Canada’s annual inflation rate accelerated to 3.2% in May, up from 2.8% in April, driven largely by higher gasoline prices and rising costs for food, travel, and transportation.

This is according to the latest report released by Statistics Canada on Monday.

While gasoline remained the biggest contributor to the rise in headline inflation, the CPI excluding gasoline also grew faster at 2.2%, compared with 2.0% in April.

On a monthly basis, the CPI rose 1.0% in May, while seasonally adjusted figures showed a 0.5% increase, mainly due to higher costs in transportation, recreation, education, and reading.

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What the data is saying

Gasoline prices continued to push inflation higher, rising 33.2% year-on-year in May compared with a 28.6% increase in April.

  • Statistics Canada said supply uncertainty linked to the Middle East conflict and the closure of the Strait of Hormuz contributed to higher fuel prices for the third consecutive month.
  • Consumers paid the highest gasoline prices since June 2022, when supply concerns intensified following Russia’s invasion of Ukraine.
  • Air transportation prices increased 7.4% year-on-year in May after declining 1.7% in April, reflecting higher airline operating costs, particularly jet fuel expenses.
  • Travel tour prices also returned to positive territory, rising 0.7% compared with an 11.0% decline recorded in April.

The continued increase in transportation-related costs added significant upward pressure to overall consumer prices.

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Food prices also contributed to the acceleration in inflation, particularly fresh produce.

  • Fresh fruit prices rose 5.3% year-on-year in May, reversing a 0.5% decline recorded in April.
  • Fresh vegetable prices increased 9.0% year-on-year, up from 4.1% in April, driven by higher prices for broccoli, cauliflower, tomatoes, and lettuce.
  • Tomato prices surged 45.2% due to supply shortages in Mexico caused by poor weather conditions and reduced planting acreage following the implementation of US tariffs.
  • On a monthly basis, fresh vegetable prices rose 5.5%, marking the largest May increase since 2008.

As a result, inflation for food purchased from stores rose 4.3% year-on-year in May, marking the 16th consecutive month it has exceeded headline inflation.

  • Shelter inflation continued to ease, helping offset some of the upward pressure from energy and food prices.
  • Shelter prices increased 1.7% in May, slightly below the 1.8% growth recorded in April.
  • The homeowners’ replacement cost index declined 2.5% year-on-year, extending its downward trend for a 13th consecutive month.
  • Mortgage interest costs fell 0.2% compared with a 0.1% decline in April, marking the 33rd straight month of decelerating price growth.
  • Rent inflation slowed to 3.5%, the lowest level recorded since January 2022.

Meanwhile, durable goods inflation remained unchanged at 1.9%. Prices for computer equipment, software, and supplies increased 3.9% amid rising demand from artificial intelligence data centres and limited production capacity for key components such as RAM and solid-state drives. However, price growth slowed for household tools, passenger vehicles, and household appliances.

What you should know

The latest inflation figures come amid renewed global commodity price pressures linked to geopolitical developments in the Middle East and disruptions to global energy supply chains.

The average annual food inflation rate for the 12 months ending May 2026 was 16.99%, down by 16.22 percentage points from 33.21% recorded a year earlier.