‘Data for Business’ is an effort of the Langley Chamber, in partnership with the Canadian Chamber’s Business Data Lab, to bring our members reports, stats, and analysis on economic and business data to help inform business and investment decisions. Read our latest update below:

Canada’s inflation rate decelerated from 1.9% in June to 1.7% in July, largely driven by lower gasoline prices.  BC’s provincial inflation rate matched the Canadian average of 1.7%.   Excluding gasoline, the CPI rose 2.5% in July, still within the Bank of Canada’s target range.

Overall, recent price acceleration took a pause and there are some encouraging signs of price stability in light of the trade war. However, an increase in shelter, groceries, and durable goods will be something to watch as emerging price pressures.

Inflation Breakdown

• Gasoline prices were lower in July by 16% on an annual basis, and declined 0.7% on a monthly basis. Though prices have been stable over the past few months, the carbon tax removal continues to impact prices. Inflation (excluding indirect taxes) moderated to 2.2% in July.
• Shelter prices grew for the first time since early 2024, as rent and natural gas prices rose in July. With summer being a time when rents renew, prices could be adjusting to the market. Declining mortgage interest costs limited the impact on overall inflation.
• Goods inflation moderated in July, growing 0.3% annually. Goods product prices have been relatively muted, but durable goods has seen consecutive price growth, which could indicate retaliatory tariffs are feeding through to consumers.
• Services inflation continues to be running hot, though decelerated to 2.8% in July. We expect services inflation to take more time to converge to 2%, as slack builds in the labour market.

• Headline inflation saw some good progress when you remove the noise. It paused some underlying price pressures that were building, with the net share of the CPI basket growing above 2% now negative. Canada’s retaliatory tariffs are likely showing up in the data as goods inflation rebounds.
• The slightly positive inflation surprise swayed market participants to increase odds for a Bank of Canada interest rate cut in September, with pricing showing expectations for an October cut. If this trend continues, we can expect the Bank of Canada to cut interest rates at its September meeting, in line with its weak economic outlook presented in their latest MPR.

 Commentary:
“This is a positive inflation report on many fronts as price pressures ease for goods and services. Sticky core measures in July may put progress at risk, but if this momentum continues, we could see the Bank of Canada move rates lower in September. Time will tell if tariffs are feeding through consumer prices, but there are some upward trends on food and durable goods products that could tilt the scales as the effects of tariffs are realized.” 
- Andrew DiCapua, Senior Economist, Canadian Chamber of Commerce
 

More data:  See Statistics Canada >