As Canada braces for potential U.S. tariffs and a continuously weakening dollar, grocery prices are expected to rise, hitting Canadian consumers hard at the checkout. Experts warn that even if tariffs are ultimately avoided, the Canadian dollar’s decline—hovering near 70 cents U.S.—will still push food costs higher.
“The Canadian dollar is getting weaker and weaker, so our buying power is dropping,” said Professor Sylvain Charlebois, senior director of agri-food analytics at Dalhousie University and co-host of The Food Professor Podcast. “Grocers will have to pay more to get food into their stores, and that impact will be felt across the board.”
President Donald Trump’s proposed tariffs—set at 25% on Canadian goods and 10% on Canadian energy—were paused for 30 days after negotiations with Prime Minister Justin Trudeau. However, if implemented, food prices in Canada could jump by as much as 18%, according to estimates from the Retail Council of Canada.
The impact will vary depending on product type, but packaged and processed foods, meats, dairy, and fresh produce would be among the hardest hit. Charlebois noted that initial tariffs were mainly aimed at packaged goods, but a second wave would impact nearly the entire grocery store, sparing only a few categories.
Even without tariffs, a falling Canadian dollar means imported food will cost more. Since a significant portion of Canada’s food supply is imported—especially in winter—the lower purchasing power of the loonie will lead to higher grocery prices.
While grocers may seek alternative suppliers outside the U.S., Charlebois warns that the weaker Canadian dollar will make those imports equally expensive. “No matter how you look at it, our food basket is going to increase in price,” he stated.
According to Canada’s Food Price Report, food prices are projected to increase between 3% and 5% in 2025.
- The average Canadian family of four will spend an estimated $16,833.67 on food this year
- This represents an increase of up to $801.56 compared to 2024
Additionally, the temporary GST/HST tax break on certain food items, implemented in December, is set to expire on February 15, further adding to consumer costs.
Charlebois emphasized that Trump’s return to an aggressive trade policy signals an increasingly fractured global agri-food trade environment. “Canada must work closely with its North American partners to safeguard food security,” he warned.
With factors like climate change, inflation, energy costs, and global conflicts already influencing food prices, the addition of tariffs and currency devaluation could exacerbate affordability challenges for Canadians.
As consumers prepare for potentially higher grocery bills, experts urge shopping locally, seeking out Canadian-made products, and reducing reliance on imported goods as ways to mitigate the impact. Still, the coming months could see a significant financial strain on households across the country.