--- PAGE 1 --- FROM TARIFFS TO TABLES: TRACKING THE FORCES BEHIND CANADA’S 2026 FOOD PRICES FOOD PRICE CANADA’S REPORT 1 6 T H E D I T I O N 2026 --- PAGE 2 --- Dr. Stefanie Colombo Dalhousie University scolombo@dal.ca Dr. Maria Corradini University of Guelph mcorradi@uoguelph.ca Bryce Cross Saint Mary’s University bryce.cross@smu.ca Sara El-Shawa University of Guelph selshawa@uoguelph.ca Dr. Evan Fraser University of Guelph frasere@uoguelph.ca Savannah Gleim University of Saskatchewan savannah.gleim@usask.ca Dr. Vlado Keselj Dalhousie University vlado@cs.dal.ca Dr. Paola Marignani Dalhousie University Paola.Marignani@Dal.ca Dr. Sadaf Mollaei University of Guelph smollaei@uoguelph.ca Dr. Rick Nason Dalhousie University Richard.Nason@Dal.ca Roseann Nasser University of Saskatchewan ron135@mail.usask.ca Dr. Armağan Özbilge Dalhousie University ozbilgea@dal.ca Paul Uys University of Guelph pauluys@uoguelph.ca Dr. Carla Prado University of Alberta carla.prado@ualberta.ca Dr. Tiff-Annie Kenny Université Laval / CRCHU de Québec tiff-annie.kenny@crchudequebec. ulaval.ca Olivia Romaniw Agri-food Analytics Lab, Writer olivia.romaniw@gmail.com Kate Sauser University of Saskatchewan kate.sauser@usask.ca Dr. Stuart Smyth University of Saskatchewan stuart.smyth@usask.ca Chelsea Sutherland University of Saskatchewan chelsea.sutherland@usask.ca Claire Williams University of Saskatchewan claire.williams@usask.ca ACADEMIC ADVISORS Jann McFarlane Designer, Tiny Rhino Studios tinyrhinostudios.com Kim Humes Communications kim.humes@dal.ca Janet Music Development janet.music@dal.ca Olivia Romaniw Writer olivia.romaniw@gmail.com PRODUCTION TEAM Dr. Stacey Taylor Cape Breton University stacey_taylor@cbu.ca Dr. Kristina Kupferschmidt University of Prince Edward Island kkupferschmidt@upei.ca FORECASTING TEAM Dr. Sylvain Charlebois Dalhousie University sylvain.charlebois@dal.ca LEAD AUTHOR CO-AUTHORS --- PAGE 3 --- 16TH EDITION CANADA’S FOOD PRICE REPORT 2026 TABLE OF CONTENTS EXECUTIVE SUMMARY .............................................................4 LOOKING BACK AT 2025: HOW DID WE DO? ...........................7 2025 HIGHLIGHTS ....................................................................9 GST/HST Holiday 9 Trade Disputes with the United States 10 “Buy Canadian” Movement 12 Interest Rate Cuts 13 Temporary Foreign Worker Program 14 Beef, Beef, Beef 15 Food Manufacturing Under Threat 16 Retail Market Consolidation & Grocery Code of Conduct 17 Retail Shifts 18 Energy Prices 19 Climate Change & Weather Events 20 Nutritional Compromises 21 The North 22 WHAT TO EXPECT IN 2026 .....................................................24 Canadian Dollar Outlook 24 Tariff Disputes Continue 26 Interprovincial Trade Barriers 28 Front-of-Pack Nutrition Labelling 29 Chicken 31 2026 FORECAST: METHODOLOGY .........................................32 2026 MACROECONOMIC FACTORS AND DRIVERS ................33 FOOD PRICES BY PROVINCE ..................................................34 THE 2026 WATCH-LIST ITEMS ..............................................35 --- PAGE 4 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 4 EXECUTIVE SUMMARY The 2026 Canada’s Food Price Report marks the 16th edition of this annual publication. This report is produced by Dalhousie University in collaboration with other universities across Canada, enriching the report's scope and regional expertise. Last year’s report predicted there would be an overall price increase of 3% to 5% in 2025. The current rate for food price increases is within the predicted range at 4% (in store) according to the latest available CPI data.1 By category, price increases for dairy, restaurants and seafood also fell within the forecasted ranges. However, meat and other food products increased at a higher rate than forecasted. This was balanced by lower-than-expected rates in the bakery category and price decreases for both fruits and vegetables. The report also provides readers with predictions on estimated annual food expenditures for individual consumers based on their age and gender. This allows readers to predict their annual food expenditures based on the consumption of their household. Based on the predictions for 2025, the maximum total annual expenditure for a family with the following demographic composition: a man (aged 31-50), a woman (aged 31-50), a boy (aged 14-18), and a girl (aged 9-13), was projected to be up to $16,833.67. Based on the observed changes in 2025, a family with the same demographic makeup spent $16,577.16, a difference of $256.51. In contrast with previous years, this edition of the report used one, systemized approach to forecast the 2026 food price increases. Forecasters employed a broad suite of predictive analysis models and factored in several key regressors that have significant potential to impact the Canadian food price pipelines, such as climate variables, economic factors, food manufacturing, and geopolitical information. The final forecasts for each food category were produced by averaging the median values from each model. Standard deviations were calculated to obtain confidence intervals, which reflect the best-case and worst-case scenarios for each food category. S A M P L E H O U S E H O L D A N N U A L F O O D C O S T S F O R 2 0 2 5 $16,577.16 --- PAGE 5 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 5 Over the last 16 years, this report has considered many market instruments and macroeconomic factors in its forecast, including financial indicators, recession signals, currency values and exchange rate fluctuation, and Canada-specific information. The 2026 report forecasts that overall food prices will increase by 4% to 6%. This report has