Canadian consumers are already paying 25% to 30% more for their groceries since the start of the pandemic.  Now, U.S. tariffs and Canada’s retaliatory tariffs will drive prices even higher, making essential goods less affordable and accessible.  Retailers and manufacturers don’t want to raise prices—they simply can’t afford to.  When prices go up, consumers buy less. Lower sales translate into lower distribution and manufacturing productivity, which raises the cost to produce each unit, cutting into profitability.

It’s unrealistic to expect suppliers—whether national brands or private label brands—to absorb these tariff costs.  Tariffs function as taxes, such as GST and retail sales taxes, tariffs should be itemized on receipts, along with other government-imposed fees such as environmental/recycling fees, which are a major driver of consumer packaged goods inflation. Transparency builds trust – providing clarity for consumers and consistency for businesses, especially smaller suppliers and retailers.  Our industry needs to regain consumer trust.  Tariffs may be temporary, but when consumer trust is lost, it takes years to rebuild.

The impact of tariffs is far more complex than consumers have been led to believe. Many assume U.S. products will increase by no more than 25% and that Canadian products will remain unaffected—both are false. Consider this: a U.S. product made with Canadian raw materials (25% tariff), Mexican ingredients (25% tariff), and Chinese ingredients (10% tariff) faces a final 25% tariff at the Canadian border, leading to a total price increase of 48% for Canadian consumers. Canadian products are also impacted by the raw materials and packaging they source directly (or indirectly) from the U.S.  Many supply both domestic and U.S. markets – when U.S. demand is challenged, production costs for domestic supply increases.  Volume is the lifeline of a manufacturing plant; the lower the units, the higher costs.

As an industry, we must Unite to Ignite a self-sufficient grocery and consumer goods manufacturing sector in Canada. We need to protect existing factories and jobs while fostering an environment that attracts new investment. Let’s make Canada a leader in domestic production. Let’s make more #MakersMake.

To learn more about how Canada’s food, health, and consumer goods manufacturing sector supports affordability, accessibility, and economic growth—especially amid rising costs and tariffs—visit oneveryshelf.ca.