Shelter inflation continued to ease in May, with the annual increase slowing to 1.7% from 1.8% in April, according to Statistics Canada.

The moderation reflected continued declines in key homeownership cost measures. The homeowners’ replacement-cost index fell 2.5% year-over-year in May, marking its 13th consecutive annual decline. Other owned accommodation expenses, including real estate commissions, also decreased 2.1% after falling 2.7% in April.

Mortgage-interest costs continued to decelerate, with the mortgage interest cost index declining 0.2% year-over-year in May compared with a 0.1% decline in April. The index has now posted 33 consecutive months of slowing annual price growth. Rent inflation also eased slightly, rising 3.5% year-over-year in May, down from 3.6% in April, its lowest annual increase since January 2022.

Overall, Canada’s Consumer Price Index rose 3.2% year-over-year in May, accelerating from a 2.8% increase in April. Statistics Canada said higher gasoline prices remained the main driver of the increase, with gasoline up 33.2% from a year earlier amid supply uncertainty linked to the conflict in the Middle East and the closure of the Strait of Hormuz. Excluding gasoline, the CPI increased 2.2%, up from 2.0% in April.

On a monthly basis, the CPI rose 1.0% in May and increased 0.5% on a seasonally adjusted basis, led by higher costs for recreation, education, reading and transportation. Food purchased from stores increased 4.3% year-over-year, driven by higher prices for fresh fruit and vegetables.

Rendering: Minto Group