{"id":14711,"date":"2025-06-18T13:40:02","date_gmt":"2025-06-18T13:40:02","guid":{"rendered":"https:\/\/www.rbc.com\/en\/?post_type=rbc_tl&p=14711\/"},"modified":"2025-12-10T14:43:19","modified_gmt":"2025-12-10T14:43:19","slug":"feeding-the-crisis-the-tariff-toll-on-food-insecurity","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/climate-action-institute\/agriculture-reports\/feeding-the-crisis-the-tariff-toll-on-food-insecurity\/","title":{"rendered":"Feeding the crisis: The tariff toll on food insecurity"},"content":{"rendered":"\n
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The past few years have been incredibly hard for many Canadians. The pandemic caused massive disruptions to the job market and the highest rates of inflation in decades, which was intensified by the war in Ukraine. And now comes a trade war with the U.S., with its own set of shockwaves, including job losses and supply-chain upheaval, sending the price of goods even higher. Many can\u2019t keep up.<\/p>\n\n\n\n

Today, one in four Canadians are experiencing food insecurity. That\u2019s 10 million people\u2014a level never seen before in this country.1<\/sup> Ultimately, it\u2019s an issue of affordability. There is an abundance of food available. But for an increasing number, it\u2019s out of reach. In March 2024, more than two million visits were recorded at Canadian food banks. That\u2019s a 90% increase in just five years.2<\/sup> And food banks are a last resort, signalling how dire things have become.  Properly supporting and resourcing food banks is critical. However, addressing food insecurity longer term, relies on building a stronger Canadian economy. This includes addressing the affordability crisis, improving productivity, and advancing durable economic development in Canada\u2019s rural and remote areas.<\/p>\n\n\n\n

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Trade war on food: Rising job loss, costs, and disruptions<\/h2>\n\n\n\n

Job loss and insecurity is forcing many to make difficult choices<\/strong><\/p>\n\n\n\n

U.S. President Donald Trump\u2019s trade war has caused widespread uncertainty. Launches have been delayed. Production has been paused. Layoffs have been announced. Between January and May, Canada\u2019s manufacturing sector lost 54,000 jobs and the country\u2019s unemployment rate rose to 7%, the highest it\u2019s been since 2016, excluding the pandemic.3 4<\/sup> Trade exposed industries, including manufacturing, continue to scale down jobs, and now there is greater uncertainty in steel and aluminum jobs with Trump\u2019s 50% tariff on the industry. All this volatility can leave workers in precarious financial situations. <\/p>\n\n\n\n

The average Canadian household spent about $76,750 on goods and services in 2023, with 15% and 32% of their money spent on food and shelter, respectively. The lowest income quintile spent $40,080 annually\u2014nearly half that of the average household\u2014with 18% spent on food and 35% on shelter.5<\/sup> In the event of a job loss\u2014or the fear of potential layoff\u2014Canadians in higher income brackets can cut spending on discretionary items (e.g., new clothes, meals out) in the short term. Lower-income households don\u2019t have that luxury and are left with difficult choices between what basic needs\u2014utility bills, medication, food\u2014they\u2019ll cover. These choices can also impact the quality of food purchased, with lower income households opting for cheaper, lower-nutrient-rich foods.6<\/sup><\/p>\n\n\n\n

Like downturns in the job market, swings in international commodity markets impacted by tariff wars can impact Canadians whose income is directly tied to market prices. Farmers are often price receivers\u2014unable to pass rising costs onto buyers and consumers. And China\u2019s tariffs on agri-food products including canola oil and seafood have recently taken a toll on Canada\u2019s rural economy. Nova Scotia is thought to be the hardest hit by China\u2019s 25% duties on aquatic products, which represented 9.2% of the provinces total export value in 2024. Farmers and fisherpersons are familiar with volatility in the marketplace from bad weather to shifts in demand. Still, ongoing disruptions can erode stability in rural and remote regions that are already at a disadvantage in accessing economic opportunities and services.<\/p>\n\n\n\n

