Gas prices aren’t the only commodity set to rise in price. A recent survey found that over half of B.C. businesses will increase their prices over the next six months.
Merchant Growth, the company that conducted the survey, said that while 38 per cent of B.C. businesses didn’t pass any added costs to customers last year, 53 per cent of them will be forced to do so in 2026 due to continued tariffs and now skyrocketing oil prices.
“At this point, passing on some of those costs is not optional anymore. It is what is required to stay viable,” David Gens, the founder and CEO of Merchant Growth, told Daily Hive in an email.
Forty-five per cent reported that tariffs and trade disruptions have reduced their profit margins, and the recent war in the Middle East is further escalating costs for businesses.
One in 10 businesses also said that they will have to reduce their workforce over the next six months.
Stats Canada released its February 2026 labour force survey results last week, finding that B.C. has already shed over 20,000 jobs last month.
How is the Iran war impacting business and prices?
As Iran has effectively closed the Strait of Hormuz (where 20 per cent of the world’s oil passes), crude oil prices are going up, which Gens said is affecting the entire supply chain.
For example, restaurants and retailers are now facing higher costs of shipping. Contractors and tradespeople who often drive to work are paying more at the pump.
Gens said we can expect fresh produce, meat, and imported goods to increase between five and 10 per cent.
People who run a vehicle-heavy operation, like plumbers, electricians, and renovators, will likely factor this into their quotes and raise prices.
Hospitably operators, who already run on thin margins, will have to adjust menu prices, he said.
How does inflation factor into all of this?
Canada’s inflation rate fell last month to 1.8 per cent, but it “doesn’t necessarily reflect what small businesses are feeling on the ground,” said Gens in a release.
“A big part of the slowdown comes from how last year’s tax break is showing up in the comparison, not because the core costs of running a business have suddenly eased,” he said.
“For many operators, the day-to-day reality hasn’t changed much. The cost of food, supplies, transportation and rent is still high, and demand tends to be uneven coming out of the winter months. After months of absorbing those pressures and cutting back where they can, pricing is often one of the few tools left to keep the business stable,” he added.
On March 18, the Bank of Canada will announce its interest rate decision. Ratehub.ca mortgage expert Penelope Graham told Daily Hive that she predicts it will hold at 2.25 per cent.
The Bank uses this policy interest rate as its main tool to control inflation. If it increases interest rates, it makes borrowing money more expensive, and people are more inclined to save, which in turn reduces consumer demand.
Lowering interest rates, meanwhile, can help increase economic activity if it’s lagging, as borrowing costs are cheaper and people are more inclined to spend more and save less.
However, Merchant Growth said if the Bank holds the rate steady, it “could worsen inflationary pressures on operators.”
Gens said that this is because inflation is driven by external cost shocks, not Canadians spending too freely.
“So the traditional tool of raising rates to cool demand doesn’t really address what’s causing prices to rise,” he said.
Gens argued that if the Bank of Canada implemented a modest rate reduction, it would lower debt payments for small businesses that are surviving on credit, as well as give consumers more breathing room.
“Right now, the bigger threat to the Canadian economy isn’t runaway consumer spending, it’s a slow strangulation of small businesses.”