Inflation Ticked Up to 3.1%, but Core Measures Eased: What That Means Before 28 October

What Statistics Canada reported

Canada’s consumer price index rose 3.1% year over year in September, following a 3.0% increase in August, according to Statistics Canada’s release of 19 October.

The agency attributes the acceleration to gasoline, which was up 27.8% from a year earlier in September compared with 22.8% in August. Fuel oil and other fuels rose 57.8%. Statistics Canada notes that crude oil prices reached their highest level since May amid uncertainty about the wars in the Middle East.

Strip gasoline out and the picture is calmer. Statistics Canada reports that excluding gasoline, the index rose 2.2% in September, after 2.4% in August. On a month-over-month basis, prices rose 0.1%, and 0.4% on a seasonally adjusted basis.

Groceries slowed to 1.7% from 2.8%, the smallest yearly increase since May 2024. Shelter rose 1.8% from 1.5%, with the agency pointing to higher home and mortgage insurance (up 4.9%) and maintenance and repairs (up 1.2%).

The core measures went the other way

According to Bloomberg, as carried by Canadian Mortgage Trends, inflation excluding food and energy held at 2.1%, while the Bank of Canada’s median and trim measures edged down to 1.9% and 1.8%. Economists surveyed by Bloomberg had expected the headline figure at 3.2% and the core measures unchanged.

The same report notes that the share of components in the index rising at 3% or more fell to 29.2% from 34.2% in August. In plain terms, the increase was concentrated in energy rather than spread across the basket.

What the Bank of Canada has said

The Bank’s next announcement is 28 October, and it comes with a Monetary Policy Report, according to the Bank’s published schedule. Its overnight target stands at 2.25%.

Canadian Mortgage Trends reports that traders in overnight swaps put the odds of an increase at nearly 70% before the inflation release, and that the smaller-than-expected reading is likely to give the Bank some relief. It also reports that Governor Tiff Macklem has warned that waiting too long to raise borrowing costs could force the Bank to move faster and higher later. At the same time, the report points to a weak labour market, with employment down 41,200 since December 2025.

Those are market odds and commentary, not a decision. The Bank is weighing energy-driven inflation against a softening economy, and reasonable forecasters disagree about the outcome.

What this means for a mortgage holder

Statistics Canada’s mortgage interest cost index fell 0.2% year over year in September, the same pace as August. That index reflects what existing borrowers are paying across the whole stock of mortgages, which is why it moves slowly. It does not show what a new term would cost today.

That gap is where renewals get surprising. A homeowner whose term was set several years ago is looking at a different market from the one their payment was built on, and the market can move again before their date arrives.

• Variable or adjustable terms follow the Bank’s decision fairly directly, usually on the next payment or at the lender’s next adjustment.
• Fixed terms follow bond markets more than the Bank’s announcement, so a decision can matter less than the days around it.
• Terms ending soon are where timing matters, because offers are usually available well ahead of the date.

What to do before 28 October

Start from your own numbers rather than the headline. Check when your term ends, what payment you could carry if borrowing costs were higher, and whether you would rather have certainty or flexibility. Our calculators use the Canadian semi-annual method for fixed terms, and Rate Tracker Pro watches the market on your behalf.

If your term ends within about four months, our renewal page explains the timeline and what changes if you stay with your lender or move. A mixed inflation reading does not make waiting safer; it just makes the outcome less predictable. Illustrative only and subject to lender approval and final terms.