largely maintained the same approach as last year and shows estimated annual food expenditures by individual consumers based on their age and gender. To forecast the maximum cost for families in 2026, we determine the anticipated change, use the highest end of the predicted scale (for this year, 6%), and multiply the observed costs in 2025 by this figure. Looking ahead to 2026, we are expecting a family of four with the same demographic makeup to spend up to $17,571.79, an increase of up to $994.63 from last year. This year’s report considers the following factors as potential contributors to price increases: trade disputes with the United States, shifts in the food manufacturing and retail landscape, labour markets, policy changes, the Canadian dollar outlook, and more. Food affordability remains a top concern for Canadian consumers. A quarter of Canadian households are considered food insecure and nearly 2.2 million people visited food banks in Canada on a monthly basis this year.2 Although inflation was relatively steady in 2025, food prices are still 27% higher than they were five years ago, and consumers are feeling the strain of these higher prices at the grocery store.3 Nearly 85% of Canadians reported that their household food expenses have increased in the past 12 months.⁴ Moving into 2026, this is unlikely to change. This year, all eyes were on the ongoing trade dispute with the United States. The inflationary impacts of tariffs and counter-tariffs will continue to be felt next year as trade tensions reshape the economic landscape. The dispute has created uncertainty in the market, as well as supply chain disruptions and declining demand for Canadian exports. With that said, Canada is actively strengthening relationships with other international trading parters to build resilience and global competitiveness. Canada’s removal of almost all counter-tariffs on U.S. imports should also help ease upward inflationary pressures on goods. For 2026, the report uses the same food categories as previous years and makes the predictions show in Table 1: TABLE 1: 2026 FOOD PRICE FORECASTS CATEGORIES Anticipated Change % Uncertainty Range* Bakery 2% - 4% +/- 0.65 Dairy & Eggs 2% - 4% +/- 0.40 Fruit 1% - 3% +/- 0.40 Meat 5% - 7% +/- 1.12 Other 4% - 6% +/- 0.87 Restaurants 4% - 6% +/- 0.67 Seafood 1% - 2% +/- 0.49 Vegetables 3% - 5% +/- 0.85 Total Increase in Food Prices 4% - 6% +/- 0.70 *The uncertainty range tells you how much the actual price change could reasonably vary above or below the forecast, based on historical volatility and model error (±1 standard deviation). S A M P L E H O U S E H O L D A N N U A L F O O D C O S T F O R 2 0 2 6 $994.63 INCREASE FROM 2025 $17,571.79 C O M P A R E D T O F I V E Y E A R S A G O , F O O D P R I C E S A R E HIGHER 27% --- PAGE 6 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 6 Table 2 presents a provincial breakdown of food price dynamics in Canada, comparing the relative change in 2025 with directional forecasts for 2026. It evaluates whether each province experienced food price movements below, at, or above the national average in 2025, offering a clear view of regional disparities. Several provinces—such as British Columbia, New Brunswick, Nova Scotia, Prince Edward Island, and Saskatchewan— saw food price increases above the national average in 2025, while Alberta, Newfoundland and Labrador, and Quebec experienced increases below the national average. Manitoba and Ontario remained close to the national benchmark, showing “average” changes for the year. Looking ahead to 2026, the table provides provincial forecasts indicating whether food prices are expected to rise faster, slower, or in line with the national average. Some provinces are projected to shift direction compared to 2025—for example, British Columbia and Manitoba are expected to fall below the national average in 2026 after performing above or at average levels in 2025. In contrast, Ontario and Quebec are forecasted to see above-average food price increases next year. The estimates offer important guidance for policymakers and consumers by highlighting emerging regional pressures and potential affordability challenges across the country. TABLE 2: 2026 PROVINCIAL BREAKDOWN OF FOOD PRICES PROVINCE 2025 CHANGE¹ 2026 FORECAST* Alberta Below National Average Above National Average British Columbia Above National Average Below National Average Manitoba Average Below National Average New Brunswick Above National Average Above National Average Newfoundland and Labrador Below National Average Average Nova Scotia Above National Average Above National Average Ontario Average Above National Average Prince Edward Island Above National Average Average Quebec Below National Average Above National Average Saskatchewan Above National Average Average *Provincial estimates provide directional guidance based on regional knowledge rather than precise forecasting. 