The annual rate of inflation cooled to 1.7 per cent in July, according to Statistics Canada, down from 1.9 per cent in June.
Lower gasoline prices fuelled the decline, but the agency says Canadians were facing higher costs at the grocery store last month.
Costs rose 3.4 per cent annually at grocery stores, up from 2.8 per cent in June. Confectionery and coffee products saw big year-over-year price jumps in July, which Statscan said were tied to tough growing conditions in countries that produce cocoa and coffee beans.
The agency also says prices for gasoline were down 16.1 per cent year-over-year, thanks largely to the removal of the consumer carbon price.
Gas prices were also down 0.7 per cent on a monthly basis following an increase in production from oil-exporting countries and a ceasefire in the conflict between Israel and Iran.
Shelter inflation also saw its first increase since February of last year as rent price gains accelerated.
