Canada's annual inflation rate climbed to 2.8% in April from 2.4% in March, driven chiefly by a steep rise in gasoline prices after the conflict in Iran lifted global crude oil prices, Statistics Canada reported on Tuesday. The April reading of 2.8% is the first time in almost two years the annual consumer price index has reached this level and underscores how the Iran war, which started on February 28, has flowed through to consumer prices.
On a monthly basis, price growth was 0.7% in April, according to Statistics Canada. That matched the monthly rate that analysts polled by Reuters had expected, although those same analysts had forecast a higher annual rate of 3.1%.
Statistics Canada highlighted that the removal of the consumer carbon levy in April 2025, which had previously produced monthly declines in gasoline and natural gas prices, has now fallen out of the 12-month comparison window. That change removed a downward drag from the year-over-year calculation and therefore contributed upward pressure to the all-items CPI basket.
Gasoline was the main contributor to the headline move. Gasoline prices rose 28.6% in April and have increased by more than 38% since the Iran war began. The jump in pump prices propelled transportation costs up by 7.6% in April - the largest monthly rise for that category since November 2022. Statistics Canada also noted that gasoline costs rose on an annual basis as the effect of the earlier carbon levy ended.
Beyond fuel, several other components recorded year-over-year increases in April. Food prices rose 3.5% in April, down from a 4.0% annual increase in March. Rents advanced by 3.6% year over year, while the cost of passenger vehicles was up 2.8%.
Measures of underlying inflation that the Bank of Canada watches showed some easing in April. CPI-median, which captures the centermost component of the CPI basket, slowed to 2.1% from 2.3% in March. CPI-trim, which excludes the most extreme price changes, fell to 2.0% from 2.2% the prior month.
In response to recent fuel-price pressure, Prime Minister Mark Carney has proposed a temporary relief on gasoline excise duty of 10 cents per liter for a five-month period.
Key figures at a glance:
- Annual CPI: 2.8% in April, up from 2.4% in March
- Monthly CPI: 0.7% in April
- Gasoline: +28.6% in April; >38% increase since the Iran war began
- Transportation category: +7.6% in April (largest since November 2022)
- Food: +3.5% year over year in April
- Rents: +3.6% year over year in April
- Passenger vehicles: +2.8% year over year in April
- Core measures - CPI-median: 2.1% (from 2.3%); CPI-trim: 2.0% (from 2.2%)
This release illustrates a headline inflation uptick concentrated in energy-related components, while several trimmed and median measures indicate some easing in broader underlying price pressures.