Statistics Canada says consumer prices rose 2.2 per cent year over year in November, unchanged from October, but grocery costs climbed 4.7 per cent, the sharpest jump in almost two years.
Although headline inflation has cooled from the peaks of 2023, households are feeling little relief as the holidays approach, according to a new poll from the Angus Reid Institute.
One-in-five respondents now fall into a “high pressure” category on the group’s Financial Pressure Index, and three-in-five in that cohort expect their situation to worsen in 2026.
Grocery bills bite household budgets
The latest Consumer Price Index release shows fresh or frozen beef up 17.7 per cent and coffee up 27.8 per cent compared with a year earlier. For many Canadians, those numbers translate directly into smaller holiday dinners and pared-back gift lists.
Angus Reid reports that 39 per cent of households find it difficult to keep up with grocery bills, a share that rises to a majority among families earning below C$50,000. Cost of living remains the single biggest public concern, chosen by 59 per cent of survey participants, well ahead of health care or housing.
Policy makers can point to falling gas prices and slower rent growth, but food inflation is proving stubborn. “There is the potential there for things to improve, but there’s precious little that the Bank of Canada can do about food prices because interest rates do not impact food prices, unfortunately,” said BMO strategist Benjamin Reitzes in an interview reported by CityNews Calgary last week.
Little relief ahead in 2026
The Bank of Canada kept its policy rate steady at 2.25 per cent on Dec. 10 and signalled patience on future moves. Core inflation metrics eased in November, yet remain above the two-per-cent target. CIBC economist Andrew Grantham cautioned that borrowing costs are unlikely to fall quickly:
“We continue to forecast the Bank of Canada to hold its overnight rate steady at its current level throughout next year,” he wrote in a client note. For households carrying variable-rate debt, that means payments will stay elevated well into 2026.
The Angus Reid survey, conducted Dec. 6-9 among 1,602 Canadian adults, finds that 36 per cent feel worse off than a year ago, while 25 per cent expect further deterioration in the coming 12 months. Only 23 per cent fall into the “very low” pressure band, and even within that group more than half anticipate no improvement.
Economists warn that food price growth may hold near four to six per cent next year because of lower cattle inventories, global weather events and a weak Canadian dollar. If that forecast is borne out, the financial squeeze on lower-income families will tighten.
For retailers, the mood translates into cautious traffic and an emphasis on bargains. Early December point-of-sale data from Moneris show average transaction values down five per cent from 2024 levels, while volumes are roughly flat, suggesting shoppers are trading down to cheaper items. Charities are also seeing the effect: Toronto’s Daily Bread Food Bank reported a 12 per cent year-over-year increase in visits in November, stretching supplies just as holiday hampers roll out.
Ottawa will release its next affordability plan update in the federal budget expected this spring, but any new measures are unlikely to arrive before Easter. Until then, many families will keep counting every dollar, hoping that slower overall inflation eventually filters through to the grocery aisle. That means leaner feasts, smaller gifts under the tree and, for the one-in-five Canadians under high pressure, a holiday season defined more by restraint than by cheer.
