Consumer inflation rose in July as gas prices increased, according to Statistics Canada, with the consumer price index ticking up from June by more than some economists expected.
Inflation increased to three per cent on average last month compared with a year earlier, up from 2.8 per cent in June, the agency says.
The majority of economists polled expected that the annual rate of inflation would rise to 2.9 per cent last month after cooling sharply to 2.8 per cent in June, according to LSEG Data & Analytics.
“Canadian inflation reaccelerated a touch more than consensus expectations in July, although with that move driven by higher gasoline prices and airfares it shouldn’t be a concern to policymakers at the Bank of Canada,” said senior economist Andrew Grantham at CIBC in a statement.
“Core measures of inflation remain around the two per cent mark on a year-over-year basis, supporting the current on hold stance as we seek more clarity regarding the future path of oil prices and Canada-U.S. trade.”
Gas prices in Canada have been riding a roller-coaster as volatile oil prices fluctuate worldwide amid the Iran war. A tentative ceasefire agreement between the U.S. and Iran helped cool oil and gas markets in June, but prices increased through much of July after the agreement unravelled and the fighting resumed.
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When removing volatile gasoline prices, core inflation was 2.2 per cent in July — the same as seen in May and June.
July saw overall prices for gasoline spike 25.7 per cent from a year earlier, up from 20.5 per cent in June.
Jet fuel costs also contributed to a 12 per cent year-over-year increase in air transportation costs last month, says Statistics Canada, and up from 9.6 per cent in June.
During the FIFA World Cup, prices for hotels and flights from Canada to U.S. destinations also got more expensive last month, with travel tours rising 15.2 per cent on average compared to last year, up from 6.8 per cent in June.
But inflation cooled at the grocery store last month, which helped offset some of the sharp price growth in other areas of the economy.
Statistics Canada says prices for food purchased from stores increased 3.1 per cent on average in July on a year-over-year basis, down from 3.9 per cent in June.
Inflation especially cooled for fresh vegetables, with prices rising 3.9 per cent year-over-year, which Statistics Canada tells Global News was down from a year-over-year increase of 9.2 per cent in June.
Meanwhile, fresh or frozen chicken increased just 0.3 per cent last month from a year ago, down from 5.7 per cent in June.
Cereal product prices actually fell 1.7 per cent on average in July compared to last year, which is known as deflation.
Meanwhile, fresh fruit inflation topped 6.1 per cent year-over-year in July compared with 1.7 per cent in June. Statistics Canada says fresh fruit prices increased from a month earlier by 4.7 per cent, which was the highest month-over-month move since July 2011, and led by more expensive berries and melons.
The Bank of Canada is aiming to keep consumer inflation within a range of one to three per cent in order to achieve its mandate of maintaining price stability while allowing the economy to thrive.
“The real risk is if pain at the pump starts spilling into broader price pressures. That would no doubt make the Bank increasingly uncomfortable,” said Andrew DiCapua, principal economist at the Business Data Lab and Canadian Chamber of Commerce in a statement.
“For now, though, one hotter-than-expected inflation print probably isn’t enough to move interest rates. The Bank still has time to wait and see whether inflation gets back on track.”
The central bank’s next opportunity to reassess its benchmark interest rate policy comes on Sept. 2.
— with a file from The Canadian Press
Once again our inflation rate is lower than the US, despite the Iran war.
With Carney printing money devaluing our dollar it’s creating record inflation. Anyone that has bought groceries know inflation is a hell amount more than 3%
Elbows up, losers. Enjoy what you voted for.
@anonymous Actually the latest poll from Quebec shows the Liberals are down 11% due to Carney’s lack of ability to be able to get a deal done.
Carney continues to not deliver on Food Inflation. A signature promise of his 2025 Election Campaign.
All the polls show the conservatives down. Poilievre has been a disappointment to me and many other conservatives I talk to. Incapable of change.
The misinformation and twisting of facts by conservatives is beneath the pale when we are faced with an existential threat from the US.
