Ground coffee prices in Canada have surged by 19% since the start of 2025, according to Statistics Canada—making it one of the fastest-rising food items on grocery store shelves this year. Many consumers may attribute the spike to global market volatility, especially after coffee futures soared to a record high of over USD $4.40 per pound in February. But that explanation no longer holds. Futures have since dropped by more than 30%, yet retail prices remain stubbornly high. So, what’s driving this divergence?
The answer lies, in part, in trade policy.
Since March 3, Canadian importers have been paying an additional 25% tariff on imported coffee. This counter-tariff, introduced as part of Ottawa’s retaliatory measures during a trade dispute, directly affects a product Canada doesn’t even grow. Unlike dairy or poultry, coffee has no domestic farming sector to protect. These tariffs are not shielding Canadian farmers—they are punishing Canadian consumers and businesses.
To grasp the scale of this impact, consider the size of the industry. According to Introspective Market Research, retail coffee sales in Canada total over CAD $27 billion annually and are projected to grow steadily over the next decade. Meanwhile, coffee shops and quick-service restaurants (QSRs)—from Tim Hortons to independent cafés—generate an additional CAD $6.4 billion per year. Tim Hortons alone sells over 5 million cups of coffee per day. This is not a fringe sector; it’s a critical part of both our economy and our culture.
Ironically, the United States—our supposed trade adversary in this case—doesn’t grow coffee either. Yet both countries are now entangled in a tariff tug-of-war that serves no practical purpose. The same logic applies to tea, which is also subject to retaliatory measures.
These tariffs were introduced under the Trudeau government in a broader geopolitical strategy that often felt more performative than pragmatic. Ottawa’s elbows-up approach to trade—seemingly crafted on a whiteboard without regard for economic fallout—may have resonated politically, but it ignored basic economic principles. Consumers were never part of the equation.
Prime Minister Mark Carney appears to be taking a more measured approach. Tariffs on U.S. alcohol and citrus products remain, but those can be sourced from other markets with relatively little disruption. Coffee and tea, however, are another matter entirely. There are no alternative domestic sources. The cost of these tariffs is being passed directly to roasters, grocers, restaurants—and ultimately, to the consumer.
Moreover, the volatility of American trade policy under Donald Trump continues to inject uncertainty into food markets. Tariffs come and go with the political winds, forcing companies to engage in “buffer pricing”—a form of risk management where businesses price in uncertainty to protect their margins. It’s effectively a tax on unpredictability, and it’s now embedded in the price Canadians pay at the till.
And while consumers might not feel the same pinch at their local café—where coffee is a smaller fraction of the total cost of a cup—the grocery aisle tells a different story. That’s where the full weight of these policies lands.
Whether a new trade agreement can be reached by the July 21 deadline remains uncertain. But what should be obvious is this: both Canada and the U.S. should leave the agri-food sector—especially essential imports like coffee and tea—out of their geopolitical skirmishes.
Canada has a vibrant coffee ecosystem, built on roasting, innovation, and consumer culture—not cultivation. There is no economic rationale for taxing it. Canadians shouldn’t be paying more for their morning brew just to send a symbolic message to Washington.
It’s time Ottawa led by example and scrapped these pointless tariffs.
My cousin sylvain is right. However, take for example Folgers. A 900g can used to cost $8.99 at my local Maxi (Loblaws) but now costs $28.99
That’s not a 23% increase. That’s a 300% increase. That’s corporate greed of 267% on top of the 23% increase.
Why would attribute every price increase to corporate greed when it is obvious that it is due to Canadian tariffs?
I couldn’t tell you other than the math indicates Corporate greed. In the early 70’s, fuel was extremely inexpensive, sugar was dirt cheap and suddenly managed by greed to increase prices to what they are today. We sit back without answers but suffer the manipulation of greed in the handling of so many products. Trump is a pefect example of unconscionable business management or basic corrupt egotistic maniac.
There is a simple way to determine if high prices are a result of increased prices of raw materials, increased cost of production, increased transportation costs, taxes, or tariffs. Do the price increases match the total of those, or are they significantly higher.
In this case, the increase, based on the above, should be no more than 30%. That means the other 270% is pure greed.
Well written commentary.
Canadians should be celebrating high tariffs and resulting high costs on products coming through the US!!! Are you not getting the results that you wanted with the “elbows up” approach in US trade negotiations for those that elected the Liberal gov’t?…
Sorry Rick
Thats not what we seen in the past. During Covid manufactures could not get parts from offshore countries (shipping ports were down) .
Companies raised the prices of the widgets that they could produce at a lower production rate.
If you chart US corporate earnings and inflation rate during Covid you will see that both moved upward, Indicating that profits were strong even without huge sales..
Once they were able to increase production they kept the prices inflated (increased their profits more). CEO’s will never decrease there profits doesn’t work for their bonus.
When tariffs are implemented like on our coffee (mine are roasted are processed in canada bypassing US) But they raised their prices to capture the extra profit.
Story is incorrect. There is no tariff on coffee that is not shipped through the USA. If companies buy direct from growers and not an american middle man then no tariff. Im sure the writer knew this but chooses to blame the Canadian government for purely political reasons.
Don’t buy and the price will come down. They tried the same stunt with peanut butter. People quit buying it and the price came down. Better for your health to drink less coffee anyways.
The increase in coffee prices is a small step in what we can expect and is purposefully done to create the illusion of a food shortage. Tariff measures are conditioning us to focus on survival by distracting us with bureaucratic BS.
Why do we have a tariff on Coffee from Italy? So stupid! We are not buying it from the US.
Liberals have again reached into Canadians pockets through these absurd retaliatory tariffs that do not cause any harm to Trump or America, only to Canadians. This is Carney’s cash grab to counter the revenue losses from removing some of the carbon taxes. The fact the gov is not paying carbon tax revenues, or the new tariff revenues, back to Canadians is abhorrent. Canadians must demand an accounting of government revenues and ensure the Liberals are not feeding a slush fund of unappropriated dollars.
Everybody want more money… affecting the end products. So consumers pay more. The government cuts taxes somewhere, raises taxes on something else.
Not just coffee but Jam too! I use to buy 3 jars of PC grape jam for just under $10.00 ( around $3.30 per jar ) for years before 2022, then it started to rise 2 jars for just under $10.00, know it is over $7.00 a jar. It’s more than doubled the price! We grow concord grapes in Canada.
The author really should have explained how, if at all, tariffs on US imports would affect the price of a product not grown there at all (except perhaps Hawaii?) Coffee generally comes from South and Central America, and so would not be affected by tariffs on US imports. Unless the beans are being roasted in the US and imported here? But you mention that roasting is part of our coffee culture?
I mean there could be a way for this article to be true but you’re not selling it.
It would appear that you have been sleeping for the last couple years. Given the threats and actions of the US government, Canada’s response should not be limited only to those products that are produced domestically. The normal use of tariffs does not apply when a trade partner initiates a trade war.
Oh, and coffee and tea are not essential and the US is not the only place they are produced. Canadian distributers and retail sellers should be seeking supply directly from the producing countries and forget about the middleman thug. My guess, however, is that you don’t really care about coffee and are just looking for reasons to criticize the current government.