An employee stocks groceries at NorthMart, in Inuvik, Northwest Territories, July, 2025. Higher prices have begun to hit store shelves in the North as transport carriers apply fuel surcharges, says Mike Beaulieu, VP of Canadian store operations for The North West Co.DARRYL DYCK/The Canadian Press
The pressure on consumer prices resulting from the Middle East conflict has been multiplied for communities in Canada’s North, with retailers growing concerned as a crucial sea-shipping season for goods approaches.
Grocery prices are notoriously high in northern communities, and because goods have to travel much farther to store shelves, rising fuel prices have far greater impacts on northern retailers than on their counterparts in the south. That’s especially true in markets where most of the perishable goods have to be flown in.
“Food security in the North is a real issue facing families in every one of the communities we serve, and the problem is only being exacerbated by these high immediate fuel costs,” said Mike Beaulieu, vice-president of Canadian store operations for The North West Co., which operates more than 125 Northern and Northmart stores.
Retailers in the North are seeing similar increases in inbound costs as other Canadian grocers. For example, The Globe and Mail reported last week that Maple Leaf Foods Inc. is among the suppliers informing retailers of a surcharge on its deliveries to their warehouses. The temporary charge is tied to rising transportation costs, due to disruptions in the global energy supply during the United States and Israel’s war on Iran. North West also received a notice from Maple Leaf to that effect, and is expecting similar actions from other suppliers.
But what is different from the southern grocers is the magnitude of the increase in outbound shipping costs from the retailers’ distribution centres to remote communities, Mr. Beaulieu said.
For example, a shipment to a Northern store in Nunavut might have to travel eight hours by truck from the company’s Winnipeg distribution centre to Thompson, Man., and then board a plane for the next leg of the journey.
“We have communities today where the freight cost per pound can be $6 or $7 a pound. So, a 10-pound jug of milk can cost $60 to $70 to transport,“ he said. ”So, if you think about it, even a small increase in that rate translates not into penny increases, it’s dollar-level increases on heavier items.”
On Tuesday, Prime Minister Mark Carney announced a temporary federal tax break on gasoline, diesel and aviation fuel, starting next week until Labour Day. The move is intended to “reduce operating costs for truckers and businesses in the food, agriculture, housing, construction and delivery sectors,” according to a government statement. But broader increases in fuel costs are still having an effect.
For perishable items heading north, air freight is unavoidable for many deliveries. But there is another concern facing retailers, as an important “sea lift” season approaches for shipping shelf-stable items by boat. During the warmer months, northern communities that are not serviced by winter ice roads rely on shipping routes to help restock non-perishable goods for much of the coming year.
Rising food bank visits show more Canadians are at risk of homelessness, experts say
Retailers are already placing orders for this summer’s sea lift, explained Duane Wilson, vice-president of stakeholder relations at Arctic Co-operatives Ltd., which has 32 members operating grocery stores in 33 communities in Yukon, Northwest Territories, Nunavut and northern Saskatchewan.
“It’s going to be a question of how those goods – that are bought in April and May and June and July for this season’s sea lift – how is the cost of those goods going to be impacted by the fuel situation?” Mr. Wilson said. If those costs stay high or go up significantly in the coming months, it could affect retail pricing throughout the entire year to come, he added.
Food affordability has been a persistent issue in the North. A study released by the Nunavut government last month showed that in 2025, a basket of 24 regularly-purchased items cost $198.75 on average in the territory – $66.31 more than the same items cost in Ottawa.
For example, potatoes cost $10.34 on average in Nunavut, compared to $4.98 in Ottawa; 2% milk was $7.29 on average, compared to $5.53 for the same amount in the nation’s capital; and pork chops were priced at $18.44, compared to $13.17 in Ottawa, according to the report from Nunavummit Kiglisiniartiit.
Fuel prices are a major factor in those dynamics, as is the fact that retailers face high general operating costs because of a lack of scale, as they operate in remote areas with small populations, Mr. Bealieu said.
Nutrition North Canada, a government program introduced in 2011, pays subsidies to retailers to offset some of the cost of delivering selected nutritious foods to northern communities – in the hope that the subsidy will be passed on to consumers through lower prices. But the program has been criticized for not achieving that objective.
“Longitudinal analysis of food insecurity prevalence in Nunavut suggests that the prevalence of food insecurity increased even after the program was introduced,” stated a 2021 report on food security strategies released by Inuit Tapiriit Kanatami, a national organization that represents Inuit in Canada.
As the Middle East conflict drags on, and transport carriers apply fuel surcharges, higher prices have begun to hit store shelves for a limited number of items, Mr. Beaulieu said – and more increases could come.
“All these cost inputs are still loading into the system,” he said.