Iran ceasefire still means uncertainty for most Canadian businesses and consumers
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A 14-day ceasefire between the US and Iran has brought uncertainty to Canadian businesses and consumers, with high energy costs and disrupted supply chains affecting the economy. Despite the ceasefire, oil prices remain high, threatening to cripple the transport sector and increase food inflation, with small and medium-sized businesses facing significant challenges.
The US and Iran have agreed to a 14-day ceasefire, but Canadian businesses and consumers are still feeling the effects of the conflict. Oil prices have soared, with Brent crude up 31% from pre-war levels. This has led to higher energy costs, with unleaded gas selling at $1.85 a litre in Ontario, up from $1.40 a litre before the conflict. The ceasefire has brought some relief, but prices are expected to remain high for the rest of the year. National Bank CEO Laurent Ferreira warned of higher inflation due to soaring oil prices and disrupted supply chains. Small and medium-sized businesses are facing significant challenges, with 85% of SMEs concerned about the war's impact on energy prices. Many are absorbing the higher costs, but may have to pass them on to consumers if the conflict continues. The conflict has also pushed up costs across the Canadian supply chain, with food inflation expected to increase by 0.4 to 0.7 percentage points by May or June. This could have a significant impact on consumers and businesses alike. The Canadian government has welcomed the ceasefire, but is urging a substantive negotiated settlement to secure the Gulf region and avert a severe global energy crisis.
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