Now that Canada and the U.S. are in a trade war, shoppers can expect some prices to rise at the grocery store 鈥� but not on all products and not all at once.
After U.S. President Donald Trump enacted sweeping tariffs on Canadian goods Tuesday, Canada responded with tariffs of its own on a broad range of U.S. imports, including food products like orange juice, peanut butter, alcohol and coffee.
Gary Sands, vice-president of government relations at the Canadian Federation of Independent Grocers, says grocers are already getting price increase notices from some suppliers, so shoppers can "expect to see those increases sooner rather than later" for at least some products.
鈥淎s soon as those price increases are presented to the retailer, they're going to be passing them on to the consumer,鈥� he said.
Price increases usually take several weeks to flow through to the retail price, he said. But some products, like produce, are subject to more frequent fluctuations.
Loblaw spokeswoman Catherine Thomas said Canadians won't see the impact of tariffs immediately.
"We expect a wide range of timing depending on the type of product, the current level of inventory, and the ability to find alternatives," she said in an email.
The first round of retaliatory tariffs Canada placed on U.S. imports is strategic, focusing on products that can be more easily replaced with domestic or international items, like poultry and orange juice, University of Guelph food economy professor Mike von Massow said.
鈥淚t's a way of inflicting pain in the U.S. while minimizing pain in Canada," he said.
Once Canada's second round of tariffs comes into play later this month, the effects will likely be more pronounced at the grocery store.
Foods that Canada relies on the U.S. more heavily for, such as produce in the winter months, are harder to replace, von Massow said.
鈥淢y expectation is those fresh fruits and vegetables that we get, particularly in the winter months, from the U.S., will go up in price if Canada puts counter tariffs on those things,鈥� he said.
Ottawa has said the second round would include fruits and vegetables, beef, pork and dairy. It is seeking views from business, stakeholders and Canadians on the impacts of the application of tariffs on the goods that could be included.
Another factor that could be inflationary in the shorter term is the loonie, von Massow said.
He expects the loonie to get weaker, and if that happens, prices of imported products will go up.
The inflationary impact of tariffs also depends on how much of what the grocers stock comes from the U.S.
Canada's biggest grocers 鈥� Loblaw, Empire and Metro 鈥� say they are doing everything they can to mitigate the impact of tariffs, including switching to Canadian or international suppliers.
Loblaw has said less than 10 per cent of its supply comes from the U.S. 鈥� mainly produce 鈥� while Sobeys owner Empire said about 12 per cent of its sales in stores are of products sourced from the U.S.
"Given our work to find alternatives to U.S. sources over the past 30 days, we expect this number to decrease," Empire spokeswoman Karen White-Boswell wrote in an email.
However, many products manufactured in Canada rely on ingredients from the U.S., meaning tariffs could be passed along through those suppliers as well.
Suppliers are trying to find alternatives, but they can鈥檛 make those changes overnight, said Michael Graydon, CEO of Food, Health and Consumer Products of Canada. Packaging in particular poses a challenge.
鈥淎 good deal of packaging that is utilized in Canadian manufacturing comes from the United States,鈥� Graydon said.
鈥淚t is problematic across the board. There's no question about it.鈥�
Some manufacturers have been trying to get extra supply in ahead of tariffs, said von Massow, who expects the 21-day window before the second round of retaliatory tariffs to help with that.
Right now, many of the food-related items on the list are 鈥渕ore ingredient-based than they are finished product," said Graydon.
"Most of it is things like chocolate, coffee and those kinds of things that are more ingredient-based, nuts, fruits. So I think you will see some inflationary impact from a manufacturing input cost perspective," he said.
Graydon said he thinks tariffs could take a little while to flow through the system, especially since the broader retaliation doesn鈥檛 come for another three weeks.
"It'll likely be mid-May before those costs start to actually get into the system, I would suspect."
However, Loblaw and Metro have said they will review price increase requests from suppliers faster than usual.
In some cases, the U.S. tariffs on Canadian goods could actually ease prices on some products, said von Massow. If demand for goods from U.S. importers goes down, that will result in excess supply, he explained.
A similar effect could arise on products imported from Mexico, if producers there are seeing less demand from the U.S., he said.
"If demand for avocados goes down because they're 25 per cent more expensive in the U.S., these avocados are still going to be coming to market, and so they might actually come down in price in Canada," he said.
This report by The Canadian Press was first published March 5, 2025.
Companies in this story: (TSX:L, TSX:MRU, TSX:EMP.A)
Rosa Saba, The Canadian Press
