The main driver? Lower gas prices, which fell 16.1% year-over-year, largely due to the removal of the consumer carbon price and increased oil production from exporting countries. A ceasefire between Israel and Iran also helped stabilize global energy markets.
On a monthly basis, gasoline prices slipped another 0.7%, adding relief at the pumps for Canadian drivers.
However, the slowdown in inflation wasn’t felt across the board. Grocery costs jumped 3.4% year-over-year, up from 2.8% in June. Shoppers saw steeper bills for coffee and confectionary products, as tough growing conditions in cocoa- and coffee-producing countries drove prices higher.
Meanwhile, shelter inflation climbed for the first time since early 2024, with rent prices accelerating—a concern for Canadian households already facing affordability challenges.
This mix of cooling energy costs and rising food and housing expenses paints a complex picture for consumers, policymakers, and investors watching Canada’s economy.
👉 Key takeaway: Gas prices may be easing inflation overall, but rising grocery and housing costs could keep pressure on Canadian households through the rest of 2025.