This article supplied by Troy Media.

By Sylvain Charlebois

Canadians are feeling the pinch as Ottawa’s trade blunders and a weak dollar drive grocery bills higher

Almost a year ago, Canada’s Food Price Report projected that food inflation in 2025 would range between three and five per cent. We now stand squarely at four.

For consumers, it’s been a bruising year. After months of relative calm, grocery prices have surged again since spring, driven by tariffs, weather disruptions and a weakening Canadian dollar.

Between March and September, food inflation jumped sharply across several everyday staples. Coffee and tea prices rose by nearly 15 percentage points, sugar and confectionery climbed by more than three, while beef and condiments each increased by about one.

These aren’t luxury goods—they’re breakfast-table essentials. Canadians are paying more for their morning coffee, family barbecues and pantry staples than they were just six months ago.

When compared with other G7 countries, Canada’s performance stands out—and not in a good way. Japan currently faces the highest food inflation rate at 7.2 per cent, followed by the United Kingdom at 5.1 per cent. Canada sits third at 3.8 per cent, the only G7 country to post three consecutive monthly increases. Italy follows closely at 3.7 per cent, while the United States, Germany and France are all below Canada at 3.2, 2.9 and 1.7 per cent, respectively. For an advanced, food-producing nation, this is not a comfortable position.

Much of the renewed pressure can be traced back to trade policy. The counter tariffs introduced in March, combined with new U.S. measures, have quietly inflated costs across the entire food chain. Tariffs are by nature inflationary: they disrupt market efficiencies, raise input prices and trigger retaliatory actions that make goods more expensive on both sides of the border. What begins as a political statement quickly becomes an economic burden, felt most acutely in grocery aisles.

The loonie’s recent weakness has only made matters worse. Since January, the Canadian dollar has fallen significantly against the U.S. dollar, amplifying the cost of imported products such as coffee, cocoa and processed foods. For a country that imports roughly $70 billion in food annually, currency depreciation functions like a silent tax on every grocery bill.

As we move into the winter months, these forces show few signs of easing. Transportation costs remain high, retailers are passing along supplier increases and consumers are already adapting by trading down or buying less. While overall inflation is moderating elsewhere in the world, Canada’s food sector is moving in the opposite direction.

Prime Minister Mark Carney recently remarked that his government will be judged by the prices Canadians pay at the grocery store. On that score, Canadians are indeed paying attention. Tariffs, trade friction and a soft currency have all converged to make food more expensive. Voters are noticing.

In a world where food inflation is once again a global problem, Canada’s return to the top of the G7 pack is an unenviable distinction.

Dr. Sylvain Charlebois is a Canadian professor and researcher in food distribution and policy. He is senior director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast. He is frequently cited in the media for his insights on food prices, agricultural trends, and the global food supply chain.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

David Clinton

Dr. Sylvain Charlebois, a visiting scholar at McGill University and perhaps better known as the Food Professor, has lamented a strange and growing trend among Canadians. It seems that large numbers of especially younger people would prefer a world where grocery chains and food producers operated as non-profits and, ideally, were owned by governments.

Sure, some of them have probably heard stories about the empty shelves and rationing in Soviet-era food stores. But that’s just because “real” communism has never been tried.

In a slightly different context, University of Toronto Professor Joseph Heath recently responded to an adjacent (and popular) belief that there’s no reason we can’t grow all our food in publicly-owned farms right on our city streets and parks:

“Unfortunately, they do have answers, and anyone who stops to think for a minute will know what they are. It’s not difficult to calculate the amount of agricultural land that is required to support the population of a large urban area (such as Tokyo, where Saitō lives). All of the farms in Japan combined produce only enough food to sustain 38% of the Japanese population. This is all so obvious that it feels stupid even to be pointing it out.”

Sure, food prices have been rising. Here’s a screenshot from Statistics Canada’s Consumer Price Index price trends page. As you can see, the 12-month percentage change of the food component of the CPI is currently at 3.4 percent. That’s kind of inseparable from inflation.

But it’s just possible that there’s more going on here than greedy corporate price gouging.

It should be obvious that grocery retailers are subject to volatile supply chain costs. According to Statistics Canada, as of June 2025, for example, the price of “livestock and animal products” had increased by 130 percent over their 2007 prices. And “crops” saw a 67 percent increase over that same period. Grocers also have to lay out for higher packaging material costs that include an extra 35 percent (since 2021) for “foam products for packaging” and 78 percent more for “paperboard containers”.

In the years since 2012, farmers themselves had to deal with 49 percent growth in “commercial seed and plant” prices, 46 percent increases in the cost of production insurance, and a near-tripling of the cost of live cattle.

So should we conclude that Big Grocery is basically an industry whose profits are held to a barely sustainable minimum by macro economic events far beyond their control? Well that’s pretty much what the Retail Council of Canada (RCC) claims. Back in 2023, Competition Bureau Canada published a lengthy response from the RCC to the consultation on the Market study of retail grocery.

The piece made a compelling argument that food sales deliver razor-thin profit margins which are balanced by the sale of more lucrative non-food products like cosmetics.

However, things may not be quite as simple as the RCC presents them. For instance:

• While it’s true that the large number of supermarket chains in Canada suggests there’s little concentration in the sector, the fact is that most independents buy their stock as wholesale from the largest companies.
• The report pointed to Costco and Walmart as proof that new competitors can easily enter the market, but those decades-old well-financed expansions prove little about the way the modern market works. And online grocery shopping in Canada is still far from established.
• Consolidated reporting methods would make it hard to substantiate some of the report’s claims of ultra-thin profit margins on food.
• The fact that grocers are passing on costs selectively through promotional strategies, private-label pricing, and shrinkflation adjustments suggests that they retain at least some control over their supplier costs.
• The claim that Canada’s food price inflation is more or less the same as in other peer countries was true in 2022. But we’ve since seen higher inflation here than, for instance, in the U.S.

Nevertheless, there’s vanishingly little evidence to support claims of outright price gouging. Rising supply chain costs are real and even high-end estimates of Loblaw, Metro, and Sobeys net profit margins are in the two to five percent range. That’s hardly robber baron territory.

What probably is happening is some opportunistic margin-taking through various selective pricing strategies. And at least some price collusion has been confirmed.

How much might such measures have cost the average Canadian family? A reasonable estimate places the figure at between $150 and $350 a year. That’s real money, but it’s hardly enough to justify gutting the entire free market in favor of some suicidal system of central planning and control.