Despite the declining headline inflation rate, the food inflation rate in Canada has remained high, and experts say it may be a while before grocery prices head in the other direction.
"I'm afraid I can't be the bearer of good news," Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers, told CTV News Channel on Tuesday. "I don't see any relief in the short-term coming."
Numbers from Statistics Canada's latest inflation report, published Tuesday, showed that in January, food prices saw a year-over-year increase of 11.4 per cent, up from 11 per cent the previous month. Since last August, the food inflation rate has been above 10 per cent.
In a research note published on Friday, RBC economist Claire Fan said global economic conditions suggest that the food inflation rate could slow down this year.
"Growth in grocery prices ticked slightly higher again in January, to 11.4 per cent year-over-year. That is still an exceptionally high rate of price growth, but lower agricultural commodity prices and easing global supply chain pressures are expected to slow food price growth this year," Fan wrote.
But even if the food inflation slows, David Macdonald, senior economist with the Canadian Centre for Policy Alternatives, says that doesn't mean food prices are coming down.
"This is one of the things, I think, that's misunderstood about inflation. These prices aren't going away. They might just slow a bit," he said in an interview with CTV News Channel Tuesday.
D.T. Cochrane, economist with Canadians for Tax Fairness, calls the food inflation "the most disconcerting category, because it's the one we face week after week."
"A lot of our housing costs were locked into, but food, we see it all the time, and I think it will continue to rise for a couple more months," he told CTV News Channel on Tuesday.
Climate-related events over the last few months, such as flooding in B.C and droughts in California, have had a significant impact limiting imports and production, Sands explained, in addition to the ongoing war in Ukraine.
"We've also experienced significant increases in fuel surcharges and transportation and, you know, input costs throughout the supply chain continue to be passed on to the retailer," he said.
The spread of avian flu in North America has also wreaked havoc on the poultry industry, which has had to cull millions of chickens. Chicken prices rose nine per cent from December to January, faster than almost every other grocery item.
"There's just a myriad of factors that are impacting the grocery supply chain," Sands said.
Sands acknowledges many of these factors that have led to high food inflation are out of the federal government's control, but says the government could help ease the cost burden when it comes to fuel costs and other transportation issues.
"Those are the subjects of a lot of fun discussions right now with the government and industry," he said.
Cochrane also wants to see the federal government apply more scrutiny into the profit margins of major grocery stores. The CEOs of the three major grocery chains -- Loblaw, Metro and Empire -- are set to testify before a House of Commons committee as they face accusations of profiting off of inflation.
"The government needs to figure out what needs to be done. And so first, they need to explain to us exactly what's going on here. There's no easy solution to this," he said.
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