Inflation for consumer goods and services increased last month, with prices rising by 2.4 per cent compared to a year ago, according to Statistics Canada.
The Consumer Price Index (CPI) increase for September was higher than the increase from August’s reading of 1.9 per cent.
Rising food prices contributed to the overall inflation spike, with consumers paying four per cent more for food purchased in stores last month compared to September 2024.
Fresh vegetables, beef, coffee, sugar and confectionary products like candy and chocolate saw especially higher prices, with low supply being one of the main factors, according to the agency.
Shelter costs also added to the headline reading with rent prices increasing 4.8 per cent nationally in September compared to a year prior, and that’s higher than August’s increase of of 4.5 per cent.
“Inflation inched higher (in September), and the culprits fuelling the uptick will surprise no one. Food and shelter continue to scamper ahead of headline inflation and scour Canadian budgets,” said personal finance expert Shannon Terrell at NerdWallet Canada in an emailed statement.
“The unrelenting pressure from must-pay non-negotiables amid a soft job market will leave more households struggling to afford the essentials.”
The latest numbers from Statistics Canada come as tariff policies imposed by countries like the United States and China are leading to higher costs for some businesses — which can lead to passing those costs onto consumers.
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In August, Metro said 20 per cent of its suppliers were raising prices as the direct result of tariffs.
Prime Minister Mark Carney is still working out a trade deal between Canada and the U.S. that aims to minimize or eliminate the negative impacts of President Donald Trump’s tariff policies.
Meanwhile, Canadians struggling with affordability are still facing higher prices for essentials like food and shelter.
Conservatives say the inflation data shows not enough is being done to address the cost of living.
“It has been seven months (since Carney took office) and Canadians’ only experience at the grocery store has been rising prices,” said the Conservative Party in an emailed statement on Tuesday.
“The latest CPI numbers showed that grocery prices have shot up four per cent year-over-year — double the Bank of Canada’s target of two per cent inflation.”
Falling prices for gasoline helped to cool down the overall inflation reading last month.
Core inflation, which strips away the volatility that energy products like gasoline brings to the full report, was measured at 2.8 per cent compared to last year.
The Bank of Canada uses this economic gauge on inflation, as well as those for wholesale prices, Gross Domestic Product, and data on Canada’s job market to determine whether or not to make changes to borrowing costs through monetary policy updates.
Some economists believe the central bank will still cut interest rates next week, even with Tuesday’s reported inflation spike.
“Inflation continues to run above the Bank of Canada’s two per cent target, but that was also true when the central bank cut the overnight rate in September,” said economist Abbey Xu at the Royal Bank of Canada in an emailed statement.
“Our base-case assumes one more reduction in the overnight rate next week in October.”
Another cut to borrowing rates could mean financial relief for some households, but other economists say consumers still need to stay vigilant to keep their costs manageable.
“Last month’s rate cut has proven to be anything but quick magic, as even modest relief on borrowing costs takes time to trickle into monthly budgets,” says Terrell.
“As housing and grocery bills continue to weigh down wallets, Canadians should concentrate on the controllables: strategic shopping, pruning subscriptions and prioritizing high-interest debt.”
The Bank of Canada will make its next interest rate announcement on Oct. 29.
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