OTTAWA — Retail sales rose 0.9 per cent to $72.7 billion in March as higher gas prices boosted overall sales for the month, Statistics Canada said on Friday.
Sales at gas stations and fuel vendors rose 12.4 per cent as the attack on Iran by the U.S. and Israel drove oil and gas prices higher, the agency said. In volume terms, sales for the subsector fell 1.9 per cent for the month.
“The war-driven price shock is leaving a mark on Canadian consumers, who have otherwise held in there against elevated economic uncertainty and outright population declines,” said BMO senior economist Shelly Kaushik in a note to clients.
She said the StatCan report suggests consumer spending will remain under pressure until energy prices normalize.
Oil prices have remained high amid ongoing uncertainty about how long the war in the Middle East will keep the Strait of Hormuz shut. The closure of the crucial waterway has prevented oil tankers from exiting the Persian Gulf to deliver crude to customers worldwide.
Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, fell 0.1 per cent in March.
Sales at building material and garden equipment and supplies dealers fell 2.9 per cent, while general merchandise retailers saw sales slip 0.5 per cent.
“A stagnant housing market continues to weigh on retail sales,” said CIBC senior economist Andrew Grantham in a note.
The largest gain in core retail sales came from food and beverage retailers, up 0.5 per cent, StatCan said.
Overall retail sales in volume terms fell 0.7 per cent in March.
Grantham said inflation-adjusted consumer spending appears to be pulling back again following a solid start to the year.
“That stall in spending will limit the ability of higher gasoline prices to spread to wider inflationary pressures, enabling the Bank of Canada to look through the near-term spike in headline inflation and keep interest rates on hold this year,” he said.
Looking ahead, Statistics Canada said its preliminary estimate for April suggests retail sales rose 0.6 per cent, though it cautioned the figure will be revised.
Grantham said early insights into April, suggesting potentially lower volumes, are setting the second quarter up to be a “much weaker quarter for consumer spending.”
This report by The Canadian Press was first published May 22, 2026.
The Canadian Press