@Mark What misinformation are you referring to. It can’t be that inflation is up in July or that the fund set up by Carney in the UK has lost over $400 million in just 2 years, or that our economy has been on an inflationary spiral since 2015 since the Liberals took over and it couldn’t be that Canadians are using food banks in record numbers, and it can’t be that our national debt has doubled since 2015, or that it costs us over a billion dollars each and every week to service that debt, and it can’t be that Canadians are going bankrupt in record numbers, and it can’t be that Carney promised a deal with Trump would be achieved in July 2025. No Mark it can’t be any of that because all of that is actual fact, not misinformation Mark. Face it Conservatives don’t need to use misinformation because there are plenty of facts that condemn Carney and the Liberals.
The conservatives are spewing misinformation about Carney because when your leader Poilievre is at 18% in the polls, you are desperate. Sad but nevertheless pathetic.
Carneys Wealth Fund he set up in the UK has lost money. We can’t have this incompetance in Canada under the Liberals.
With stats Canada saying that inflation was up again in July it would be a smart move for Carney to extend the fuel tax implementation until Canada Day 2027 as Poilievre has suggested but we know from news today that the Sovereign Wealth Fund Carney set up in the UK by Carney when he was Bank of England Governor has lost over $400 Million in just 2 years, and he is going to do the same thing here in Canada with his proposed wealth fund for Canadians. The guy is just plain incompetent and has no clue.
The clean fuel standard took effect in July 2023 when Trudeau was PM. Carney government is in consultations and looking at amendments to it, following their practice of listening to Canadians.
Carney just added an additional cost to fuel, called the Clean Fuel Standard, the consumer carbon tax just has a new name!
The Liberals are taxing air and water now. It’s the new Carney carbon tax!
Carney hasn’t dealt with food inflation, in fact the worst in the G7. He told Canadians last year to judge him on this statistic, and I will do so. Grade of F is allocated.
Benoît
August 17, 2026 at 10:49 am
Now that Carney got rid of the carbon tax, conservatives will say Carney is imposing tax on air to cover up the fact that Trump and his war is causing inflation.
You can’t be a real person living in Canada.
Dwight
August 17, 2026 at 9:48 am
I find it funny that people all blame Carney, but this article is mostly about the gas prices due to the Iran war, which Trump caused. It’s also funny that I see restaurants and bars still full of people that are not concerned about inflation.
To funny…
Yes yes Trumps been screaming death to America since 1947. Give your head a shake.
It’s pathetic how so so many “Canadian” (in name only) conservatives cheer against Canada. Economists have said this inflation is the result of the Iran war. Stop your divisive politicking.
@Benoit. Time to read about the Clean Fuel Standard, adding more cost to Canadian consumers.
The Bank of Canada, inflation is up and the Canadian dollar is down. Key indicators of our economy. Elbows up folks.
Prime Minister Mark Carney said one way for Canadians to judge the performance of his government would be “by their experience at the grocery store.”
I’d happily do that.
Mark Carney is the definition of someone failing upwards
Now that Carney got rid of the carbon tax, conservatives will say Carney is imposing tax on air to cover up the fact that Trump and his war is causing inflation.
@Benoit. Actually no. Carney added extra costs to fuel also. Called the Clean Fuel Standard (CFS). Basically the new fuel carbon tax just a new name.
All the result of the Iran war. Where is Mr. 18% Poilievre’s security clearance as another poster adroitly asked?
We wouldn’t have this inflation if Poilievre would get his security clearance.
@Dwight. Why are so many restaurants closing due to bankruptcy?
I find it funny that people all blame Carney, but this article is mostly about the gas prices due to the Iran war, which Trump caused. It’s also funny that I see restaurants and bars still full of people that are not concerned about inflation.
To funny…
Food Inflation is going way up in Canada still, the worst in the G7. Carneys continued taxation on the inputs is a huge part of it. Carney told us to judge him on prices at the grocery store.
Inflation caused our GDP to grow…the only growth we’ve had in years.
More evidence of Carneys incompetence and the media that covers for him
“We have your back”
Your words not mine
Another metric that Carney isn’t getting it done. He is to busy in Italy on vacation.