The Hamilton, Ont., resident needs\u00a0the SUV to commute to his in-person job as a broadcast media technician in Oakville. He needs it to take his three children to after-school activities and other family outings.<\/p>\n
If prices at the pumps remain high, Harris and his wife fear they won\u2019t be able to afford road trips with the kids this summer.<\/p>\n
\u201cIt feels like an unfair sacrifice to make because of corporate and political decisions that are out of our control,\u201d he told the Star.<\/p>\n
He is also concerned about the possibility of a surge in food prices. His children are 11, seven, and five years old and \u201cthey\u2019re eating, like, all the time,\u201d added Harris.<\/p>\n
Across the country, consumers are already feeling the pinch of higher prices as the conflict in Iran enters its third month. But this could be just the beginning.<\/p>\n
Unless there is a quick end to the blockade of the Strait of Hormuz \u2014 through which about one fifth of the world\u2019s oil and gas normally passes\u00a0\u2014 economists are expecting prices to increase across the board this year.<\/p>\n
In April, the International Monetary Fund\u00a0raised its global inflation forecast to an average of 4.4 per cent in 2026.\u00a0<\/p>\n
The Bank of Canada says domestic inflation could peak at around three per cent in April and if the conflict persists, it could stay near that level for most of 2027.\u00a0\u00a0 \u00a0<\/p>\n
Exorbitant price tags, plus an already soft labour market and slow economic growth, would mean more financial trade-offs for millions of Canadians who haven\u2019t had a break from economic stress in years.<\/p>\n
Harris said he can\u2019t simply boycott essential items like groceries, though he is considering switching to an electric vehicle so he doesn\u2019t \u201chave to worry about gas anymore,\u201d he added.\u00a0<\/p>\n
\u201cEverything just feels out of our control.\u201d\u00a0<\/p>\n
Largest disruption in history<\/p>\n
The massive disruption to the global oil market \u2014 dubbed the largest in the market\u2019s history by the International Energy Agency \u2014 is destabilizing supply chains around the world.<\/p>\n
The price of West Texas Intermediate (WTI) crude oil soared from $67 (U.S.) a barrel on Feb. 27, a day before the United States and Israel launched strikes on Iran, to a peak of almost $113 a barrel on April 7. It was at\u00a0$105 on Thursday, representing a\u00a057 per cent increase since the war began.<\/p>\n
As a result, higher gasoline and diesel prices will put upward pressure on the prices of \u201cthings like fresh fruit and fresh vegetables, or any type of good that has to be transported,\u201d explained Andrew Barclay, an economist at Statistics Canada.<\/p>\n
He added that consumers could also see price increases in\u00a0furniture, appliances and clothing.<\/p>\n
Adding pressure to food prices worldwide is the fact that shipments of fertilizers were also intercepted by the closure of the\u00a0Strait of Hormuz, said Barclay.<\/p>\n
In March, Canada\u2019s inflation rate was already capturing some of the impact from higher energy costs due to the war.<\/p>\n
The Consumer Price Index was up 2.4 per cent year-over-year. Excluding gasoline, it rose 2.2 per cent.<\/p>\n
Gasoline prices jumped 21.2 per cent on a monthly basis \u2014 the largest price increase for the fuel on record, according to Statistics Canada.<\/p>\n
At the same time, grocery inflation climbed 4.4 per cent year-over-year from 4.1 per cent in February. Prices for fresh vegetables increased 7.8 per cent in March\u00a0\u2014 the largest spike since August 2023.<\/p>\n
Oil could hit $150 per barrel<\/p>\n
Assuming the U.S. and Iran reach a deal by early May, and traffic in the Strait of Hormuz recovers gradually over the remainder of this year, TD Bank economists expect\u00a0West Texas Intermediate crude oil to trade at around $80 per barrel by year-end.<\/p>\n
In the case of a prolonged disruption, however, TD Bank sees the price of oil peaking at $130 per barrel in the second quarter and remaining above $90 by the end of 2026.<\/p>\n
Roger McKnight, chief petroleum analyst at En-Pro, told the Star that if the war continues for another month, it is possible the price of oil reaches $150 per barrel.\u00a0<\/p>\n
\u201cI don\u2019t think the economies of the world can handle that,\u201d he said, adding, \u201cI don\u2019t think President Trump<\/a> would really want to have this carry on when we have a run-up to his midterms.\u201d\u00a0<\/p>\n Canadians cutting spending<\/p>\n There are early signs that consumers are changing spending habits as essential costs increase.\u00a0<\/p>\n A recent online survey\u00a0of 600 households by the Bank of Canada revealed that 21 per cent of respondents have cancelled or postponed their trips due to increases in travel costs. Meanwhile, 28 per cent have reduced major spending more broadly since the war in the Middle East started.<\/p>\n <\/p>\n
A new survey shows Canadians are skipping meals, using credit, and shopping at multiple stores as grocers\u2019 market power and rising prices squeeze <\/p>\n <\/p>\n
A new survey shows Canadians are skipping meals, using credit, and shopping at multiple stores as grocers\u2019 market power and rising prices squeeze <\/p>\n As the population spends less on trips and other discretionary goods and services, experts expect economic growth in Canada to be stunted this year.\u00a0<\/p>\n Jimmy Jean, chief economist at Desjardins, is forecasting\u00a0gross domestic product (GDP) growth of 1.4 per cent, on average, in 2026.<\/p>\n \u201cSo that\u2019s not a recession, what we have in our baseline forecast. But it\u2019s still a pattern that is quite weak in terms of growth,\u201d Jean said.\u00a0\u201cIt\u2019s a deceleration even from 2025.\u201d\u00a0<\/p>\n Jean also believes the unemployment rate \u2014 currently at 6.7 per cent \u2014\u00a0will remain elevated for some time.\u00a0<\/p>\n \u201cEmployers are very prudent as it stands, given all the uncertainty. And so you have much less job openings,\u201d he said.<\/p>\n Oil sector could benefit<\/p>\n The upside of higher oil prices is that Canada is a producer and net exporter of the commodity, with provinces like Alberta benefitting when demand increases.\u00a0<\/p>\n
\n
\n <\/a><\/p>\n
\n
\n <\/a><\/p>\n