The latest inflation report from Statistics Canada shows that in October the Consumer Price Index (CPI) rose 3.1% on a year-over-year basis, down from a 3.8% gain in September.
The national statistical agency says that the largest contributors to the year-over-year CPI increase continued to be mortgage interest cost, food purchased from stores and rent.
The year-over-year deceleration was largely a result of lower prices for gasoline (-7.8%) in October. Excluding gasoline, the CPI rose 3.6% in October, following a 3.7% increase in September.
While prices for goods (+1.6%) decelerated, led by lower prices at the pump, prices for services (+4.6%) rose at a faster pace in October, largely driven by higher prices for travel tours, rent and property taxes and other special charges.
On a year-over-year basis, consumers paid 7.8% less for gasoline in October after a 7.5% increase in September. The decline in October was partly driven by a base-year effect, as prices increased 9.2% on a monthly basis in October 2022 when the Organization of the Petroleum Exporting Countries Plus announced production cuts.
In October 2023, prices for gasoline fell 6.4% month over month. The decline was largely due to lower refining margins, which were partly driven by producers switching to cheaper winter blends.
While grocery prices remained at elevated levels, they also continued their trend of slower year-over-year growth, with a 5.4% increase in October following a 5.8% gain in September. While deceleration continued to be broad-based, fresh vegetables (+5.0%) contributed the most to the slowdown.
Prices for services put upward pressure on the CPI in October, rising 4.6% on a year-over-year basis, following a 3.9% increase in September.
Canadians continued to feel the impact of rising prices for rent, which rose at a faster pace year over year in October (+8.2%) than in September (+7.3%). The national increase reflected acceleration across most provinces. The largest increases in rent prices were seen in Nova Scotia (+14.6%), Alberta (+9.9%), British Columbia (+9.1%) and Quebec (+9.1%).
Property taxes and other special charges, which are priced annually in October, rose 4.9% on a year-over-year basis, compared with a 3.6% increase in October 2022. The national increase in October 2023 was the largest since October 1992, with homeowners paying more in all but one province, as municipalities required larger budgets to cover rising costs. Property taxes in Manitoba (-0.3%) declined for the third consecutive year, mainly due to a reduction in the provincial education tax.
Prices for travel tours rose 11.3% year over year in October after a decline of 2.2% in September, with faster price growth largely driven by travel to destinations in the United States.
