July’s rebound in gas prices pushed the annual rate of inflation up to three per cent last month even as there were signs cost pressures were easing at the grocery store, Statistics Canada said Monday.
The acceleration in the consumer price index for July comes after inflation fell to 2.8 per cent in June. Heading into Monday’s release, most economists had expected inflation would rise just a tick to 2.9 per cent.
Volatility in gasoline prices was once again to blame for changes in the consumer price index.
Progress on peace talks between the United States and Iran helped tame energy prices and cooled inflation sharply in June, but renewed hostilities in the Middle East last month pushed global oil prices higher again.
Excluding gas, the consumer price index rose 2.2 per cent in July for a third consecutive month, StatCan said.
Higher jet fuel prices contributed to a 12 per cent hike in the cost of airfares last month, up from 9.6 per cent in June, the agency said.
Travel tour costs also accelerated sharply in July, which StatCan attributed to more expensive hotels and flights to U.S. destination cities that were hosting FIFA World Cup games.
Helping to offset those cost pressures in July was some relief at the grocery store. StatCan said inflation for food bought from the store cooled to 3.1 per cent in July, down from 3.9 per cent in the previous month.
Slowing price hikes for fresh vegetables and chicken products, as well as lower prices for cereal products, drove the decline. Inflation for fresh fruit meanwhile accelerated to 6.1 per cent from 1.7 per cent previously as prices rose for berries and melons.
Despite the slowdown, grocery store inflation has now outpaced the all-items consumer price index for 18 consecutive months.
The July inflation figures mark the Bank of Canada’s last look at price data before its next interest rate decision on Sept. 2.
This report by The Canadian Press was first published Aug. 17, 2026.
By Craig Lord | Copyright 2026, The Canadian Press. All rights reserved.