Canada annual inflation rises to 2.4 percent in March
Canada’s annual inflation rate rose to 2.4% in March as gasoline prices jumped. Rising food costs also contributed to the monthly spike in consumer prices.
The annual inflation rate in Canada rose to 2.4% in March, driven by a surge in energy costs following the outbreak of conflict in Iran. Statistics Canada reported that the monthly consumer price index jumped 0.9%, marking the highest monthly increase in 14 months. This spike was largely attributed to the war, which began in late February and has disrupted crude oil shipments through the Strait of Hormuz, impacting global supply.
The geopolitical instability has significantly pressured global energy benchmarks, including Brent Crude Oil and West Texas Oil. Consequently, the price of WT GASOLINE surged by 21.2% on a monthly basis in March, contributing to a 5.9% year-over-year increase. The annual figure was somewhat moderated by the removal of a carbon levy in April 2025, which had kept prices higher during the same period last year.
Rising fuel costs also pushed transportation prices up by 3.7% compared to a year ago. Food prices remained another major contributor to inflation, with grocery prices rising 4.4% annually. Fresh vegetable prices, in particular, saw a 7.8% increase, the largest jump recorded since August 2023. Analysts polled by Reuters had anticipated a slightly higher headline figure of 2.6%, but the current level remains within the Bank of Canada's target range of 1% to 3%.
Despite the volatility in headline figures, core inflation metrics remained relatively stable. The CPI-median was unchanged at 2.3%, while the CPI-trim edged down to 2.2%. Bank of Canada Governor Tiff Macklem recently noted that the central bank is not concerned about short-term fluctuations in inflation expectations, focusing instead on the underlying long-term trends.
