Canada’s annual rate of inflation for May came in at 2.2%, identical to the April rate, Statistics Canada reported today.

Cost increases for housing and gasoline put upward pressure last month on the overall inflation rate, while a decline in the price of natural gas eased some of that pressure.

The Bank of Canada’s core index rose 2.2% in May 2007 over May 2006, a slowdown from the 2.5% increase in April. This index is used by the Bank of Canada to monitor the inflation control target. The 12-month change in this index has remained above two% since July 2006.

The costs of housing took a bigger bite out of Canadians’ wallets and pocketbooks than they did in May 2006. Mortgage interest costs rose 5.7% last month from the same time last year.

Homeowners’ replacement cost, which represents the worn-out structural portion of housing and is estimated using new housing prices but excluding land, increased by 6%.

Food costs were also higher last month. Consumers spent an average of 3.5% more to eat in May than they did in May 2006, including 2.3% more for restaurant meals and four% more at the grocery store.

The cost of operating an automobile also increased. Motorists paid 5.8% more to fill up their vehicles, while vehicle insurance premiums increased by 3.7%.

Consumers saw some price relief in the form of an 8.8% decline in the price of natural gas, and a 20% decline in prices for computer equipment and supplies.