Food costs will continue to rise in 2023 with prices for all food categories rising by as much as 7 per cent and vegetables seeing the largest increase of up to 8 per cent.
That's the finding of "Canada's Food Price Report 2023" developed by the universities of Dalhousie, Guelph, Saskatchewan and British Columbia.
The average family of four including a man (age 31-50), woman (age 31-50), boy (age 14-18), and girl (age 9-13), who paid more than $15,200 for food in 2022, will pay more than $16,200 next year for the same groceries, notes the report.
“We were hoping to have better news for Canadians given the difficulties experienced in 2022, but our models tell us a different story,” said the report.
The main drivers of price increase are the ongoing effects of the pandemic, supply-chain disruptions, the war in Ukraine, high transportation and labour costs, and the impact of climate change.
“To say that it’s been a challenging year for Canadians at the grocery store would be an understatement,” says Dr. Sylvain Charlebois, project lead and Director of the Agri-Food Analytics Lab at Dalhousie University. “Consumers will continue to get smarter about grocery shopping as they navigate through this so-called food inflation storm.”
The report says food security will continue to be a concern for many in 2023.
"Food bank use has been increasing since June 2020 and because of rising food prices, 20 per cent of Canadians reported their household would be likely or very likely to get food or meals from community organizations including food banks, community centres, or other access points over the next six months.
"Additionally, 47 per cent of Canadians have purchased cheaper alternatives, brands, or items to adjust their spending in the face of current inflation rates. Steps have been taken to help Canadians with affordability, like the doubling of the GST credit from the Federal government, and some corporations’ interventions, like Loblaw’s announcement of a price freeze until January 31, 2023. However, these measures cannot be assumed to be permanent and while they may relieve some of the financial stress around food security and affordability, Canadians will still need to be prepared to spend more in the coming year."
The report also notes that continued pressure on inputs and commodities and a possible economic slowdown will contribute to overall rising food prices.
"We haven’t seen food prices increase this high in Canada for over 40 years and based on our findings, the increases we have predicted are still quite high but not as high as the increases for 2022,” says Dr. Simon Somogyi, University of Guelph campus lead. “That may be cold comfort for Canadians, as food prices are already high, but if inflation can come down, it’s possible that we could see price increases for 2023 at or below 5 per cent.”