And the impact of tariffs is not just about job security. Windsor, Ontario, for example, is reliant on automotive and advanced manufacturing, food processing, and grains and oilseed handling and shipping. This exposes the entire city and surrounding area to Trump\u2019s tariffs on auto as well as China\u2019s retaliatory tariffs on Canada\u2019s agri-food products. Unemployment in Windsor is higher than the national average at 10.8% in May 2025, up from 7.8% in May 2024.7<\/sup> And the knock-on effects from multiple pressures on employment within a region and rising costs of living can trickle down to local retail and services. As consumer spending tightens, all sectors and their workers are impacted.  <\/p>\n\n\n\n

Rising cost of living threatens to further deepen the food insecurity crisis<\/strong>.<\/p>\n\n\n\n

With rising costs in Canada, a job is no longer a precursor for meeting basic needs. More than 60% of Canada\u2019s food-insecure households rely on wages, salaries, or self-employment income as their primary source of income.8<\/sup> Workers experiencing moderate to severe food insecurity often occupy low-wage or precarious jobs that are not keeping pace with the cost of living. Visible minorities, women and new immigrants in Canada earn less than the national average. As a result, food insecurity is disproportionality experienced by these groups. More than 46% of black households and 39% of the Indigenous population living off-reserve are food insecure.9<\/sup> Single-mother households also have higher rates of food insecurity at 52%.10<\/sup><\/p>\n\n\n\n

The effects of food insecurity further marginalize vulnerable groups. Food insecurity is associated with higher rates of chronic diseases, including diabetes and cardiovascular disease. This means more visits to the doctor\u2019s office and the hospital. Severely food insecure Canadians incur health costs that are more than double those who are food secure.11<\/sup> Food insecurity also impacts the physical and mental development of children, as well as academic performance and behaviour.12<\/sup> These impacts underline the health and socio-economic costs to families and the Canadian economy.<\/p>\n\n\n\n

Over the past five years, the affordability crisis has been acutely experienced by households whose wages are not keeping pace with the rising price of goods and services. With pre-tariff inventory coming off grocery store shelves, tariffs are starting to intensify the unaffordability of products in Canada, especially food. Since January 2025, food prices have been a notable driving factor growing the Canadian Consumer Price Index. In April 2025, food prices increased by 3.8% from last year. <\/p>\n\n\n\n

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Supply chain disruptions impact food consistency and costs<\/strong><\/p>\n\n\n\n

Food companies and retailers reported loses in the first quarter\u2014a direct result of the tariff wars.13<\/sup> On top of mitigating losses, Canada-U.S. agri-food supply chains are now tasked with additional administrative demands in proving the Canada-United States-Mexico (CUSMA) trade agreement compliance as only two-thirds of Canada\u2019s agri-food exports in 2024 were traded under CUSMA. These stacking complexities and added costs cannot only be absorbed by agri-food suppliers, wholesalers, and retailers, who often operate on thin margins. Eventually rising costs are passed onto the consumer. In the U.S., the impact of tariffs is estimated to increase food prices by 2.6% in the short run, disproportionately impacting fruit and vegetables, that are expected to rise 5.4%.14<\/sup> <\/p>\n\n\n\n

Trade wars have sparked a diversification movement. And while trade diversification is a strategy to grow and strengthen Canada\u2019s agri-food exports, it can also result in trade-offs such as short-term uncertainty in quality and cost for consumers while supply chains are being established. Stability and consistency in trade is a key factor in keeping transportation, logistics and operational costs down for traders, wholesalers and retailer, which helps ensure consumers have consistency in price, quality, and availability.  Now, uncertainty from tariffs jeopardizes these benefits that North American consumers have become accustomed to through Canada and the U.S.\u2019s interconnected supply chains.  <\/p>\n<\/div>\n<\/section>\n\n\n\n

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The next step: Tying food solutions to Canada\u2019s growth ambitions<\/h2>\n\n\n\n

Solutions to food insecurity in Canada are well documented but the issue remains on the sidelines when it comes to large-scale policy and funding commitments.<\/p>\n\n\n\n

Potential solutions include:<\/p>\n\n\n\n