Canadian inflation is slowing, but those living outside Ottawa’s models may struggle to feel relief. Statistics Canada’s (StatCan) latest Consumer Price Index (CPI) shows growth decelerated in June, largely due to gasoline and shelter. In reality, gas prices remain more than 20% higher than last year, while shelter’s slowdown is driven by modelled ownership costs—not rents, property taxes, or many of the bills homeowners actually pay.
Canadian CPI Inflation Slows But Remains Broad
Annual CPI growth slowed to 2.8% in June, down 0.4 percentage points from May. On a seasonally adjusted basis, prices fell 0.1%—the first monthly decline since April 2025. StatCan highlighted that five of the eight major components decelerated, though only four were running below the Bank of Canada’s 2% target. Inflation cooled, but much of the basket remains elevated.
Gasoline provided the biggest drag on inflation. Prices were still 20.5% higher than last year, but that was a sharp slowdown from 33.2% in May. They also fell 10.2% in June, the largest monthly decline since April 2025, when the consumer carbon levy was removed.
Shelter Divergence: Rents Still Soaring, Ownership Costs Slow
Canadian rent inflation: annual growth rate.
Source: StatCan; Better Dwelling.
Annual growth of CPI shelter slowed to just 1.5% in June, but it was a very different story for renters and owners. Rent inflation eased to 3.5% in June, its lowest rate since January 2022. That sounds encouraging until you remember it’s slowing from a 2024 peak not seen since the early 1980s. It also remains above the Bank of Canada’s target and more than double overall shelter inflation.
There was also a hint that slowing rents may not last. Seasonally adjusted rents rose 0.4% in June, equivalent to a 4.9% annualized pace. One month does not make a trend, but sustained growth at that rate would reverse much of the recent cooling.
So how did shelter inflation fall to just 1.5%? Statistically, much of the relief came from homeownership costs—though owners may struggle to realize any of these modelled savings in their budgets.
Canadian Homeownership Inflation Falls To A 13-Year Low
Canadian ownership costs: annual growth rate.
Source: StatCan; Better Dwelling.
Annual growth in homeownership costs slowed to just 0.2% in June, the weakest pace since June 2013. Owners may have trouble recognizing that relief, since the measure blends actual carrying costs with the modelled cost of purchasing a new home.
Homeowners’ replacement cost—which largely reflects new-home prices—fell 2.4% from last year. That component accounted for virtually all of the downward pressure on shelter and was the largest drag on CPI overall.
Mortgage interest cost growth fell 0.3% year-over-year, providing another notable drag, while maintenance and repair costs rose just 0.4%—well below their usual pace. Other ownership expenses remain much less cooperative.
Property taxes and special charges rose 5.6%, still elevated after hitting their fastest pace since the early 1990s in September of last year. Home and mortgage insurance eased to 3.9%, its slowest rate since early 2021, but remains unusually high. It has not fallen below 3% since early 2018, allowing years of elevated growth to compound.
Canada’s shelter inflation is cooling, but the relief is tied to new-home prices. With virtually no sales, builders’ list prices are being compared with previously inflated values, producing statistical relief that renters and homeowners are unlikely to recognize in their bills.
