Canada is the second-largest country in terms of size, but home to just 37 million people. It’s a varied country with different landscapes, cultures, and traditions. Overall, Canadians enjoy a high quality of life and have above-average rankings for security, jobs, health status, income, social connections, and more.
That being said, Canada is not a cheap country to live in. Soaring housing costs in large cities are one driving factor of the high cost of living, but food is the other. It’s unfortunate that something necessary to live can be so expensive! Experts predict that annual food expenditure for Canadians will be up to $695 higher in 2021 than it was in 2020.
So, why is food in Canada so expensive? Some of the reasons include the impact of climate change and natural weather changes that impact farming, government policies, geography, fluctuating currency, and the COVID-19 pandemic. Let’s look at each of these items further in-depth to determine why food is so expensive in Canada.
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Weather, Environment, and Farming
One of the main reasons food in Canada is expensive, and increasingly so, is due to weather pattern changes and climate change. The price of produce, especially, is increasing due to the wildfire activities both in Canada and in California, where a lot of produce is imported from. 2021 has seen significant wildfire activity in British Columbia which impacts farming and, therefore, food supply.
In other parts of the country, heat waves, floods, droughts, and variable temperatures can all affect farming practices and increase food prices. Farmers in Saskatchewan have been facing a drought in the summer of 2021, with only around 50mm of rain, compared to the 190mm that is normally received. This is preventing crops from growing, so shortages are to be expected and prices to increase accordingly.
Geography
Canada is a large country with over 9.9 million square kilometers. While approximately two-thirds of Canadians live close to the southern border with the USA, there are still many communities that live in rural areas. Those communities face extremely high costs of food because of their remote nature.
For example, one woman living in Nunavut gained popularity on TikTok recently by exposing the high costs of everyday food items. Some of these shocking examples were an aluminum foil roll was $69.99 (nearly $40 more than normal) or $33 for a bag of chips. The reason for such high prices is because of the extremely remote regions that take so long to access and deliver food.
Many of the communities living in northern remote communities are Inuit, who face the highest rates of food insecurity of any indigenous group in an industrialized nation. With such high grocery bills, it is easy to see why purchasing adequate food for one’s family is such a challenge. There are government programs in place, such as Nutrition North, to help address this issue, but more work needs to be done.
Even though this is an extreme example of a high cost of food due to remote areas, it is true that high transportation costs in a large country like Canada generally affect the price. Since food often travels far distances, either internationally or domestically, prices are reflective of those traveling costs.
Government Policies
One reason some food – particularly dairy and poultry products – are so expensive in Canada is because of the government’s supply management programs. The purpose of supply management is to control the number of goods produced by farmers, also called quotas, so that they are able to sell their products.
Because of these quotas for the dairy and poultry industry, there is a limited supply of food products. This will increase the price of the product, making it more expensive than it would be if there were allowed to be more food products circulating in the economy.
Fluctuating Dollar
One reason food prices can be high in Canada is because of the reliance on imports for many food items. While Canada does produce a lot of food through farming and industrial production, it still imports quite a bit. In fact, in 2019, food imports made up over 8% of total product imports in the country.
Since imported food is purchased in the currency of the producing country, currency fluctuations have a big impact on the prices. An article from 2016 illustrated these issues, indicating that food prices had increased by over 10%, attributed in large part to the decreased value of the Canadian dollar, which decreased by 15% in the same period.
While that was just a snapshot from 2016, the dollar is constantly fluctuating and so it can have dramatic effects on the prices of food, particularly in areas like produce, where so much of it is imported into the country.
COVID-19 Pandemic
While the food in Canada has always been expensive, the COVID-19 pandemic has made it even more so. Because of the pandemic, borders were closed, which led to major disruptions in the food distribution and supply chain. Increased transportation costs due to border delays will reflect higher prices for consumers.
The COVID-19 pandemic also brought about labor shortages, which also affected the production and distribution of food products. Even though unemployment rates are returning to pre-pandemic levels due to easing restrictions, it will take time to fully return and the economy to bounce back.
Conclusion
Food is essential to daily life – we all need it! So, for food to be so expensive in some areas of Canada, there can be real challenges. There are a number of reasons food is expensive in Canada, including climate change, geography, government policies, the fluctuating value of the dollar, and the COVID-19 pandemic.
Overall, these issues work together to make food prices high in Canada. It is a complex issue and will require creative solutions to help address it. Consumers have little control over these forces that make the cost of purchasing food difficult, so should focus on how they can budget, save, and find good deals to bring their grocery bill. After all, there is a lot that the individual can do to effectively budget and stretch their dollars.