Half of Canadian SMBs Now Worried About Fuel Costs — And It's Getting Worse

In just four weeks, fuel cost anxiety among Canadian small businesses went from a serious concern to a majority problem. According to a CFIB survey cited by Retail Insider on March 18, 2026, 50% of Canadian businesses now flag fuel costs as a pressing worry — up from 36% in February. That 14-percentage-point single-month jump is not a gradual trend. It's a signal that something broke fast, and it has a name: the Strait of Hormuz.

The Geopolitical Trigger Behind Your Fuel Bill

On March 4, 2026, escalating conflict involving Iran led to the closure of the Strait of Hormuz — the narrow waterway through which roughly 20% of the world's oil supply flows. The market reaction was swift and severe. Brent crude crossed $100 per barrel by March 8 and peaked at $126. Dubai crude hit $166 per barrel on March 19. For Canadian businesses, the consequences landed at the pump almost immediately: diesel prices rose from 166.3 cents per litre to 199.7 cents per litre within weeks, according to Supply Chain Canada. That's a roughly 20% increase in diesel costs over a very short window — an increase that hits transportation, agriculture, and any fuel-dependent operation with almost no lag time.

Who's Getting Hit Hardest

The sectors facing the sharpest margin compression are those where fuel isn't a line item — it's the business model. Trucking and logistics operators are absorbing diesel costs that have climbed nearly 34 cents per litre in weeks, with limited ability to pass those increases upstream on contracts already in place. Agriculture faces a compounding problem: not only have fuel costs for equipment spiked, but fertilizer exports moving through the Strait of Hormuz have been disrupted, raising input costs heading into the spring planting season. Food service operators are caught between rising ingredient transport costs and consumers who are already under financial pressure. Construction, meanwhile, is dealing with fuel costs alongside a labour market that shed 108,000 full-time positions in February alone.

A Demand Crisis on Top of a Cost Crisis

The timing of the energy shock is particularly brutal because it landed on top of a weakening labour market. Statistics Canada reported that Canada lost 84,000 jobs in February — 108,000 of those in full-time positions. Those layoffs happened before the worst of the oil price spike, meaning the consumer purchasing power needed to absorb price increases was already eroding when fuel costs began their climb. For small business owners, this creates a near-impossible pricing environment: input costs are rising sharply while customer spending capacity is shrinking. Raising prices to protect margins risks losing customers who are already watching their budgets; holding prices means eating losses.

Food Inflation Is the Downstream Risk

Higher fuel costs don't stay contained in the transportation sector. They move through supply chains and show up on grocery shelves, restaurant menus, and retail price tags. Food inflation for 2026 is now forecast at 6–8%, a projection that predates some of the most severe crude oil price moves. For food service operators and grocery-dependent retailers, that forecast suggests sustained margin pressure well beyond the current spike — particularly if the Strait of Hormuz disruption extends or crude prices remain elevated.

What This Means for Your Business

If your operation depends on fuel — directly or through suppliers — now is the time to do a line-by-line cost review, not a quarterly one. Identify where fuel surcharges are absorbed versus passed through, and revisit any supplier contracts that don't include energy escalation clauses. For trucking-dependent businesses, it's worth having direct conversations with your carriers about how they're handling the spike — some will be managing quietly, others may not be able to absorb much more without adjusting their rates or service levels. If you haven't raised prices recently, model out what a 5–10% input cost increase does to your margins before the decision becomes urgent.

On the revenue side, the jobs data matters as much as the fuel data. With 84,000 Canadians losing work in February — before the worst of the energy shock hit — consumer spending is under real pressure. If your business serves price-sensitive customers, be cautious about assuming you can pass fuel cost increases through to your prices without volume consequences. The businesses that will navigate this best are those that move quickly on cost controls, lock in supplier pricing where possible, and stay close to their cash flow projections over the next 60–90 days. This is not a situation where a wait-and-see approach is likely to serve you well.