OTTAWA (Reuters) - Rising prices of oil and other commodities have driven up costs for Canadian businesses, and many plan to pass on those costs to consumers, a Bank of Canada second-quarter business survey showed on Monday.

As a result, a growing number of companies expects consumer price inflation to spike beyond the central bank's 1-3 percent target range over the next two years. Thirty-six percent expect inflation of above 3 percent, up from 17 percent in the previous first-quarter poll. However, a majority of 63 percent expect inflation to stay within the target range.

The balance of opinion on both input and output price growth soared to its highest ever for the survey, which is based on interviews with senior management at 100 companies. The balance of opinion is the percentage of companies expecting greater price increases minus the percentage expecting smaller price increases.

The sharp rise in inflation expectations is expected to weigh on the Bank of Canada's interest rate decision next Tuesday.

Despite a slowing economy, the survey results did not reveal widespread concern in the private sector. The percentage of firms planning to boost their investment in machinery and equipment jumped to 40 percent from 28 percent in the previous poll.

The outlook for sales growth was relatively unchanged; nearly half of the firms reported capacity pressures and 40 percent reported labor shortages. The bank did note, however, that capacity pressures were much greater in Canada's resource-rich west than in the manufacturing-heavy central region.

(Reporting by Louise Egan; Editing by Bernadette Baum)

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