Canadians should brace to pay even more for groceries in the coming year.
That’s according to the 13th annual Canada’s Food Price Report, out today, that predicts that food prices will rise up to seven per cent in 2023, with vegetable prices seeing the biggest increases of six to eight per cent.
“We were hoping to have better news for Canadians, given the difficulties experienced in 2022, but our models tell us a different story,” said the report, complied by four Canadian universities from Halifax to Vancouver.
The report calculates that the annual food expenditure for a family of four will hit $16,288 in 2023, an increase of $1,065 from this year.
Canadians will continue to struggle with food security as grocery prices rise, the report said.
Visits to food banks hit about 1.5 million in 2022, up 15 per cent from the year before and 35 per cent from 2020. Visits in March of this year were the highest on record.
Almost half, 47 per cent, of Canadians have chosen cheaper brands when buying groceries to lower their spending. Efforts have been made to help, such as the federal government doubling the GST credit and Loblaw’s freezing prices of its No Name brand until Jan. 31, 2023, but these measures are temporary.
“To say that it’s been a challenging year for Canadians at the grocery store would be an understatement,” Dr. Sylvain Charlebois, project lead and director of the Agri-Food Analytics Lab at Dalhousie University, said in the press release.
“Consumers will continue to get smarter about grocery shopping as they navigate through this so-called food inflation storm.”
Last year the report’s prediction that prices would rise between five and seven per cent fell short of the mark, even though it was considered “alarmist” at the time.
Food prices actually soared more than 10 per cent as of September. The report had expected an annual food expenditure of $14,767 for a family of four, when it actually rose $455 higher to $15,222 in 2022.
That’s because unforeseen events such as Russia’s invasion of Ukraine, higher interest rates and soaring energy prices piled more challenges on the production and distribution of food, which had already been disrupted by the COVID-19 pandemic.
The cost of producing a crop, driven by higher prices for fertilizer, fuels and chemicals, has increased by 50 per cent and a lower Canadian dollar makes imports more expensive.
There was also a number of “idiosyncratic” factors that boosted food prices this year, according to Capital Economics. Avian flu in the U.S. led to the culling of 50 million chickens, citrus crops were hit by a bacterial disease and salmonella in lettuce pushed prices higher.
Eventually there may be relief. Charlebois said food inflation will stay high in the first of 2023 before it starts to ease.
“When you look at the current food inflation cycle we’re in right now, we’re probably in the seventh-inning stretch,” he told the Canadian Press. “The first part of 2023 will remain challenging … but we’re starting to see the end of this.”
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Quebec proved a bit of an outlier in Friday’s job numbers and wages, as today’s chart shows. Canada nationally gained a modest 10,000 jobs in November and the unemployment rate edged down to 5.1%. While some provinces saw little change and there were outright declines in Prince Edward Island, Newfoundland and Labrador, Manitoba, Alberta and British Columbia, Quebec, where employment grew by 28,000, stood out. And the jobless rate reached a record low of 3.8 per cent. (the last low was in April, 2022). Joëlle Noreau, principal economist for Desjardins, said the data “came as a bombshell” and could signal a fourth-quarter rebound for the Quebec economy.
“This morning’s release makes it hard to predict where employment numbers are going to go,” she wrote in a note after the data came out.
The coming economic slowdown would typically bring on a labour market contraction while an aging workforce means fewer workers to draw from.
“It makes for palpable stress in the labour market, as November’s figures make clear. In all likelihood, we can expect an uneven next few months for the labour market,” she wrote.
Innovation, Science and Industry Minister Francois-Philippe Champagne will hold a media availability during his Nov. 6 – Dec. 6 trip to Belgium and Germany
The Quebec Professional Association of Real Estate Brokers releases November home sales
Minister of Justice Tyler Shandro will discuss proposed legislation to protect Albertans’ property rights
Former CannTrust Holdings Inc. leaders court hearing
Today’s Data: Canada building Permits, U.S. Factory Orders, ISM Services PMI
Earnings: DLH Holdings, Gitlab
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