1. Statistics Canada. (October 29, 2025). Consumer Price Index, monthly percentage change, seasonally adjusted, Canada, provinces, Whitehorse and Yellowknife – Food. Retrieved from https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000403 2. Food Banks Canada. (n.d.). Hunger in Canada. Retrieved from https://foodbankscanada.ca/hunger-in-canada/ 3. Statistics Canada. (August 19, 2025). Consumer Price Index, July 2025. Retrieved from https://www150.statcan.gc.ca/n1/daily-quotidien/ 250819/dq250819a-eng.htm. 4. Agri-Food Analytics Lab. (May 6, 2025). Canadian Food Sentiment Index Spring 2025. Retrieved from https://www.dal.ca/sites/agri-food/research/the-canadian-food-sentiment-index-spring-2025.html. --- PAGE 7 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 7 LOOKING BACK AT 2025: HOW DID WE DO? In the 2025 forecasts, the projections for food price increases demonstrated some variability (Table 3). The overall total increase in food prices fell precisely within the forecasted range, as did the observed price increases in dairy, restaurants and seafood. On the other hand, CPI for categories like meat and other (which encompasses products that do not fall into the listed categories, such as non-alcoholic beverages) increased at a higher rate than forecasted. This was balanced by lower-than-expected rates in the bakery category as well as observed decreases in CPI for fruits and vegetables. TABLE 3: 2025 FOOD PRICE RESULTS FORECAST VS. OBSERVED CATEGORIES 2025 CANADA’S FOOD PRICE REPORT FORECAST 2025 ACTUAL CHANGE (LATEST CONSUMER PRICE INDEX REPORTING) Bakery* 2% - 4% 0.6% Dairy & Eggs 2% - 4% 1.9% Fruit 1% - 3% -1.1% Meat 4% - 6% 7.2% Other 2% - 4% 5.5% Restaurants 3% - 5% 3.3% Seafood 1% - 3% 2.7% Vegetables 3% - 5% -0.9% Total Increase in Food Prices 3% - 5% 3.4% *Green indicates where the actual food price changes fell within the forecasted range; yellow indicates where the actual changes were near the forecasted range; and red indicates where the actual changes fell outside the forecasted range. “We predicted last year that beef would be a big story in 2025 — and it certainly was. We don’t see how beef prices could normalize before mid-2027.” --- PAGE 8 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 8 D A I R Y & E G G S 1.9% M E A T 7.2% F R U I T -1.1% T O T A L I N C R E A S E F O O D P R I C E S 3.4% Food price increases are impacted by a wide range of factors including geopolitics, global weather events, policy enactment, consumer behaviours and changes in retail business models. Most notably in 2025, the trade dispute between Canada and the United States and subsequent policy changes as well as consumer-led movements altered the economic retail landscape, therefore impacting food price inflation. --- PAGE 9 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 9 2025 HIGHLIGHTS From mid-December 2024 to mid-February 2025, the government implemented the Tax Break for All Canadians Act (Bill C-78), during which customers were not charged any Goods and Service Tax (GST) or Harmonized Sales Tax (HST) when they purchased specified items. This included most food and beverages at grocery stores and restaurants. The tax break was intended to leave more money in Canadians’ pockets for everyday items and holiday non- essentials. The effect on food inflation was staggering. It dropped to -0.6% in January, marking the first time food inflation has been in the negatives since May 2017.5 This figure was largely propped up by the restaurant industry which recorded an inflation rate of -5.1% compared with 1.9% for food purchased in stores.5 Regardless, the impact was clear: Canadians spent less on food over the two-month period, offering some economic relief for them during a time of year when upward pressure on the price of goods is typically at its peak. Understandably, provinces with the highest tax rates—Nova Scotia*, Newfoundland and Labrador and Prince Edward Island at 15%— experienced the steepest decline in food inflation during the GST/HST holiday. On the other hand, provinces with tax rates that are already relatively low—Alberta and Saskatchewan at 5%—did not feel quite as much of an impact. It is important to note that Statistics Canada’s Consumer Price Index reflects the final prices that consumers pay at the till; therefore, tax is included in food inflation measurements. *HST was still 15% in Nova Scotia at the time of the tax holiday. The provincial tax rate was lowered to 14% on April 1, 2025. “The GST holiday provided short- term relief for consumers, but it failed to address the underlying drivers of food inflation. Once it ended, prices reset, and the affordability problem remained unchanged.” GST/HST HOLIDAY 5. Statistics Canada. (October 29, 2025). Consumer Price Index, monthly percentage change, seasonally adjusted, Canada, provinces, Whitehorse and Yellowknife – Food. Retrieved from https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000403. --- PAGE 10 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 10 At the start of 2025, the new American administration announced historic, sweeping tariffs on most Canadian imported goods and energy; in response, the Canadian government retaliated with substantial counter-tariffs. The tariffs officially came into effect at the beginning of March 2025, and they have since overhauled the Canadian economic landscape and reshaped its longstanding trade partnerships with the United States. The United States proceeded to impose tariffs against 24 other countries in April, further disrupting the global economy. On September 1st, Canada lifted almost all its counter-tariffs on U.S. goods. Trade between Canada and the United States is highly enmeshed: geographical proximity has enabled integrated supply chains, profitable trade, and the employment of 2.6 million Canadians.6 Billions of dollars in goods pass between the two countries daily: in 2024, bilateral trade was worth over $1 trillion.7 New trade barriers weaken the economy by creating uncertainty in the market, softening employment, decreasing demand for Canadian goods, and creating inflationary pressures. Canadian export volume declined by 7.5% in the second quarter of the year as U.S. imports sharply declined, therefore causing demand for Canadian exports to plummet.6 This was the largest quarterly drop since the 2008 recession.6 Manufacturing activity was also down 3.2% mid-year and over half of manufacturers reported that the tariffs were impacting