The Consumer Price Index (CPI) rose 1.9% on a year-over-year basis in June, up from a 1.7% increase in May, reported Statistics Canada on Tuesday.
Headline inflation grew at a faster pace, as gasoline prices fell to a lesser extent in June (-13.4%) than in May (-15.5%). Additionally, faster price growth for some durable goods, such as passenger vehicles and furniture, put upward pressure on the CPI in June, said the federal agency.
Year over year, the CPI excluding energy (+2.7%) remained higher than the CPI in June, partly due to the removal of consumer carbon pricing in April. On a monthly basis, the CPI rose 0.1% in June. On a seasonally adjusted monthly basis, the CPI was up 0.2%, it said.
“While consumers continued to pay less at the pump on a year-over-year basis in June (-13.4%), the decline was smaller than in May (-15.5%). The smaller decline was a result of a larger month-over-month decrease in June 2024 (-3.1%) compared with June 2025 (-0.7%). Gasoline prices were nearly unchanged in June, as lower refining margins were offset by higher crude oil prices amid geopolitical conflicts,” said Statistics Canada.
“Prices for food purchased from stores rose 2.8% year over year in June following a 3.3% increase in May. The slower growth was largely a result of fresh vegetable prices, which declined 3.1% year over year in June following a 1.0% increase in May. This decline was the first since October 2021 and was driven by lower prices for onions (-10.3%) and cucumbers (-18.3%).
“Prices for clothing and footwear rose 2.0% year over year in June after increasing 0.5% in May. This acceleration was largely due to the women’s clothing index, which was unchanged in June following a 2.5% decline in May. Uncertainty surrounding international trade put upward pressure on prices for clothing and footwear in June, as the industry faced higher costs in the wake of tariffs.”
Douglas Porter, Chief Economist, BMO Capital Markets, said: “Today’s result gives the Bank of Canada almost nothing to justify a rate cut in July. If the solid employment report was the icing on the cake for that decision, this is the cherry on top. Simply put, underlying inflation remains stubbornly strong. We’ll need to see a material deceleration in core for a cut in even the September meeting to be in play, barring a steep deterioration in the economy (which can’t be ruled out with the ongoing tariff uncertainty).”
Andrew Hencic, Director & Senior Economist, TD Economics, said it was another month of the inflation data coming in as expected.
“Top line price growth continues to be restrained by weak readings for gasoline. Moreover, “geopolitical conflicts” were cited as propping up crude prices in June, a factor that faded mid-month and should provide some offset in July. Meanwhile, core inflation held up on an annual basis, with the monthly figures also pointing to healthy price growth. The groundwork for July to continue June’s story (weak top-line price growth and more core strength) looks to be set,” he said.
“Healthy core price growth, coupled with last week’s surprisingly robust employment gains now make a July cut from the Bank of Canada unlikely. However, renewed trade threats add to the uncertainty that has lingered over the economy since the start of the year. Looking forward, the course of trade negotiations and evidence of whether June’s healthy labour market report was a one-off, or the start of a new trend, will be crucial. Ultimately, we believe that absent a quick resolution on trade, the economic backdrop should give the BoC space to deliver more easing this year.”
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