Canadian families could face another $1,000 in annual grocery costs next year if diesel prices remain high, a leading food economist has warned MPs.Sylvain Charlebois, senior director of Dalhousie University's Agri-Food Analytics Lab, told the House of Commons human resources committee that rising transportation costs threaten to push food prices higher over the next six to 12 months.“If energy costs remain the same as they are now, we are likely to see a bump of 0.5 to 0.7% on food inflation over the next 6 to 12 months,” Charlebois testified.“That is significant. That represents basically about $700 to $1,000 more to spend on groceries for the average household in Canada.”Charlebois said Canada's heavy reliance on trucking makes the country's food supply particularly vulnerable to rising diesel prices.“Whenever diesel costs go up for whatever reason, it does impact food prices which is why it is one of the factors that concerns us right now,” he said.“We are in the middle of our planning for Canada’s Food Price Report which will be released on December 3rd. It is our 17th edition, and transportation cost is probably the biggest concern we have right now.”“Several regions in Canada do depend on trucks. We have a trucking economy.”Blacklock's Reporter said the warning comes as Canadian households continue struggling with the cumulative impact of years of rising food prices.Statistics Canada previously told MPs that grocery prices had increased nearly 30% over the past five years.The latest edition of Canada’s Food Price Report estimated a typical family of four spends $17,572 annually on food..Charlebois said the current food inflation rate of 1.7% does not reflect the financial pressures many Canadians continue to experience at grocery stores.“Food inflation is at 1.7% right now as we speak, actually below 2%,” he said.“But that’s not what matters most. What matters most is how people feel when they go to a grocery store.”He said years of unpredictable price increases have made it increasingly difficult for families to determine whether they can afford their grocery bills.“They have seen so much volatility over the last five years it is impossible for them to know if they could or could not afford groceries,” Charlebois said.“That is really the big challenge right now.”The food economist also warned that Canadians with jobs are increasingly relying on food banks to make ends meet.“There is a term, working poor,” he told MPs.“A lot of Canadians actually go to food banks and they are working. They have one, two, sometimes three jobs, and so the lower 40% are forced to either trade down at the grocery store or seek help at a food bank, basically.”Charlebois said lower-income households are particularly vulnerable to further food price increases because they have fewer opportunities to absorb additional costs.Beyond diesel prices, a weaker Canadian dollar could make imported food more expensive this winter.Charlebois told the committee that a Canadian dollar worth 68 cents US could significantly increase the cost of fresh produce.“In our currency scenario, a dollar at 68 cents U.S. could bring fruit inflation to 4% and vegetable inflation to 5.5%, all else being equal,” he said..The potential impact is significant because Canada relies heavily on imported food, particularly fresh fruits and vegetables during the winter months.Conservative MP Colin Reynolds asked Charlebois how much of the food Canadians purchase is produced domestically.“How much of our food that we consume in Canada is from Canada?” Reynolds asked.“Retail, I would say probably about 50 to 60%,” Charlebois replied.That reliance on imported products leaves Canadian consumers exposed to fluctuations in currency values, international transportation costs and energy prices.Charlebois said transportation expenses will be a major consideration in the upcoming Canada’s Food Price Report, scheduled for release December 3.His testimony suggests that even if the headline inflation rate remains relatively low, Canadians could face another year of higher grocery bills as diesel prices and a weaker dollar put additional pressure on household budgets.