their businesses.6 For the food industry, tariffs have meant increased costs and price volatility for businesses8, which ultimately get passed down to Canadian consumers at the store. While the isolated impact of the tariffs on food prices is difficult to gauge, the tariffs and counter-tariffs have increased grocery costs. “Tariffs’ inflationary pressures are real — and they’ll continue well into the new year, keeping costs high across global supply chains, including here in Canada.” TRADE DISPUTES WITH THE UNITED STATES C A N A D I A N E X P O R T V O L U M E D E C L I N E D FIRST QUARTER OF 2025 7.5% --- PAGE 11 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 11 As noted by RBC and the Arrell Food Institute, tariffs have also affected employment rates in Canada, with the manufacturing sector observing significant layoffs since the tariffs were announced in January.9 This puts pressure on local economies as there is less household income available for consumers to spend on retail and services. When job security wavers and affordability becomes strained, concerns around food security also increase.9 To maintain their presence in U.S. markets, some businesses are weathering the storm by selling their products at a negative margin.8 However, the industry has also seen collaboration along the supply chain and investment in modernization—such as AI and automation—to bring down operating costs, improve efficiency, and build resilience.8 Businesses are also adjusting their supply chains by branching out into new markets to conduct trade. Despite the removal of counter-tariffs by the Canadian government in September, it may still take some time for the policy change to be reflected in the prices of U.S.-imported food, if at all. Commodities with short shelf lives that move through the supply chain quickly will show more immediate decreases, whereas previously tariffed items with long shelf lives like coffee will take more time.10 Coupled with the fact that many producers, manufacturers and suppliers are exploring international trade markets outside the U.S., it is unlikely that food prices will see a notable decrease soon. 6. Statistics Canada. (October 22, 2025). Recent developments in the Canadian economy: Fall 2025. Retrieved from https://www150.statcan.gc.ca/n1/pub/36-28-0001/2025010/article/00004-eng.htm. 7. Statistics Canada. (September 18, 2025). Impact of tariffs on businesses in Canada: Expectations and strategic responses, third quarter of 2025. Retrieved from https://www150.statcan.gc.ca/n1/pub/11-621-m/11-621-m2025012-eng.htm. 8. MNP. (September 2, 2025). How are Canadian food and beverage businesses navigating the impact of US tariffs? Retrieved from https://www.mnp.ca/en/insights/directory/canadian-food-beverage-businesses-navigating-impact-us-tariffs. 9. RBC. (June 18, 2025). Feeding the crisis: The tariff toll on food insecurity. Retrieved from: https://www.rbc.com/en/thought-leadership/ the-trade-hub/feeding-the-crisis-the-tariff-toll-on-food-in 10. Canadian Grocer. (September 23, 2025). Food inflation up in September despite end to counter-tariffs. Retrieved from https://canadiangrocer.com/food-inflation-september-despite-end-counter-tariffs. --- PAGE 12 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 12 The start of this year saw the rise of the “Buy Canadian” movement, led by consumers in response to the American administration’s tariffs on imported goods from Canada as well as other political frictions between the two countries. In a show of national patriotism, Canadians across the country pledged to keep their dollars in Canada by purchasing products that are grown and produced domestically, while avoiding imports, particularly from the United States. Some banking experts estimated at the time that this increase in consumer appetite for domestic goods could have significant impacts for the Canadian economy, potentially adding about $10 billion annually.11 While this movement extended to all sectors, groceries are one of the easiest and most cost-effective areas for consumers to prioritize domestic products over imported goods. By June of this year, sales of U.S.-made food products were down 6.9% in Canada while Canadians spent more on items sourced domestically.12 This drop in U.S. sales after just a few months represented a massive shift for the food retail sector, one that is often only seen in times of national crisis. With that said, a recent survey showed that consumers are still taking a “Price First” approach to purchasing. While “Buy Canadian” remains an attractive ideal, value and affordability are driving decision making at the grocery store, particularly for younger generations. Of the respondents, 58% of Gen Z maintained that the price of a product is more important to them than its country of origin.13 Furthermore, retailers have taken the opportunity to highlight Canadian goods on the shelves, displaying maple leaves and Canadian flags next to products to inform customers who are looking to purchase domestically. However, this has led to increased cases of “maple washing,” where retailers will use Canadian branding to promote imported goods. The CFIA found many incidences of maple washing this year, with most of the violations happening at national grocery chains.14 Misleading marketing such as this risks eroding the public’s trust and could reduce consumers’ willingness to pay for Canadian goods. “The ‘Buy Canadian’ movement showed how patriotism can shape consumer behaviour — but for many Canadians, ideals met reality at the checkout.” “BUY CANADIAN” MOVEMENT 11. BMO Economics (April 8, 2025). Special Report: Buy Canadian Measuring the Benefits and Costs. Retrieved from