The Consumer Price Index (CPI) rose 1.9% on a year-over-year basis in August, up from a 1.7% increase in July, according to a Statistics Canada report released on Tuesday.
Gasoline prices fell to a lesser extent year over year in August (-12.7%) than in July (-16.1%), leading to faster growth in headline inflation. Excluding gasoline, the CPI rose 2.4% in August, after increasing 2.5% in each of the previous three months. Moderating the acceleration in the all-items CPI were lower prices for travel tours and fresh fruit compared with July, said the federal agency.
The CPI decreased 0.1% month over month in August. On a seasonally adjusted monthly basis, the CPI was up 0.2%.
Gasoline prices continue to fall
“On a yearly basis, prices for gasoline fell 12.7% in August, compared with a 16.1% decline in July. The smaller year-over-year decrease was partially a result of a base-year effect. In August 2024, prices declined 2.6% month over month, as concerns about slower economic growth began to emerge. In August 2025, prices rose 1.4% on a monthly basis due in part to higher refining margins, offsetting lower crude oil costs,” explained Statistics Canada.
“In August, prices for meat rose 7.2% year over year, following a 4.7% increase in July. Higher prices for fresh or frozen beef (+12.7%) and processed meat (+5.3%) put upward pressure on the index in August. Growth in prices for ground beef and multiple processed meat categories contributed the most to the upward movement.
Fresh fruit prices decline
“Year over year, prices for fresh fruit fell 1.1% in August, after increasing 3.9% in July. Price declines for grapes, other fresh fruit, and berries (including cherries) contributed the most to the yearly price decrease for fresh fruit in August.”
In August, prices for clothing and footwear rose 1.7% year over year compared with a 0.8% increase in July. The increase in August was mainly the result of a base-year effect as prices declined by 0.6% in August 2024. On a monthly basis, prices for clothing and footwear rose 0.3% in August, noted Statistics Canada.
Ksenia Bushmeneva, Economist, TD Bank, said: “Consumer spending has lost momentum. Inflation-adjusted consumption has been flat since December and growth is expected to remain sub-par through the middle of next year amid heightened economic uncertainty, a slowing labor market, higher inflation and other headwinds.
“Indeed, labor market conditions have weakened noticeably, as hiring slowed to a crawl and job gains have become concentrated in a handful of sectors.
“The full impact of tariffs on consumer prices is taking longer to materialize. However, tariff-driven inflation is still set to build, with core goods prices projected to rise and keeping core inflation slightly north of 3% through mid-2026.
“In addition, broader structural headwinds—including resurgent student loan burdens, tighter immigration policy, and a stagnant housing market—are further constraining consumer activity, reinforcing a cautious outlook through the first half of 2026.”
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