Core inflation just hit its lowest point since 2020
Canada's April CPI dropped this morning at 2.8% — well below the 3.1% economists were expecting.
The headline number is almost entirely an energy story.
Gasoline prices jumped 28.6% year over year, contributing 0.9% to the headline figure — up from just 0.2% in March. Strip that out and there's barely any inflation to speak of for April.
Core filters out volatile items like gas and food to give a cleaner read on underlying price pressure. It cooled to 2% in April — the lowest reading since 2020.
The Bank of Canada's preferred measures, CPI-trim and CPI-median, are sitting at five-year lows.
Why does that matter? Because the Bank of Canada targets core, not headline. And for now, core is telling them there's no fire to fight.
As of today, the broader picture supports this: the labour market is soft, unemployment is sitting in the 6.5–7% range, consumer demand is weak, and businesses don't have the pricing power to pass energy costs onto consumers. The oil shock is real — but it's hitting an economy that can't sustain it as persistent inflation.
What this means for rates?
The Bank of Canada has held at 2.25% since October and the next decision is June 10. Today's data gives them every reason to hold again. TD, RBC, and CIBC are all forecasting rates stay at 2.25% through the rest of 2026.
The honest summary: a hike only happens if the Bank of Canada is forced into it if the war continues longer-term inflationary trends persist. Today's data doesn't force anything.
Questions about how this affects your specific mortgage situation?
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Austin Yeh is a Smith Manoeuvre Certified Professional and independent mortgage agent based in Toronto, funding mortgages across Canada. He specializes in advanced mortgage strategies for high-income earners, real estate investors, and self-employed borrowers.
Lender features and policies are subject to change. Always verify current product details directly with the lender or through an SMCP-certified mortgage broker. This article is for educational purposes and does not constitute financial or mortgage advice.