https://economics.bmo.com/en/publications/detail/bf98da44-f0ad-405b-9114-4bb1100b5dd8/ 12. Neilson IQ (June 9, 2025). Made in Canada: The Retail Ripple of Patriotic Sentiment. Retrieved from https://nielseniq.com/global/en/insights/report/2025/tariffs-tensions-and-the-rise-of-the-buy-canadian-consumer/ 13. Ipsos (September 4, 2025). Balance Price and Patriotism. Retrieved from https://www.ipsos.com/en-ca/balancing-price-and-patriotism 14. CBC News (September 1, 2025). No fines for big grocers that promoted imported food as Canadian, Retrieved from https://www.cbc.ca/news/business/buy-canadian-label-maple-washing-1.7621843 P R I C E I S M O R E I M P O R T A N T T H A N C O U N T R Y O F O R I G I N GEN Z 58% --- PAGE 13 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 13 This year, interest rates in Canada have undergone an easing cycle. The Bank of Canada has periodically lowered its key interest rates throughout the course of the year, with the latest cut at the end of October bringing the rate down to 2.25%. This represents a 75-point reduction since the start of the year. With inflation rates expected to remain around 2%, the Bank of Canada determined that interest rate cuts were important to boost economic activity.15 Interest rates are a balancing act. After they peaked at 5% to control inflation in April of 2024, economic growth slowed and upward inflationary pressures eased enough at the start of the year for the Bank to recommend rate reductions. Since then, the trade dispute with the United States, decreased demand for Canadian exports and a soft labour market have contributed to further economic contraction.15 Theoretically, lower interest rates mean more money in the pockets of Canadian consumers to spend on goods and services, subsequently stimulating the economy while balancing inflation. On the other hand, low rates can also weaken currency over time, making imported goods more expensive.16 Food businesses can leverage these low rates by taking out more affordable loans to put towards expansion, modernization or acquisition, especially for resilient commodities like health and wellness products, prepared snacks and alternative proteins.17 For consumers, they will have more disposable income to spend on groceries, but it is unlikely that the interest rate reduction will have any effect on food prices at the store.18 15. Bank of Canada. (October 29, 2025). Bank of Canada lowers policy rate to 2¼%. Retrieved from https://www.bankofcanada.ca/2025/10/fad-press-release-2025-10-29/ 16. Bank of Canada. (April 5, 2021). Understanding how monetary policy works. Retrieved from https://www.bankofcanada.ca/2021/04/understanding-how-monetary-policy-works/ 17. MNP. (October 21, 2025). Tariffs and interest rates: What food and beverage businesses need to know. Retrieved from https://www.mnp.ca/en/insights/directory/tariffs-interest-rates-what-food-beverage-businesses-need-know 18. Global News. (October 28, 2025). The Bank of Canada could cut rates again. It likely won’t help food prices. Retrieved from https://globalnews.ca/news/11498632/food-inflation-bank-of-canada/ “Higher living costs have prevented households from spending more at the grocery store, though lower interest rates have provided some relief for many middle-class families.” INTEREST RATE CUTS --- PAGE 14 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 14 Canada’s Temporary Foreign Worker Program (TFWP) allows businesses to hire temporary workers from participating countries for short-term jobs that cannot be filled by qualified Canadians. It is widely utilized along the food supply chain. In 2024, the program brought over 78,000 workers into the agricultural industry alone.19 Last September, the Canadian government announced a 10% cap on the number of workers in low-wage positions at a single work location. Reforms are meant to tighten eligibility as well as strengthen oversight towards non-compliance. Agriculture is exempt from the cap to ensure that producers and manufacturers have access to sufficient, seasonal labour while still being held to the same compliance standards and penalties as other industries. As Canada revisits its immigration policy, the government also announced plans to reduce the share of temporary residents in Canada to less than 5% of the population—currently at 7%—by 202720 to encourage more domestic labour and improve youth employment rates. There are concerns that this shift from temporary work could lead to a major labour shortage in agriculture, thereby disrupting the supply chain and costing businesses that already operate on tight margins. Consequently, these extra costs would be passed down to consumers. However, some of these inflationary shocks could be mitigated by the gradual approach over the next couple years. Research supports these concerns. Reforming the TFWP is a double-edged sword: previous reforms to the program showed that fewer foreign temporary workers meant higher wages for domestic workers, but it also led to labour shortages and policy substitutions.21 19. Statistics Canada. (May 9, 2025). Temporary foreign workers in the agriculture and agri-food sectors, by industry. Retrieved from https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3210021801. 20. Government of Canada. (October 10, 2024). 