ImpactS RELATED TO fuel charges: 1)(Updated) Inflation jumps on Iran war shock but few signs yet of spreading price hikes; 2)StatCan said March’s 21.2 per cent monthly increase in the price of gasoline was the largest on record; 3) Independent grocers adjusting to fuel surcharges from suppliers
1)(Updated) Inflation jumps on Iran war shock but few signs yet of spreading price hikes
Courtesy Barrie360.com and Canadian Press
By Craig Lord, April 20, 2026
Courtesy Barrie360.com and Canadian Press
Statistics Canada reported a jump in the headline inflation rate for March but economists parsing the latest data argue there are few signs so far that the price shock from the Iran war is spreading beyond the pumps.
The agency reported Monday that the annual rate of inflation accelerated to 2.4 per cent last month, an increase of 0.6 percentage points from February.
It said higher gas prices tied to the war in the Middle East were the main reason for the jump. But economists had expected a slightly larger increase in the headline inflation rate and pointed to signs of easing elsewhere in the consumer basket.
“I would say, apart from those fuel-related inflation spikes, the report was fairly benign,” said TD Bank senior economist Leslie Preston.
Iran’s move to close the Strait of Hormuz in response to U.S. and Israeli attacks and ongoing uncertainty over ceasefire talks has sent global fuel prices skyrocketing in recent weeks.
StatCan said March’s 21.2 per cent monthly increase in the price of gasoline was the largest on record. The agency said inflation would have been 2.2 per cent in March if gasoline was taken out of the equation — a second consecutive monthly decline.
Monday also marks the start of Ottawa’s roughly four-month break on federal fuel excise taxes, a move expected to remove as much as 10 cents from a litre of gas and four cents per litre of diesel. Economists expect that move will take one-to-two tenths of a percentage point off the headline inflation rate starting in May.
BMO chief economist Doug Porter said in a note to clients Monday that he expects the headline inflation rate will top three per cent in April as gas prices kept rising heading into the month and the carbon tax removal drops out of the year comparison.
“However, depending on where oil prices go and how long the Strait remains closed, it’s possible that April will mark the high-water point for inflation this year,” Porter said, though he put emphasis on “possible.”
Preston said the Bank of Canada’s closely watched core inflation metrics, which tend to strip out volatile movements from categories like gas, showed further signs of easing in March.
That suggests that knock-on effects from the war in Iran have yet to spread.
“We’re not yet seeing those price pressures show up in other categories. That would be something we’d be watching for in a couple of months,” she said.
Food inflation, meanwhile, cooled to four per cent from 5.4 per cent in February as the lingering distortions of the federal government’s two-month “tax holiday” a year earlier fell out of the annual comparisons. That drove down inflation at restaurants and on some grocery items last month.
Fresh vegetable prices jumped 7.8 per cent year-over-year in March, which StatCan chalked up to recent tough growing conditions for cucumbers, peppers and celery.
Preston warned that food inflation is one area particularly vulnerable to higher fuel prices because profit margins in the grocery sector are thin and transportation costs make up a sizeable share of expenses.
“In Canada, we are getting a lot of our food from very far away, so transportation costs are a key factor. That would be something we’d be watching for in the months ahead potentially to boost food prices,” she said.
The Bank of Canada will be paying close attention to the March inflation figures as it prepares for its next interest rate decision on April 29.
The central bank has signalled it will look through the initial inflationary spike tied to the Middle East conflict but will act to ensure higher gas prices don’t turn into longer-term inflation.
The Bank of Canada has held its benchmark interest rate steady at 2.25 per cent since its last cut in October. Financial market odds are more than 90 per cent in favour of another hold next week, according to LSEG Data & Analytics.
Porter noted that the drags on inflation in March were varied, as telephone services, auto insurance, furniture, candy, and mortgage interest costs all saw outright price declines on a monthly basis, suggesting underlying softness in the economy.
“Our considered view is that if it were not for the conflict with Iran, the discussion would currently be revolving around the strong possibility of BoC rate cuts, not hikes. This report reinforces that opinion,” he said.
Preston said she is with the majority calling for a hold from the central bank next week but agreed with Porter that rate cut chatter would be louder if not for the conflict.
Separately on Monday, the Bank of Canada released its quarterly surveys of business and consumer expectations. While the central bank was out polling in mid-February — before the war in Iran erupted — followup surveys suggested firms were already grappling with higher costs from the conflict.
The Bank of Canada’s trackers showed sentiment was improving somewhat heading into the war, but later surveys suggested businesses’ inflation expectations were higher in the year ahead and marginally higher over the medium term. Consumers also expect higher prices for gas and food over the coming year, particularly if the war lasts a long time.
Preston said the Bank of Canada will be particularly concerned with keeping inflation expectations reined in.
“If businesses, who are in a position to set prices, expect inflation to be higher, it becomes a self-fulfilling prophecy. Businesses will raise prices to cover their expected increases in costs,” she said.
Some of the businesses polled in the followup surveys mentioned that their ability to pass on prices was constrained by weak demand and the cost structure of their contracts.
