Canada Inflation Forecast: Energy Shocks and Carbon Price Changes

Canadian economists predict inflation will exceed 3% in April 2026, driven largely by surging gasoline prices following energy shocks in the Middle East. The increase is further compounded by the expiration of a consumer carbon price relief measure from 2025. Beyond fuel, the report highlights how rising energy costs are impacting food prices through higher fertilizer and transportation expenses. The Bank of Canada is monitoring whether these energy spikes create long term inflationary pressures across the broader economy.