Canada’s

inflation rate

accelerated to 2.4 per cent in March, up from 1.8 per cent in February, as gasoline prices spiked because of oil supply disruptions in the ongoing Iran war.

Gas prices

rose over 21 per cent in March from the month before — “the largest price increase for gasoline on record, due to the supply shock resulting from the conflict in the Middle East,” Statistics Canada said Monday.

Overall, energy prices rose 3.9 per cent in March after falling 9.3 per cent in February.

Prices for food purchased in stores rose 4.4 per cent in March, up from 4.1 per cent in February. Prices for fresh vegetables rose 7.8 per cent, the biggest increase since August 2023.

Lingering effects of the end of GST/HST last year slowed inflation on some goods. Prices for restaurant food increased 3.2 per cent in March, down from a 7.8 per cent pace in February. Prices for alcoholic beverages purchased from stores and toys, games (excluding video games) and hobby supplies also grew at a slower pace.

Excluding gasoline, the consumer price index rose 2.2 per cent.

Overall, inflation last month could have been worse, said Douglas Porter, chief economist at BMO Capital Markets. Economists were expecting the rate to hit 2.6 per cent.

The

Bank of Canada’s

measures of core inflation also stayed calm, he said. Median held steady at 2.3 per cent and trim eased to 2.2 per cent, a five-year low.

The central bank, which next decides on interest rates April 29, will be watching these inflation numbers closely.

More to come …

  • Why rate watchers shouldn’t take the Bank of Canada at its word
  • Economists see oil spike costing Canada jobs, raising inflation