Canadian Inflation Update – May 2025

by Florencio Jr Mende

In May 2025, inflation in Canada continued its gradual cooling trend. According to Statistics Canada, the Consumer Price Index (CPI) rose 1.7% year-over-year, consistent with April’s increase. Month-over-month (seasonally adjusted), the CPI was up 0.2%, indicating that while prices are still rising, the pace is relatively stable.

🔍 Shelter & Food Costs in Focus

One of the key stories this month is the slowing pace of shelter price growth. Shelter costs—long the biggest contributor to inflation—increased 3.0% in May, down from 3.4% in April. However, food prices have now outpaced shelter costs for the second month in a row, primarily due to tariffs imposed on a variety of grocery items. This shift is especially relevant for BC households managing tight budgets in today’s housing market.

🏠 British Columbia: A Closer Look

In British Columbia, prices rose 2.3% year-over-year in May, up from 2.0% in April. Several CPI components contributed to this increase:

Food: +3.2% (down from 4.3% in April)
Shelter: +3.1% (down slightly from 3.3%)
Household furnishings: +2.4%
Clothing and footwear: +1.9%

Some relief came from lower energy prices—particularly gasoline, which fell by 14.5% year-over-year in May, easing the cost of living and transportation expenses.

12-month change in the Consumer Price Index (CPI), Canada vs. British Columbia

📊 Inflation & Interest Rates: What's Next?

Despite the stability in headline CPI, core inflation remains elevated, with the Bank of Canada’s preferred measures—median and trimmed CPI—holding at 3.0%. Markets remain uncertain about whether the Bank of Canada will cut interest rates in July. A key economic growth report this Friday will help shape that decision, especially given the conflicting pressures of slowing trade and tariff-driven inflation.

As a realtor based in Victoria, BC, I keep a close eye on inflation trends—not just because they influence borrowing costs, but also because they affect affordability for buyers and sellers alike. If you’re considering entering the real estate market or want to better understand how these economic shifts impact your home buying or selling plans, I’m here to help.

Let’s talk real estate and make informed decisions together!

Florencio Mende Jr
📍 Victoria, BC Realtor | Real Broker
📩 florenciomendejr@gmail.com
📞 250-882-1986