Canada's inflation slows to 2.8% in June as gasoline prices ease, while World Cup drives up travel costs
Canada's Consumer Price Index rose 2.8% year over year in June 2026, decelerating from May's 3.2% gain due to slower growth in gasoline prices. The index fell 0.4% month over month, the largest monthly decline since December 2024. Meanwhile, travel-related costs surged amid World Cup hosting duties, and grocery inflation remained above the headline rate for the 17th consecutive month.
Canada's annual inflation rate cooled in June 2026, with the Consumer Price Index (CPI) rising 2.8% year over year, down from a 3.2% gain in May. On a month-over-month basis, the CPI fell 0.4%, marking the largest monthly decline since December 2024. The seasonally adjusted monthly CPI also dropped 0.1%, its first decline since April 2025.
The deceleration in the headline CPI was primarily driven by slower growth in gasoline prices. Gasoline increased 20.5% year over year in June, a significant pullback from the 33.2% increase recorded in May. Month over month, gasoline prices declined 10.2% as global oil prices eased following diplomatic talks and an interim ceasefire arrangement related to conflicts in the Middle East. Excluding gasoline, the CPI remained unchanged at 2.2% compared with May.
While energy costs moderated, travel-related expenses surged as Canada hosted World Cup matches. Prices for traveller accommodation rose 10.1% year over year in June, accelerating sharply from a 2.5% increase in May. Accommodation costs climbed significantly in host provinces, rising 19.4% in Ontario and 20.0% in British Columbia, particularly in the host cities of Toronto and Vancouver. Air transportation prices increased 9.6% year over year—the largest gain since February 2023—driven by higher jet fuel costs and greater demand for domestic travel. Consumers also paid 6.8% more for travel tours, up from a 0.7% increase in May, while the index for rental of passenger vehicles rose 6.8% year over year.
Grocery inflation slowed but continued to outpace overall price growth. Prices for food purchased from stores grew 3.9% year over year in June, decelerating from 4.3% in May. This marked the 17th consecutive month that grocery price inflation exceeded the all-items CPI. Within the grocery basket, bread, rolls and buns rose 6.0%, chicken increased 5.7%, frozen food preparations grew 2.7%, and fresh fruit edged up 1.7%, though lower prices for grapes contributed to a slowdown in the fresh fruit category.
In other categories, the purchase of passenger vehicles index increased 1.9% year over year, slowing from 2.5% in May. Internet access services fell 3.8% year over year, largely due to lower prices in Western Canada, reversing a 0.3% increase in May. In Quebec, cellular service prices rose 2.6% year over year following the end of promotional offers.
Provincially, Nova Scotia recorded the largest price gain at 4.7% year over year, mostly due to higher prices for traveller accommodation. Ontario saw the smallest provincial increase at 2.0%.