The grocery basket will become heavier for the family budget
Climate change and trade disputes are forcing a rethink of food spending.
Canadian families will face a significant increase in grocery expenses in 2026. According to a new study conducted by Dalhousie University's Agri-Food Analytics Lab in collaboration with other institutions, a family of four will spend nearly $995 more on groceries than in the current year.
Total food expenses for such a family will reach approximately $17,572, driven by projected food sector inflation of 4-6 percent. This rate exceeds the country's overall inflation level and the four percent food price increase observed in 2025.
Trade Relations Improving
Lead study author Sylvain Charlebois noted that trade issues affecting prices this year are gradually easing. In September, Canada removed most counter-tariffs against the U.S., and American President Donald Trump also lifted tariffs on more than 200 agricultural and food products.
"Geopolitics will remain an unknown in 2026, but we expect tariffs won't be as big of an issue in 2026 as they were in 2025, which is good news"
American trade restrictions, including a 50 percent levy on coffee from Brazil, created additional pressure on Canadian prices. Shelf-stable goods like coffee will take time to decrease in cost, unlike perishable items such as bananas.
Meat Remains Main Driver of Price Increases
Meat products are contributing most to food inflation. Meat prices rose 7.2 percent this year and could increase another 5-7 percent next year.
The issue stems from cattle herds shrinking to their lowest level since 1988. Drought has driven up feed costs, while packaging and processing expenses are also rising. Charlebois expressed concern about the beef situation and suggested the government consider increasing imports from countries like Australia.
Impact of Climate Change
Sadaf Ollaei, chair of the Arrell Chair in the Business of Food at the University of Guelph, emphasized the role of climate factors in shaping prices:
"Climate change is having a very significant impact on prices, and it will likely increase prices because of these harsh climate situations we're seeing in places where food is produced"
Weather problems this year significantly affected the cost of imported goods, including coffee, tea, cocoa, strawberries, oranges, and other products.
Forecasts by Product Category
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Pricing trends are expected to shift across different product groups:
- Fruits: increase of 1-3 percent (after declining 1.1 percent in 2025)
- Vegetables: increase of 3-5 percent (after dropping 0.9 percent this year)
- Seafood: moderate growth of 1-2 percent
- Dairy products and eggs: increase of 2-4 percent
- Restaurants: increase of 4-6 percent
New Regulatory Measures
In 2026, the Canadian Grocery Code of Conduct will become fully operational, which could help stabilize the pricing situation. According to Charlebois, this framework could limit retailers' influence over suppliers and create fairer conditions for all market participants.
"Bringing processors, suppliers, and retailers to the negotiating table in fairness and good faith will ultimately help consumers over time"
