Happy Monday and congrats to the Roughriders on the Grey Cup victory last night!

We kick off the week with an inflation report that should keep the Bank of Canada on the sidelines next month with a rate hold.

The overall inflation rate in Canada came in at 2.2% year-over-year in October, down from 2.4% in September.

The moderation was primarily due to lower gasoline prices - down 9.4% y/y. Also providing an assist were grocery prices, which grew at a slower year-over-year rate of 3.4%. However, you can be forgiven for not celebrating the moderation in food inflation, as grocery prices remain elevated. Nationwide, they’re sitting nearly 28% higher than in January 2021 due to the cumulative impact of past price jumps.

The roll-back in Canada’s retaliatory tariffs on September 1 has likely helped cool inflation, particularly on food costs. In fact, inflation would have fallen more had the prices of cellular services not spiked (up 7.7% y/y), along with an acceleration in home insurance costs (6.8% y/y).

The overall inflation rate is volatile, so the Bank of Canada tries to see through this using a core, or underlying, inflation rate. Two core metrics closely tracked by the Bank (CPI-trim and CPI-median) remained at roughly 3% on a year-over-year basis for the seventh month in a row. But it’s a little more complicated than that, as they also look at monthly changes and a few other core indicators. The Bank’s assessment is that, using a broader basket of readings, core inflation is sitting at “around 2.5%.” One additional month of data is unlikely to change that.

As for Alberta, the inflation rate nudged lower from 1.9% to 1.8%, and stayed below the national average for the seventh straight month. The story here is energy prices. Natural gas prices and, to a lesser extent, gasoline prices fell faster on a year-over-year basis than national trends. Excluding energy costs, the annual inflation rate in Alberta was 2.8%, matching the national reading.

Recall that, on October 29, the Bank of Canada cut its policy rate to 2.25%, but then said it was pretty happy with where rates were right now. The bias towards holding came through in this key quote:

“If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment.”

Nothing in this report should fundamentally change the Bank of Canada’s view and we expect the Bank will hold its policy rate in its final decision of 2025 on December 10.

Answer to the previous trivia question: The 2025 federal budget is 493 pages long.

Today’s trivia question: As of October 2025, the price of a benchmark home in Canada (as calculated by the Canadian Real Estate Association) was $688,880. What was the price 20 years earlier in October 2005?