Yes, Canadians Pay More For Food Than Americans

NOVEMBER 8TH, 2026 | NATHAN DANIEL

Every Canadian who has driven south for a weekend knows the moment. You wander into a Walmart in Montana or Washington, pick up a carton of eggs or a block of cheddar, do the conversion in your head, and quietly resent your own country. Then you drive home, pay the Canadian price, and console yourself with something someone told you at a dinner party once. The milk is better here.

I would rather be accurate than angry, so let me state the claim carefully. Canadians put a bigger share of their budgets into groceries than Americans do. Food prices here have recently climbed faster than they have south of the border. And in the aisles where government policy shapes the market, the gap is large and has almost nothing to do with what is printed on the label. None of this means every item in every store costs more in Canada. It doesn't. A Globe and Mail comparison of more than 40 products at retailers operating on both sides of the border found a few things cheaper here once currency was counted, including a 12-pack of Coca-Cola and a big bottle of Tylenol at Walmart. 

Wonderful. Nobody has ever been bankrupted by Tylenol.

The real damage is in the weight of food in a household. TD Economics points out that groceries make up 11% of the consumer price basket in Canada, compared with 8% in the United States. Three percentage points sounds small until you realize it means a bigger bite out of every pay cheque, every week, for as long as people insist on eating.

The trend is no friendlier. TD finds Canadian grocery prices up more than 30% since late 2019, and ahead of the American pace through 2025. By early 2026, Statistics Canada had food prices up 6.2% from the year before, roughly double the American rate, with coffee up close to 30% and beef close to 17%. 

Dalhousie's Canada's Food Price Report expects a family of four will have spent about $17,572 on food in 2026, nearly $1,000 more than last year. Some of that jump came from the end of the GST holiday on certain items, which Statistics Canada says lifted the price of things like chips and candy once the break lapsed. Plenty of the rest is not. Droughts shrank cattle herds, coffee has had a rough few years, and the weather does not check passports. Americans face the same cattle and the same coffee. So the sensible approach is to set aside what both countries share and ask what is left over. What is left comes down to three questions. Who sells the food, who is allowed to produce it, and what does it cost to get it here.

Who sells it

In 2023 the Competition Bureau published a long study of the grocery sector, and its opening position was blunt. Most Canadians buy their food in stores owned by a handful of giants. Loblaw, Sobeys and Metro together reported more than $100 billion in sales in 2022 and over $3.6 billion in profit. This didn't happen by accident. Of the large chains operating, about 37 years earlier, five were bought up by their competitors, with names like Steinberg's, Provigo, A&P and Safeway disappearing into the survivors.

The detail I find most revealing is what the Bureau said about discount stores. In most countries the budget grocer is the enemy of the supermarket. Here it is the supermarket's other brand. Loblaw owns No Frills and Maxi, Sobeys owns FreshCo, and Metro owns Food Basics and Super C. The shopper who believes they have escaped the big chain for a bargain one has, in the corporate sense, stayed home.

Americans, meanwhile, have Aldi, which runs roughly 2,500 stores south of the border and is still expanding, and Lidl, which keeps growing its own footprint. Lidl once set up an office in Mississauga, hired staff, scouted real estate and filed trademarks. Then nothing. The Bureau pointed to Australia, where prices fell after Aldi arrived, and to Walmart's own arrival here, which shook the incumbents. Retail Insider's coverage this March quoted an industry voice saying flatly that an Aldi or Lidl launch in Canada is not going to happen, in part because the United States offers a bigger and denser prize.

There are also the quieter barriers. 

Property controls, the lease clauses that stop a rival grocer from opening in the same plaza, made it hard or even impossible for new stores to set up in some places. Ottawa passed a bill in late 2023 to limit them, which tells you the problem was real enough to need legislation. The reluctance of foreign discounters proves how competitive the market already is. That is a bit like a restaurant insisting its food must be superb because nobody else will open across the street.

Concentration is not proof of gouging. It is the absence of pressure, and pressure is what lowers prices. You can see what pressure does inside Canada itself. A twelve-item staples basket priced by Narcity came to $121 at Walmart, $139.72 at Loblaws and about $141.78 at Sobeys. That is a spread of roughly 17% between the cheapest and dearest option for identical groceries. 

When a real competitor shows up, the savings are real.

Who is allowed to produce it

Now to the part where Canadians get defensive. Since 1972, dairy, eggs and poultry have run under supply management, a system of production quotas and high import tariffs designed to keep farm incomes steady. Farmers must buy quota to produce, those quotas are now worth something like $30 billion in total, and imports beyond small allowances are blocked by tariffs. Roughly 13,500 farms sit inside the arrangement. Everyone else sits at the cash register.

What it costs is argued over, but the estimates all point the same way. In June 2026, the Montreal Economic Institute compared Canadian prices with the American Midwest and reported that milk cost 171%  more here, eggs 46% more and chicken 29% more, for an average cost of a little over $200 per person, per year. 

The Institute is a free-market think tank and that milk number strikes me as steep, so treat it as the high end. An older peer-reviewed study in Canadian Public Policy put the burden at $444 per household per year, and $585 for households with kids. A Fraser Institute estimate suggested that without tariffs, frozen turkey would be 15 per cent cheaper, milk 34 per cent, butter 29 per cent and eggs 62 per cent. Different methods and different years, with the same direction of travel.