2025–2027 Immigration Levels Plan. Retrieved from https://www.canada.ca/en/immigration-refugees-citizenship/news/2024/10/20252027-immigration-levels-plan.html 21. Chen, W.H., & Fang, T. (2025). Restricting temporary foreign labour: evidence on wage effect from Canada’s 2014 policy reform. Journal of Ethnic and Migration Studies, 1-29. https://doi.org/10.1080/1369183X.2025.2577780. “Any changes to the Temporary Foreign Worker Program will have a significant impact on the Canadian food industry.” TEMPORARY FOREIGN WORKER PROGRAM --- PAGE 15 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 15 22. Canada Beef (n.d.). Domestic Market Report | Q2 2025. Retrieved from https://cdnbeefperforms.ca/wp-content/uploads/2025/06/DMIR-Canada-Q2-2025.pdf 23. Canada Beef (n.d.). Domestic Market Report | Q3 2025. Retrieved from https://cdnbeefperforms.ca/wp-content/uploads/2025/09/CB-DMIR-Canada-Q3-2025.pdf 24. Canada Beef (n.d.). Domestic Market Report | Q1 2025. Retrieved from https://canadabeef.mx/wp-content/uploads/2025/04/DMIR-Canada-Q1-2025.pdf 25. Statistics Canada. (October 22, 2025). Food Price Data Hub. Retrieved from https://www.statcan.gc.ca/en/topics-start/food-price “Very rarely have we seen all three main components of the meat trifecta — beef, chicken, and pork — become more expensive at the same time in a single year.” BEEF, BEEF, BEEF Meat showed the highest inflation rate of any food category in Canada this year with a price hike of 7.2%. This was largely driven by the soaring retail price of beef, which showed a 16% increase in the first quarter of 2025 alone.22 While the spring and summer seasons showed more stability, beef prices were still up 9% from last year and up 23% from the five-year average.23 As of January 2025, cattle herds reached their lowest numbers since 1988; beef cow inventories were down across the country, and there were not enough breeding heifers to sustain herd sizes.24 Challenges persisted for producers throughout the year as Western Canada experienced a drought over the summer and input costs, such as feed, rose sharply. In June, production costs for livestock and animal products were up by 11.3% year- over-year; in August, the sector’s processing and packaging costs were up by 10.7%.25 As expected, these extra costs were passed down to consumers at the grocery store. Some producers are choosing to downsize their farms to improve returns or leaving the beef sector altogether. Industry trends show that this sector squeeze is expected to continue until at least 2027.23 Nonetheless, Canadians are keeping beef on their plates. Canada has turned to other countries to keep up with the unwavering consumer demand for beef products. From January to April this year, import volume was 22% higher than 2024 to compensate for the record-low herd numbers.22 In particular, the country has strengthened its import partnerships with Mexico, due to a favourably integrated supply chain, as well as Australia, whose exporters are looking to break into the North American market. Increased beef imports into Canada should help to stabilize retail prices by easing pressures on supply, offering some relief for consumers.23 R E T A I L P R I C E O F B E E F I N C R E A S E D FIRST QUARTER OF 2025 19% --- PAGE 16 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 16 Adding value to food has been a national priority for years. In a 2019 report on strengthening the value-added food sector, the Senate of Canada discussed improving regulations to grow international trade partnerships, investing in sector innovation, and reducing barriers to domestic trade.26 However, recent trends in the manufacturing sector seem to be straying from this objective. The food manufacturing sector has had a year of restructuring: large corporations like Kraft-Heinz and Dr. Pepper Kellogg are splitting up and Nestle recently announced that it will be cutting 16,000 jobs globally due to rising production costs.27 This type of downsizing is happening across the country as businesses start to feel the impacts of an increasingly complex trading environment and sluggish sales growth.28 Despite price increases, the volume of food being sold in Canada has reduced considerably, leading to a 1.9% decrease in food manufacturing growth month-over-month in August.29 Food manufacturing is the largest manufacturing sector in Canada in terms of employment, boasting over 300,000 employees in 2024.30 If multinational food corporations downsize their processing plants in Canada, the strain will be felt along supply chain. These disruptions can lead to uncertainty in supply and demand; poorer product quality; and, consequently, greater food price fluctuations as extra costs are passed down to consumers.31 FOOD MANUFACTURING UNDER THREAT “Food manufacturing in Canada — and around the world — is clearly facing major headwinds.” 26. Senate of Canada. (July 19, 2025). Made in Canada: Growing Canada’s Value-Added Food Sector. Retrieved from https://sencanada.ca/en/info-page/parl-42-1/agfo-made-in-canada/ 27. CBC News. (October 16, 2025). Nestle cutting 16,000 jobs worldwide in effort to reduce costs. Retrieved from https://www.cbc.ca/news/business/nestle-job-cuts-9.6941283. 28. Farm Credit Canada (October 7, 2025). Trade disruptions stifle growth for Canadian food and beverage manufacturers: FCC reports. Retrieved from: https://www.fcc-fac.ca/en/about-fcc/media-centre/news-releases/2025/trade-stifles-food-manufacturers. 29. Statistics Canada. (October 15, 2025). Monthly Survey of Manufacturing, August 2025. Retrieved from https://www150.statcan.gc.ca/n1/daily-quotidien/251015/dq251015a-eng.htm. 30. Government of Canada. (July 18, 2025). Overview of the food and beverage processing industry. Retrieved from https://agriculture.canada.ca/en/sector/food-processing-industry/overview-food-beverage. 