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Food inflation continues to rise. Here’s what that means for your fridge

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Despite the annual pace of inflation cooling last month, Statistics Canada says consumers continue to pay higher costs for groceries as food prices rose faster in April than they did the previous month. A sign advising that products from the U.S. affected by a tariff will be marked with a symbol at the shelf is seen beside a display of Canadian products in a grocery store in Ottawa, on Wednesday, April 2, 2025. THE CANADIAN PRESS/Justin Tang

Food inflation in Canada continued to outpace overall inflation in April, but recent policy changes and currency stabilization are offering cautious optimism for consumers.

According to Loblaw Companies Ltd.’s May Food Inflation report, grocery prices rose 3.8 per cent year-over-year in April, surpassing the general Consumer Price Index (CPI) increase.

This marks the third consecutive month where food inflation has outstripped overall inflation as noted by Statistics Canada.

Mike von Massow, a food economist and University of Guelph professor, says while Canadians may have adjusted to some of the price hike, the effect of these price jumps is often most acutely felt in the short term, adding to the ongoing affordability strain for customers.

“The changes you notice are the ones we saw last month,” von Massow told CTVNews.ca in a phone interview Wednesday. “We’ve seen food prices go up significantly in the last five years. This (3.8 per cent) is a smaller increase than we’ve seen before, but it’s still an increase.”

Von Massow noted that the products that ticked down last month were dairy products, while beef products ticked upward.

Statistics Canada says items that contributed most to the year-over-year price acceleration included fresh vegetables, for which prices rose 3.7 per cent, fresh or frozen beef at 16.2 per cent growth and coffee and tea at 13.4 per cent.

“How significant you feel these price increases will depend on what you eat,” von Massow said.

Prices for food purchased from restaurants also rose at a faster rate in April, increasing 3.6 per cent year-over-year after a 3.2 per cent hike in March, according to Statistics Canada.

Canadian dollar and tariffs

Loblaw attributes the persistent food inflation to several factors, including a weaker Canadian dollar during the winter months and the initial impacts of tariffs on U.S. food products, particularly produce, coffee, tea and packaged goods.

Loblaw notes in the report that tariffs-affected products include health and wellness items like soap, shampoo and cosmetics.

“The Canadian dollar has gotten weaker over the last several months, because of a lot of this uncertainty” von Massow explained. “That will lead to some inflationary pressure for products that we’re getting out of the U.S. and other countries, especially before Canadian-grown produce hits the shelves.”

Relief could come as the growing season progresses.

“Now that we are getting into the Canadian production season – asparagus, strawberries – we’ll get some relief,” he said.

More signs of potential relief include a move by the Canadian government which introduced a six-month reprieve on certain tariffs for U.S. imports used in Canadian food manufacturing and packing. This policy change aims to mitigate the broader impact of retaliatory tariffs on grocery prices.

However, von Massow notes the situation remains complicated.

“Food packaging like cans is no longer subject to tariffs coming into Canada, but the U.S. is still tariffing aluminum and steel, which raises the cost of those materials – even if we import from the U.S.,” he said.

In the report, Loblaw points out that out of the 80,000 items in a conventional grocery store, about 6,000 items can expect tariff-related increases, half of which are food.

To combat growing public distrusts, Loblaw marks items impacted by tariffs directly on shelves with a “T” symbol.

Loblaw clarified that products prepared in Canada may also face partial tariff-related cost increases, due to ingredients that may be sourced in the U.S. and subject to tariffs.

Von Massow called this an important step – but not a complete solution.

“They’re trying to be proactive to say, ‘Here’s why these prices are going up,’” he said. “It’s a step in the right direction. But I’d like to see them be clear about what qualifies as tariff affected.

“Is it just the products that there are tariffs on?” von Massow continued. “So, oranges, orange juice, some dairy products? Or are they also putting a ‘T’ on the products that have more expensive packaging? That’s relevant.”

What’s next?

Loblaw also says it has increased promotional pricing on key essentials to help customers find more savings as tariffs come into effect.

Von Massow sees this as an opportunity – for some.

Through his research at the University of Guelph, von Massow says Canadian stores offer promotions and discounts twice as much as their U.S. counterparts.

“Promotions give people who are willing to be flexible the opportunity to reduce the impact of price increases,”

But flexibility comes at a cost. Von Massow says lower-income people, or those in smaller homes with limited fridge space, can’t stock up. He added that those who aren’t brand loyal can save, but not everyone has that luxury.

As for where food prices are headed next, von Massow said the signals are dependent on several factors.

“I follow the monthly data,” he said. “We expect, as we get into the summer, that fruit and vegetable prices will go down as Canadian production comes online.”

Von Massow says that key indicators suggest potential easing of food prices in the next six months.

“We’ve adjusted to the war in Ukraine. We know that commodity prices are relatively low as compared to the last couple of years. So, unless we have a very dry summer in North America, we would expect yields to be good,” he explained.

However, unpredictable factors can quickly disrupt these projections.

“Extreme weather events... are really hard to predict,” von Massow cautioned, highlighting through an example. “Two years ago, the price of olive oil went through the roof” due to poor weather conditions in Spain and the Mediterranean.

Von Massow warned that while olive oil got more expensive, it wasn’t the reason everything went up.

“Looking at individual products also gives you a real sense of what’s happening on the ground,” he advised.