Canadians will have to pay an extra $966 for food in 2022, with COVID-19-fuelled supply chain disruptions, labour shortages, adverse weather, transportation challenges, and high inflation all driving up grocery costs, a new report says.
That amounts to a seven percent increase compared to last year—the biggest jump ever predicted by the annual food price report.
“The era of cheap food has ended,” said Sylvain Charlebois, Dalhousie University professor of food distribution and policy and lead author of the report.
High Inflation and Food Insecurity
The Food Price Report noted that food inflation has outpaced general inflation over the past 20 years, with a typical grocery bill increasing by 70 percent between 2000 and 2020.The soaring food costs in Canada will likely lead to greater food insecurity and increased demand on organizations that aim to provide aid. This will result in greater reliance on food programs and food banks could struggle to meet demand if incomes do not rise to meet increased expenditures on food, the report said.
“What is being challenged right now is food affordability,” Charlebois said. “It’s not going to be easy for families or anyone already struggling to put food on the table.”
The rising food insecurity appears to be linked to increased cases of theft from grocery retailers.
“Grocers are anecdotally reporting an uptick in theft, particularly of items such as meat, cheese, over-the-counter medication and energy drinks,” the report said.
The report noted that data from the Global Food Security Index ranked Canada 24th in the world for food affordability in 2021, falling from 18th place in 2019.
Certain grocery categories will see larger jumps than others in 2022.
Restaurant menu prices are also going up six to eight percent as the food service sector grapples with widespread labour market challenges and rising commercial rents, the report said.
Adverse Weather and Transportation Challenges
Adverse weather conditions have also contributed to food price increases, the report said. For example, wildfires in British Columbia and drought conditions in the Prairies have elevated the prices of meat and bakery products this year and may continue to influence food prices in 2022.Labour market challenges driving up wages and costs is also expected to lead to higher prices, the report said. As Canada continues to face labour shortages across several sectors, the hospitality sector has seen some of the most severe shortages amid the pandemic, particularly among restaurant staff.
In addition, the transportation crisis brings the vulnerability of global supply chains to the forefront for food and many other products. Major disruptions, delays, and reduced capacity have led to backlogs in maritime transport, as cargo ships have experienced congestion in ports in both Canada and the United States.
“On top of rising food prices, consumers are likely noticing empty shelves in their grocery stores and will continue to see them for the next while,” the report said.
