OTTAWA – Inflation cooled in July thanks largely to relief at the gas pumps, but Statistics Canada said grocery and shelter costs were accelerating last month.
The annual rate of inflation fell to 1.7 per cent in July, the agency said Tuesday, down from 1.9 per cent in June.
A 16.1 per cent decline year-over-year in gas prices tied mainly to the removal of the consumer carbon price earlier this year fueled the drop.
Gas prices were also down 0.7 per cent on a monthly basis. StatCan pointed to increased production from oil-exporting countries, as well as a ceasefire in the conflict between Israel and Iran, as driving down global crude oil prices.
Beyond the gas pumps, there were signs of costs accelerating at the grocery store and in housing.
Inflation on food from the grocery store accelerated to 3.4 per cent annually in July, up from 2.8 per cent in June.
Confectionary prices (up 11.8 per cent) and coffee (up 28.6 per cent) were among the biggest contributors to food inflation last month. StatCan said poor growing conditions in countries that produce cocoa and coffee beans were to blame for higher costs.
Prices for fresh grapes, meanwhile, were up nearly 30 per cent, driving the overall cost for fresh fruit up 3.9 per cent in July from 2.1 per cent in June.
Shelter inflation also saw a modest acceleration to three per cent last month from 2.9 per cent in June, marking the first increase in the category since February 2024.
Rent price growth picked up in July, particularly in Prince Edward Island, Newfoundland and Labrador and British Columbia. Lower mortgage costs are still moderating the overall increase in shelter inflation.
Prices for natural gas meanwhile fell to a lesser degree than in June, thanks mostly to higher costs in Ontario.
The Bank of Canada will be parsing the inflation figures closely as it prepares for its next interest rate decision on Sept. 17.
StatCan said the central bank’s preferred measures of core inflation, which tend to strip out more volatile price changes, held around three per cent in July.
This report by The Canadian Press was first published Aug. 19, 2025.