Statistics Canada says the annual rate of inflation cooled to 1.7% in July as lower gas prices led the decline from 1.9% in June.
The agency says gasoline prices were down 16.1% year-over-year, thanks largely to the removal of the consumer carbon price.
Gas prices were also down 0.7% on a monthly basis following an increase in production from oil-exporting countries and a ceasefire in the conflict between Israel and Iran.
There were signs of price pressure building for grocery bills last month as costs rose 3.4% annually at grocery stores, up from 2.8% in June.
Confectionary and coffee products saw big year-over-year price jumps in July, which Statistics Canada said were tied to tough growing conditions in countries that produce cocoa and coffee beans.
Shelter inflation also saw its first increase since February of last year as rent price gains accelerated.