Canada's Record Diesel Prices Threaten Northern Ontario Businesses

Diesel prices in Canada have hit record levels, causing financial strain on northern Ontario businesses that rely heavily on fuel. The current price average across Canada is $2.75 per litre, a significant increase from last year's price of over $1 less.

For farmers like Ron Bonnett, who grows canola, soybeans, wheat, and barley near Bruce Mines, Ont., the higher diesel prices are particularly concerning. 'It's really affecting the bottom line of anyone that's farming,' he said. Bonnett estimates the increased cost adds $2,000 to each tank of fuel.

The rising costs are attributed to the ongoing conflict between Russia and Ukraine, as well as the US-Iran war, notes Patrick De Haan, head of petroleum analysis at GasBuddy. 'Ukraine has found increasing success attacking Russian oil refineries,' he said. As a result, global diesel supply has tightened, leaving little refining capacity in Canada and the United States to compensate for disruptions elsewhere.

While mining companies like Agnico Eagle Mines are also affected by the increased costs, they have taken measures to mitigate their impact. The company locked in fuel prices for some of its expected usage in the second half of the year, protecting it from price increases. However, diesel is still expected to put pressure on the company's costs in 2027.