Food prices are 27 per cent higher now than they were in 2020, the new Canada’s Food Price Report shows.
The report was full of predictions that came true, as well as a few surprises. This year’s report was the 16th annual.
Food prices were driven higher in 2025 by meat, said Sylvain Charlebois, the lead of Canada’s Food Price Report. Charlebois is the Director of the Agri-Food Analytics Lab at Dalhousie University. He leads Canada’s Food Price Report, but the report was developed by a collective of scholars.
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“In fact, we claimed last year that meat would be driving food inflation, and we underestimated how significantly meat prices would go up. That was really the big story in 2025,” he said.
Meat prices to stay high
Unfortunately, the group expects meat prices will remain a huge factor for 2026.
“Beef is an issue, of course, it’s been an issue for a while now, and we don’t see how the situation will normalize itself before at least mid-year 2027,” he said. “Ranchers are leaving the industry. It’s difficult for ranchers across North America.”
The high prices of beef are encouraging people to change to other types of meat, like chicken.
“We’re short on chicken because of higher beef prices. The situation with beef is really a major issue for meat counter economics in general,” he said.
Chicken raised in Canada is under supply management.
“Supply shouldn’t be a problem, but it is a problem right now, because we’re importing more chicken from abroad. But I don’t think that is going to last. I do think the chicken industry will recover eventually. It’s kind of awkward to have supply management and import more chicken from the United States right now,” he said.
Fruit and vegetable inflation down
Vegetables and fruits had their inflation rates go down in 2025 compared to 2024.
“We were expecting increases to be in the positive, but the increases didn’t accelerate as much as we expected,” he said.
The group thought the “Buy Canadian” movement and the entire American boycott would put a lot of pressure on grocers to source products that are cheaper or the same price in America.
“But we were spared, and I think that’s due to the Canadian dollar. I think the Canadian dollar remained a non-issue. That came as a surprise, I would say,” said Charlebois.
Food affordability is a top concern for consumers. A quarter of Canadian households are considered food insecure, and nearly 2.2 million people visited food banks in Canada monthly this year.
Charlebois said there are numerous factors that affect food prices including geopolitics, global weather events, policy enactment, consumer behaviour and changes in retail models. Energy costs, climate change, interest rates, labour costs, the level of consolidation in a sector, and consumer demand, including whether consumers have more money or less money to spend on food.
“These are the things that impact food prices over time. But the bottom line is that not one node of the growth of the food supply chain totally controls food prices,” he said.
Trade wars affect food prices
In 2025, food prices were affected by the trade dispute between Canada and the United States and subsequent policy changes. Consumer-led movements also altered the economic retail landscape, impacting food price inflation.
Charlebois said farmers would say there’s a weak correlation between protein prices, and retail prices, and they’re correct to say so.
“So even though there is a weak correlation between the two, production does have an impact on how food is sourced to supply grocery stores in general,” he said.
When people spend more money at the grocery store, the farmer gets a bigger proportion of the farm bill. With retail, 13 to 15 per cent of the money spent at the grocery store goes back to the farmer compared to food service, where about four per cent to five percent goes back to the farmer from food service.
“Right now, there is a strong movement towards staying retail for consumers, because they’re trying to save as much money as possible, and they’re avoiding restaurants, so that could actually be a positive for farmers in general,” said Charlebois.
Temporary foreign workers
Temporary foreign workers are widely used along the food supply chain. In 2024, Canada’s Temporary Foreign Worker Program brought in over 78,000 workers into the agricultural industry. The Canadian government is revisiting its immigration policy and has announced plans to reduce the share of temporary residents in Canada to less than five per cent of the population by 2027, to encourage more domestic labour and improve youth employment rates. Agriculture is exempt from this cap.
The current population of temporary foreign workers is at seven per cent.
There are concerns that shifts with temporary workers could lead to a major labour shortage in agriculture, disrupting the supply chain and costing businesses already operate on tight margins. The costs would be passed down to the consumer.
Charlebois said the research team is concerned about the temporary foreign worker problem.
“It’s a very important program to support our farmers,” he said. The information about temporary foreign workers was added to Canada’s Food Price Report, to send a clear signal to government that the temporary foreign worker program in agriculture should not be compromised, he said.
Food bill to rise “a lot”
The report also contains predictions for 2026.
“We’re expecting the average family (of four) to see their food bill increased by $1,000, so we’re expecting an increase of four to six per cent, so that’s a lot. I believe it’s the highest we’ve ever seen in 16 years. That’s going to be pushed by two categories; meat and the centre of the store. That’s pantry goods and dry goods. This is not going to help consumers,” he said.
“We think it’s going to push inflation higher,” he said.
The ongoing trade dispute with the United States will continue to affect prices next year. The inflationary aspects of the tariffs and counter-tariffs will continue in 2026 as trade tensions reshape the economic landscape. Canada is strengthening its relationships with other international trading partners to build resilience and competitiveness.
