Grocery prices could lower following removal of Canadian counter tariffs

Shoppers and business owners are optimistic prices could come down after Ottawa removed some counter tariffs on U.S. goods. CTV’s Joseph Bernacki explains.

Prices on the shelf could soon lower after the federal government’s decision to drop existing 25 per cent tariffs on U.S. goods covered under the CUSMA free trade agreement between Canada, the U.S. and Mexico.

Sylvain Charlebois, visiting scholar at the Faculty of Agriculture and Environmental Sciences at McGill University, said a difference of 25 per cent at the border will make a huge difference for many everyday grocery items.

“That list would include, coffee, tea, nuts, spices, dried pasta, sauces, pickles, anything in a jar coming from the U.S,” Charlebois said.

While he’s optimistic prices will lower, Silver Heights Food Fare owner Munther Zeid said it will take some time to see costs come down, until existing stock sells.

“It’s going to depend on the wholesaler that brought it in,” Zeid said.

“Are they going to eat the tax that they paid? Ask for a refund? We’ll see. It depends on how fast they get rid of that stock and new stock starts coming in.”

Zeid said it’s been a game of managing supply and demand ever since tariffs were set in place earlier this year. Certain cereal brands at his store have not been restocked as they would have been last year, for example.

“The ones that were made in the States, we are constantly just front-facing everything and not reordering until the last package is sold,” Zeid said.

“If you look at our shelf, you’ll notice that it’s very empty in behind on certain cereals because again, will people buy it? It’s going slow. Hopefully once they go back to normal, we might reorder them.”

He said imported steak seasonings that have been bestsellers in the past have also slowed down in sales.

“We had some spices that we’d normally bring in during the summer, two shipments minimum,” Zeid said.

“This year we only brought in one. Right when the tariffs happened, it increased the cost of each jar anywhere from $3 to $5. When something goes up three or four or five dollars a jar, that’s dramatic.”

Zeid’s not the only business owner hoping relief is on the way for customers.

Best Sleep Centre’s David Keam has watched American-made furniture prices skyrocket.

“If the chair cost $100, it cost $125, if it cost, $200, it cost $250,” Keam said.

“25 per cent is a significant increase in costs. Having it go the other way will be a significant decrease in my costs.”

Charlebois said food inflation is now hovering at 3.4 per cent. He said a normal rate would be between 1.5 to 2.5 per cent. The food expert said the removal of these counter-tariffs is a step in bringing that rate down.

“The decision will likely push the food inflation rate downwards, which certainly is good news for a lot of consumers out there struggling,” Charlebois said.