Food prices forecast to climb up to 6% in 2026
Canadians should brace for even higher grocery bills next year, with food prices forecast to increase by 4% to 6%, according to the 2026 Canada’s Food Price Report. For a family of four, that will add up to $17, 571.79—a $994.63 increase from 2025. Compared to five years ago, food prices are 27% higher.
Now in its 16th year, the report also looks at expected price hikes across major categories. Meat is expected to see the steepest increase, rising 5% to 7%. Vegetable prices are projected to climb 3% to 5%, while fruit comes in at 1% to 3%. Prices in bakery, along with dairy and eggs, are expected to increase 2% to 4%, while seafood will rise 1% to 2%. Food prices at restaurants are forecast to rise 4% to 6%, as will packaged goods (categorized as “other” in the report).
The meat of the matter
Among all categories, meat is the big story. In 2025, prices increased 7.2%—the highest rate of any food category. This was largely driven by the soaring retail price of beef, which jumped 19% in the first quarter alone, according to the report. While spring and summer brought more stability, beef prices were still up 9% year over year and up 23% from the five-year average.
Several factors are behind the surge, including low cattle herd numbers, a drought in Western Canada and rising input costs. Production, processing and packaging costs have all climbed, with these added costs passed on to consumers.
“We predict that meat prices are going to continue to be a nightmare for consumers,” says Sylvain Charlebois, director of Agri-Food Analytics Lab at Dalhousie University, which produced the report in collaboration with other universities across Canada. “What’s going on with beef is quite contagious amongst the meat trifecta [beef, chicken and pork] because it’s pushing people to pivot and focus more on chicken.”
To keep up with Canadians’ strong appetite for beef, the country is turning to import markets such as Mexico and Australia. However, Canada limits the volume of imported beef that can enter the country at low tariff rates. “We don’t see how beef prices will get normalized before mid-year 2027 unless something is done,” Charlebois says.
As for grocers, he believes they will continue to pressure Global Affairs Canada to increase beef imports. “They need traffic at the meat counter; it’s a really important piece for them to protect margins,” he says. “My guess is they’ll get more aggressive on promoting pork. Pork is sort of the forgotten child within the meat trifecta—I don’t know why—but pork should be more popular than it is now. It’s really a cheap deal right now.”
Macro pressures fuelling food costs
Beyond category-specific pressures, a mix of economic and geopolitical factors are contributing to the projected 4% to 6% increase in food prices. These include trade disputes with the United States, labour markets, policy changes, an uncertain Canadian dollar, and more.
The report notes that Canada’s ongoing trade dispute with the U.S. is expected to continue into 2026, with American tariffs still weighing on the economy. But there are some positive signals: Canada removed all counter-tariffs on U.S. goods in September, which should ease inflationary pressures, and the U.S. rolled back tariffs on more than 200 agricultural and food products.
“We’ve had a series of good news in recent weeks—both from Ottawa and Washington,” says Charlebois. “I think there is a collective recognition when it comes to agri-food that you’re basically taxing food … There’s more sensitivity to that compared to a year ago.”
Turning to discount stores to stretch dollars
With grocery bills climbing, Canadians will continue to shift their dollars to the discount channel. According to the report, stores that prioritize high-volume, cost-effective goods can help ease the budgetary pressures consumers face. However, because most discount banners are owned by major grocery chains, the report highlights ongoing concerns about a lack of competition, with pricing negotiations concentrated in the hands of just a few companies.
The grocery code of conduct, which becomes fully operational in January 2026, is designed to create a more level playing field. In theory, it gives manufacturers and smaller grocers more sway and therefore more choice for consumers at the grocery store.
“I’m hoping this will work and I do believe it will, but only time will tell … my expectation is the code of conduct, its functionality, will stabilize prices over time,” says Charlebois. "And that’s the whole idea.”
