Energy Prices Drive March Inflation Higher in Canada

Apr 21, 2026

Canada’s inflation rate moved higher in March, but with much of the increase seemingly tied to a sharp, war-driven spike in energy costs.

Statistics Canada reported Monday that its consumer price index rose 2.4% from a year earlier in March, up from 1.8% in February. On a monthly basis, prices climbed 0.9%, the largest monthly increase in 14 months, while seasonally adjusted inflation rose 0.5%.

The main driver was energy, particularly gasoline, as the conflict in the Middle East disrupted supply and pushed crude oil prices higher. Gasoline prices were up 5.9% from a year earlier and surged 21.2% from February, marking the largest monthly increase on record. Fuel oil and other fuels also posted a steep year-over-year increase of 26.1%, while natural gas prices fell 18.1%, helping to offset some of the broader energy rise.

Excluding gasoline, inflation actually slowed to 2.2% in March from 2.4% in February, suggesting the jump in headline inflation was concentrated at the pumps.

Food prices also continued to rise. Grocery prices increased 4.4% from a year earlier, up from 4.1% in February, with fresh vegetables leading the way. Vegetable prices rose 7.8%, the largest gain since August 2023, as tighter supplies and poor growing conditions in producing countries pushed up the cost of items such as cucumbers, peppers, and celery, StatsCan said.

At the same time, some categories showed slower price growth because of lingering comparisons tied to the temporary GST/HST break that ran from December 2024 through February 2025. Restaurant food prices rose 3.2%, much slower than the 7.8% increase recorded in February, while alcoholic beverages and hobby-related goods also helped ease some inflation pressure.

Economists said the report showed little evidence so far that the oil shock from the Iran war is broadly feeding into other prices. Analysts had expected an even larger increase, with forecasts calling for annual inflation of 2.6% and monthly inflation of 1.1%.

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Video: Western Canadian Agriculture: Hard Times Made the World's Best Farmers

Western Canadian agriculture produced the most advanced farmers in the world not through abundance but through adversity. The crow rate fell. The wheat price went nowhere. The brown envelopes stopped.

When the subsidies disappeared, the bad farmers left and the good ones stayed. And the ones who stayed could not just grow wheat anymore. They started growing lentils and canola and peas and flax and faba beans. They built crop rotation. They got serious about agronomy because there was no government backstop. That process produced the Western Canadian agriculture Dennis Bulani describes in this clip: the most advanced, most educated farming culture in the world.

His contrast with Iowa corn and soybean farmers is sharp. At a DeKalb farmer meeting in Okoboji, Iowa, he asked what crop rotation they ran. Beans on corn stubble, corn on bean stubble. How do you fertilize? The co-op agronomist handles it. Have you considered other crops? No need. We make so much money on corn and soybeans. Western Canadian agriculture was never allowed that comfort. And now those Iowa farmers are watching soybean markets lock up with China and corn prices slide, and they do not have the agronomy knowledge or the research base to pivot. Western Canadian farmers adapted on a dime because they had done it before.

Dennis also makes the case that Western Canadian agriculture keeps adapting in real time. Low commodity prices over the past year have pushed growers to look seriously at precision spot-spray technology. He knows a neighbor who bought a sprayer with the seeing-eye system and sprayed only 80 out of 320 acres. As a chemical retailer Dennis acknowledges that will affect his sales. He supports it anyway, because if it advances Canadian agriculture and makes farmers money, that is a good outcome.

The lesson Dennis draws from the tale of two farms: continuous improvement is the only durable strategy. When canola was $22 a bushel some growers went to Arizona instead of the Crop Production Show. When the price came down those same growers came back to the research and the discipline. Products do not go on Rack Petroleum's shelves unless they pass a replicated trial first. That is what Western Canadian agriculture built through hard times: farmers who do the work whether the times demand it or not.

Dennis Bulani is CEO of Rack Petroleum and Ultimate Yield in Biggar, Saskatchewan. Dan Aberhart hosts GTF Productions, Western Canadian Agriculture's foremost live briefing platform and its foremost AI training platform for ag operators