Statistics Canada reports that the country’s annual inflation rate eased to 1.7 percent in July, down from 1.9 percent in June, driven largely by a sharp drop in gasoline prices. Gas prices fell 16.1 percent year-over-year, helped by the removal of the consumer carbon price. On a monthly basis, prices at the pump dipped 0.7 percent, reflecting higher oil production from exporting nations and a ceasefire in the conflict between Israel and Iran.
While energy costs pulled inflation lower, grocery bills showed renewed upward pressure. Food prices at grocery stores rose 3.4 percent compared with a year earlier, an acceleration from June’s 2.8 percent. Confectionary and coffee products saw some of the steepest increases, which Statistics Canada attributed to poor growing conditions in major cocoa- and coffee-producing countries.
Shelter costs also edged higher for the first time since February 2024, as rent price gains accelerated, signaling ongoing challenges for Canadian households despite the broader cooling trend.