By Philip Oddi, Local Journalism Initiative Reporter, Vankleek Hill Review
January 14, 2025
Prices will again rise this year as Canadians continue to struggle with significant cost increases for common goods and services. Eastern Ontario and Southwestern Québec residents can expect to shell out between $5,000 and $15,000 more than in 2024.
Numerous factors continue to play a significant role in the affordability of necessities. This includes the ongoing battle with inflation, limited housing, a weaker Canadian dollar, global political tensions, and the threat of United States President-elect Donald Trump’s 25 per cent tariff on goods imported from Canada and Mexico.
Food
The 2025 Canada Food Price Report outlined that food prices are expected to rise between three and five per cent. Meat products are set to increase the most at four to six per cent, followed by vegetables and restaurants at three to five per cent. Bakery and dairy products will see a two to four per cent increase.
On average, Canadians can expect to pay approximately $801.56 more than last year for food for a family of four. The average family of four in Canada spends approximately $16,000 a year on food alone.
Statistics Canada also reported that more than 50 per cent of Canadians have changed their spending habits to make ends meet. Furthermore, the Canadian Food Sentiment Index explained that 47.3 per cent of Canadians stated that affordability was the most important factor when purchasing food, followed by nutrition at 24.9 per cent.
Housing
The demand for housing, both home ownership and rental units, is likely to continue this year. The Canadian Real Estate Association (CREA) forecasts national home sales to climb 6.6 per cent in 2025, or approximately 500,000 units, playing into the strong demand and competition for housing in the country.
Average housing prices across Canada are hovering around $713,000; a 4.4 per cent increase from 2024.
The CREA also predicts that housing prices in both Québec and Ontario will rise significantly this year. The average home price in Québec is expected to increase to $557,595, attributed to a whopping seven per cent rise from 2024. In Ontario, the average housing price will increase to approximately $877,546, or an additional 2.4 per cent.
Utilities
The cost of heating homes, powering businesses, and filling up the gas tank are all expected to add to the cost of living in Canada. In Ontario, utility prices are predicted to increase between five and eight per cent, although the Ontario Energy Board (OEB) has yet to confirm its annual standard increase in fees.
The OEB regulates and sets electricity prices across the province after reviewing annual applications from distributors to change rates.
A 2025 OEB report stated that factors including transmission, distribution, and maintenance costs in Eastern Ontario will play a role in raising rates.
For Québécers, Hydro Québec proposed increases of three per cent for residential customers, 3.9 per cent for businesses, and 3.3 per cent for large industrial customers and will take effect on April 1, 2025, if approved. The Régie de l’énergie will confirm its rate increase decision in March at the latest.
Hydro Québec explained that the increases come as part of inflationary pressures in recent years, rising operational costs, and an overall increased demand for energy in the province.
Similarly, gasoline prices could jump between five and ten per cent in Ontario and Québec. Ontario residents will be paying approximately $1.65 per litre, up from the average of $1.50 per litre in 2024. Québec drivers will see prices rise to $1.71 per litre, up from an average of $1.55 per litre.
Ontario drivers could pay about $215 more this year in fuel costs while Québécers are likely to pay an additional $230.
Carbon Tax
The carbon tax is set to increase for Ontario residents in April this year, rising another $15 to a total of $95 per tonne. Québec residents remain unaffected due to the province having a cap-and-trade program which meets federal environmental standards.
The CBC reported that provinces affected by the increase will see a jump of 20 cents per litre for gasoline and 14 cents per litre for propane this year.
Agri-Foods Analytics Lab’s Senior Director Sylvain Charlebois at Dalhousie University explained that the upcoming carbon tax increase will also play a role in rising food costs, “The policy’s impact on food security, competitiveness, and affordability has been underestimated.”
“While retail food prices cannot be directly correlated with carbon pricing due to numerous influencing factors, wholesale food prices in Canada have surged relative to other countries. This suggests that the competitiveness of Canada’s agri-food sector has been negatively affected, partly due to the carbon tax. The long-term implications for food security and affordability are significant,” he continued.
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Approximately 90 per cent of government revenues from the carbon tax are returned to households quarterly through Canada Carbon Rebate payments, while the other 10 per cent is used toward programs aiding businesses, schools, and municipalities to reduce fossil fuel dependency.