BNN Bloomberg is Canada\u2019s definitive source for business news dedicated exclusively to helping Canadians invest and build their businesses. <\/p>\n
OTTAWA \u2014 Canada\u2019s inflation rate is expected to remain elevated when new figures are released next week, but economists are divided over whether rising energy costs will fuel broader price increases.<\/p>\n
Statistics Canada will release its October consumer price index report Monday. \u00a0<\/p>\n
The monthly report tracks changes in the cost of goods and services typically purchased by Canadian households, offering a snapshot of how prices are affecting consumers\u2019 purchasing power.<\/p>\n
As of Friday morning, a Reuters poll of economists predicted the annual rate of inflation rose to 3.2 per cent in October, up from 3.1 per cent in September, according to LSEG Data & Analytics.<\/p>\n
The big question among economists now isn\u2019t just how high inflation has climbed but whether rising energy costs will push up prices across the economy, keeping inflation elevated for longer and potentially prompting further interest rate hikes.<\/p>\n
LJ Valencia, an economist with Desjardins Economics, said persistently high energy costs risk driving up prices more broadly. \u00a0<\/p>\n
He said he expects October inflation to be \u201csimilar or perhaps slightly higher\u201d than September.<\/p>\n
Valencia said businesses have largely shielded consumers from rising energy costs so far, but their ability to continue absorbing those increases is limited.<\/p>\n
\u201cAt some point, they\u2019re going to start passing on these higher costs to consumers,\u201d he said.\u00a0<\/p>\n
Yet CIBC Capital Markets said higher business costs won\u2019t necessarily translate into higher consumer prices.<\/p>\n
In a client note, economists Avery Shenfeld and Helen Lao said manufacturers, wholesalers and retailers are indeed facing sharply higher input costs.<\/p>\n
But they argued that passing those costs on to consumers could cause enough \u201csticker shock\u201d to hurt demand, forcing businesses to cut prices again to maintain sales.<\/p>\n
They said weak consumer demand and relatively healthy profit margins among wholesalers and retailers mean \u201cthose margins, rather than consumers, will bear a significant share of the burden of higher costs.\u201d<\/p>\n
\u201cIf so, the implication is that inflation will not escalate nearly as much as (the Bank of Canada) expects, leaving less urgency for further rate hikes ahead,\u201d the CIBC economists said.\u00a0<\/p>\n
The Bank of Canada expects inflation to remain above three per cent through much of 2027.<\/p>\n
The central bank aims to keep inflation at two per cent, the midpoint of its target range of one to three per cent.<\/p>\n
It can raise interest rates to curb borrowing and spending when inflation is too high or lower rates to encourage economic activity when inflation is weak.<\/p>\n
On Oct. 28, the bank raised its key interest rate by a quarter of a percentage point to 2.5 per cent, its first increase in more than three years, amid concerns that higher energy costs could fuel broader inflation.<\/p>\n
With the Bank of Canada signalling further rate hikes may be needed, inflation figures are being closely watched for clues about its next move.<\/p>\n
Its decisions affect everything from mortgage payments and consumer spending to business investments.<\/p>\n
Meanwhile, RBC economist Salim Zanzana said in a research note that while energy prices are driving inflation, the impact varies widely across the country.<\/p>\n
He said higher energy costs are hitting Atlantic Canada particularly hard because home heating oil is more widely used in the region, while inflation remains lower in provinces like Ontario and British Columbia where economic conditions are weaker.\u00a0<\/p>\n
\u201cWhile higher rates may help contain inflation in regions where price pressures have been more persistent, they could also compound economic challenges elsewhere where inflation is less problematic, for example in Ontario and B.C.,\u201d Zanzana said.\u00a0<\/p>\n
—<\/p>\n
Brett Bundale, The Canadian Press<\/p>\n
This report by The Canadian Press was first published Nov. 13, 2026.<\/p>\n
Related Stories<\/p>\n","protected":false},"excerpt":{"rendered":"BNN Bloomberg is Canada\u2019s definitive source for business news dedicated exclusively to helping Canadians invest and build their…\n","protected":false},"author":2,"featured_media":969443,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[4498,45,49,48,46,133,6578],"class_list":["post-969442","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-banks","tag-business","tag-ca","tag-canada","tag-economy","tag-finance","tag-retail"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/969442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=969442"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/969442\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/969443"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=969442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=969442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=969442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}