Groceries in Canada have surged 29% over the past five years, and economists are warning that the worst price hikes may still be ahead. A basket of groceries that cost $100 five summers ago now costs roughly $129. While grocery inflation has slowed to 2.8% in August, the first time in over two years it has fallen below the overall inflation rate, prices are still much higher than they were five years ago, with significant jumps in items like beef and coffee.
The next wave of price increases is expected to hit after Thanksgiving, driven by soaring diesel prices, which impact the transportation of food from farms to store shelves. A global energy shock, exacerbated by the war in Iran and the closure of the Strait of Hormuz, has caused diesel prices to rise 75% year-over-year. As Canada’s harvest season ends, the reliance on imported food will increase, leading to higher shipping costs, particularly for fresh vegetables.
Other factors contributing to rising food prices include a weaker Canadian dollar and renewed trade disputes, which have introduced new costs for farmers. Economists warn that these combined forces are likely to push food inflation higher in the coming months. Lower-income households are feeling the squeeze the most, as their wages have not kept up with rising prices, eroding their disposable income.
Experts advise consumers to use the next few weeks wisely, stocking up on non-perishables and freezer staples, buying Canadian-grown produce while it’s in season, and comparing prices to adjust budgets accordingly. While price increases are not guaranteed, taking preventive steps now can help avoid financial strain later.