What to know
- Canada’s Food Price Report says a family of four will spend about $17,572 on groceries in 2026, nearly $1,000 more than this year, with overall food prices rising 4–6 per cent.
- Beef, chicken, vegetables and dry goods will drive most of the increases, fueled by factors such as reduced cattle supply, low chicken production, and tariffs.
- While dairy, bakery and frozen items should remain stable, experts warn food price pressures will persist into 2027.
Food shopping in Canada is already enough to make your eyes water, and a new report shows that it will only be getting more expensive in the new year.
Canada’s Food Price Report (CFPR) for 2026 predicts that the average family of four in Canada is set to spend a whopping $17,571.79 on food next year, that’s an increase of $994.
The report is produced collaboratively by Dalhousie University, Saint Mary’s University, University of Prince Edward Island, Cape Breton University, the University of Guelph, Université Laval, the University of British Columbia, and the University of Saskatchewan. This year’s CFPR shows that food prices are set to increase by four to six per cent from last year, with prices 27 per cent higher than they were five years ago.
While prices at the checkout are already steep, currently, the annual food price increases are within the range predicted in the 2025 report (four per cent). However, the price of meat increased faster than expected at a rate between five and seven per cent.
The price of beef in particular saw a huge increase in 2025, up 19 per cent in the first quarter of the year alone. While increases stabilized as the year went on, prices are still up 23 per cent from the five-year average.
The report explains that this follows nearly a decade of drought in the leading beef-producing areas of Canada, leading to the smallest number of cows in the country since the late 1980s. So with reduced supply and consistent demand, prices have been on the rise. And an expert says it’s only going to get worse.
“Beef prices are still a problem, and now people are pivoting towards chicken, but we’re not producing enough chicken,” Sylvain Charlebois, the director of the Agrifood Analytics Lab at Dalhousie University and the lead author of the CFPR, told Now Toronto.
“Chicken farmers who actually hold government-sanctioned quotas to produce enough chicken, they’re still not producing enough chicken,” he explained. “So we’re importing chicken from the US about 45 million kilos so far this year, and still that’s not enough, and that’s why we’re expecting chicken prices to increase dramatically.
The report explains that Canada has strengthened import partnerships for beef with Mexico and Australia. While this should help stabilize prices, the squeeze is expected to continue until at least 2027.
He explained that he is shocked that Ottawa has yet to step in and intervene when it comes to beef prices in the country.
“President Trump has actually launched an investigation to look into beef backing. Why aren’t we doing the same?” he questioned. “Our beef packing sector is controlled by two foreign, privately owned companies, GPS and Cargill. Why aren’t we looking into this?”
He explained that it’s confusing, as there is a portion of the increase for beef prices that we can’t explain, and perhaps some of the increases are not justified.
“I think the Canadians deserve some answers.”
Charlebois explained that, in addition to meat prices, the other categories that will impact grocery price inflation are vegetables and dry goods.
“Dry goods, pasta sauces, coffee, tea, spices, all the things you would find at the centre [of the store], we are expecting that section to get more expensive as well, and vegetables also. We were spared in 2025, but we are expecting vegetables to increase by as much as 5 per cent.”
The report shows that specific provinces, including Alberta, New Brunswick, Nova Scotia, Ontario, and Quebec, are expected to see food price increases higher than the national average in 2026.
WHAT’S (GOT PRICES) UP?
Several factors have contributed to the increase in food prices, including the GST/HST tax break implemented from mid-December 2024 to mid-February 2025. During this period, the federal government paused the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) charges on select product purchases, including most food and beverages. This played a part in a large decrease in food inflation, dropping to -0.6 per cent in January.
Meanwhile, the trade war in the United States saw the new American administration implement tariffs on most goods and energy imported from Canada, while the Canadian government implemented substantial counter-tariffs in response. Since the tariffs were rolled out, the food industry has experienced increased costs and price volatility.
Interest rate cuts also played their part. The Bank of Canada lowered interest rates approximately 75 points throughout this year, with the latest cut bringing the rate down to 2.5 per cent.
The Canadian government’s new 10 per cent cap on the number of workers in low-wage positions at a single work location, as well as plans to reduce the number of temporary residents from 7 per cent to less than 5 per cent of the population by 2027, and layoffs in the food manufacturing industry also played their part. This year saw many large corporations, including Kraft-Heinz and Keurig Dr. Pepper, restructure and downsize. This meant laying off thousands of workers. Additionally, the volume of food sold in Canada has reduced considerably, and production costs have risen, leading to a 1.9% decrease in food manufacturing growth.
Charlebois says that it’s important to remember that the issue of grocery prices in Canada is structural.
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“We’re not looking at one single factor, like greed, for example, it’s more systemic than that. If you look at the United States, food inflation has moved up in lockstep with inflation in general. That’s not Canada,” he explained.
“Problems in Canada started 17 years ago with the financial crisis in 2008. That’s when you saw both inflation, deflation and food inflation decoupling, and we’ve never recovered since,” he explained. “We are unable, as a country, to absorb global shocks like the United States can.”
WHAT TO EXPECT FOR 2026
So what can Canadians expect as we head into the new year? Well, first of all, inflation is likely to drop, settling in around the two per cent mark and holding steady. Meanwhile, Canadian GDP growth will continue to slow to approximately 1.2-1.4 per cent.
While the trade war with our neighbours south of the border is ongoing, a recent rollback of tariffs on over 200 different agricultural and food products is a promising sign that things could be getting better when it comes to cross-border relations.
Plus, the One Canadian Economy Act, which passed in July 2025, is expected to stimulate trade between provinces, reduce costs, encourage labour mobility, and strengthen domestic competition.
The Grocery Code of Conduct will become fully operational in January 2026. The new legislation aims to set expectations for responsible dealings between retailers and suppliers, ensuring transparency, accountability, and mutual respect. The CFPR states that Canada’s top four grocery chains control at least 72 per cent of the national market share.
As of New Year’s Day, it will be mandatory for all food in Canada to surpass a pre-determined threshold for sodium, sugar, and saturated fat to be included on the front of packaging, aimed at helping Canadians make better choices about their groceries. Additionally, Health Canada has mandated that all dairy milk must be fortified with nearly double its current amount of Vitamin D by Dec. 31, 2025.
Meanwhile, the CFPR warns that new changes to the Temporary Foreign Workers Program (TFWP) could lead to labour shortages, which pose risks to agriculture, as the industry is heavily reliant upon these workers. In turn, this could increase costs for businesses producing food, many of which are already operating on tight margins, with those extra costs being passed onto customers at the checkout.
The report also lists increasingly severe and unpredictable weather events around the world, and the way they will continue to disrupt agricultural production and create supply challenges as additional factors that Canadians should be aware of as we head into 2026.
CANADIANS ARE PREPARED
The food expert says that while it won’t be easy, people in Canada are more prepared to deal with grocery price hikes than they were a few years ago.
“I actually do think that consumers are much better equipped to deal with a 6 per cent [increase] compared to a few years ago. A few years ago, few people were ready to deal with what was about to happen, and people just panicked, really.”
He explained that now, people visit stores more often, take note of prices, and do their homework to compare costs before they go shopping.
“So I do think that Canadians are going to be okay. It’s just you need to be a little bit more careful.”
And the good news? Charlebois says that there are sections of the grocery store where prices are not expected to increase at all. That includes dairy, bakery and frozen items.
“So if you’re into grilled cheeses, for example, you should be fine,” he joked.
