Why Canadian grocery shoppers have been seeing discounts, despite tariffs

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Days into the rollout of U.S. tariffs on Canadian imports and Canada’s counter-tariffs, some Canadian shoppers were seeing grocery prices drop or hold steady in the immediate term, despite warnings of impending increases.

U.S. President Donald Trump granted another one-month reprieve on sweeping 25-per-cent tariffs on Canadian and Mexican imports Thursday afternoon, nearly three days after they took effect. While the tariffs had been widely expected to lead to immediate spikes in grocery prices, many Canadian shoppers have reported steep discounts, especially on American products.

“I’ve seen a few posts already this morning from Americans shocked to find out that prices on things had been raised already – I have yet to see one post from a Canadian that has noticed a difference,” wrote Katherine Arnett, a resident of Abbotsford, B.C., on a Threads post Wednesday, racking up close to a hundred comments and thousands of views after she made a post about it on TikTok.

“Has anyone seen immediate price changes that impact them?” she asked. The answers mostly melded into a resounding “no” in the comments section.

“Many people are seeing produce go bad on the shelves,” Ms. Arnett said in an interview. “They’re not seeing an increase to their bill, with some even saying it went down.”

In her own experience, the few American-made grocery items she buys went on sale in the days after tariffs came into effect. Bottles of American mayonnaise were discounted nearly $5. Her American vegan sausages, usually priced at $11.99, were on sale for $4 on a recent shopping trip to Save-On-Foods.

“Usually, when they are marked down they’re completely sold out,” Ms. Arnett said. “This time they were fully stocked … people checked the ‘product of USA’ label and put them back down.”

A push to “buy Canadian,” combined with low consumer confidence – it dropped to its lowest level in more than a year in February, according to the Conference Board of Canada – mean some prices will drop before they rise, despite the added challenges for businesses on both sides of the border.

In the short term, it’s not a surprise that the price of many Canadian products remains unchanged, while American products boast steep discounts, said François Neville, a professor of strategic management at McMaster University’s DeGroote School of Business.

While the full impact of tariffs certainly hasn’t hit, “we cannot dismiss the possibility that the ‘Buy Canadian’ movement, which has been gaining traction and growing for over a month now, has reduced the demand for certain American products,” he said.

Retailers don’t want to be hit with the costs of unsold inventory: “They have no choice but to discount their current stocks of American products in order to sell,” said Joseph Steinberg, a University of Toronto economics professor.

Grocers may also be strategically encouraging Canadians to shift toward domestic products by offering temporary discounts on domestic items as well: “Get people used to buying different Canadian products, give them a taste of it,” Mr. Steinberg said. “Once those consumption shifts kind of locked in, you might anticipate those sales to go away.”

While Ms. Arnett has seen many discounts for American products, she tries to buy mostly Canadian, and her grocery bill has noticeably shrunk in that category as well.

Macroeconomic forces may also push down prices. As American demand falls for Canadian products that become more expensive once President Trump’s tariffs are applied, producers of those goods may respond by lowering prices, including in the domestic Canadian market, Mr. Steinberg said.

In the U.S., the effects of tariffs may be hitting differently: “On the American front, it is entirely possible, given the sophistication of North American and global supply chains – and if we consider Donald’s tariffs on China in addition to Canada and Mexico – that American consumers are already seeing the ‘true’ effect of tariffs,” Mr. Neville said early Thursday morning.

Still, any price drops Canadians see after the introduction of tariffs are likely short-lived: “It is too early to be able to say anything definitive,” said Mr. Steinberg, adding that it will take months for impacts to be measured.

Meanwhile, some experts still predict Canadians will pay more for key staples within weeks of tariffs officially coming into effect, as businesses deplete their inventory of U.S. products and order more.

“The three I would put at the top of my list would be produce, because we import so much of it from the states in the off-season … also seafood and a lot of shellfish that’s coming in from the states and also beef and pork,” said Gary Sands, vice-president of government relations at Canadian Federation of Independent Grocers.

He added that retailers will likely keep leaner inventories in response to price hikes and shifting consumer behaviour, meaning fewer product options on shelves.