Canada’s Inflation Climbs to 2.4% as Gas Prices Surge to Record High

 

Canada’s inflation rate accelerated to 2.4% in March, up from 1.8% in February, as the Iran war triggered the largest monthly gasoline price increase on record. Statistics Canada reported that gas prices surged 21.2% month‑over‑month, a supply‑shock response to Iran’s closure of the Strait of Hormuz and broader Middle East instability. 

Energy costs were the dominant driver of March inflation, with overall energy prices rising 3.9% year‑over‑year after a sharp decline the month before. Excluding gasoline, inflation would have eased to 2.2%, highlighting how concentrated the price shock was. 

Food inflation offered mixed relief: grocery prices rose 4.4%, while fresh vegetables jumped 7.8% due to difficult growing conditions. Restaurant inflation cooled sharply as last year’s tax‑holiday distortions fell out of the annual comparison. 

Economists note that while headline inflation spiked, core measures remained relatively tame, giving the Bank of Canada room to hold its policy rate at 2.25% during its upcoming April 29 decision. Still, analysts warn inflation could top 3% in April if oil prices continue rising.

For Canadians already strained by high living costs, March’s numbers underscore how global conflicts can quickly ripple through household budgets — especially at the pump.