Canadians thinking their grocery bills got more expensive in August are right. Food inflation rose 3.5 per cent in August compared to the overall Consumer Price Index, which rose 1.9 per cent.
The CPI is published regularly by Statistics Canada and reflects changes in prices of consumer goods and services, comparing the cost of a fixed basket of items such as food items, clothing, gas, cell service and travel. It’s the country’s main measurement of inflation.
Much of the gap between August’s food inflation number and the CPI can be attributed to
, such as higher transportation and energy costs within supply chains as well as weather-related disruptions affecting produce and meat, according to the latest Loblaw Food Inflation Report.
What is the impact of drought on food crops?
In the Atlantic provinces, Quebec, and parts of Ontario rainfall was unusually low in August, notes the report. Crops such as corn, soybeans, blueberries and root vegetables were stressed during critical growth phases, resulting in reduced yields.
That means, says Loblaw, grocers have to transition to imports earlier or sell products that may be a bit smaller than usual.
Dry conditions also increase the cost of irrigation and feed, particularly for forage crops and livestock.
How did the cost of meat products fare in August?
Statistics Canada says one of the
big increases came in prices for meat
, which rose 7.2 per cent year-over-year, following a 4.7 per cent increase in July. Higher prices for fresh or frozen beef (+12.7 per cent) and processed meat (+5.3 per cent) put upward pressure on the CPI last month.
“Growth in prices for ground beef and multiple processed meat categories contributed the most to the upward movement.”
Did the price of fruit and vegetables rise too?
On a positive note, year-over-year prices for fresh fruit fell 1.1 per cent in August, after increasing 3.9 per cent in July, says StatCan. “Price declines for grapes, other fresh fruit, and berries (including cherries) contributed the most to the yearly price decrease for fresh fruit in August.”
StatCan acknowledged, as Loblaw stated in its report, that prices for fresh fruit and vegetables are prone to seasonal volatility due to factors such as weather during the growing period.
What are “struggle meals”?
On Sept. 14, during question period, Conservative Leader Pierre Poilievre rose in the House of Commons to question Prime Minister Mark Carney about food inflation. Canadians are now experiencing what he called “struggle meals,” which he said “are often of lower nutritional value because that’s all they can afford.”
He argued that “price inflation” has accelerated to almost double the Bank of Canada’s target, which is not the case. The CPI’s August increase of 1.9 per cent is less than the central bank’s inflation target of 2 per cent.
Poilievre also said Canada’s price inflation is rising 50 per cent faster in Canada than in the United States, which again is not strictly correct. The U.S CPI increase was up 2.9 per cent for the last 12 months ending in August, according to the
.
Is Canada doing worse than the U.S. with food inflation?
However, comparing food inflation in the U.S. to Canada’s does show a distinct difference.
In August 2025, food prices in the U.S. rose by 0.5 per cent for the month, with the yearly increase in food prices reaching 2.7 per cent (compared to the 3.5 per cent increase in Canada).
Still, says the Bureau of Labor Statistics, the U.S. jump marks a significant acceleration in monthly food inflation — the biggest monthly jump in grocery prices since August 2022.
Poilievre asked Carney about “Liberal taxes” on groceries to which the prime minister responded that there is no GST on groceries.
in Canada are not subject to GST. That includes fresh, frozen, and canned fruits and vegetables, bread, cereals, unflavoured dairy products, eggs, meat, poultry, fish, coffee beans, and plain bottled water.
Grocery items that are taxed include items such as carbonated beverages, snack foods, salads and sandwiches.
How are tariffs affecting food prices?
The Loblaw food inflation report also addressed the hot topic of tariffs. “Since this report first began, tariffs have been a constant headwind in food inflation.”
The grocer recounted that as of September 1, Canada dropped its counter tariffs on most food products imported from the U.S. and customers “can expect to see tariffs come off in waves – the most immediate price decrease on produce (with blood oranges, lemons and peanuts already flowing through), followed by fresh items like meat, poultry and dairy, and then packaged/pantry goods as retailers sell through inventory.”
One of the most high-profile products affected by the tariff war was orange juice. The prices for U.S. imports spiked compared to ‘processed in Canada’ alternatives but have balanced out with the removal of tariffs.
The downside for coffee drinkers, says Loblaw is that prices have climbed back close to the 2025 high, following the imposition by the Trump administration of a 50 per cent tariff on Brazilian imports.
“At the same time, Brazilian producers are holding onto their beans and taking a more cautious approach to selling, which is tightening available supply. Together, these factors are keeping global coffee markets volatile.”
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