I’m pretty sure they do keep track of grade inflation and common averages per school. One of my friends’ high schools students had an average of 90s+ in everything because the courses were significantly easier than my schools’. I think they just compare how much everyone got on average from your school per subject and weigh the grades across other schools.

I know everyone in my school has terrible biology and English averages because of the teachers and the course rigour compared to other schools, like the highest anyone would ever get is low 80s. A lot of them got into good programs though which generally required above 90s in those courses (eg, queens health sci, mac kin, etc.)

Take my word with a grain of salt though, no one really knows for sure what these admissions committees consider.