The Big Story
Why the sky high price of groceries may be starting to stabilize
May 2, 2025
Stuart Smyth, a professor in Agricultural and Resource Economics at the University of Saskatchewan, dives into the factors affecting grocery prices in Canada. He discusses how the depreciation of the Canadian dollar and U.S. trade policies have driven food inflation. Seasonal availability of produce could stabilize prices this summer, though challenges like tariffs and avian flu impact specific sectors. Smyth also questions outdated interprovincial trade barriers and their relevance to modern agricultural markets.
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Quick takeaways
- The low value of the Canadian dollar against the U.S. dollar significantly impacts the pricing of imported food products.
- There is potential for grocery prices to stabilize as tariffs are reassessed and more Canadian produce becomes available this summer.
Deep dives
Impact of Currency Value on Food Prices
The low value of the Canadian dollar against the U.S. dollar has a significant influence on food prices, particularly for imported products. As the Canadian dollar hovered below 70 cents for most of March, the cost of fresh produce and other items imported from the U.S. and abroad increased markedly. This currency valuation meant that importers had to account for potential tariffs in their product pricing, further driving up costs. Additionally, the uncertainty surrounding tariffs from the U.S. exacerbated the situation, creating a precarious environment for traders and consumers alike.
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