Statistics Canada reported that Canada’s annual inflation rate remained unchanged in November compared to October. Inflation has remained close to the Bank of Canada’s (BoC) 2% target despite the threat of higher prices amid US tariffs. At its last meeting, the BoC said it expects inflation to remain close to its target while supporting economic activity. Meanwhile, real estate activity softened in November, but the outlook for 2026 might be a bit brighter.

• Canada’s annual inflation rate was 2.2% in November, unchanged from October. This came in just below the 2.3% rate economists had expected, based on a Bloomberg survey. Canada’s annual inflation rate continues to run close to the BoC’s 2% target.
• Gasoline prices declined by almost 8% on a year-over-year basis in November. The decline slowed compared to October. The increase in shelter prices slowed. These were offset by a rise in prices for food and cellular services.
• Two key core measures of annual inflation both slowed to 2.8% in November, which was their lowest level since the beginning of 2025.
• Looking at the real estate market, the Canadian Real Estate Association (CREA) announced that sales of existing homes declined by 0.6% in November over the previous month, and by 10.7% compared to November 2024.
• Meanwhile, the Canada Mortgage and Housing Corporation said that housing starts increased by 9.4% in November to 254,058. It is widely hoped that increasing the supply of homes will help balance the market and alleviate concerns about affordability.

CREA said demand for housing may pick up in 2026 as buyers consider that interest rates are likely at their lowest level for some time still. At its November meeting, the BoC stated that interest rates are at an appropriate level to support the Canadian economy and keep inflation close to its 2% target. November’s consumer price data was largely in line with the BoC’s expectations.

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