Provincially, Statistics Canada said growth was most pronounced in Prince Edward Island where prices rose 8.9% year-over-year.
As prices rose faster on an annual basis in March, average hourly wages were up by 3.4%, still far behind inflation and eating into consumers' purchasing power across income levels, said BMO chief economist Douglas Porter.
"This is not sustainable to have a gap of more than three percentage points between inflation and wages," he said.
"Either inflation has got to come down fast, or wages have got to rise up to to meet if not exceed inflation in fairly short order, and I think I think it's going to be a little bit of both."
The growing rate of inflation has spooked economists and central bankers amid signs that Canadians are beginning to expect inflation to stay higher for longer.
Last week, the Bank of Canada increased its key policy rate by half a percentage point, raising the benchmark interest rate to one per cent with warnings that more rate hikes are to come this year.
"The Bank of Canada has been behind the curve and they've recognized that and now they have to catch up," Desjardins chief economist Jimmy Jean said.
"That's why they went out with that 50 basis-point rate hike, and we think they have another one in store for the next meeting."
Rising interest rates are expected to encourage saving and curb borrowing and spending, helping cool Canada's housing market and the cost of goods. As demand goes down prices tend to rise more slowly—or even edge down—easing inflation.
But the dampening effect of higher interest rates won't be immediate.
"It does take time for those interest rate hikes to have an effect on the economy and on inflation," he said.
The average of the three core measures of inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was 3.77% in March. That the highest recorded since March 1991 and up from the 3.53% in February.