The cost is also regressive. The poorest fifth of households pay roughly 2.3% of their income for it, against about half a per cent for the richest fifth. A family on a tight budget spends a bigger share of its money on food and so pays a bigger share of the price of the system. The people the policy was supposedly built to protect, ordinary Canadians, are quietly the ones funding it.

Defenders have a point. TD notes that Canadian food prices are less volatile than American ones, especially in supply-managed categories, and when egg prices exploded in the United States, Canadians were spared the worst of it. Stability has value. But a price that never swings is only a virtue if it is a fair price to begin with. A price that sits permanently on the top shelf is nicer for the seller than the buyer.

The milk argument

This brings us to the argument I was asked to take apart. Canadian milk is hormone-free, the line goes, so of course it costs more, and it is better. Let me give it its due before dismantling it, because it has a kernel of truth. Artificial growth hormone, rbST, has been banned in Canada since 1999. In the United States it is permitted in conventional milk but not in organic. Canada also holds milk to a tighter somatic cell limit, 400,000 cells per millilitre compared with 750,000. The Dairy Farmers of Canada have even published comparisons showing Canadian milk and butter priced below hormone-free American equivalents.

Now the problems. 

First, this is a quality claim offered in answer to a price question. Even if every word is true, it says nothing about why Canadians pay more. A Lexus is better than a Corolla, but that is not an argument for banning Corollas and then calling the Lexus price a bargain. Saying the product is superior does not explain the gap. It only changes the subject to something more flattering.

Second, the comparison is rigged by its own footing. The industry's numbers pit Canadian milk against a specific slice of the American market, the rbST-free and premium shelf. That shelf exists in the United States because some shoppers want it and pay for it. Americans get to choose. Canadians get the choice made for them at the quota office, and the premium is then presented as a feature. If Canadians value that bundle, let them buy it on purpose. A voluntary label would do the job. The industry already has one, the Quality Milk logo. Nobody has to make the cheaper option illegal for the labelled one to sell.

Third, and this is the part the argument cannot survive, milk is one product. A basket is dozens. Hormones play no role in the price of eggs, chicken, coffee, tomatoes or cereal. American chicken is hormone-free by law too, and hormone use in poultry has been prohibited in the United States for decades. If growth hormone were the explanation, the gap would vanish outside the dairy aisle, and it does not. A single regulatory difference in one refrigerated cooler cannot account for a food bill that is heavier across the entire store.

Fourth, notice what the reply concedes. The complaint was that Canadians pay more. The answer is that Canadians get more. Anyone who defends a price by praising the quality has already admitted the price is high.

What it costs to get here

The last piece is plain logistics and money. Canada is large, thinly settled in places and heavily dependent on imports in the winter. TD notes that Canada's higher share of imported food makes grocery prices more sensitive to currency swings, and a weak loonie makes every imported lemon and lettuce dearer. The retailers who set prices do not adjust them often, as the Notre Dame economist Jeffrey Campbell told the Globe and Mail, so a falling dollar bakes in higher shelf prices for a while.

Geography is a real obstacle for any new chain, and analysts say so. But the United States has its own Montana and its own long empty highways, and Aldi manages to run thousands of stores across them. Distance is a cost. It is not a full explanation, especially when most Canadians live in a narrow strip of cities hugging the American border.

And then we have the retaliatory tariffs. Ottawa's counter-measures on American goods, which by one Montreal outlet's August tally reach everything from cheese to toilet paper, are a very patriotic way to pay more. I understand the politics. I also understand arithmetic. A tariff is a tax on whoever is standing in the checkout line, and that person is not the president.

What do we do about it?

The federal answer so far has been to send money. A new Canada Groceries and Essentials Benefit replaced the quarterly GST credit in July, which will help. It is also a bandage. It makes the bill easier to pay without asking why the bill is what it is.

The harder answers are not mysterious. Keep dismantling the property controls and the lease tricks that keep rivals out. Make it easier, as the Bureau urged, to compare unit prices so that shoppers can punish expensive stores. Let discounters and foreign grocers in without treating them as invaders. And have a serious, unsentimental talk about supply management. A March 2025 Angus Reid poll found only 29 per cent favoured scrapping it entirely, which suggests most of us would take a gradual wind-down over a cliff. Australia's dairy sector reformed in the early 2000s and survived.

Canadians are famously polite. We apologize when someone steps on our foot, and again to the cashier when the total comes up higher than expected. Perhaps it is time to stop apologizing and start asking why. The answer is not hormones, and it is not the weather. It is a grocery market with few players and a food policy built to keep prices high on purpose.

The Americans, bless them, have their own problems, and their egg prices had a spectacular year. But when it comes to filling a cart without a second look at the receipt, I have to admit, through gritted teeth, that they have us beat.

Sources

TD Economics, "Canadian Grocery Price Inflation" report; TD Stories, "Which groceries cost more now than pre-pandemic"; Competition Bureau, "Canada Needs More Grocery Competition" (June 2023), as reported by CBC, Global News and Supermarket News; Retail Insider, "Why Aldi and Lidl Are Unlikely to Enter Canada" (March 2026); Montreal Economic Institute, supply management study (June 18, 2026); Canadian Public Policy, "Milked and Feathered" (2015); Fraser Institute commentary on supply management; Dalhousie's Canada's Food Price Report 2026; The Globe and Mail, price comparison of goods across the border; Narcity grocery basket comparison; Dairy Farmers of Canada rbST-free milk materials.