Question Period Note: CONSUMER PRICE INDEX – April 2026

• Total consumer price index (CPI) inflation increased to 2.8% (year over year) in April from 2.4% in March, below market expectations of 3.1%.
• Despite the continued rise in energy prices, headline inflation has remained within the Bank of Canada’s target range for 28 consecutive months.

• Inflation everywhere, including in Canada, has gone up because of the surge in energy prices caused by the conflict in the Middle East.
• We all agree that we don’t want to see higher energy costs broaden into persistent inflation.
• Even with this increase, inflation has remained within the Bank of Canada’s 1 to 3 per cent target range for 28 consecutive months.
• Measures of underlying inflation remain close to 2 per cent.
• There has been also constructive progress for key everyday essentials with both grocery and rent inflation easing in April.
• These external pressures—largely beyond our control—are adding to affordability challenges for Canadians.
• That is why the government recently announced a suspension of the federal fuel excise tax on gas and diesel until September 7th, which has provided some immediate relief at the pump.
• This action builds on a broader range of affordability measures aimed at supporting Canadians. These include the new Canada Groceries and Essentials Benefit, the removal of the consumer carbon price, targeted support for first-time homebuyers, and initiatives to boost housing supply, such as through Build Canada Homes and a $1.7 billion-payment to provinces and territories to accelerate construction.

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• Bottom Line: Higher oil prices passed through quickly to gasoline and fuel oil prices, leading headline inflation to increase by 2.8% in April. Other components mostly continued to ease, indicating that inflation pressures outside energy remain relatively contained. Excluding energy prices, inflation moderated from 2.3% to 1.8% in April. Core measures eased to 2.1% year-over-year in April from 2.3% in March, while the three-month annualized rate remained below 2%.
• Energy: Energy prices rose 19.2%, compared to +3.9% in March, driven by stronger gasoline prices (+9% month-over-month) and to a lesser extent fuel oil prices (+2.7% month-over-month). The increase reflected higher crude oil prices (with WTI oil prices up 8.5% month-over-month) and the unwinding of temporary downward effects from last year’s removal of the consumer carbon price (which added roughly 0.5 percentage points to headline inflation).
o The temporary suspension of the federal fuel excise tax on gasoline provided some offsetting downward pressure and is estimated to have lowered headline inflation by 0.1 percentage points in April. Given the measure was introduced on April 20th, the impact is expected to increase to 0.2 p.p. starting in May.
• Food from stores: Grocery inflation eased to 3.8% in April, the lowest year-over-year growth in the last 6 months (March 2026 was 4.4%). The moderation was broad-based, with growth in all components easing except for volatile fruits. Categories previously affected by global supply disruptions continued easing (i.e. beef, coffee, and confectionary), as well as vegetables prices. Given the lag between changes in food input costs and consumer food prices (i.e. about 6-9 months), it is still too early to see the signs of higher energy and fertilizer costs on consumer food prices.
• Shelter (excluding energy): Shelter inflation moderated to 1.4% in April from 1.7% in March, reflecting continued easing in mortgage interest costs (from 0.3% to -0.1%) and rent inflation (from 4.2% to 3.6%). Average asking rent in Canada continued declining in April, falling 4.7% (y/y), signaling further moderation ahead in consumer rent inflation.
• Services excluding shelter: Inflation for services excluding shelter moderated to 1.8% in April owing to a large decline in travel tours (-11% year over year), a typically volatile component. Airfare declined 1.7% year over year. Airfare enters Canadian CPI based on the departure date rather than the ticket purchase date. This helps explain the divergence with U.S. airfare inflation in April (+21.7% in the U.S.), where U.S. airfares are recorded at the time of purchase. Given this lag, the impact of higher jet fuel on Canadian airfares is expected to become more evident over the summer months.
• Goods excluding food and energy: Inflation for goods excluding food and energy increased to 1.6% in April from 0.8% in March owing to higher prices in clothing and footwear.
• Preferred measures of core inflation: The average of preferred core inflation metrics eased to 2.1% in April from 2.3% in March. The three-month annualized rate picked up slightly to 1.8% but has remained below 2% since December. The share of components growing above 3% eased to 38%, still higher than its historical average, largely due to high inflation across many food categories.
• Looking ahead: Elevated oil prices are expected to continue putting upward pressure on headline inflation in the near term. Headline inflation is now expected to remain close or slightly above the upper-bound of the Bank of Canada target range (3%) through the summer, before easing gradually if oil prices come down as expected by futures.