Overview
- Statistics Canada reported on Monday that annual inflation fell to 2.8% in June and the Consumer Price Index declined 0.4% from May, the largest monthly drop since December 2024.
- The monthly fall was driven by a more than 10% drop in gasoline prices at the pump which was the single biggest contributor to the headline slowdown.
- Core measures that strip out volatile items eased in June with CPI‑median at 1.9%, CPI‑trim at 1.8% and CPI excluding gasoline unchanged at 2.2%, signalling moderated underlying price pressures.
- Travel costs jumped sharply as World Cup demand pushed traveller accommodation prices about 20% higher in Ontario and British Columbia while grocery inflation remained elevated at roughly 3.9% year‑over‑year.
- Policy and household implications include reduced near‑term pressure on interest rates but continued risk from rising fuel costs after Middle East flare‑ups and persistent food and regional price gap that still squeeze family budgets.