OTTAWA — Food prices in Canada remain stubbornly high, driven largely by rising import costs and global pressures rather than domestic factors, according to new research from the Bank of Canada and recent federal inflation data.
Statistics Canada says food purchased from stores rose five per cent in December compared with a year earlier, while food prices climbed 6.2 per cent between December 2024 and December 2025, the fastest pace among G7 countries.
Bank of Canada research released Tuesday suggests most of the acceleration in food inflation last year came from abroad. Excluding fruits and vegetables, food prices rose 3.1 per cent in 2025, with roughly 2.7 percentage points tied to direct food imports, imported inputs and international shipping costs. The analysis points to a weaker Canadian dollar in late 2024 as a key driver.
The impact is increasingly visible at the community level. In the Regional Municipality of Wood Buffalo, the local food bank reports distributing more than 8,500 hampers last year, providing over 430,000 pounds of food to more than 22,000 people. The estimated value of food distributed exceeded $1.5 million.
Demand for assistance has surged. The food bank says need increased 23 per cent between 2023 and 2025, reflecting sustained pressure on household budgets as grocery prices continue to rise faster than overall inflation. Providing fresh produce alone now costs roughly $713 per day.
Certain food categories have seen particularly sharp increases. Bank of Canada researchers point to coffee prices rising about 31 per cent last year and confectionery products climbing roughly 14 per cent, driven by supply shortages linked to extreme weather and trade tariffs. Meat prices have also remained elevated as drought conditions reduced cattle herds in North America.
Lower income households are being hit hardest. Statistics Canada data show households in the lowest income quintile spend about 27 per cent of their disposable income on food and non alcoholic beverages, compared with less than five per cent for the highest income households.
The federal government has announced plans to expand the GST credit through a Canada Groceries and Essentials Benefit, with the parliamentary budget officer estimating the program will cost $12.4 billion by 2030–31. Economists caution, however, that global supply conditions and currency pressures mean grocery prices are unlikely to fall quickly.
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