Canadian CPI remains unchanged at 2.2% in November
Canada’s latest inflation report shows consumer prices stayed stable in November, coming in at an annual growth rate of 2.2% – unchanged from October. On a monthly basis, the measure increased by 0.1%.
That’s largely good news for cash-strapped shoppers – but price relief is largely uneven, with wallets being further squeezed at the grocery store.
According to Statistics Canada, the Consumer Price Index (CPI) was pulled down by slowing rent prices, travel tours, as well as various service costs, which rose at a slower pace. Upward pressure, meanwhile, came from a smaller year-over-year decrease in gas prices (at -7.8% compared to -9.4% last month), and a sharp uptick in food costs.
The report shows that prices for food bought in stores rose by 4.7% year over year, above the 3.4% growth recorded in October, and well outpacing the headline number of 2.2%. That’s the largest increase seen since December 2023, and reflects how tariffs are impacting various supply chains – even if Canadian importers aren’t paying them directly. According to StatCan, fresh fruit (4.4%), prepared foods (6.6%), beef (17.7%) and coffee (27.8%) are the top contributors to price increases.
On a monthly basis, grocery prices rose 1.9% in November, the largest month-over-month increase since January 2023.
Shelter costs continue to fall, mortgage interest costs no longer a major contributor CPI basket
Shelter is one of the largest contributing factors to the overall Consumer Price Index basket, and both homeowners and renters were given a price break in November. The overall shelter index came in 2.3% year over year growth, down from 2.5% in October.
Rent prices rose at a rate of 4.7%, compared to 5.2% last month. However, it should be noted that mortgage interest costs (MIC) – the amount that homeowners pay monthly to service their mortgage loans – has now been removed as a main upward contributor to inflation. Interest rates have steadily decreased from the latter half of 2024, following nine cumulative rate cuts from the Bank of Canada. Mortgage interest costs for November came in at 3.2% – down from 2.9% in October – and well below their peak of 30% in late 2023.
A slight drop to core inflation – but the BoC won’t budge
While the overall CPI basket showed choppy progress, the underlying core measures of inflation – which smooth out the extremes in the data – showed overall price growth is trending lower. The CPI-Median, which measures the middle of the price growth range, dipped to 2.8% from 3% in October. Meanwhile the CPI-Trim – which removes the top and bottom extreme price swings – fell in kind.
That’s good news for the Bank of Canada, which keeps a close eye on inflation’s progress, and strives to maintain it within a 2% growth target. The central bank has been walking a fine line in the aftermath of Trump’s tariff regime, split between supporting the economy from the impact, while also keeping price growth stable. The Bank controls inflation via interest rates policy – when it’s running too hot, it hikes rates to dissuade excess spending. The opposite occurs when the economy is flagging – the Bank then lowers its benchmark borrowing rates to prop up spending and investment.
After bringing its rate from a peak of 5% in June 2024 to the current 2.25%, the Bank has strongly signalled it will be holding rates for the foreseeable future, as the current level is “about right” to support today’s economic conditions. This latest inflation report will further support their rate hold stance, as it shows the previously-made rate cuts are still working their way through the economy, and that prices are largely stabilizing. It’s widely anticipated that the Bank will hold its rate again in its next announcement on January 28, and likely throughout the remainder of 2026.
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Penelope Graham, Head of Content
Penelope has over a decade of experience covering real estate, mortgage, and personal finance topics and her commentary on the housing market is featured on both national and local media outlets.