With a little over a week to go until the central bank’s next rate decision, Preston said monetary policy-makers’ tone will depend heavily on whether gas prices continue along their recent easing path.
Further drops in prices at the pumps could give the Bank of Canada confidence that the energy supply shock is temporary, while a renewed global price hike would lean toward discussion about when costs could get passed on to consumers.
“The bank is likely still working out what they’re going to say, because a week is a long time in the current environment,” Preston said.
2)StatCan said March’s 21.2 per cent monthly increase in the price of gasoline was the largest on record
Statistics Canada reported a jump in the headline inflation rate for March but economists parsing the latest data argue there are few signs so far that the price shock from the Iran war is spreading beyond the pumps.
The agency reported Monday that the annual rate of inflation accelerated to 2.4 per cent last month, an increase of 0.6 percentage points from February.
It said higher gas prices tied to the war in the Middle East were the main reason for the jump. But economists had expected a slightly larger increase in the headline inflation rate and pointed to signs of easing elsewhere in the consumer basket.
“I would say, apart from those fuel-related inflation spikes, the report was fairly benign,” said TD Bank senior economist Leslie Preston.
Iran’s move to close the Strait of Hormuz in response to U.S. and Israeli attacks and ongoing uncertainty over ceasefire talks has sent global fuel prices skyrocketing in recent weeks.
StatCan said March’s 21.2 per cent monthly increase in the price of gasoline was the largest on record. The agency said inflation would have been 2.2 per cent in March if gasoline was taken out of the equation — a second consecutive monthly decline.
Monday also marks the start of Ottawa’s roughly four-month break on federal fuel excise taxes, a move expected to remove as much as 10 cents from a litre of gas and four cents per litre of diesel. Economists expect that move will take one-to-two tenths of a percentage point off the headline inflation rate starting in May.
BMO chief economist Doug Porter said in a note to clients Monday that he expects the headline inflation rate will top three per cent in April as gas prices kept rising heading into the month and the carbon tax removal drops out of the year comparison.
“However, depending on where oil prices go and how long the Strait remains closed, it’s possible that April will mark the high-water point for inflation this year,” Porter said, though he put emphasis on “possible.”
Preston said the Bank of Canada’s closely watched core inflation metrics, which tend to strip out volatile movements from categories like gas, showed further signs of easing in March.
That suggests that knock-on effects from the war in Iran have yet to spread.
“We’re not yet seeing those price pressures show up in other categories. That would be something we’d be watching for in a couple of months,” she said.
Food inflation, meanwhile, cooled to four per cent from 5.4 per cent in February as the lingering distortions of the federal government’s two-month “tax holiday” a year earlier fell out of the annual comparisons. That drove down inflation at restaurants and on some grocery items last month.
Fresh vegetable prices jumped 7.8 per cent year-over-year in March, which StatCan chalked up to recent tough growing conditions for cucumbers, peppers and celery.
Preston warned that food inflation is one area particularly vulnerable to higher fuel prices because profit margins in the grocery sector are thin and transportation costs make up a sizeable share of expenses.
“In Canada, we are getting a lot of our food from very far away, so transportation costs are a key factor. That would be something we’d be watching for in the months ahead potentially to boost food prices,” she said.
The Bank of Canada will be paying close attention to the March inflation figures as it prepares for its next interest rate decision on April 29.
The central bank has signalled it will look through the initial inflationary spike tied to the Middle East conflict but will act to ensure higher gas prices don’t turn into longer-term inflation.
The Bank of Canada has held its benchmark interest rate steady at 2.25 per cent since its last cut in October. Financial market odds are more than 90 per cent in favour of another hold next week, according to LSEG Data & Analytics.
Porter noted that the drags on inflation in March were varied, as telephone services, auto insurance, furniture, candy, and mortgage interest costs all saw outright price declines on a monthly basis, suggesting underlying softness in the economy.
“Our considered view is that if it were not for the conflict with Iran, the discussion would currently be revolving around the strong possibility of BoC rate cuts, not hikes. This report reinforces that opinion,” he said.
Preston said she is with the majority calling for a hold from the central bank next week but agreed with Porter that rate cut chatter would be louder if not for the conflict.
Separately on Monday, the Bank of Canada released its quarterly surveys of business and consumer expectations. While the central bank was out polling in mid-February — before the war in Iran erupted — followup surveys suggested firms were already grappling with higher costs from the conflict.
The Bank of Canada’s trackers showed sentiment was improving somewhat heading into the war, but later surveys suggested businesses’ inflation expectations were higher in the year ahead and marginally higher over the medium term. Consumers also expect higher prices for gas and food over the coming year, particularly if the war lasts a long time.
Preston said the Bank of Canada will be particularly concerned with keeping inflation expectations reined in.
“If businesses, who are in a position to set prices, expect inflation to be higher, it becomes a self-fulfilling prophecy. Businesses will raise prices to cover their expected increases in costs,” she said.
Some of the businesses polled in the followup surveys mentioned that their ability to pass on prices was constrained by weak demand and the cost structure of their contracts.
With a little over a week to go until the central bank’s next rate decision, Preston said monetary policy-makers’ tone will depend heavily on whether gas prices continue along their recent easing path.
