Inflation in Canada: what it does to your savings and pay
Quick summary
Annual consumer price inflation in Canada was 3.1% in September 2026, above the Bank of Canada's 2% target. See what it does to your own money with theinflation impact calculator.
Checked November 3, 2026. Main source: Bank of Canada: inflation-control target (modified Feb. 22, 2024). See all 2 sources.
What inflation is
Inflation is the rise in the average price of what households buy, measured by the Consumer Price Index (CPI). When prices rise faster than your savings earn, your money buys less.
The Bank of Canada target and the latest rate
- The Bank of Canada aims for 2% inflation, the midpoint of a 1% to 3% control range.
- Annual CPI inflation was 3.1% in September 2026 and 3.0% in August 2026, according to Statistics Canada figures reported by Reuters.
What it means for your money
Example: at 3% a year, $10,000 of spending power today needs about $10,300 next year to buy the same things. A savings account paying less than the inflation rate loses buying power even while the balance grows.
- Compare your savings rate with the inflation rate, not with zero.
- Check whether your pay rises are keeping up with prices.
- Fixed debts get easier to carry in real terms when prices rise, but new borrowing costs more when rates are high.
Questions people ask
What is the Bank of Canada's inflation target?
2%, the midpoint of a 1% to 3% control range.
What was Canada's inflation rate in September 2026?
3.1%, up from 3.0% in August, according to figures reported by Reuters from Statistics Canada.
How does inflation hurt savings?
If your savings earn less than the inflation rate, what the balance can buy shrinks over time.