Canada CPI Report: May 2026 — Inflation Climbs to 3.2%, Highest Since December 2023
Statistics Canada released the Consumer Price Index (CPI) report for May 2026 on June 22. Headline inflation jumped to 3.2% — up from 2.8% in April and above analyst expectations of 3.0% — driven by a third consecutive month of gasoline price surges tied to the Iran war closure of the Strait of Hormuz. Consumers are now paying the highest prices at the pump since June 2022.
Headline Overview
| Indicator | Apr 2026 | May 2026 | Change |
|---|
| Headline CPI (YoY) | 2.8% | 3.2% | +0.4pp 🔴 |
| CPI excl. Gasoline (YoY) | 2.0% | 2.2% | +0.2pp |
| MoM Change (NSA) | — | +1.0% | — |
| MoM Change (SA) | — | +0.5% | — |
Key takeaway: For the third straight month, the headline number is being distorted upward by energy. Excluding gasoline, the CPI rose at a faster pace year over year in May (+2.2%) compared with April (+2.0%) — meaning underlying inflation is also ticking up, albeit modestly. The 1.0% monthly jump was the largest since early 2025. Despite the headline surge, both BoC core measures averaged just 2.1% — signalling the energy shock has not yet infected broader price-setting.
Key Sector Inflation (Year-on-Year)
| Sector | Apr 2026 | May 2026 | Change (pp) |
|---|
| Gasoline | +28.6% | +33.2% | +4.6 🔴 |
| Transportation (overall) | — | +9.0% | — |
| Air Transportation | -1.7% | +7.4% | +9.1 🔴 |
| Travel Tours | -11.0% | +0.7% | +11.7 🔴 |
| Food (stores) | 3.5% | 4.3% | +0.8 🔴 |
| — Fresh Vegetables | +4.1% | +9.0% | +4.9 🔴 |
| — Fresh Fruit | -0.5% | +5.3% | +5.8 🔴 |
| — Tomatoes | — | +45.2% | — |
| Food (overall) | 3.5% | 3.8% | +0.3 🔴 |
| Shelter | 1.8% | 1.7% | -0.1 ⬇️ |
| — Rent | 3.6% | 3.5% | -0.1 ⬇️ |
| — Mortgage Interest Cost | -0.1% | -0.2% | -0.1 ⬇️ |
| — Homeowners' Replacement Cost | -2.7% | -2.5% | +0.2 |
| Computer Equipment & Software | -0.2% | +3.9% | +4.1 🔴 |
| Household Appliances | — | -5.7% | — |
| Health & Personal Care | 3.3% | 2.7% | -0.6 ⬇️ |
| Household Operations | 0.4% | -0.2% | -0.6 ⬇️ |
🔴 Gasoline prices rose at a faster pace in May (+33.2%) compared with April (+28.6%). Supply uncertainty stemming from the conflict in the Middle East, specifically the closure of the Strait of Hormuz, put upward pressure on gasoline prices for the third consecutive month. Consumers paid the highest prices for gasoline since June 2022.
🔴 Tomato prices rose 45.2% in May due to supply contractions in Mexico, stemming from poor weather and a reduction in planted acreage following the implementation of US tariffs. Fresh vegetables overall jumped 9.0% YoY — the fastest pace since August 2023 — with broccoli, cauliflower, and lettuce all contributing.
🔴 Prices for computer equipment, software and supplies rose 3.9% on a year-over-year basis in May following a 0.2% decline in April. Prices for Random Access Memory (RAM) and solid-state drives (SSDs), both key inputs in computers, have risen. Heightened demand from artificial intelligence data centres and limited production capacity have both contributed to the price increase. This is the first year-over-year increase in this category since 2020.
⬇️ Shelter prices rose 1.7% in May after increasing 1.8% in April. The homeowners' replacement cost index (-2.5%) declined on a year-over-year basis for the 13th consecutive month. Year-over-year price growth for rent slowed slightly in May (+3.5%) compared with April (+3.6%), marking the lowest rent inflation since January 2022.
Bank of Canada Core Measures
| Measure | Mar 2026 | Apr 2026 | May 2026 |
|---|
| CPI-Trim | 2.2% | 2.0% | 2.0% |
| CPI-Median | 2.3% | 2.1% | 2.1% |
| Average of Core | 2.25% | 2.05% | 2.05% |
The Bank of Canada's preferred core inflation metrics (median and trim) averaged 2.1% in May, unchanged from April. This is the key reassurance for the BoC: despite the headline shock, underlying inflation is sitting right at target. However, both measures have risen above 2% on a three-month annualized basis, which warrants watching.
CPI Basket Update — New 2025 Weights
The basket of goods and services used in the calculation of the CPI has been updated with the release of the May 2026 data. The new basket weight reference period is 2025, based on the most recent household final consumption expenditure data, as well as expenditures from the Survey of Household Spending and other alternative data. The headline CPI for May 2026 would have been the same using the 2024 basket weights.
This is a routine update that happens periodically to reflect how Canadians actually spend their money. The 2025 basket better reflects the growing share of spending on technology, services, and housing relative to goods.
Provincial Highlights
Prices rose at a faster pace in all provinces in May compared with April. The main driver in the acceleration for all provinces was gasoline, which has a larger impact in Atlantic Canada due to higher expenditure shares. Quebec saw the smallest acceleration, ticking from 2.9% to 3.1%.
The Iran War Oil Shock — Running Tally
| Month | Gasoline YoY | Headline CPI |
|---|
| Feb 2026 (pre-conflict) | -14.2% | 1.8% |
| Mar 2026 | +5.9% | 2.4% |
| Apr 2026 | +28.6% | 2.8% |
| May 2026 | +33.2% | 3.2% |
Oil prices are down significantly since a tentative peace deal between Iran and the U.S. was reached, and gasoline prices have been following suit. TD Economics expects May to mark the peak for headline inflation this year. If the tentative peace holds, June and July data should show headline relief.
Context & Outlook
May is likely the peak for headline inflation in this cycle. A tentative Iran-U.S. peace deal has already pushed crude prices down meaningfully, and gasoline pump prices have begun to follow.
Apart from energy costs and some emerging tech price pressures, inflation remains very well behaved in Canada — services inflation held at just 2.0% YoY.
AI-driven tech inflation is a new and notable emerging trend: RAM, SSDs, and computer components are rising for the first time since 2020 due to data centre demand.
Grocery bills remain a persistent pain point: food from stores has outpaced headline inflation for 16 consecutive months.
The next CPI release is Monday, July 20 (June data).
Source: Statistics Canada, The Daily — Consumer Price Index, May 2026 (released June 22, 2026)
