U.S. Tariffs Driving Up Grocery Prices in Canada, Experts Warn

The ongoing trade war between Canada and the United States is beginning to hit home — literally — as rising prices on grocery store shelves signal the early effects of newly imposed tariffs. According to industry experts, the impact of Canada’s counter-tariffs on U.S. goods, introduced in early March, is now becoming visible in food pricing across the country.

Small and independent grocers are feeling the effects most acutely. Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers, said fresh produce and other perishable items have seen the sharpest price hikes. With independent stores typically operating on razor-thin profit margins of around two per cent, any increase in wholesale costs is quickly passed on to consumers. “There’s just no way around that,” said Sands, adding that food manufacturers have imposed price increases of up to double digits in some cases.

Canada’s 25 per cent counter-tariffs, covering $30 billion in U.S. imports, include a wide range of food products such as orange juice, berries, nuts, ketchup, and shrimp. Recent comparisons between Canadian and American orange juice brands show stark price differences, with U.S. brands like Tropicana now costing significantly more than Canadian-made equivalents. On the Metro grocery site, for example, a 2.5-litre jug of Tropicana was listed at $13.99 — nearly double the price of similar Canadian or foreign alternatives.

Adding to the challenge is a surge in consumer demand for Canadian-made products. A recent Leger poll found that 81 per cent of Canadians are actively trying to buy local, a trend applauded by retailers but difficult for smaller grocers to meet on short notice. Some are scrambling to replace U.S. suppliers with alternatives from South America or Europe, but lack the buying power of larger chains, making transitions slower and more costly.

Experts caution that the full impact of the tariffs has yet to be felt, with supply chains still adjusting and some grocers struggling to offload higher-priced U.S. inventory. As inflation in Canada eased to 2.3 per cent in March, food prices rose at a faster pace, climbing 3.2 per cent year-over-year. Economists attribute part of this uptick to tariff uncertainty, which continues to disrupt planning and pricing across the food sector.

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While larger grocery chains may eventually stabilize their supply chains, smaller retailers could continue to struggle with price pressures and consumer expectations — signs that the economic ripple effects of the trade war are just beginning to take hold.