Further drops in prices at the pumps could give the Bank of Canada confidence that the energy supply shock is temporary, while a renewed global price hike would lean toward discussion about when costs could get passed on to consumers.
“The bank is likely still working out what they’re going to say, because a week is a long time in the current environment,” Preston said.
3)Independent grocers adjusting to fuel surcharges from suppliers
By Rikita Dubey, April 19, 2026
A few weeks into the war in Iran, an Ontario-based grocer started receiving surcharge letters from its suppliers stating that delivery costs would be going up.
It was not an exorbitant amount; somewhere between $15 to $50 for a truckload, said Giancarlo Trimarchi, president of Vince’s Market, a family-owned grocery chain with four locations north of Toronto.
But that quickly adds up, he said.
“Smaller grocers like us often have smaller orders because we have smaller stores and smaller back rooms where we can’t hold a lot of stuff,” Trimarchi said.
“We usually try to order less, more often, to keep our shelves full … (which) becomes a larger proportional cost on the goods.”
Higher fuel prices have started to reflect in shipping costs after a large chunk of the global oil supply was choked off at the Strait of Hormuz as a result of the conflict in the Middle East. As the pressure continues, many economists are forecasting an uptick in grocery prices across the board.
While most grocers are bracing for another bout of food inflation, independent grocers expect an even higher bill on their wholesale deliveries as suppliers start charging more to offset fuel costs.
Many independent grocers have already started to receive notices from their suppliers about price increases or temporary surcharges, said Gary Sands, a senior vice-president at the Canadian Federation of Independent Grocers, which represents 6,900 independent grocers across the country.
Some suppliers are adding surcharges of 10 to 15 per cent on deliveries, while others are baking price increases into items, he said.
The impact on food prices depends on how far that food item has to travel, said Mike von Massow, a food economist at the University of Guelph.
Usually, he said, transportation represents about 3.5 to four per cent of the retail price of food, but it varies widely for individual items. For instance, the retail share of transporting fresh fruits and vegetables could range between 10 and 15 per cent, reflecting the cost of a long journey from parts of the United States or Mexico to stores in Canada, and shorter shelf lives.
While that’s a cost all grocers would bear, von Massow said shipping to independent stores can be more expensive because, like Vince’s Market, they tend to have more frequent deliveries of smaller loads.
Other factors, such as a truck idling in heavy traffic and burning fuel, or waiting to unload the shipment, also add to the cost of deliveries, von Massow added.
Sands said some independent grocers try to keep their costs low by doing things like picking up their own fresh produce from a wholesale market.
They are trying to stay agile, he said.
Vince’s Market picks up its fresh produce from a wholesale food market several times a week. Each round trip is roughly 100 kilometres, plus delivery stops at all its locations.
“We’re definitely seeing our cost of transportation internally rise, which of course puts pressure on our operating costs,” Trimarchi said. So far, the cost of gas has risen about 25 per cent month-to-month, he added.
The federal government’s 20-week pause on some fuel taxes, which kicks in on Monday, is expected to save consumers 10 cents per litre on regular gasoline and four cents per litre on diesel.
At a rural grocery store in Tignish, P.E.I., however, the troubles aren’t just limited to fuel surcharges and expensive groceries. They’re also facing delays in shipments as some truck operators weigh their profit margins for certain routes amid elevated gas prices.
“The last point of contact is the difficulty in finding carriers, and if it’s not a beneficial route that they can’t make a profit off delivering, then they would likely not take on that as a delivery option,” said Darren MacKinnon, general manager of the Tignish Co-operative Association Ltd.
The delays are anywhere from a couple of days to a week, he said.
While shipments eventually arrive, MacKinnon said the delays add costs to the business for missed sales opportunities and labour that’s mismatched with delivery timings.
Von Massow said independent grocers might see their already-narrow margins squeezed further as the current ceasefire in the war remains on shaky ground. Independent grocers usually operate on a margin of about two per cent. That’s lower than average large-scale grocery margins of 3.5 per cent, according to the Retail Council of Canada.
If independent grocers pass those costs on to consumers, it will make their prices less competitive, von Massow said.
But independent grocers have more flexibility to switch up their offerings, unlike large-scale chains that are expected to carry everything regardless of price, he said.
“They’ll buy what they can get the best deal on, and they’ll buy stuff that maybe needs less transportation costs,” von Massow said. “There might be ways to adapt.”
Even as cost pressures mount, both Vince’s Market and Tignish Co-op are taking a wait-and-see approach.
“For now, we’re absorbing the costs. We haven’t passed them through yet in any way,” Trimarchi said. But that could change by the end of this month, as shipping costs become clearer, he said.
There’s also a growing fear that if those higher costs are passed on, consumers might choose to shop elsewhere, he said.
“We have to be really calculated and we can’t just make rash decisions,” he said.
For the rural grocer in Tignish, losing consumers to other retailers is less of a concern.
“When you look at the scope of logistics, food to any banner of a retail store is going to be affected,” MacKinnon said. “I don’t have a direct fear that there will be any other retailer in any better position than we will be.”