7 ways the war in Iran could impact Canadians — from grocery prices to terrorism

An oil boom?

The war is already choking global fuel supplies. One-fifth of the world’s oil and liquefied natural gas passes through the Strait of Hormuz, a narrow body of water that Iran has said it will block.

U.S. President Donald Trump has responded by suggesting the U.S. will conduct patrols to escort tankers through the strait.

In theory, limited oil supply could drive up prices and demand for Canadian crude.

That might lead to a stronger Canadian dollar and a boost to the economy. It could also leave shippers passing higher fuel costs on to consumers.

TD Bank economist Marc Ercolao said in a note to clients Friday that the national average price of gasoline jumped 12 cents this week — an almost 10 per cent gain — “with further moves higher likely on the way.”

At National Bank, analyst Cameron Doerksen said in a research note that jet fuel prices were already on the rise before spiking this week. That could affect the summer vacation landscape in Canada, he warned.

Grocery price increases

Fen Osler Hampson, an international affairs professor at Carleton University, said wars which happen before the fall harvest season tend to have an impact on food availability in multiple countries.

War can disrupt shipments of fertilizer and the petrochemicals and fuel used in food production — particularly amid shifts linked to climate change.

“This war comes at a terrible time, when it comes to agriculture,” Hampson said. “This is going to have all kinds of knock-on effects.”

Fraser Johnson of the Ivey Business School at Western University has said consumers could feel the jump in global energy prices at the grocery store. The shorter shelf life of fresh food means greater vulnerability to global shipping disruptions and changes in freight rates that ultimately are passed on to consumers.

Transnational repression

On Feb. 28, hours into the U.S. airstrikes, the Canadian Association of Chiefs of Police wrote that “based on current intelligence, there is no indication of any imminent threat to Canada or Canadians.”

The organization said it would monitor for threats.

“Experience shows that periods of geopolitical tension can sometimes inspire extremist networks, hate-motivated individuals or proxy-related threat actors to exploit these situations to incite hate-fuelled violence,” the organization said.

Thomas Juneau, a University of Ottawa professor specializing in Iran and Gulf countries, said Canada should be concerned about transnational repression emanating from Iran because the regime lashes out when it’s backed into a corner.

“Survival at home includes countering anti-regime activism abroad. They won’t disentangle these two things,” Juneau said last weekend.

Last weekend, in the Toronto suburb of Thornhill, Ont., 17 bullets were fired into a gym owned by Salar Gholami, who used the building to organize large protests against the regime.

Gholami has said he believes his gym was targeted by people linked to the Islamic Republic. York Regional Police say they’re aware of those claims but haven’t established a motive.

Kaveh Shahrooz, a senior fellow a the Macdonald-Laurier Institute, has warned that Canada is already seen as a safe haven for regime officials — who might try emigrating to Canada if the Islamic Republic appears to be near collapse.

He said Ottawa should make sure it closely vets those entering Canada to prevent a situation similar to Nazi officials fleeing Germany for places such as Argentina.

Inter-communal violence

Some American and Israeli officials have talked of emboldening factions within Iran that have at times looked to separate or obtain more autonomy.

Hampson said there is a risk of Iran imploding, leaving various ethnic groups and militias battling for control. That could reverberate among the various Middle Eastern diasporas in Canada.

Younes Zangiabadi, executive director of the Institute for Peace and Diplomacy, said countries will be watching to see how Canada responds to violence in Iran by all players — including the bombing of a girls’ school last weekend.

“That is something that should be condemned if you’re principled,” he said. “Regardless of where you live, we’re all human.”

Canadian military engagement

Prime Minister Mark Carney said this week he could not “categorically” rule out military participation in the Middle East, adding that this was a “fundamental hypothetical.”

Iran borders NATO ally Turkey, which reported Thursday that a NATO defence system had shot down an incoming ballistic missile. But the alliance played down the prospect of invoking its collective defence clause, which would theoretically bring Canada into a war against Iran.

Saideman said that’s not likely to happen because there are divisions within the alliance about the U.S. campaign in Iran.

He noted that the Trump administration is unlikely to seek Canadian involvement in the region as a diplomatic sign of multilateralism, because that is not a priority for the U.S.

But Hampson argued Washington might pressure Ottawa to send naval assets to accompany ships in the Strait of Hormuz, and Gulf countries might make the same demand of Canada as it seeks more investment from the region.

Canada already has 200 military personnel in the Middle East at six different locations.

On Thursday, Kuwait activated its air-defence systems after missiles were fired toward the country.

Videos posted on social media reportedly show an explosion at the Ali al-Salem Air Base in Kuwait, though the U.S. Air Force had not confirmed that Friday.

Canada has an operational support hub at that base, according to regulatory records.

Wider effects

The Washington Post reports that Russia is providing Iran with intelligence on the location of U.S. targets.

Meanwhile, American involvement in Iran could theoretically distract Washington from Russia’s invasion in Ukraine, and any Chinese movement in the South China Sea. It might also require Canada to one day reallocate assets it currently has stationed in Latvia to help deter a Russian attack.

“We need to think about countries using supplies that they can’t use for other things,” Saideman said.

He said the war could expand in unpredictable ways. He cited how Sri Lanka took control of an Iranian naval vessel off its coast, a day after the U.S. sank an Iranian warship in the same waters.

“That’s a radical expansion of the war beyond the immediate Middle East,” he said.

Saideman also said countries in a position to obtain nuclear weapons are likely to put those efforts into overdrive now, given how Iran was attacked before it had that capacity.

“That’s the only way to make sure that you could be in the North Korean club, where you are immune from American attack,” he said.

Ultimately, the American attack could see Canada distance itself further from the U.S.

“Tying ourselves too close to the Americans at this moment in time is very costly, because the Americans are going to be doing incredibly dumb, foolish, counterproductive things — and we don’t want that to spill over on us,” he said.

A democratic Iran?

Many in the Iranian diaspora hope that the war will put an end to a 47-year-old regime that has committed egregious human rights abuses and sponsored terrorist groups.

Ottawa has continually noted Iran’s destruction of Flight PS752 in 2020 — which killed 55 Canadian citizens and 30 permanent residents — and brazen state violence against those protesting the regime in recent months.

But Trump has mulled an approach to Iran similar to his policy on Venezuela, where he has rebuffed democracy activists and maintained an autocratic regime which has ramped up its repression.

Hampson said this is a constant source of tension for Canada, which generally supports the use of force to protect people suffering under brutal governments but tends to insist on intervention being carefully considered in venues like the United Nations.

“The purists say you can’t do it — (that) you shouldn’t intervene. Those arguments become a bit harder to sustain when you have very brutally repressive regimes that are doing terrible things to their own population.”