No. If Canadian inflation stays above 3 percent into 2027, the Bank of Canada’s October 28, 2026 outlook does not say wages are the cause. Labour costs, it says, remain in line with productivity and are not a material source of upward pressure. The pressure is traced to energy costs and non-energy import costs: oil-linked inputs, Canadian counter-tariffs, and the past depreciation of the Canadian dollar.
That is a forecast of cost channels, not a raise already paid and not a shop price already charged. The report is dated October 28. This article uses the Canadian-outlook page as fetched through November 1, 2026. The discussion of separate price categories breaks off before any contribution is stated, so none is filled in.
Above 3 percent, and about a point above July
The Bank projects consumer price index inflation—the change in a broad basket of consumer prices—to stay above 3 percent through the third quarter of 2027, about 1 percentage point higher than in the July Report. Inflation rises until the first quarter of 2027 as energy and non-energy import costs reach buyers while slack, meaning unused capacity, shrinks. Those pressures then spread into inflation excluding energy and keep the overall rate elevated through 2027. It is projected to ease to close to the 2 percent target by the middle of 2028.
The growth numbers in the same section do not reassign that path to wages. Gross domestic product growth in 2026 is revised to 1 percent, with strength in the middle of the year partly offset by fourth-quarter weakness. The quarter had just begun on October 28 and was still early on November 1, so 1 percent is an outlook, not a completed year. Growth is projected to average 2 percent in 2027 and 2028, modestly stronger than in July. Energy prices, U.S. trade policy, and household and business responses remain uncertain.
When the energy rate turns negative, older costs can remain
A sharp rise in oil prices, the Bank says, usually reaches inflation through more than one channel: mainly energy costs, and also imported non-energy goods through supply chains. In this projection the main upward pressure is higher oil prices from a smaller global energy supply, plus other factors that raise business costs. No oil-price assumption and no pump price are printed.
Energy costs push inflation up into early 2027. Energy-price inflation turns negative at the end of 2027, so energy prices in the basket would be lower than a year earlier. Earlier increases would still raise other prices as transportation and production costs move through supply chains. That pattern is not a statement that wages created the pressure. A firm buying fuel or oil-linked inputs can still face older costs after the year-over-year energy rate has turned down.
Imports, counter-tariffs, and a larger share passed through
Non-energy import costs remain a source of pressure through 2027. The page cites oil-sensitive industrial inputs, Canadian counter-tariffs, and the past depreciation of the Canadian dollar, which raises the Canadian-dollar cost of foreign goods. It prints no exchange rate, duty, or product list.
Import growth is projected to slow from about 3 percent in 2026 to around 2 percent in 2027 and 2028. The difference, about 1 percentage point, is arithmetic on the Bank’s rounded wording. It is not a tariff rate or a checkout price. Dearer foreign goods, counter-tariffs, and the earlier currency decline restrain import demand as strong second-quarter demand fades.
Businesses initially absorbed most of these increases. They are expected to pass on an increasing share over the next 12 months as excess capacity is absorbed. The Bank says this matches its business surveys. The cited chart is outside this fetch, so no share is added. Pass-through means charging customers for more of a cost. It is not a price already paid.
U.S. tariffs are projected to slow 2027 export growth to around 1.25 percent and to leave exports below the July path. Higher energy and imported-input costs are expected to restrain construction, with residential investment still averaging growth of slightly less than 1 percent in 2027 and 2028. Weaker demand from tariffs and trade uncertainty is only a partial offset to inflation.
Labour costs are not the material upward source
Labour costs remain in line with productivity, the Bank says, because the labour market is close to balanced, and they are not a material source of upward pressure. Productivity is output per unit of work. Pay that rises about as fast as productivity does not, on its own, raise the labour cost of each unit produced. This is a judgment about the forecast, not a tally of raises, and the page gives no wage-growth rate.
Slow labour-force growth and the effect of U.S. tariffs on productivity constrain production. Business investment is projected to grow about 4 percent a year on average in 2027 and 2028 and to support productivity, including through the Productivity Mega Deduction, though the response is uncertain. Government spending is projected to grow about 2.5 percent a year on average. Consumption is projected to grow just above 2.25 percent in 2026 and around 2 percent on average in 2027 and 2028. Higher long-term interest rates weigh on that spending, partly offset by past gains in the terms of trade, export prices relative to import prices.
For a worker, the outlook does not say a pay surge is why inflation stays above 3 percent into 2027. For a shopper, the projected rate is not one household’s completed bill. For a business, the operative point is gradual pass-through of energy and import costs as spare capacity shrinks. Watch whether a later projection still keeps labour costs in line with productivity, still dates negative energy-price inflation at the end of 2027, and still expects greater pass-through over the next 12 months. A consumer-price release can record what prices did. It would not rewrite this October 28 account unless the Bank changes the stated source.