Canada maintains the highest food inflation in the G7 — rising to 7.3% in January

Another month means another rise in food inflation for Canada — reaching 7.3% in January.On Tuesday, Statistics Canada announced the country has now maintained its position as the country with the highest food inflation among the G7 countries for the second consecutive month.As the Food Professor, Dr. Sylvain Charlebois, who runs an agri-food analytics lab at Dalhousie University, points out, things like beef, nuts, pork, and even chicken were between 5% and 18% more expensive than just a year earlier.Charlebois says a year earlier, food inflation was estimated at roughly 6.3% still yielding the top spot for food inflation among G7 countries..This is a rough estimate adjusted due to an artificial suppression of the inflation index caused by Canada's GST holiday (between December 2024 and February 2025).Compared to the US, which has pursued aggressive tariff policies affecting many imported goods, it only has an inflation rate for food at 2.9% less than half of Canada's.Charlebois says the issue is a structural one, because since 2008, the price of food (measured through the Consumer Price Index) (CPI) has grown at a faster pace than the general price of goods and services. This means the problem is recurring — not temporary..Charlebois categorizes the issue as being caused by several factors, leading to problems in productivity, competitiveness, and the structure of Canada's agri-food economy.Here are some of the government-regulated barriers the agriculture industry faces:1. Interprovincial trade barriers: These include supply management (like in the dairy industry), where quotas are needed for production and are provincially regulated.2. Multiple layers of taxation affecting the food chain: This includes the industrial carbon pricing..3. Fragile logistics system: at the port, rail and trucking levels — which are unreliable and causes delays.4. Old infrastructure5. Less diverse business ecosystem: compared to global competitors, the Canadian food businesses do not have much variety. 6. Regulatory environment: safety and administrative compliance is complicated and expensive..Some temporary measures also contributed to the rise.Like counter-tariffs and the GST holiday, businesses made opportunistic (increased) pricing adjustments, potentially to absorb their regulatory policy burdens.Each of Canada's agricultural food barriers is marginally impactful on the individual level, but when combined, they result in the costs inevitably being paid by the consumer. This is something Pierre Poilievre, opposition leader of the Conservative Party of Canada, echoed in his letter to Prime Minister Mark Carney Tuesday:"Prime Minister, this is a made-in-Canada problem. Farm Credit Canada reports that we produce 70% of our food needs domestically, while Agriculture and Agri-Food Canada says that 80% of the processed food and beverage products sold in Canada are supplied by the domestic processing industry."."That food should cost so much in a country with as much land, as many resources, and as incredible farmers as ours is utterly unacceptable," Poilievre wrote.He calls for the Liberals to remove the industrial carbon tax on farm equipment, the fuel standards tax (which sits at seven cents a litre), and the food packaging tax, which costs Canadians $1.3 billion in a year.So far Charlebois says the feds have only attempted to treat the symptom of food inflation and not the actual cause of the problem — government regulation.The government is giving families extra money for groceries through the bigger GST credit and one-time payment, but adding $14 billion into the economy could push prices even higher because it increases spending without boosting productivity..Charlebois advises addressing the issue directly by "acknowledg[ing] that Canada’s food affordability challenge is fundamentally a productivity and competitiveness problem, we will continue treating symptoms rather than causes — and repeating the same policy mistakes."

Canada maintains the highest food inflation in the G7 — rising to 7.3% in January

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