Statistics Canada reported Friday that last month's inflation rate stayed at 1.2 per cent— matching a two-year low also achieved in August and May of this year.
Perhaps the most eye-catching result was that core inflation — which measures underlying price pressures by excluding volatile items such as gasoline and some seasonal foods — dropped three-tenths of a point to 1.3 per cent and was below the Bank of Canada's call for the third quarter.
Given excess capacity in the economy and expected slow the remainder of the year, both short and long-term interest rates are likely to remain super low, said David Madani, an analyst with Capital Economics.
"The fact is that not just core inflation, but any measure of underlying inflation remains very subdued," he explained.
"In this environment obviously the Bank of Canada isn't really in any hurry to raise interest rates and there's obviously good reason for that, the slowdown in the global economy and now signs that the domestic housing market is correcting."
If central bank governor Mark Carney were to act in the next few months, said Madani, it would be more likely to lower the one per cent policy rate than raise it.
David Watt, chief economist at HSBC Bank Canada, said he expects Carney may remove his tightening bias language in next Tuesday's interest rate announcement, as he did in a speech in British Columbia earlier this week. This would signal to markets that interest rates will likely remain stimulative for an extended period.
The only fly in the ointment to that scenario was a revision by Statistics Canada earlier this week that found household debt at 163 per cent of income, about where they were in the U.S. before the housing crash of 2007. As well, while the Canadian economy is slowing, there are tentative signs the U.S. recovery is firming.
Overall in September, it cost more to fill up at the gas pump and to buy the new winter fashions, but the cost of many items saw outright declines, including mortgage interest, natural gas, women's clothing, video equipment and airfares.
Gasoline was up 4.7 per cent from last September and electricity costs were up six per cent. Meanwhile, natural gas fell 14.2 per cent, mortgage costs were 2.2 per cent lower and video equipment prices dropped 14.6 per cent.
Car buyers got some good news as the year-over-year increase in motor vehicles slowed 1.8 percentage points.
And there was still no sign of the impact of this summer's drought in the U.S. and parts of Canada on overall food prices, which in September were a modest 1.6 per cent higher than last year.
On a month-to-month basis, prices rose 0.2 per cent as gasoline prices climbed 2.1 per cent from August and clothing increased 6.2 per cent as retailers unveiled their fall and winter merchandise.
Food prices actually fell 1.1 per cent in September from the previous month, led by seasonal declines in fresh vegetables and fruit.
Dampening inflation, natural gas fell 14.2 per cent, mortgage costs were 2.2 per cent lower, video equipment prices fell 14.6 per cent, and the year-over-year increase in motor vehicles slowed 1.8 percentage points.
The agency said there was an average 3.7 per cent increase for post-secondary tuition across the country, despite Quebec's freeze in fees. Tuition costs rose highest in Saskatchewan, up 5.8 per cent.
Regionally, prices in Ontario and British Columbia rose the least in September at 0.7 per cent, the agency said.
Also on HuffPost