The headline inflation rate in Canada rose to 3.2% in May of 2026 from 2.8% in the previous month, ahead of market expectations of 3% and the 2.8% rate from the previous month to mark the fastest inflation rate since December 2023. The increase was largely due to a surge in gasoline inflation (33.2% vs 22.8% in April) as the war in the Middle East suspended energy exports from the key region, lifting broader energy costs in Canada by 9% (vs 7.6%). Meanwhile, food inflation picked up to 3.8% from 3.5% amid a 5.3% jump for fresh fruit and 9% increase for vegetables, aligned with higher prices for fertilizers. Still, underlying inflation rates tracked by the BoC remained steady, with the trimmed-mean core rate at 2% and median core rate at 2.1%. Inflation edged lower for shelter (1.7% vs 1.8%) and health and personal care (2.7% vs 3.3%), and prices dropped for household operations (-0.2% vs 0.4%). The Canadian CPI rose 1% from the previous month.