Canadian food prices rising amid higher production costs & climate change

Canadian grocery and food prices are slowly but surely rising in recent times, and one expert cites not just the pandemic but rising production costs and the toll of climate change as reasons why.

“For the longest time, the last 12 months or so, we were able to import our way out of food inflation or if, for example, if a product in Canada was not available, we were able to import a product from elsewhere and priced pretty much the same as if it came from Canada,” explains Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, per City News 1130. “But with a weaker dollar, things may actually get a little bit more challenging for importers.”

Indeed, a recent Food Basics study found that while 85 per cent of grocery shoppers in Ontario would like to shop more for local products, two-thirds (65 per cent) consider local products to be too expensive right now.

Of course, the COVID-19 pandemic has had huge impacts on virtually all aspects of life, impacts that have been felt particularly keenly by the foodservice industry.

But Charlebois says that while the health crisis has played a big role in increasing food prices, climate change is also a major culprit.

For example, British Columbia’s recent record-breaking heatwave has devastated crops and food production in the province.

Charlebois says the current situation is the second-worst he has seen after 2014, when food prices went up about six per cent on average.

“We were expecting the food inflation rate to be about five per cent in December, when we released Canada’s Food Price Report. That’s pretty much where we’re heading for this year.”

Even staple foods like peanut butter, meat, and baked goods are seeing prices rise. Peanut butter has pretty much been priced the same since 2000 in Canada, Charlebois notes, but it’s gone up six per cent this year. “That’s due to the fact that COVID has actually slowed things down logistically and it’s costing more to move things around.”

Though the pandemic situation appears to be improving in Canada, Charlebois says the impact on food prices will likely last until the fall, when Canada’s own harvest kicks in and is hopefully unaffected by extreme weather.

“We are expecting the economy to normalize itself a little bit more, so things will be more predictable,” he explained. “When things get more predictable for the entire food supply chain, it tends to allow companies to control cost. But until then, things will remain choppy.”

In December 2020, Canada’s Food Price Report said the average Canadian family would pay up to an extra $695 for food in 2021. It cited the pandemic, wildfires, and changing consumer habits as reasons for rising costs which have resulted in the highest increase ever predicted by a food price report.