Consumer price index for food

The food price index is projected to reach 140.5 in 2025, representing growth of 3.7% over the previous year and marking a re-acceleration of food inflation after the moderation experienced in 2023-2024. This increase reflects multiple pressures including persistent supply chain costs, elevated labor expenses throughout the food distribution system and input price volatility affecting agricultural producers.

The past five years have been characterized by significant food price volatility driven by pandemic disruptions, supply chain crises, and aggressive monetary tightening. Food prices increased 1.4% in 2020 as initial pandemic panic buying and supply disruptions were largely absorbed by retailers and the supply chain. Inflation accelerated sharply to 3.7% in 2021 as supply chains buckled under reopening demand, labor shortages emerged throughout food production and distribution, and agricultural commodity prices surged on global markets.

Price pressures moderated in 2022 with growth of 2.4%, then slowed dramatically to just 1.2% in 2023 as supply chains normalized, commodity prices retreated from peaks, and aggressive interest rate hikes dampened demand. This brief respite proved temporary, with inflation re-accelerating to 2.3% in 2024 and 3.7% in 2025 as underlying cost pressures reasserted themselves despite moderating headline inflation. The cumulative effect has been substantial—food prices increased 14.1% from 2020 to 2025, significantly eroding household purchasing power and making food affordability a top concern for Canadian consumers.

Tariffs have emerged as a significant driver of food price volatility throughout this period. The Trump administration's trade policies created substantial price distortions, with tariffs on US food imports causing spikes in categories like orange juice where Canadian alternatives were limited. Canada's retaliatory tariffs further elevated costs until most were dropped effective September 1, 2025, allowing prices on produce, meat, poultry, and dairy to gradually decline as inventory turns over. However, new tariffs imposed by the Trump administration, including a 50% levy on Brazilian coffee, continue creating volatility in specific categories, with coffee prices climbing back near 2025 highs.

Food inflation has consistently exceeded headline CPI throughout 2025, creating particular hardship for lower-income households who spend a disproportionate share of income on groceries. July 2025 saw overall inflation cool to 1.7%, yet food costs rose at a faster pace, prompting economists to note that food prices "just won't quit" even as other categories moderate.