August 16, 2018 9:50 am

Canadians may soon see grocery price hikes due to tariff spat, retailers warn

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Canadians heading to the grocery store may have to pay more at the checkout counter due to the ongoing tariff spat between Canada and the U.S., major grocery chains are warning.

On Wednesday, the CEO of Canadian grocery giant Metro said customers should prepare themselves for higher prices as the company (and the industry as a whole) is facing pressure from suppliers to accept higher prices in light of the trade dispute.

READ MORE: Here’s the final list of Canadian retaliatory tariffs taking effect against Trump on July 1

On July 1, the Canadian government announced it would impose retaliatory tariffs on a range of American products in response to U.S. tariffs on Canadian steel and aluminium.

Metro said the new tariffs, which target a number of food products, such as yogurt, coffee, soya sauce and mayonnaise, mean it is currently reviewing supplier demands and negotiating prices.

WATCH: How do tariffs work and why it will impact Canadian consumers

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“We’re starting to get demands from some suppliers … whose products will be, affected by the new tariffs,” Metro CEO Eric La Fleche said.

“If it’s legitimate and if it’s industry-wide, sometimes we won’t have a choice and we will have to accept,” he said, adding the company has already agreed to some minor cost increases.


Empire Co. Ltd., which operates Sobeys, predicted a similar outlook in late June when the company reported its latest quarterly earnings.

READ MORE: Here’s the final list of Canadian retaliatory tariffs taking effect against Trump on July 1

Sobeys CEO Michael Medline said at the time that the pending tariffs could result in higher grocery prices, though he said the company would try to resist accepting suppliers’ cost increases.


In July, the CEO of Loblaw Companies Ltd. said there is a “very strong possibility” of a price hike at its grocery stores. The company also blamed the tariffs, but added that higher transportation costs and a low loonie add further pressure on the grocery and pharmacy retailer, which indicated it expects to see upward pressure on prices.

The country’s largest grocer said it expects prices to rise in the second half of the year as retaliatory tariffs on U.S. imports come into effect.

“We don’t think it’s going to be meaningful, you know, super significant,” CEO Galen G. Weston said, “but it certainly will be higher than what it is today.”

WATCH: With soaring grocery costs, families planting their own gardens

How much will prices go up?

Prices on some grocery products could go up by as much as 10 per cent, Walid Hejazi, a professor of economics at the University of Toronto told Global News.

READ MORE: Here’s how Canada’s new tariffs on U.S. imports could impact your weekly shopping bill

“The upper limit is going to be 10 per cent,” Hejazi said. “Some companies have already said they’re just going to pass the entirety to the customer.”

For a detailed list of which products may face price hikes at the grocery store and by how much, click here.

— With files from the Canadian Press

© 2018 Global News, a division of Corus Entertainment Inc.

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