Canada Inflation Research Brief

Energy-driven inflation behind accelerated price growth. Canada’s headline inflation rate moved higher in March, with the Consumer Price Index rising 2.4 per cent year-over-year, up from 1.8 per cent in the prior month. A sharp increase in energy prices largely drove the acceleration, as gasoline costs surged amid the ongoing conflict in the Middle East and its implications on key global shipping routes such as the Strait of Hormuz. Energy alone contributed roughly 0.7 percentage points to the annual inflation rate, highlighting how geopolitical tensions — not underlying domestic demand — are currently shaping price pressures. While food prices also rose modestly, the broader inflation backdrop remains heavily influenced by volatile, externally driven factors.