Business

Cheap Canadian dollar making fruits and vegetables much more expensive

Produce prices went up by around 10 per cent last year and may double inflation in 2016

Food prices head higher 5:07

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The sliding loonie could make it harder for some Canadians to eat their Florida oranges or California heads of lettuce this year.

The dropping dollar, which is hovering just above the 70-cent U.S. mark, is expected to continue to leave shoppers with bigger grocery bills, especially when it comes to buying fresh fruit and vegetables.

Nearly all fruit and vegetables consumed in Canada are imported, making them more susceptible to the loonie's fluctuations.

"It really boils down to the dollar," said Kevin Grier, an agriculture and food market analyst.

Last year, fruits and veggies jumped in price between 9.1 and 10.1 per cent, according to an annual report by the Food Institute at the University of Guelph. The study predicts these foods will continue to increase above inflation this year, by up to 4.5 per cent for some items.

whole-foods.jpg

Food and vegetable prices are on the rise because virtually all the produce consumed in Canada comes from the U.S. where the greenback is soaring. (Lynne Sladky/Associated Press)

Sylvain Charlebois, the report's lead author, said for every U.S. cent the dollar drops, foods that are imported likely increase one per cent or more.

These prices have been on the rise for years.

1 cent = 1% increase

In November 2011, one kilogram of apples cost an average of $3.35 in Canada, according to Statistics Canada. Four years later, the same amount cost $4.12.

One kilogram of celery, meanwhile, increased from $2.23 to $3.08 over the same time frame.

While the increased costs have dealt a blow to everyone's wallet, they have a more pronounced effect on Canadians living on a tight budget or in remote regions, where fresh fruit and vegetables is more expensive than in more urban areas.

People living in northern and remote communities are most likely to be hurt by these rising costs, said Diana Bronson, the executive director of Food Secure Canada.

In Nunavut, for example, residents typically pay about two times more than the Canadian average for staples, according to the Nunavut Bureau of Statistics.

There, a kilogram of carrots cost $6.17 in March 2015, while the Canadian average was about $4 less.

Vulnerable groups

Lower- and middle-class people — many "who can't find a job that will pay them enough to ensure that they can afford a healthy diet for their families" — also feel the pinch of rising food prices, said Bronson.

"It's students. It's senior citizens. It's the working poor. It's new immigrants," she said, adding that aboriginals and visible minorities are disproportionately impacted.

When fruits and vegetables rise in price, it makes it more difficult for these groups to buy enough to get their daily fruit and vegetable intake.

"The wrong kind of food is cheap, and the right kind of food is still expensive," said Bronson. She hopes the new Liberal government's promised national food policy will address this imbalance.

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