31. Rogas-Reyes, J.J., Rivera-Cadavid, L., & Peña-Orozco, D.L. (2024). Disruptions in the food supply chain: A literature review. Heliyon, 10(14):e34730. https://doi.org/10.1016/j.heliyon.2024.e34730. F O O D M A N U F A C T U R I N G I N C A N A D A EMPLOYEES IN 2024 300,000+ --- PAGE 17 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 17 An ongoing challenge facing the retail landscape is the level of market concentration in Canada: the top four largest grocery chains control at least 72% of the national market share.32 Not only does this limit competition and choice for consumers, it can also compromise negotiating power for producers and others along the supply chain, dampen innovation, and make it more difficult for smaller companies to scale up their operations or enter the market at all.33 Consumers feel the effects of consolidation in the form of food price volatility, as inflation rates are directly linked to the annual corporate cycle of negotiations. Food price bumps are observed in October and February every year, before and after supplier-retailer negotiations enter their blackout period, respectively. The high degree of consolidation means that any disputes or standoffs in price negotiations will result in higher-than- expected food inflation rates due to the lack of competition in the market; in other words, the decisions of only a few corporations can dictate what happens to the retail landscape. In fact, research shows that local markets, such as farmers’ markets, raise their prices at a smaller rate than conventional grocery stores despite similar input costs34, pointing to structural inefficiencies in the traditional grocery model. However, the Grocery Code of Conduct started its transition period in June of this year and will become fully operational in January 2026. The Code was created to promote fairness in the market, in theory giving food manufacturers and smaller grocers more sway and therefore increasing choice for consumers at the grocery store. The Code is intended to stabilize the peaks and valleys of food price inflation to make Canadians’ grocery bills more predictable, but oversight and enforcement of the Code are essential if any of these changes are going to become a reality. 32. Government of Canada. (December 16, 2022). Response from the Retail Council of Canada to the consultation on the Market study of retail grocery. Retrieved from https://competition-bureau.canada.ca/en/how-we-foster-competition/consultations/response-retail- council-canada-consultation-market-study-retail-grocery#toc3 33. MNP. (n.d.). Global Agri-Food: Most Influential Nations Rankings Second Edition. Retrieved from https://www.mnp.ca/-/media/files/mnp/ pdf/niche/food--beverage/525426ntl-fb-global-agrifood-reportyear-2--full-mnp-report-remediated.pdf. 34. Stephens, P., Madziak, V., Gerhardt, A., & Cantafio, J. (2025). Exploring price changes in local food systems compared to mainstream grocery retail in Canada during an era of ‘greedflation’. Food Policy, 130:102773. https://doi.org/10.1016/j.foodpol.2024.102773. RETAIL MARKET CONSOLIDATION & GROCERY CODE OF CONDUCT “When four grocers control nearly three-quarters of Canada’s food market, competition becomes an illusion. The Grocery Code of Conduct is designed to create a levelled playing field, if it works.” --- PAGE 18 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 18 Consumer shopping behaviour is evolving, and the food retail landscape is shifting with it. Earlier this year, 35% of Canadians said they found the best value for their dollars at discount retailers and reported shopping for food at these stores more frequently.35 As such, Canada has seen a rise in discount stores opening their doors across the country with large grocery corporations adapting their strategies to prioritize discount banners and provide value for consumers. For example, Loblaw began piloting its new, ultra-discount store called No Name in Ontario this year and has further stated its plans to open 50 more No Frills, with smaller format stores available in downtown hubs like Toronto.36 Metro opened an additional seven Food Basics locations and five Super C stores. Dollar stores like Dollarama are expanding their non-perishable food line.37 Globally, the discount grocery market is forecasted to increase at compounded annual growth rate of 5.2% into 2029.38 The discount market is anticipated to make up over 15% of the Canadian grocery sales by this time, the highest share of any area outside of Europe.38 The rapid shift towards discount grocery channels in 2025 means there are more affordable options for consumers to choose from on the shelves. Canadians may be able to shop more within their budget as stores prioritize stocking high-volume, cost-effective goods, easing some of the budgetary constraints that customers are facing today. However, most of the discount stores still fall under the banners of major grocery chains, leading to ongoing concerns of a lack of competition in the retail market as control over pricing negotiations is still mainly in the hands of only a few companies. Along with discounted retailers, food rescue apps are offering Canadians another way to save on groceries. While there is not yet concrete data on their prevalence in the retail marketplace, platforms like Second Harvest, Food Hero and Too Good to Go are increasing in popularity. Canada’s Food Price Report will continue monitoring the ongoing integration of food rescue apps in the retail landscape. 35. Caddle. (March 6, 2025). Value Shopping in Canada: Trends Shaping Consumer Habits in 2025. Retrieved from https://askcaddle.com/wp-content/uploads/2025/03/Caddle_Value-Shopping-Webinar_Feb-28_v3.pdf. 36. Grocery Business (July 9, 2025). Budget-conscious shoppers drive increased growth in discount grocery channel. Retrieved from https://www.grocerybusiness.ca/budget-conscious-shoppers-drive-increased-growth-in-discount-grocery-channel/. 