3 Things We're Watching: Week of March 27

1. Pricier oil is causing pain at the pump—and beyond

The Strait of Hormuz, the narrow waterway through which roughly 20 per cent of the world's oil supply flows, has come to a near-standstill since conflict erupted in the Middle East. This has sent crude and gasoline prices higher, but it’s not just energy costs that have been impacted. Fertilizer, wheat, rice, plastics and palm oil have all risen, too, since they rely on oil to grow, produce and ship.¹ Fertilizer alone has spiked about 50 per cent since the conflict began, which is bad news for farmers heading into planting season.² If the conflict continues, those costs will eventually make their way to our grocery bills, though experts say it may take a few months before the impact is felt. Fresh produce is expected to be first to go up, followed by more processed products.³

What we’re watching: Before the conflict, the pace of grocery price increases had been showing signs of easing, rising 4.1 per cent year-over-year in February, down from 4.8 per cent in January.⁴ Now, though, economists are warning that if oil stays around $100 a barrel, Canada’s inflation rate could climb back toward 3 per cent this year⁵ – meaning we’ll all be paying noticeably more for food and other essentials. That said, geopolitical oil spikes have historically been short-lived, with prices often coming down once the situation stabilizes. No one knows how long this conflict will last but for now, the progress we were starting to feel on food costs may be on pause.

2. Slow start for spring housing market

If you’ve been in the market for a house over the past couple of years, you may have noticed that real estate prices have come down. In February, the benchmark price of a home in Canada was $661,100, falling 4.8 per cent year-over-year.⁶ At the same time, RBC’s national aggregate affordability measure, which looks at how much of a household’s pre-tax income is needed for home ownership expenses, has improved. In the third quarter of 2025, that figure was 53.2 per cent, down from an all-time high of 63.5 per cent in 2023.⁷

However, according to research from RBC, buyers may not find the same deals in the coming months as they’re seeing today. Robert Hogue, Assistant Chief Economist at RBC, points out that with the Bank of Canada expected to hold its overnight rate steady in 2026, mortgage rates may not fall further. Most of the improvement in ownership costs has also come in Vancouver and Toronto, the two most expensive markets. At the same time, Hogue points out that even in these cities, home prices are still well above pre-pandemic levels. And the recent conflict with Iran is only adding to feelings of uncertainty.

What we’re watching: Hogue expects the spring housing season to be more subdued. It’s in the latter part of 2026 that affordability could potentially improve, but only if some of the current uncertainty subsides. If you’re in the market for your first home, and you have time to save, consider a First Home Savings Account (FHSA). The FHSA is a registered account that lets you build tax-free savings for a down payment so that when the right moment arrives, you’ll be ready.

3. Is AI compute the hot new work perk?

Forget ping-pong tables and free kombucha. The hottest new recruiting tool in tech just may be AI compute. Jensen Huang, CEO of Nvidia, the world’s largest chipmaker, made the case for a new kind of employment perk at the company’s GPU Technology Conference. His proposal? Give software engineers a huge budget of AI tokens, on top of their salary and benefits, allowing them to run AI agents and coding tools that multiply their productivity.⁸ The idea is that the more work AI takes on, the more the employee gets done – and the more valuable they become. (Software engineers at OpenAI and Meta already compete to see who can burn through the most tokens, running AI coding tools around the clock.)⁹ Huang thinks the model will become standard across Silicon Valley and points to his own top engineers as proof of the concept. He estimates they already spend as much as US$250,000 a year in AI compute.¹⁰

What we’re watching: The idea is provocative but raises a few questions. Tokens don’t pay rent, so whether workers will embrace a productivity-linked perk remains to be seen. The premise also assumes AI agents will deliver reliable business results – something that has so far proved elusive for many companies employing the technology.¹¹ Still, Huang’s proposal touches on a bigger conversation about how AI will reshape the future of work. At the GPU Technology Conference, he projected that there will be at least US$1 trillion in computing demand between now and the end of 2027, adding that even that figure will likely fall short.¹² With numbers like that, those tokens might start to matter more than we think.