Consumer Price Index (CPI) in Canada: What It Measures and How It Works

CPI stands for consumer price index. Canada’s CPI was 170.0 in September 2026 (2002=100), 3.1% higher than a year earlier, Statistics Canada reported on October 19, 2026; the next figure is due on November 16, 2026. The index tracks what a fixed basket of goods and services costs over time, so its change measures how fast consumer prices are rising. What is driving the rate, by category and province, is on the Canada inflation rate page.

What does the CPI measure?

Statistics Canada prices the same basket every month and compares its cost with the base period, when the index was set to 100. The base period is 2002, so an index of 170.0 means prices were about 70% higher than in 2002. The basket stands for the spending of an average Canadian household, and the CPI covers private households in the ten provinces and the three territorial capitals. Prices are counted the way shoppers pay them, with GST, HST and provincial sales taxes, so a change in a sales tax moves the index.

The CPI is not a cost-of-living index: it measures the cost of a fixed basket, not of keeping the same standard of living. Some things are outside it:

• income tax
• stocks, bonds and other investments
• the price of a house itself (mortgage interest is included as a cost of owning a home)
• life and disability insurance
• interest on credit cards and loans

What’s in the basket, and how much does each part count?

The basket is split into eight major components and over 500 product classes. Each one counts in proportion to what households spend on it: because people spend far more on rent than on milk, a 10% rise in rent moves the CPI much more than a 10% rise in milk. The shares come mainly from the national accounts’ household spending data, with Statistics Canada’s Survey of Household Spending filling in detail. They have been updated every year since the 2021 basket; the current basket reflects 2025 spending.

How is the CPI calculated?

The index compares what the basket costs in the current month with its cost in the base period, scaled so the base period equals 100. The inflation rate then comes from two index values: divide the newer index by the older one, subtract 1 and multiply by 100.

For the 12-month rate in September 2026: the index was 170.0, against 164.9 in September 2025. (170.0 ÷ 164.9 − 1) × 100 = 3.1%, the published rate. The change from the month before works the same way, with last month’s index (169.8 in August 2026) as the older value. Annual rates compare the average of the twelve monthly indexes in one year with the year before. Statistics Canada does not revise the CPI once it is published. To convert a dollar amount between years, use the inflation calculator.

What is core inflation?

Some prices, such as gasoline and fresh food, jump around from month to month. Core measures strip out these swings to show the underlying trend, and the Bank of Canada focuses on them when setting interest rates. Since January 2017 its preferred measures have been these three:

• CPI-trim drops the 20% of price changes at each end, by basket weight, each month, so it always leaves out 40% of the basket; it was 1.8% in September 2026.
• CPI-median is the price change in the middle of the month’s distribution, at the 50th percentile by basket weight; it was 1.9%.
• CPI-common uses a statistical model to pick out the price changes that categories share; it was 2.4%.

Two older measures still appear in reports: CPIX leaves out eight of the most volatile components, such as fruit, vegetables and gasoline, and CPI-XFET leaves out food and energy, both also removing the effect of indirect tax changes. The trend in each measure is on the inflation rate page.

CPI by city

In September 2026 prices rose fastest in Whitehorse and slowest in Toronto. Each city’s index measures how its prices changed over time, not how high they are, so a higher index doesn’t mean a city is more expensive. What it costs to live in each city is on the cost of living in Canada page.

Where CPI indexing shows up

Governments, businesses and people use the CPI to raise payments in line with inflation:

• Federal tax amounts. Tax brackets, non-refundable credits and most other amounts rise with the CPI each January 1; the increase for 2026 was 2.0%. The tax changes page has the indexed amounts.
• Benefits. Income-tested benefits such as the Canada child benefit rise each July 1; indexing of the Canada Groceries and Essentials Benefit resumes in 2027.
• Canada Pension Plan. Pensions already being paid rose 2.0% in January 2026. See the CPP guide.
• Old Age Security. Payments are reviewed in January, April, July and October to keep up with the CPI. See the OAS maximum payment page.

Why your own inflation can differ

The CPI reflects an average household’s spending, so a household whose spending is split differently can see its own costs rise faster or slower. Statistics Canada’s personal inflation calculator estimates a rate from your own spending.

Related pages

• Canada inflation rate: the trend, categories, provinces and the next release
• Inflation calculator
• How to protect savings from inflation
• All cost of living guides