Canada’s annual inflation rate eased to 1.9% in November, marking a continued slowdown in price growth as lower mortgage interest costs and cheaper travel tours drove the decline, Statistics Canada reported Tuesday.
The deceleration was felt across many sectors, with groceries, gasoline, and other goods and services seeing modest price changes compared to previous months. Despite the easing inflation, Canadians continue to face higher costs for essentials, particularly food, which remains well above historical averages.
Grocery prices rose 2.6% year-over-year in November, a slight decrease from the 2.7% growth recorded in October. While the slowing pace of growth is a positive sign, the cumulative impact on Canadian households remains significant, with grocery prices having risen 19.6% since November 2021.
Gasoline prices also played a role in November’s inflation picture, declining by 0.5% year-over-year. However, the drop was less pronounced than in previous months due to a base-year effect — a phenomenon where comparisons to the elevated gas prices of late 2022 reduce the scale of the current decline.
Excluding gasoline, Canada’s overall inflation rate would have risen slightly to 2.0% in November.
The latest inflation figures suggest that price pressures are gradually easing as the Bank of Canada’s aggressive interest rate hikes over the past year take effect. Lower mortgage interest costs, a direct consequence of the central bank’s rate decisions, have begun to trickle into the data, providing some relief to households grappling with housing affordability.
Travel tours also saw notable declines in November, contributing to the slower pace of inflation. Seasonal factors and reduced demand during the fall months likely played a role in driving down prices in the travel sector.
While the latest data offers some optimism, economists caution that the path to sustainable price stability remains uncertain. Key areas, such as food prices, remain elevated, and global economic conditions, including energy market volatility, could still pose risks to Canada’s inflation outlook in the coming months.
For consumers, the November figures signal a mixed message: while the cost of living is rising more slowly, the financial strain of cumulative price increases remains a pressing concern for many Canadian households.
As inflation approaches the Bank of Canada’s target range of 2%, policymakers and analysts will be closely monitoring trends to determine whether further monetary policy adjustments are necessary to sustain the downward trajectory.
