Food prices are set to increase by $700 more for Canadian families in 2024, according to an annual report on grocery pricing.
According to the Canada Food Price Report, grocery prices will rise between 2.5% and 4.5% next year.
A family with two parents and two children can expect to pay $16,297.20 for their annual grocery bill.
The annual report was released on Thursday and first began 14 years ago, published by Dalhousie University, the University of British Columbia, the University of Guelph and the University of Saskatchewan.
It estimates that in 2024, certain items like bakery, meat and vegetables will go up in cost by 7%.
While the rate of inflation is slowing, with the estimated 4.5% peak being less than the 5.9% increase of 2022, the cost of groceries is expected to go up overall.
Interest rates will contribute to the price hikes, as well as energy costs brought on by policies related to climate change like the carbon tax.
Additionally, the Israel-Hamas war and Ukraine war are expected to add costs to transportation expenses.
Certain staple foods like wheat, corn and soybean may see a small drop in prices, according to Stuart Smyth, Agri-Food Innovation & Sustainability Enhancement Chair.
“We’re also seeing a more consistent supply of products through our supply chain, and uncertainty costs money,” said Smyth, a co-author of the report. “I am optimistic that we will be in a little bit more of a stable period now.”
As inflation begins to come down, grocers will have more wiggle room to make profits on the basics, noted Sylvain Charlebois, the lead researcher for the report and director of the Agri-Food Analytics Lab at Dalhousie University.
“It’s going to be a much more manageable year compared to the last two years,” said Charlebois. “Dried pasta, sauces, canned goods – all those products could be subject to some price wars.”
From the beginning of the pandemic to October 2023, grocery prices have increased 18.5%, Charlebois told the Globe and Mail.
The grocery sector has been the subject of scrutiny over their higher profits since the pandemic.
The Trudeau government introduced Bill C-56 in September, which proposed several amendments to the Competition Act, aiming to make groceries less expensive.
Among the amendments is giving the Competition Bureau more authority to conduct market studies and to terminate deals between rivals that allow for price fixing.
In October, Prime Minister Justin Trudeau summoned the heads of the big five grocery chains in an attempt to stabilize the rising cost of food prices. Despite this, prices are still expected to rise at a rate that will likely outpace inflation.
The Bank of Canada projected that inflation would remain around 3.5% until the middle of 2024, in its October Monetary Policy Report, before returning to its 2% target in 2025.
2023 marks the first time in the Food Price Report’s publication history that Canadian families spent less on average on groceries than in the preceding year. This is a result of the financial strains families are facing due to higher interest rates and debt levels in combination with the cost of housing, noted Charlebois.
In 2022, the report estimated that the typical Canadian family of four would spend about $16,300 on groceries in 2023, similar to this year’s prediction, but they ended up spending $15,600, either through reducing the quantity or quality of their food.