Todd NesnickA new analysis shows that the price of groceries in Canada will likely keep increasing in 2023, following a year in which record inflation caused food costs to rise by amounts unseen in decades.
According to the most recent Canada Food Price Report, food costs are expected to rise by an additional five to seven percent next year, raising yearly spending for the typical household by hundreds of dollars.
Why Are Food Costs so High in Canada?
The overall inflation rate reached its greatest level since the most recent peak in the early 2000s, immediately following the implosion of the dot-com bubble, by the end of 2021 and into 2022. In such a situation, many people save themselves by taking a payday loan Alberta in order to somehow make ends meet.
An average grocery bill increased by 70% between 2000 and 2020, according to statistics gathered by Dr. Sylvain Charlebois, the principal author and project leader for the Dalhousie University Food Price Report. Over the past 20 years, food inflation has surpassed overall inflation.
Contributing factors to rising food prices:
- Higher expenses for transportation and gasoline.
- labor market difficulties.
- persistent supply chain problems.
- Climate change effects.
- prolonged lack of eating.
- Higher costs of living, and exceptionally high housing costs across Canada.
However, Canada’s food inflation did not begin when the epidemic began in early 2019. According to an analysis from Dalhousie University, basic shortages and supply chain stress in Canada started well before the outbreak. Their figures show that between 2015 and 2019, Canada’s median income increased by 6.6%. The average national food spending rose by 16.3% over the same time frame. Canadians were already devoting more of their cash to food purchases before the epidemic struck and before the price increases in 2022.
Higher Costs and Fewer Wholesome Options
Policymakers ought to pay notice as well. It’s critical to realize that as healthy food prices rise, consumers are compelled to purchase less nutritious, higher-calorie alternatives. Health effects resulting from this, particularly for young children. Food cost has an equity component. These growing prices have a far greater effect on persons with low incomes, women, the elderly, and residents of Northern areas.
In response to the present inflation rates, 47% of Canadians have bought less expensive brands, goods, or alternatives. According to Food Banks Canada, 2022 saw the most utilization of food banks in March history with approximately 1.5 million visits.
For the typical Canadian consumer who is just trying to make ends meet, serious geopolitical challenges, whether local or international, may be daunting. It is simple to experience a lack of control.
However, there are alternatives. If you haven’t already, now is the time to learn how to “buy smart.” Look for alternatives to pricey foods (such as frozen fruits and veggies instead of fresh, and plant-based proteins like chickpeas or lentils instead of meat), make and keep to a budget and shopping list, check flyers for discounts, and freeze meat when it goes on sale. At the very least, programs like CFPR can assist you in comprehending the costs you see at the shop.
How Will This Affect the Cost of Food in Indigenous Communities?
The cost of food was already up to 2.5 times greater in isolated Indigenous villages than it was nationwide. The 9% rise might therefore appear to be 20% or more.
One of the Indigenous partner communities of the CFTC, Ernie Bussidor served as the Sayisi Dene First Nation’s leader in the past. He points out that high gas costs were also making it very difficult to purchase food, particularly this past winter when the gas ran out and had to be flown in at a significant expense.
In other words, it’s become increasingly harder for many Indigenous families to feed their families.
Food Purchased in Stores
Food prices increased annually in September 2022 at the quickest rate since 1981 (11.4%), and this trend continued in October (+11.0%). The cost of producing food has increased as a result of a number of variables that have increased pressure on those expenses along the food supply chain.
Many variables, including supply chain interruptions, labor shortages, changes in customer buying habits, bad weather in certain growing regions, tariffs, increased input costs, and higher salaries, have had an influence on grocery store pricing since the COVID-19 pandemic’s commencement. Contrary to prior trends, several of these factors and pressures have been acting concurrently or more strongly, which has caused food prices to rise broadly.
Experts about Food Prices
One of the study’s authors and senior accounting faculty at Dalhousie University, Samantha Taylor said that the news we are giving is not good; living is expensive. Researchers’ estimates of a five to seven percent increase for 2022 in the latest Food Price Report were outperformed by the actual rate of inflation, which Taylor described as “quite strong” and “aggressive.” The Canadian consumer price index for food increased by 16 points to 175.2 in October 2022 compared to the same month the year before.
That was before the COVID-19 pandemic-caused supply-chain problems drove inflation to a 40-year high and significantly constrained the world’s food supplies. Taylor said that a falling Canadian currency reduced the purchasing power of grocery stores.
Professor of food distribution and policy at Dalhousie University and the report’s principal author, Sylvain Charlebois, said that prior to beginning to decline in the second half of 2023, food inflation is predicted to stay persistently high.
You might say that we are currently in the eighth inning of the current cycle of food inflation. Although the first half of 2023 will still be difficult, we can already start to glimpse its conclusion.
Conclusion
Researchers hope the new analysis will provide consumers with the knowledge they need to prepare for additional price increases in the food industry since food inflation has already forced Canadians to shift their purchasing patterns and adopt alternate diets in order to save money.