Average Canadian household to spend almost $700 more on groceries next year

Canadians, brace yourselves! Food prices are expected to reach a new high for 2021, and average households could spend almost $700 more on their grocery bills.

In a cross-country collaboration with Dalhousie, Guelph, Saskatchewan, and British Columbia universities, the report found that an overall food price increase of 3% to 5% would be in the cards for 2021.

Diving into specifics, the report predicts that meat and vegetables will increase by 4.5% to 6.5%, bakery goods by 3.5% to 5.5%, and restaurants by 3.5% to 5%.

This is a big increase in comparison to years prior, wherein 2019 the average household was expected to spend about $411 more, to a total of about $12,157, and in 2020 the average household was expected to spend $487 more than that, to a total of about $12,667.

In 2021, average households are expected to spend about $695 more on food, to a total of $13,907 in annual food costs, according to the study.

Canada’s Food Price Report 2021

At the time, 2020’s food price predictions suggested that climate change would impact the numbers and Canada’s food systems.  Changes in weather patterns such as droughts and forest fires, heavy rain, reduced access to fresh water, and rising sea levels were all cited as causes.

According to the study, the significant increase to 2021’s food costs is rooted in the COVID-19 pandemic, which affected “the entire agri-food chain from farm gate to consumers.”

Border and facility closures, a switch in consumer demand from “food service to food retail,” as well as unemployment and underemployment were all factors leading to these increases.

Canada’s Food Price Report 2021

“It also introduced modifications in production, manufacturing, distribution and retailing practices to accommodate enhanced safety procedures, from testing of personnel to additional time for sanitizing,” states the report. Besides the pandemic, there was also an “oil price war and devaluation of the Canadian dollar,” leading to an impact on food prices.

As for the provincial breakdown of food prices, Ontario came in second place for the highest food inflation rate in the country for 2020. Next year, the food price increase is expected to be below-average.

Despite the pandemic being a leading factor, the study suggests “climate change, the growth in e-commerce and online services, the continued loss of the food manufacturing sector, the national ban on some single-use plastics and the impact of the US presidential election on food policy and the Canadian dollar,” are others to watch out for in 2021.