Canadian households should brace for higher grocery bills next year, with a new Food Price Report forecasting that a typical family of four will spend an estimated $994.63 more on food in 2026. The report, produced by Dalhousie University’s Agri-Food Analytics Lab in partnership with several other universities, projects a total annual food cost of $17,571.79 for an average family — driven largely by a predicted four to six per cent rise in food prices.
The expected increase in food inflation surpasses the roughly four per cent seen in 2025 and is set to outpace general inflation, which the Bank of Canada hopes to bring down to its two per cent target. Lead author Sylvain Charlebois says that although some trade-related pressures are easing, climate impacts, supply chain adjustments, and rising production costs continue to push prices upward.
International trade tensions, which had contributed to higher prices throughout 2025, are beginning to subside. Canada removed almost all counter-tariffs on U.S. goods in September, and U.S. President Donald Trump recently rolled back tariffs on more than 200 agricultural and food products, including levies affecting coffee and bananas. However, Charlebois cautions that long shelf-life items such as coffee will take time to show price declines.
Climate disruptions — droughts, wildfires, and shifting growing seasons — remain a major wildcard. Report adviser Sadaf Mollaei of the University of Guelph notes that extreme weather continues to affect crop production and supply chains, influencing prices for products ranging from cocoa and tea to strawberries, carrots, squash and oranges.
While vegetable and fruit prices actually dipped slightly in 2025, declining 0.9 per cent and 1.1 per cent respectively, they are expected to rise again next year. Vegetables could increase three to five per cent, and fruit prices one to three per cent.
Meat continues to be the biggest source of food inflation. Prices rose 7.2 per cent this year and are projected to climb another five to seven per cent in 2026 due to shrinking cattle herds — now at their lowest levels since 1988 — and higher feed and processing costs. Charlebois warns that the situation is “problematic,” and says Ottawa should consider expanding beef import options beyond current suppliers, including Australia, to help stabilize prices.
As beef becomes increasingly expensive, consumers have shifted to chicken, causing prices there to rise as well. Poultry production can be adjusted more quickly than cattle farming, but the ripple effects are still being felt across the market.
Seafood prices are expected to rise modestly by one to two per cent in 2026, while dairy and eggs could increase between two and four per cent. Restaurant dining is also set to become pricier, with projected increases of four to six per cent.
Next year will also mark the launch of the Canada Grocery Code, a long-awaited industry framework designed to improve fairness between grocers and suppliers. Charlebois says the code could help moderate price volatility by limiting the leverage large grocery chains have over food processors and farmers.
“Getting processors, vendors, and grocers to the table to negotiate in fairness, in good spirit, will eventually help consumers over time,” he said. “So 2026 is going to be an important year in that regard.”