Are the Carney Liberals baking Canada's inflation numbers?
Statistics Canada reported that Canada’s annual inflation rate rose to 2.4 per cent in September 2025, up from 1.9 per cent in August. Core inflation measures excluding gasoline were about 2.6 per cent, while shelter costs increased 2.6 per cent and groceries rose 4.0 per cent, according to the agency’s latest CPI release.
While Canada’s official inflation rate is 2.4 per cent, many essential household expenses are rising at 6–10 per cent annually: rent (8–9 per cent, up to 11 per cent in major cities), auto insurance (6–8 per cent, higher in Ontario and Alberta), meat products (6–9 per cent, with beef and pork leading), fish and seafood (6–8.5 per cent), new passenger vehicles (6–7 per cent amid tariffs and supply issues), and travel tours (6–7 per cent).
Other household expenses have also surged well above 10 per cent year-over-year: hotel accommodations (+16.1 per cent nationally, up to 30.9 per cent in Newfoundland and Labrador), travel tours (+18.8 per cent in February), air transportation (regional peaks of 10–14 per cent), restaurant meals (10–11 per cent in urban areas like Toronto), and cigarettes and tobacco products (~13 per cent due to excise tax hikes).
The Bank of Canada says inflation is “around 2 per cent,” with underlying momentum “about 2½ per cent,” consistent with its target range. But despite official data showing price growth moderating, many Canadians say day-to-day costs are rising faster.
Some independent analysts using older fixed-basket methods — which exclude quality adjustments and substitution — estimate broad inflation pressures could feel closer to 6–10 per cent for households heavily weighted toward rent, food, utilities and transportation.
According to the International Monetary Fund, inflation in the 6–10 per cent range “erodes purchasing power rapidly,” disproportionately affecting low-income households and retirees, and can weaken economic stability by reducing real wages and distorting investment decisions.
The disconnect between official inflation figures and household experience isn’t unique to Canada. StatCan notes that individual inflation varies based on spending patterns, and its personal inflation calculator shows some Canadians face higher-than-headline price pressure depending on where they live and what they buy.
With food banks reporting record demand and rents rising fastest in major urban centres, cost-of-living anxiety remains high even as headline inflation returns to the Bank of Canada’s target.