Inflation in Canada 2025: Complete Guide
How rising prices affect your money and what you can do about it.
As of December 2025, Canada's inflation rate has moderated but remains a concern for household budgets.
Current Inflation Rate
The Consumer Price Index (CPI) stands at approximately 2.8%, close to the Bank of Canada's 2% target.
Key Drivers of Inflation
- Shelter costs (mortgage interest and rent)
- Food prices (particularly meat and dairy)
- Energy prices
- Supply chain disruptions
Bank of Canada Outlook
The Bank expects inflation to remain near 2% through 2026, with potential rate cuts if growth slows.
Impact on Household Budgets
Food inflation has added hundreds to annual grocery bills. Shelter costs continue to squeeze renters and mortgage holders.
Strategies to Protect Your Money
- Invest in assets that historically outpace inflation (stocks, real estate)
- Lock in fixed-rate mortgages or GICs
- Budget for rising costs
- Use rewards cards to offset spending
While inflation has cooled from 2022 peaks, staying informed helps protect your purchasing power.
