Canada June inflation falls to 2.8% as gas prices drop

Canada's annual inflation rate cooled more than expected in June, falling back below three per cent as a sharp drop in gasoline prices provided relief for consumers. Statistics Canada reported on Monday, July 20, 2026, that the Consumer Price Index rose 2.8 per cent year-over-year, down from a 29-month high of 3.2 per cent in May.

The decline was driven primarily by a significant retreat in gasoline costs. The price of gasoline at the pump fell by over 10 per cent in June compared to May. On an annual basis, gasoline prices rose 20.5 per cent in June, a notable deceleration from the 33.2 per cent increase recorded in May. Officials attributed the monthly drop to a tentative peace agreement between the United States and Iran in June, which eased global oil prices after a spring surge fueled by Middle East conflict. However, they noted that renewed hostilities have since pushed pump prices higher again in recent weeks.

Excluding gasoline, the annual inflation rate held steady at 2.2 per cent from May to June, indicating broader price pressures remained contained. On a monthly basis, the overall CPI declined by 0.4 per cent in June, the largest drop since December 2024.