Canada got a moment of breathing room in February. Inflation eased to 1.8%, the Bank of Canada held steady, and it looked, briefly, like the worst of the price pressure was behind us.
Then this morning happened.
We learned that the U.S. Consumer Price Index jumped to 3.3% in March — the highest reading in nearly two years — driven by an energy shock tied to the war with Iran and the continued pass-through of tariffs into everyday goods. Gas prices in the United States crossed $4 a gallon for the first time in over three years. The Bank of Canada has already warned that the oil shock could make Canada’s own inflation relief temporary. Today’s data suggests that warning deserves to be taken seriously.
For Canadian investors trying to build steady, long-term income, it’s a good time to ask whether the stocks you own are built to hold their ground when (not if) inflation picks up?
Two TSX stocks stand out right now — not because they’re exciting, but because they’re built for exactly this kind of environment.
Source: Getty Images
Dollarama: A Winner in Almost Any Inflation Scenario
Dollarama‘s (TSX:DOL) appeal is straightforward: When shoppers feel squeezed, they get excited about value retailers, and they tend to stay. What’s less obvious is that Dollarama’s business has grown far beyond that single thesis.
Over the past year, the company acquired Australian discount chain The Reject Shop and continued expanding its Latin American Dollarcity business, giving it meaningful growth levers that have nothing to do with Canadian consumer confidence. In the third quarter of fiscal 2026, sales rose 22% to $1.91 billion, EBITDA climbed to $612 million, and diluted earnings per share increased 19% to $1.17. Same-store sales in Canada rose 6%, and management lifted its Canadian same-store sales guidance for the full year.
The stock is not cheap — the market cap around $51.8 billion and a P/E near 40 reflects a business that has consistently delivered. But the premium is easier to justify in an inflationary environment. Customers who find their way to Dollarama when budgets get tight rarely leave when things improve. If inflation keeps grinding higher, Dollarama doesn’t face an investment thesis problem — it faces more customers.
Canadian National Railway: Infrastructure That Moves With the Economy, Not Against It
Canadian National Railway (TSX:CNR) is not a consumer story. It’s an infrastructure story. As one of the most important transportation networks in North America, it moves real goods across the continent regardless of what inflation is doing in any given month.
That distinction matters right now. CN spent the past year working through trade-war pressure on freight volumes, including layoffs and tariff-related revenue headwinds. It came through in reasonable shape. In the fourth quarter of 2025, revenue rose 2% to $4.46 billion, net income increased 9% to $1.25 billion, and diluted EPS climbed 12% to $2.03. For the full year, revenue reached $17.3 billion and net income came in at $4.7 billion. Management set a 2026 capital program of $2.8 billion — down $500 million from 2025 — wisely showing discipline in an uncertain environment rather than overextension.
At a market cap around $84.2 billion and a P/E near 18, CN is priced far more reasonably than most high-quality Canadian stocks. And unlike businesses whose fortunes rise and fall with consumer mood, CN’s revenue is tied to the physical movement of goods like grain, potash, and oil. And demand for those things persists through inflationary cycles rather than shrinking inside them.
Bottom line
Canada’s inflation reprieve may be shorter-lived than it looked a month ago. This morning’s U.S. data is a reminder that the macro environment can shift quickly — and that portfolios built for a calm, rate-cutting backdrop may not be positioned for the environment that’s actually arriving.
Dollarama and CN aren’t flashy answers to that problem. But they are durable ones. For income investors who want to stop reacting to every inflation print and start building something that holds, they’re worth a close look.
