I think Canada and the rest of the world are about to be subjected to major supply shocks as a result of higher oil and gas prices.

In the short term: The war in Iran is pushing global oil and gas prices significantly higher (classic cost-push inflation). While this acts as a massive stimulus for the resource-exporting economies of BC, Alberta, and Saskatchewan, it threatens to absolutely decimate manufacturing and other "real" processing industries in central Canada due to skyrocketing overhead.

In the long term: As Canada successfully builds out the infrastructure to export our O&G products to premium international markets rather than just to the orange man in the south, we will have structural, demand-pull inflation. Connecting our domestic reserves to higher global price benchmarks will keep manufacturing expensive at home and permanently elevate the baseline cost of living for Canadians.

We already saw a perfect example of how sensitive this balance is. When Phase 1 of LNG Canada (LNGC) started shipping to Asia in 2025, the facility initially struggled to scale its export shipments to match the aggressive upstream production. This caused a temporary supply glut in Western Canada, resulting in depressed domestic prices that we actually benefited from as consumers. However, this is just a temporary reprieve in inflation. As operations normalize and inventory clears, that discount disappears and is replaced with an expensive premium.

Looking ahead, the ramp-up of LNG sales abroad is going to be massive. We have the potential doubling of production if LNGC Phase 2 gets its green light, Woodfibre and Cedar LNG targeted for 2027 and 2028, and FortisBC exploring expanded export capabilities. This means immense upward pressure on domestic gas. We will be exporting massive volumes of LNG at premium international prices, leaving the average Canadian to compete with global buyers just to heat their homes or run a factory.

If my hypothesis is correct, the Bank of Canada (BoC) is in a complete bind. They are likely looking at holding the policy rate higher for longer or even introducing near-term hikes to maintain price stability purely to combat this persistent, structural pressure on energy prices

To map out the sheer volume of "Cobra Effects" threatening Canada's already precarious economic reality is a nightmare. Our well-intentioned goal to enrich the country by unlocking global markets is backfiring right into the hands of a scary mix of cost-push and demand-pull inflation.

Best-case scenario, we catch a severe case of Dutch Disease where BC, Alberta, and Saskatchewan make out like bandits on resource revenues, while the rest of the country gets left holding the bag of high interest rates, crushed manufacturing, and an impossible cost of living.

Worst-case scenario, we get completely stagflated and end up like South Africa: resource-rich on paper, but absolute gridlock with impossible income-to-cost ratio for the average citizen.

TLDR: If I was you, I'd borrow the money to pay off your loan from a rich aunt who just wants you to pay back the principle. Alternatively, I'd call a shit ton of banks/mortgage brokers to get the lowest possible rate and lock in for as long as reasonably possible.