Inflation is continuing to cool in Canada—and that’s helping keep the Bank of Canada (BoC) on the sidelines.
According to analysis sourced directly from Dominion Lending Centres’ Chief Economist, Dr. Sherry Cooper, the Consumer Price Index (CPI) held steady at 2.2% year over year in November, while core inflation continued to ease. That’s an encouraging signal for anyone watching interest rates closely—especially homebuyers and homeowners thinking about renewing, refinancing, or purchasing in 2026.
Inflation Held at 2.2%—Core Measures Eased
The headline CPI didn’t move in November, staying at 2.2% year over year, while core inflation measures softened. Dr. Cooper notes the Bank of Canada’s two core measures both eased to 2.8% year over year, and CPI excluding food and energy slowed to 2.4% year over year.
A key driver was cooling services inflation. Services prices rose 2.8% year over year, down from 3.2% in October. Travel-related categories helped pull inflation lower, including travel tours, which declined 8.2% year over year, and traveller accommodation, which fell 6.9% year over year. Rent inflation remains elevated but edged lower to 4.7% year over year.
Grocery Prices Are the Big Watch Item
The standout concern in this report is food inflation. Prices for food purchased from stores rose 4.7% year over year in November, the largest increase since December 2023. On a monthly basis, grocery prices jumped 1.9%, the biggest month-over-month gain since January 2023.
Major contributors included fresh or frozen beef, up 17.7% year over year, and coffee, up 27.8% year over year. These increases were driven by lower cattle inventories in North America, adverse growing conditions, and tariff impacts on coffee-producing countries.
The BoC Likely Holds—And the Next Move Could Be a Hike (Later)
Dr. Cooper’s conclusion is that this data supports the Bank of Canada holding the policy rate. Outside of food prices, inflation pressures appear to be dissipating. Upward revisions to GDP since 2022 suggest the economy has been stronger than expected, largely due to improved productivity growth.
Looking ahead, the Bank of Canada is expected to remain on hold for most of 2026. If rates do move, the next change is more likely to be a hike, but not until late next year, assuming inflation expectations remain contained.
What This Means for Homebuyers and Homeowners in Alberta
For buyers and homeowners across Alberta, a steadier rate environment can make planning easier. Buyers may benefit from improved budgeting certainty if inflation continues to cool. Homeowners approaching renewal have time to carefully weigh fixed versus variable options. Those considering refinancing may find opportunities depending on their long-term goals, such as improving cash flow or consolidating debt.
Dr. Cooper also notes that the housing market has been the biggest underperformer over the past year. Ongoing uncertainty, particularly related to tariffs and trade, has weighed on activity. Greater clarity could help support a rebound in housing markets, especially in regions most affected by uncertainty.
Need Mortgage Advice in Lethbridge, Coaldale, or Anywhere in Alberta?
If you’d like to discuss how today’s inflation trends and the Bank of Canada’s outlook could impact your mortgage plans, feel free to reach out.
Dillan Kelly
Dominion Lending Centres Mortgage Excellence
Cell: 403-894-5818
Email: dillan@dlcme.ca
Source: Information cited above is sourced directly from Dominion Lending Centres’ Chief Economist, Dr. Sherry Cooper
