Are you spending more at the grocery store? An increase in the cost of food was one of the main reasons for a recent jump in inflation and a study from the University of Guelph Food Institute says we should expect more of the same in the new year.
The research team there forecasts that food inflation rates will be two to four per cent in 2016, much higher than the overall inflation rate. That’s after this year, in which the cost of meat, vegetables, fruit and nuts jumped more than anticipated, pushing up your food bill by more than 4 per cent.
The main driver is the value of the loonie, which has fallen its lowest level in more than 11 years. Given that 80 per cent of vegetables, fruit and nuts are imported, all of these items are more expensive and are set to become even pricier as our dollar falls further. The cost of meat is also expected to go up as much as 4.5%. The institute says the average Canadian household will spend $8,600 on food in 2016, an increase of $345. That figure includes $2,416 spent at restaurants.
Canada is the only industrialized country where you find the food inflation rate to be above 2.5%.