Lethbridge braces for wider inflation as gas prices grow amid Iran war

The Bank of Canada is warning Canadians that although the bank’s central interest rate stayed flat for the third time in a row, cost of living woes remain on the horizon because of the war in Iran.

The Bank of Canada announced its central interest rate would remain unchanged at 2.25 per cent on Wednesday morning.

But the BOC says it is working to prevent another inflation crisis as Canadians feel pain at the gas pumps.

“(We) can’t fix the war. What we can do…is we will ensure that if energy prices stay high, that does not become ongoing, generalized, persistent inflation,” said Bank of Canada Governor Tiff Macklem on Wednesday.

Gas prices have jumped 20 cents a litre in Lethbridge since fighting broke out in Iran. Those prices may be passed onto the consumer and push already struggling Canadians to the brink.

“We feel it pretty directly at the pumps, so we can say it costs more for transportation,” said Alberta Living Wage Network economist Ryan Lacanilao.

“But it goes much further than that. It indirectly affects so many things.”

Outreach programs in southern Alberta are also bracing for more demand. Danielle McIntyre of Lethbridge’s Interfaith Food Bank says it sees more demand for services during rough economic periods — a demand that is made more difficult by a period that also brings in less donations.

But other groups aren’t hitting the panic button quite yet.

Home builders are still expecting that 2026 will be a strong year, but it also may be too early to tell if inflationary pressures will hit the industry.

“It’s really hard to predict, especially when we don’t know the length of what these challenges will be,” said BILD Lethbridge executive officer Bridget Mearns.

“We know that provinces outside of the prairie provinces have seen some pullback. But as far as we’re seeing…steady it goes.”