Canada’s inflation rate accelerated to 2.4% in March as a war-driven gasoline shock pushed consumer prices sharply higher, lifting headline CPI from 1.8% in February even as the result still came in below economist expectations for 2.6%.
On a monthly basis, the consumer price index rose 0.9%, also below the 1.1% median forecast, but still the biggest month-over-month increase in 14 months.
Statistics Canada said the main driver was energy, especially gasoline. Gasoline prices rose 21.2% from February to March, which the agency called the largest monthly increase on record, and were up 5.9% from a year earlier. Energy prices overall rose 13.1% on the month and 3.9% year over year after falling 9.3% annually in February.
The year-over-year gasoline figure was held down by a base effect. March 2025 prices still reflected the since-removed consumer carbon levy, making the annual comparison less severe than the month-to-month move suggested. Statistics Canada said that distortion will disappear from the annual comparison starting with April 2026 data, due for release on May 19.
Transportation costs, the second-largest component of the CPI basket, rose 3.7% from a year earlier and became a major channel through which the gasoline spike flowed into headline inflation. Canada’s inflation profile had otherwise stayed relatively contained for more than a year, hovering near the midpoint of the Bank of Canada’s 1% to 3% target range.
Prices for food purchased from stores rose 4.4% year over year in March, up from 4.1% in February. Fresh vegetables rose 7.8%, the largest annual increase since August 2023, with Statistics Canada citing tighter supplies and adverse growing conditions in producing countries. Restaurant food inflation, however, cooled sharply to 3.2% from 7.8% a month earlier, reflecting a base effect tied to the end of the temporary GST/HST break in March 2025.
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