37. Canadian Grocer. (December 12, 2024). Retailers are betting on discount. Will the momentum last? Retrieved from https://canadiangrocer.com/retailers-are-betting-discount-will-momentum-last. 38. IGD. (May 21, 2025). Discounts to increase pressure on large grocers. Retrieved from https://www.igd.com/articles/discounts-to-increase-pressure-on-large-grocers/71249. RETAIL SHIFTS “As Canadians chase deals, the grocery landscape is following suit — discount stores are multiplying, almost at a record pace.” 35% --- PAGE 19 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 19 Gas and food prices are highly interconnected: any significant shocks to the price of gas will be directly felt by the food industry. Higher energy costs increase the price of inputs like fertilizers and fuel for farm equipment, and they make transporting food along the supply chain, from the farm to the shelf, more expensive.39 Food companies and consumers quickly bear the impacts of these extra costs. Energy prices—particularly gasoline—decreased this year due to a combination of lower global crude oil prices, an increased fuel supply from OPEC and its partners, and the end of the national consumer carbon tax policy in April.40 These changes come after several years of volatility. Reports showed consistent year-over-year declines for most of 2025, peaking in July with a 16.1% decrease.40 However, more recent trends indicate that the rate of decline is slowing down as gasoline prices start to show modest monthly increases once again.41 Despite these recent declines, Canadians are still feeling the impacts of the last few years of high energy spikes in their grocery bills. While food inflation is quick to jump in response to higher energy costs or tightened availability, it is much slower to stabilize, meaning that it can take some time for falling energy prices to be reflected on price stickers at the store. 39. Diab, S., & Karaki, M.B. (2023). Do increases in gasoline prices cause higher food prices? Energy Economics, 127:107066. https://doi.org/10.1016/j.eneco.2023.107066. 40. Statistics Canada (August 19, 2025). Consumer Price Index, July 2025. Retrieved from https://www150.statcan.gc.ca/n1/daily-quotidien/250819/dq250819a-eng.htm. 41. Statistics Canada (October 21, 2025). Consumer Price Index, September 2025. Retrieved from https:// www150.statcan.gc.ca/n1/daily-quotidien/251021/dq251021a-eng.htm?utm_source=stcplus&utm_ medium=web&utm_campaign=statcan-statcan-stcplus-weekreview-24-25&utm_content=25-10-24. ENERGY PRICES “Energy has been a non-factor in recent months, but that could change quickly.” --- PAGE 20 --- CANADA’S FOOD PRICE REPORT IS SUPPORTED BY A COLLECTIVE OF UNIVERSITIES FROM ACROSS THE COUNTRY AND PRODUCED BY THE AGRI-FOOD ANALYTICS LAB AT DALHOUSIE UNIVERSITY. CANADA’S FOOD PRICE REPORT 2026 20 Climate change and weather events have become a growing concern for agricultural producers as they face more extreme and unpredictable conditions year after year. Since the supply chain starts with producers, the entire chain is highly sensitive to climate-related disruptions that impact agri-food output. Hot temperatures, droughts and wildfires damage crops and threaten agricultural land, and warmer winters can make crops and livestock more susceptible to pests and disease. When supply cannot meet demand, businesses need to pivot quickly or take the losses, neither of which is economically viable. These extra costs will show up in food prices on the shelves. In June 2025, 66% of agricultural land in Canada was experiencing moderate to extreme drought, most notably in Saskatchewan and Alberta.42 By September, over 8.3 million hectares of land burned from wildfire activity.43 Rainfall activity was well below normal levels as well, particularly in Ontario, Quebec and Nova Scotia, impacting fruit and vegetable production.44 Canada is also indirectly impacted by global weather events. Prices for certain imports such as coffee and tea, cocoa, strawberries, oranges, squash, carrots, cabbage and potatoes increased significantly in Canada due to weather-related challenges in other countries.45 For 2026, it is forecasted that Canadians can expect traditional winter weather conditions, deep freezes and frequent snowfall46, as well as higher-than-normal temperatures and humidity in the summer months, particularly on the coasts.47 42. Agriculture and Agri-Food Canada. (n.d.). Canadian Drought Monitor: Conditions as of June 30, 2025. Retrieved from https://publications.gc.ca/collections/collection_2025/aac-aafc/A27-39-2025-6-eng.pdf. 43. Government of Canada. (October 22, 2025). National Agroclimate Risk Report. Retrieved from https://agriculture.canada.ca/en/agricultural-production/weather/national-agroclimate-risk-report. 44. Government of Canada. (October 10, 2025). Current drought conditions. Retrieved from https://agriculture.canada.ca/en/agricultural-production/weather/canadian-drought-monitor/current-drought-conditions. 45. Government of Canada. (October 3, 2025). Canada: Outlook for Principal Field Crops, 2025-09-26. Retrieved from https://agriculture.canada.ca/en/sector/crops/reports-statistics/canada-outlook-principal-field-crops-2025-09-26. 46. Farmers’ Almanac (n.d.). Farmers’ Almanac Winter 2025-2026 Extended Weather Forecast (Canada). Retrieved from https://www.farmersalmanac.com/canadian-extended-forecast. 47. Government of Canada. (September 26, 2025). Seasonal forecasts for Canada. Retrieved from https://climate-scenarios.canada.ca/?page=cansips-prob. “Increasingly severe and unpredictable weather events are disrupting agricultural production, creating supply challenges that continue to influence food prices across Canada.” CLIMATE CHANGE & WEATHER EVENTS