OTTAWA — Inflation accelerated in May, rising above the Bank of Canada’s target range as higher fuel and food prices continued to put pressure on household budgets.
Statistics Canada says the Consumer Price Index rose 3.2 per cent year over year in May, up from 2.8 per cent in April. The increase pushed inflation above the Bank of Canada’s preferred operating range of one to three per cent.
Gasoline remained the largest driver of inflation, with prices climbing 33.2 per cent compared with a year earlier. Statistics Canada attributed much of the increase to supply uncertainty linked to tensions in the Middle East and the closure of the Strait of Hormuz, a key global oil shipping route.
Canadians paid the highest gasoline prices since June 2022, when Russia’s invasion of Ukraine disrupted global energy markets.
Food prices also continued to rise faster than overall inflation.
Food purchased from stores increased 4.3 per cent year over year in May, marking the 16th consecutive month grocery inflation outpaced headline inflation.
Fresh fruit prices rose 5.3 per cent compared with a year earlier, while fresh vegetables increased nine per cent. Statistics Canada cited higher prices for items including tomatoes, broccoli, cauliflower and lettuce.
Tomato prices alone jumped 45.2 per cent amid supply shortages in Mexico caused by poor weather and reduced planting following the introduction of U.S. tariffs.
Statistics Canada also said higher fuel costs contributed to rising produce prices. Fresh vegetable prices rose 5.5 per cent from April, the largest monthly increase for May since 2008.
Travel-related costs also increased. Air transportation prices rose 7.4 per cent year over year as airlines faced higher fuel costs, while travel tour prices returned to positive growth after declining in April.
Some categories provided relief for consumers.
Shelter inflation continued to ease, with overall shelter costs rising 1.7 per cent year over year. Rent inflation slowed to 3.5 per cent, the lowest rate since January 2022, while mortgage interest costs continued a long-running trend of deceleration.
Statistics Canada said inflation accelerated in every province during May, with gasoline prices accounting for much of the increase.
Excluding gasoline, inflation still rose 2.2 per cent year over year, up from two per cent in April, suggesting price pressures extended beyond energy costs.
The latest figures will likely be closely watched by the Bank of Canada as policymakers assess whether inflation is moving sustainably within the central bank’s target range.
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