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What Shippers in Western Canada Were Dealing With in Q1 2026

Q1 2026 was one of those quarters where you kept one eye on the road and one eye on the news. Tariff uncertainty, a slow rate recovery, a highway project that matters for southern Alberta, and a diesel spike that nobody saw coming. Here’s a straightforward look at what happened and what it means for your business.

Diesel Got Expensive Fast

Military conflict in the Middle East disrupted oil shipments through the Strait of Hormuz, and Canadian diesel prices climbed nearly 30 percent in a matter of weeks, reaching $2.19 per litre by March 18. That’s the highest price since 2022. Fuel surcharges exist to absorb this kind of volatility, but they’re based on prior-period indexes and lag behind sudden spikes. That gap has to land somewhere in the supply chain. Analysts aren’t expecting a quick resolution, so budget accordingly heading into Q2.

The Tariff Picture Remains Unclear

The Canada-U.S. trade situation has been unsettled since early 2025, and Q1 didn’t bring the resolution anyone was hoping for. Cross-border volumes stayed soft. Late February brought some movement when the U.S. Supreme Court struck down key elements of the legal basis for some tariffs, and Canada has kept its retaliatory tariffs on steel, aluminum, and vehicles in place while lifting most others on CUSMA-compliant goods. A formal CUSMA review starts July 1, so the second half of 2026 could bring more clarity or more complexity. Either way, it’s worth watching.

A Highway Upgrade Worth Knowing About

Construction on the Highway 3 twinning project between Taber and Burdett is active. The stretch covers 46 kilometres of a new four-lane divided highway, 11 bridges, and a bypass around Grassy Lake, with completion expected in fall 2026. It’s part of a longer effort to twin the full route from the BC border to Medicine Hat. If you’re moving freight through southern Alberta regularly, this east-west corridor improvement is going to be good news for transit times.

Freight Rates Are Slowly Coming Back

After two-plus years of compressed rates, there are real signs of a turn. The Cass Freight Index reported that truckload linehaul rates hit a new cycle high in February 2026, with spot capacity tightening in early March and year-over-year rates up around 2.2 percent. It’s not a dramatic recovery, but the direction has changed. Most analysts still point to 2027 as the year the market fully stabilizes, with weak manufacturing and excess capacity continuing to slow things down in the meantime.

Heading into Q2, the freight market is in a bit of a tug-of-war. Rates are improving, but diesel costs and tariff uncertainty are pulling in the other direction. For businesses that ship regularly, now is a good time to ensure your freight partnerships are solid and that your planning has some room to breathe.

References

Export Development Canada — Impact of Canadian Tariffs on U.S. Goods in 2026
https://www.edc.ca/en/article/how-canadian-tariffs-on-us-goods-may-affect-your-business.html

Cass Information Systems — Cass Freight Index, February 2026
https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/cass-freight-index

Alberta.ca — Highway 3 Twinning: Taber to Burdett
https://www.alberta.ca/highway-3-twinning-taber-to-burdett

CBC News — Diesel Prices Surge to Highest Since 2022 
https://www.cbc.ca/news/canada/calgary/bakx-diesel-iran-kalibrate-9.7132148

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