Record-high diesel prices are putting increasing pressure on businesses across Northern Ontario, with farmers, mining companies and trucking operators facing sharply higher costs as global fuel supplies tighten.
The national average price of diesel has climbed to about $2.75 per litre, more than $1 higher than at the same time last year, according to Natural Resources Canada. For farmers preparing for the fall harvest, the increase is translating into thousands of dollars in additional operating expenses.
Ron Bonnett, who grows canola, soybeans, wheat and barley near Bruce Mines in Ontario’s Algoma District, said current prices are adding roughly $2,000 to the cost of filling a tank. He said the increase is reducing profitability for both crop and livestock producers, who have little ability to control fuel costs.
Patrick De Haan, head of petroleum analysis at GasBuddy, attributed much of the increase to disruptions associated with the U.S.-Israel war with Iran and Russia’s war in Ukraine. He said Ukrainian attacks on Russian refineries, combined with Russia’s halt to diesel exports since July, have significantly tightened global supplies. Russia traditionally supplied more than 10 per cent of global diesel, according to De Haan.
The pressure is also reaching Northern Ontario’s mining industry. Agnico Eagle Mines, which operates the Detour Lake mine in the Cochrane District and Macassa mine in Kirkland Lake, has said diesel accounts for approximately seven per cent of its overall costs. The company has locked in prices for some of its fuel requirements for the second half of 2026, providing partial protection against the recent surge, but expects diesel to create greater cost pressures in 2027.
Farmers have fewer options to shield themselves from the increases. Bonnett said his farm has adopted no-till technology this year to reduce vehicle use and fuel consumption. Higher diesel expenses could also affect decisions about equipment upgrades and which crops farmers choose to plant next year.
Fuel is not the only rising input cost. Farmers are also facing higher fertilizer prices linked to disruptions in the Middle East, adding further pressure ahead of the harvest.
Bonnett warned that the increases could eventually reach Canadian consumers through higher food prices. Agricultural products must be transported after leaving farms, meaning trucking companies face many of the same diesel pressures as producers.
With diesel affecting virtually every stage of the agricultural supply chain, from operating farm machinery to transporting goods, Bonnett said rising fuel expenses are ultimately being carried throughout the system.
