First Insights: Canada: May CPI Review

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First Insights: Canada: May CPI Review

Nomura | First Insights 22 June 2026

BoC’s repeated emphasis that it will look through near-term inflation effects from the Iran

war, we do not expect the May headline pickup to materially alter the policy outlook.

Fig. 3: The broader inflation picture was softer than headline Fig. 4: The BoC’s preferred core measures averaged 2.1% y-o-

suggests, as CPI excluding gasoline rose 2.2% y-o-y y, essentially unchanged from April

Measures of core inflation

Source: StatsCan, Haver, Nomura

Note: Weighted median and trimmed mean are the BoC's preferred metrics of core

inflation.

Source: StatsCan, Haver, BoC, Haver, Nomura

Core inflation sends an encouraging signal

The BoC’s preferred core measures remained comfortably within the 1–3% target range.

The average of CPI-trim and CPI-median were unchanged on a rounded basis at 2.1%

and ticked down slightly on an unrounded basis (Fig.4).

Governor Macklem has emphasized both the breadth of price increases and a range of

alternative core measures in assessing underlying inflation. Both improved in May.

Despite higher input costs, there is little evidence of broad-based passthrough to

consumer prices, as firms remain cautious about raising prices amid weak demand. We

expect excess supply in the economy should continue to limit price pressures, while

easing shelter costs are also likely to contribute to disinflation.

Shelter inflation continued to moderate

Shelter inflation eased to 1.7% y-o-y. Rent inflation moderated to 3.5% y-o-y, the smallest

annual increase since January 2022 (Fig.5). Private rent data continue to point to

declining asking rents across regions, suggesting further moderation in official rent

inflation ahead (Fig.6).

Mortgage interest costs fell for a second consecutive month.