, the estimated rate of inflation was over 190% in 2024, driven by prolonged economic instability, currency depreciation, and weak domestic production.

In Argentina, inflation reached around 210% in 2024, largely due to chronic fiscal imbalances, rapid peso devaluation, and rising food and energy costs. In Sudan, inflation has remained extremely high at well over 150%, caused by ongoing political instability, armed conflict, and severe disruptions to food and fuel supply chains.

Conclusion

Inflation has been high in Canada in recent years, especially following the COVID-19 pandemic. The cost of goods and services has been driven higher by a range of factors including disruptions to supply chains, extreme weather, and the on-going war in Ukraine.

The rate of inflation in Canada fell significantly after it peaked in 2022 and by late 2024 and into 2025 inflation stabilised. While inflationary pressures have eased, higher costs for essentials such as food, housing, and energy mean that many Canadians continue to feel the impact of the inflation, and it is likely to still take time before lower inflation is reflected in everyday prices.