Canadians can expect to see their grocery bills go up in the near future and even shortages in some store aisles amid a trade war with the United States, the Retail Council of Canada warns.
On Tuesday, a sweeping 25 per cent tariff on all Canadian goods entering the U.S. went into effect as well as Canada’s counter-tariffs on $30 billion worth of American goods.
Canada trades billions of dollars’ worth in grocery items with the U.S., including $72.6 billion in agriculture and agri-food products, according to government data.
The trade war is going to have a “negative impact pretty quickly on Canadians’ access to food and groceries,” said Matt Poirier, vice-president of federal government relations for the Retail Council of Canada.
“It’s a very challenging time to say the least and it won’t take long for consumers to see prices go up and certainly for consumers to maybe even see shortages of certain items depending on what sector we’re looking at.”
How are grocers responding?
In the weeks leading up to the tariffs, Canadian grocers have been pivoting away from U.S. products and ramping up efforts to make more local alternatives available.
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The tariff threats from the U.S. have also given rise to a wave of “buy Canadian” sentiment in Canada in recent weeks.
Canadian grocers Loblaw and Longo’s said they are looking at ways to reduce the impact of the tariffs on customers, including finding alternatives to U.S. products from within Canada and other countries as well as promoting home-grown products.
“These tariffs are essentially a tax on consumers and run the risk of increasing food prices,” said Catherine Thomas, vice-president of communications at Loblaw.
“At this point, we do not have all the information, but Canadians should not expect to see the impact of tariffs show up immediately,” she said in an emailed response to Global News.
“We expect a wide range of timing depending on the type of product, the current level of inventory, and the ability to find alternatives.”
Ontario-based Longo’s said it continues to monitor the situation closely, while highlighting Canadian goods in its flyers and through email, social media platforms and digital communications.
“Tariffs are an evolving situation and we are actively working with our partners and suppliers to identify how we will minimize the impact to our Guests,” said Longo’s president Deb Craven in a statement.
Which grocery products could get hit hardest?
Canada’s list of counter-tariffs includes dozens of grocery items, including poultry, meat, dairy products, fruits, vegetables, coffee and tea.
Poirier said while Canada has an ample supply of poultry and other meat products, it might be a bit more challenging to meet the demand for things like lettuce, berries, orange juice and American whiskey.
He said the longer the trade war goes on, it’s inevitable that Canadians will see shortages or price spikes for products that are being tariffed and still imported from the U.S.
“It’s a wait and see at this point, but certainly a lot of items that are subject to Canadian counter-tariffs are going to see some shortfalls and some price increases over the next few days and weeks,” Poirier said.
He said the biggest price increases will be seen on unique goods that are mostly manufactured in the U.S., including children’s Tylenol, baby formula, diapers and paper products.
Despite the concerns around price hikes and shortages, Poirier encouraged Canadians not to rush and stock up on supplies like many did during the COVID-19 pandemic.
“It’s basic human behaviour to see stuff like panic buying. We encourage people not to do that for obvious reasons.”
