Canadian shoppers could face higher grocery bills this fall and winter as a weaker dollar, expensive diesel and uncertain growing conditions put pressure on food supplies and costs.
Sylvain Charlebois, senior director of Dalhousie University’s Agri-Food Analytics Lab, said the three factors could reinforce one another. However, he cautioned that it is too early to predict how much prices will rise, particularly for fruits and vegetables.
The Canadian dollar’s recent dip below 70 cents US is a concern as retailers prepare for winter, when Canada depends more heavily on imported produce. A weaker loonie means importers must spend more Canadian dollars to purchase goods priced in American currency.
At an exchange rate of 68 cents US, a shipment priced at US$100 would cost approximately C$147.06, compared with C$142.86 when the dollar trades at 70 cents US. That represents an increase of about 2.9 per cent from the exchange rate alone.
Charlebois emphasized that higher import costs do not automatically produce an identical increase on store shelves. Purchasing contracts, currency protection arrangements, promotions and retailer margins can soften or delay the effect. A prolonged decline in the dollar, however, would increase pressure on produce prices over the following weeks and months.
Diesel costs are also affecting the food system, increasing expenses for farm machinery, processing and transportation. Those pressures apply to food grown in Canada as well as products brought in from abroad.
Sara Wood, vice-president of the Ontario Federation of Agriculture, said farmers are paying substantially more to complete this year’s harvest. Filling a modern combine’s approximately 1,250-litre fuel tank could now cost more than $2,600, compared with roughly $1,560 last fall.
For a 500-acre operation growing corn, soybeans and wheat, additional diesel expenses could reach approximately $14,000 compared with 2025. Wood said farmers have little room to postpone essential work because crops must be harvested when ready.
Rising expenses can leave producers with less money for equipment maintenance, business improvements and preparations for the next growing season, particularly when the prices they receive for their crops fail to keep pace.
Weather presents another uncertainty. Charlebois said El Niño can alter rainfall and growing conditions, potentially disrupting harvests, although the effects differ by crop and region. He stressed that an elevated weather risk does not establish how much grocery prices will increase.
Loblaw’s September food inflation report pointed to pressure on several commodities. It reported an 18.8 per cent annual increase in sugar prices, while coffee rose 2.6 per cent and cocoa increased 5.1 per cent.
The retailer also warned that reduced fishing quotas and smaller harvests could raise costs for certain wild-caught products, including haddock, cod and canned pink salmon. Supplies of farmed Atlantic salmon and tilapia remained more plentiful.
There were some signs of relief. The report noted a 4.3 per cent decline in beef prices following the announcement of additional low-tariff American beef imports, which improved supply expectations.
Tariffs could add further pressure to selected imported goods. Loblaw identified American cheese, baking mixes and dough products among the food categories potentially affected by Canadian retaliatory tariffs. The company has also announced the return of its “T” symbol to identify tariff-affected products.
The eventual impact on household budgets will depend on how long the dollar remains weak, whether fuel costs ease and how harvests develop in major food-producing regions.