Consumers could see ‘higher prices and fewer choices’ as trade war drags on: CHFA CEO
The ongoing trade tensions between Canada and the United States have placed Canada’s natural, organic and wellness (NOW) sector under severe strain.
With ever increasing tariffs and retaliatory measures put in place by Canada’s government, the $39.7 billion sector is facing unprecedented challenges—from the 50% tariff on U.S. whey coming into Canada and a similar tariff on Canadian whey going into the U.S., to shortages of gluten-free foods and specialized dairy staples caused by Canada retaliatory measures to disruptions in supply chains on essential ingredients.
Many say the NOW sector is nearing a tipping point.
Canadian Grocer recently spoke with Aaron Skelton, president & CEO of the Canadian Health Food Association (CHFA) on the challenges facing the NOW sector and what may be done to help the many small- and mid-sized operators weather these coming months of tariff turmoil.
How large is the natural, organic and wellness sector in Canada and the United States?
“This is not a niche industry. In 2025, Canada’s natural, organic and wellness sector generated approximately $26 billion in sales and nearly $40 billion in economic output, contributed over $18 billion to GDP and supported more than 147,000 full-time-equivalent jobs.
"The NOW industry is also deeply connected to the U.S. market. We do not have one figure that captures all bilateral trade across such a broad sector, but whey offers a clear example. Over the 12 months ending July 2026, the whey and protein tariff codes identified by CHFA represented $629 million in Canadian imports from the U.S., while Canada exported $58 million in whey south of the border. These are not two separate markets. Businesses on both sides have spent decades building a shared supply chain.”
What impact has the ongoing trade tensions between Canada and the United States had on the sector?
“Tariffs do not disappear into the supply chain—someone ultimately absorbs them. In an industry where more than 80% of businesses are small or medium-sized, tariffs of up to 50% can quickly create significant pressure.
"Companies are reviewing suppliers, reconsidering orders and making difficult decisions about pricing and production. We don’t yet know exactly how this will affect retail prices, but businesses cannot absorb these costs forever. If the dispute continues, consumers could eventually see higher prices, tighter inventories and fewer choices.”
READ: Grocery leaders talk counter-tariffs, navigating trade tensions
How are NOW businesses navigating counter-tariffs?
“Businesses are reviewing their options, but changing suppliers is rarely straightforward. Many specialized ingredients are not readily available in Canada, and moving to a new source can require testing, reformulation, regulatory review and manufacturing changes.
"Companies are weighing cost against quality, compliance and reliability as they evaluate other markets. Over time, counter-tariffs may lead some businesses to reconsider established U.S. suppliers—but finding a practical and affordable alternative will take time.”
How have Canada’s counter-tariffs impacted the affordability and availability of gluten-free foods?
“We’re still in the early days, so we don’t yet know exactly how prices or availability will change. But when costs rise and suitable Canadian alternatives are limited, businesses may have little choice but to raise prices, reduce orders or stop carrying certain products.
“That is especially concerning because, for people with celiac disease or gluten intolerance, gluten-free food is a necessity—not an optional purchase. If these tariffs remain in place, consumers could end up paying more for fewer choices. That is why CHFA is calling for immediate tariff relief on these products.”
READ: Gluten-free foods enter new era of innovation
Whey producers are being hit on both sides of the border in this ongoing dispute. How have tariffs and supply chain disruptions affected businesses?
“Whey is one of the clearest examples of how trade disruption can reverberate across an integrated market—especially as consumer demand for protein continues to grow.
“Some companies are buying additional inventory or looking for alternative suppliers, but neither is a simple solution. Smaller businesses may lack the capital and storage to buy in bulk, while changing suppliers can require testing, reformulation and manufacturing changes.
“Ultimately, these measures work against both countries. U.S. suppliers risk losing Canadian customers, while U.S. businesses and consumers could lose access to established Canadian supply.”
The Canadian government has introduced tariff remission processes and funding programs. Is this enough for the industry?
“Tariff remission and other supports are welcome, but relief needs to be fast and accessible—especially for smaller businesses without large legal or government-relations teams.
“Canada must also address the bigger issue: making it easier to build and grow businesses here. That means targeted tariff relief now, alongside proportionate regulation, investment in domestic production and support for reaching new markets. We can protect consumers without placing unnecessary burdens on the Canadian companies trying to invest, innovate and compete.”
