The story behind your grocery bill

By the Canadian Federation of Agriculture

The annual Food Price Report from the Food Institute at the University of Guelph is forecasting that food prices across the country will increase by 2.0% to 4.0% in 2016. What does this mean for the Canadian consumer?

Every year, the Canadian Federation of Agriculture calculates the calendar date when the average Canadian has earned enough income to pay for his/her grocery bill for the year, known as “Food Freedom Day”. Because of rising food costs, this year’s Food Freedom Day falls on February 9, three days after last year’s date. In 2015, Canadians are expected to have spent 11% of their disposable income on food, compared to 10.4% the previous year. While the increase is certainly felt, it’s important to realize that relative to populations around the world, we are quite lucky here in Canada. Canadians enjoy one of the lowest food costs in the world, consistently ranking in the top five for cheapest food costs world-wide.

Still, the rise in food costs has the potential to affect your day-to-day life and budget. Some questions may come to mind. What are the reasons behind these rising food costs? What are some tips to reducing my food bill?

Source: Food Price Report, The Food Institute of the University of Guelph

Source: Food Price Report, The Food Institute of the University of Guelph

Factors contributing to higher
food costs

The Food Institute at the University of Guelph conducted a comprehensive study on Canadian food prices, culminating in the Food Price Report 2016. The data indicated that in 2015, food prices rose by 4.1%. The prime reason was the low Canadian dollar. This had profound effects on food products, particularly imported products like fruits, vegetables and nuts as these products are much more susceptible to market fluctuations. The higher cost maintained throughout the year was partly due, the report notes, to the drought in California, adding to the difficulty in sourcing these products. Because of the Canadian climate and limitations around available growing seasons, we are dependent on imports for certain products. 

Source: Food Price Report, The Food Institute of the University of Guelph

Source: Food Price Report, The Food Institute of the University of Guelph

Looking at in 2016, The Food Price Report outlined its forecast and noted that food prices would be most affected by “El Nino’s impact on climate, the lowering Canadian dollar, and important consumer trends.”  As any farmer knows, climate and weather patterns could make or break a years’ harvest or production.  The report maintained that “[c]limate change will remain one of the most significant, unpredictable influences on food prices.” Moreover, the Canadian dollar is expected to further devalue. The report points out that“[for] every cent drop in the dollar over a short period of time, currency exposed food categories like vegetable, fruits and nuts are likely to increase by more than 1%.” 

And of course, consumer trends affect food prices. The report astutely points out that, “Since food is in the public eye, the curiosity of consumers has now moved up the food chain of the industry, probing into the practices of processing plants and farms” andthat “[t]his collective awakening of the foodie within us is compelling industry to address consumers’ concerns.”

President of the Canadian Federation of Agriculture, Ron Bonnett, explains his experience with this reality. “As a farmer myself, I am definitely aware of the affect consumer choices and preferences have on my farm and, of course, the broader food sector. Your grocery store purchases are market data for retailers who will then determine what they will stock their shelves with. The ripple effect is felt right down to the farm level.”

“Make your grocery store ‘vote’ count. There are plenty of reasons why we encourage consumers to buy Canadian. We are lucky to have the variety of food products year round and because of our climate, we require imported food products. However, when you have the choice, choose Canadian. Domestically produced food does not face the same exchange rate increase we have been seeing. There are Canadian products available year round. By understanding what’s available in Canada in every season, you can contribute to Canadian food security and also keep your food bill down.”

Rene Van Acker, Associate Dean at the University of Guelph, echoed this statement. “Farmers have always responded to the market and adjusted their operations accordingly. The primary impact of consumer choices will be through the market,” he said.

“We also know there is a difference in the Canadian brand when it comes to animal welfare standards and the quality and safety of our products, and it’s one to be proud of. We ask that consumers place their ‘grocery store vote’ for Canadian farmers and invest in a stable domestic food supply.”

Understandably, costs play a huge part in the choices we make as consumers. That’s why we’ve put together a few tips to help you eat healthy and affordably.

Dealing with higher food costs

The take-away message

Food costs are expected to remain high throughout 2016. It is important to note that Canadians still enjoy some of the cheapest food costs world-wide, and this price increase does not trickle down to the farmer level – or even the Canadian food chain. 


While higher food costs can put stress on the budgets of families, following some of the tips will help in eating nutritiously and affordably. The importance of building a strong domestic food system and ensuring Canada’s food security is evident now more than ever. Choosing Canadian products at the grocery store is an incredibly important role Canadian consumers have in supporting farmers and our food system here at home. In season and domestically produced food is also often more cost-effective as it does not face the same exchange rate increase and volatility. Canadian standards on animal welfare and food safety are held in high regard worldwide – there is a difference in the Canadian brand. The Canadian agricultural community has been responsive on many fronts. The commitment from farmers across Canada is to listen to Canadians and maintain transparency.

  • Reduce at-home food waste. Did you know that over 50% of food waste occurs at home? Reducing food waste can go a long way in lowering your food costs. Here are some tips:

›  Freeze, preserve, or can surplus fruits and vegetables - especially abundant seasonal produce
›  Many fruits give off natural gases as they ripen, making other nearby produce spoil        
   faster. Separate ripening produce when you store them
› Prepare and cook perishable items, then freeze them for use throughout the month.
› Shop in your refrigerator first!  Casseroles, stir-fries, omelettes, soups, and smoothies are great ways to use leftovers or food products that are beginning to wilt.

  • Buy local, Canadian. Consider buying at the farm gate, find out where farm markets are, and check the local supermarket for Canadian products.  
  • Seek out in-season foods. Get to know what local produce is available each season in your area. Then stock up on seasonal produce and freeze portions to use during other times of the year.
  • Plan! Before heading out to the grocery store, prepare a weekly meal plan to help avoid too many impulse purchases, which will also help cut down on your amount of food waste.
  • Consider frozen options. During the winter months, when food costs tend to spike because of imports, check out the options your grocery store has for frozen fruits and vegetables.