The cost of food will increase by up to five per cent in 2017, according to a new report.
That means an average Canadian family of four will spend around $420 more on food in the coming year.
Canada’s Food Price Report 2017, released Monday by Dalhousie University, says prices are “expected to rise above the acceptable inflation rate.”
The prices will rise across the board, but some items will see a higher increase than others.
READ MORE: Nearly a quarter of Canadians worry about being able to pay for groceries: poll
Some of our staples, like meats, vegetables and seafood will have the greatest hike: up to six per cent. Bakery foods, cereals, dairy and eggs are expected to remain within a normal inflation range: between zero to two per cent.
Fruits and nuts will see a moderate increase of three to five per cent and restaurants are expected to charge around two to four per cent more.
WATCH: These are the food items that are expected to rise in price in 2017
It’s a significant enough jump that many families may be in trouble, Sylvain Charlebois, the report’s lead author told Global News.
“So you are going to have to resort to coupons and go out less to restaurants,” he said. “It’s going to be problematic for many, many people.”
Food prices across the country
The highest increases will be seen in Ontario and British Columbia, according to the report.
These two provinces are expected to have a higher inflation rate, according to Charlebois, and grocers will also be taking advantage of a less competitive market.
In comparison, Nova Scotia, Prince Edward Island, Saskatchewan and the Northwest Territories will see the average increase, and the rest of the provinces will see a lower than average increase.
Why are food prices going up?
There’s a few reasons to account for the increase. While you might expect inflation to be a huge driver for prices, the report says the effect it has is minimal. Rather, the report suggests climate and trade policies are the main factors that bring up the cost of groceries.
WATCH: Food prices to go up in 2017. As Ross Lord reports, the reason behind the spike may surprise you.
First, Donald Trump’s presidency will have a major effect on Canadian food prices, Charlebois explained, due to his views on illegal workers (two million of whom work in the agriculture industry) and a U.S. protectionist view on farming and trade policies.
READ MORE: How Trump’s immigration crackdown could raise food prices for Canadians
Secondly, the Canadian dollar is expected to fall, which will “decrease the buying power of many of our importers,” Charlebois explained.
That means we might see another incident like this past year’s skyrocketing price of the cauliflower.
The report also said the implementation of a carbon tax will have a “distortive effect” on the prices of food over the next few years, because some food sectors are dependent on fossil fuels.
READ MORE: Restaurants grapple with cauliflower crisis as price soars
Just a prediction?
It’s the seventh year the report was released. And its predictions were accurate for five out of the six years.
“The one time we weren’t accurate, we actually underestimated food inflation that year,” Charlebois explained.
“In fact, our model that we developed here at Dalhousie was suggesting much higher increases of anywhere between four to six per cent and we thought it was a bit too much so we’re going ahead with the three to five per cent threshold.”
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