It's also tied for the highest the rate has been since April 2012.
Statistics Canada reported Thursday that the consumer price index was driven up by energy prices, which were 4.6 per cent higher in March. Within that, natural gas prices jumped significantly, up by almost 18 per cent in March compared to the same month last year.
Although it was a jump, it was in line with what economists had been expecting. The large increase in natural gas prices seen this winter has been making yearly comparisons look larger for several months now.
Alberta rate highest
"With gasoline prices headed for about another three per cent rise this month," BMO economist Doug Porter said, "headline CPI will take another step higher in next month’s report, possibly finally touching the two per cent target."
"Perhaps the Bank of Canada can stop fretting so much about the downside risks to inflation."
Regionally, the biggest jump in inflation occurred in Alberta, where natural gas prices skyrocketed 81.5 per cent over last year's levels and 49.6 per cent over February. The province's annual inflation rate shot up to 3.9 per cent in March from 2.4 in February.
In its latest interest rate decision on Wednesday, the Bank of Canada said it expects inflation to steadily climb to near the desired two per cent target over the next few months, largely due to energy price gains.
Outside of energy, food prices were 1.5 per cent higher in March than they were a year ago. although fresh fruit was 8.8 per cent higher, fresh vegetables cost 5.3 per cent more and meat was up 3.4 per cent.
Another major jump came from the price of tobacco, which was up 7.6 per cent largely because of a new round of excise taxes announced in the recent federal budget.