FX.co ★ Canada Inflation Surges in March

Canada’s headline inflation rate rose to 2.4% in March 2026, up from 1.8% in February, matching the highest level in a year but coming in just below market expectations of 2.5%. The increase largely reflected the initial impact of the war in the Middle East on Canadian consumer prices, as disruptions to tanker traffic from the Persian Gulf led to global energy shortages.

Consumer energy prices swung sharply higher, with energy inflation climbing to 3.9% in March from a deflation rate of 9.3% the previous month. This reversal was sufficient to push transportation inflation up to 3.7%, compared with -0.8% in February. Price growth also accelerated in other major categories, including shelter (1.7% vs. 1.5%) and recreation and education (2.6% vs. 0.5%).

At the same time, base effects associated with the reintroduction of GST/HST continued to influence food prices. Food inflation eased to 4.0% in March from 5.4% in February. Overall, the Consumer Price Index (CPI) rose 0.9% on a monthly basis, driven in large part by a 21.2% jump in gasoline prices.