Canada’s August CPI is expected to show inflation around 3% year over year, with energy prices remaining elevated and gasoline up about a quarter from a year ago despite a modest August dip.

Gasoline prices eased from earlier in the summer, helping keep the headline rate steady even as energy costs stay volatile.

While the headline may hover near 3% in August, observers warn that future readings will hinge on energy prices and evolving trade tensions.

September data will be watched for pass-through effects from tariffs, though economists expect only limited near-term inflation impact.

Disclaimer: the preview does not include the actual CPI release.

The report is authored by Nathan Janzen, RBC Assistant Chief Economist, and Abbey Xu, RBC macro forecaster.

Oil’s influence skews spending sensitivity toward air travel, urban transit, and transport services, with food inflation less directly tied to energy yet still pressured by oil-linked costs.

Currently, there’s no strong evidence of broad oil pass-through to inflation, but risks rise if oil stays elevated and price data across sectors are closely monitored.

Oil shocks and a tighter global financial backdrop are shaping both economies, with Canada still having slack and core inflation near 2%, while the U.S. faces higher inflation, solid growth, and a tight job market.

RBC and peers have nudged higher Canada and U.S. inflation forecasts on oil prices, but expect only gradual, limited pass-through to core inflation.

Ex-food-and-energy CPI is forecast to rise to about 2.1% year over year—the highest since January and the fourth straight acceleration from April—though still not a BoC core measure.

Inflation breadth remains narrow, with pressures concentrated in energy-heavy categories like gas and airfares; imports and substitutes may mitigate some pass-through from higher energy costs.