Oil Prices, Gas Taxes, and the Coming Inflation: Analysis from the Centre for Future Work
We will also host a special webinar on Thursday, May 21, at 1:00PM Eastern time (10:00AM Pacific) to present this research. … Registration for the webinar is free; sign up to join the webinar here.
From Canadian Economist Jim Stanford. Director, Centre for Future Work
Posted May 20th, 2026 on Niagara At Large
The war in the Persian Gulf has caused the biggest disruption in oil supply in world history, and is driving up costs and inflation around the world. We’re feeling it directly in Canada, even though we produce three times as much oil as we use, and import none from the Persian Gulf.
In short, Canadians are facing a repeat of the painful experience of 2022, when another geopolitical misadventure (Russia’s invasion of Ukraine) sparked a destructive cycle of inflation, falling real wages, high interest rates, and near-recession. We know how that movie ended. Unfortunately, the sequel will be worse.
Today the Centre for Future Work has published new research from our False Profits project, showing how damaging this latest oil shock will be for affordability and inflation in Canada — and what policies could protect consumers and workers.
The numbers are grim: The report predicts $50 billion in additional consumer costs over a 12-month period, and inflation jumping to 4.2%, even if the conflict ended and the Strait of Hormuz reopens tomorrow.
If the Strait remains closed for longer, the impacts on consumers will be much worse. Three months of additional closure would double the hit to Canadian consumers (to $100 billion), and push Canadian inflation to 6.9%.
The study also estimates the windfall revenue gains flowing to Canada’s petroleum industry from the war. Upstream oil revenue will soar by $65 billion over 12 months, even if the Strait reopens immediately. Under a longer closure, the industry’s revenue would increase by up to $155 billion, reaching almost $400 billion in total over the 12-month period.
The report advocates measures to stabilize oil prices within Canada (since Canada produces almost three times as much oil as it consumes, and production costs at home are unaffected by the Persian Gulf conflict), redistribute record petroleum profits back to consumers, and accelerate the transition to renewable energy sources.
Please see the full report, A Sequel We Don’t Want: What the 2026 Oil Price Shock Will Cost Canadians.
We will also host a special webinar on Thursday, May 21, at 1:00PM Eastern time (10:00AM Pacific) to present this research. The webinar will also learn about the campaign for an excess profits tax on petroleum companies. Speakers will include Jim Stanford from the Centre for Future Work and Atiya Jaffar from 350.org. The webinar will be chaired by DT Cochrane, Senior Economist at the Canadian Labour Congress.
Registration for the webinar is free; sign up to join the webinar here.
Another pointless cycle of rising costs, inflation, falling living standards, higher interest rates, and macroeconomic slowdown is the last thing Canada needs – especially given the damage being done by Donald Trump’s tariffs and other policies.
Jim Stanford, Canadian economist and director of the Centre for Future Work
That’s why it’s so important that more Canadians learn about the true causes of this crisis, and what we can do about it.
Thank you as always your interest in our work.
In solidarity,
Jim Stanford
Economist and Director, Centre for Future Work
For more from the Centre for Future Work, click on – https://centreforfuturework.ca/
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