Let’s face it, living your day-to-day life as a Canadian doesn’t come cheap. It seems that wherever we look, the rising cost of living is inescapable. Items and services are becoming increasingly expensive and show no signs of slowing down. As we settle into the new year, many Canadians are wondering just how much the cost of things will rise. Between a shocking housing market and issues with our neighbours south, what rising costs can Canadians expect in 2026?
Rising Cost of Living in 2026: What Can Canadians Expect?
From tariff-related job losses and trade uncertainty to a housing market stuck in neutral, 2025 wasn’t the best year financially for Canadians. However, many are stepping into 2026 optimistic that things may slow down. Though the economic landscape remains quite uncertain, one thing is clear: these rising costs are expected to continue to climb. This makes it more difficult for Canadians everywhere to budget for expenses such as groceries, insurance, and mortgage payments.
From monthly bills to a simple trip to the grocery store, many aspects of one’s daily life will be affected. Luckily, you can plan by staying informed about which areas of your life are likely to see rising costs. Let’s take a look at some places where Canadians can expect rising costs in 2026.
1. Rising Costs, Groceries and Dining Out
The price of groceries has climbed steadily in the last couple of years. Unfortunately, Canadians should brace for even higher food costs in 2026, as grocery and restaurant prices continue to rise.
Roslyn Kunin, an independent consulting economist and principal of Roslyn Kunin and Associates, Inc., spoke to Rates.ca on the topic.
“Food inflation is probably the biggest component,” Kunin stated.
However, it’s not just about rising costs. Unfortunately, many Canadian households are already living paycheque to paycheque. In fact, cities such as Toronto are reporting record numbers of people, even those with jobs, turning to food banks to put food on the table. According to Food Banks Canada, March 2025 saw roughly 2.2 million visits to food banks in Canada, the highest number in history. To add to this, Food bank usage has doubled since March 2019 and is 5.2% higher than in 2024.
The latest Canada Food Price Report states that food prices are expected to rise 4% to 6% this year. In 2026, an average family of four is projected to spend roughly $15,572 on food, approximately $1000 more than last year for the same amount of groceries.
Dining out is also expected to become more expensive. The report states that when it comes to rising costs, restaurant prices are projected to climb 4%-6%. This is a reflection of higher food costs and staffing challenges. This leaves many business owners with what Kunin calls a “horrible paradox”: inflation coinciding with a slow economy and difficulty filling jobs in the service industry.
Kunin states that now is the time to start planning for the rising cost of living.
“Read menus from right to left,” she says. “Look at the prices of everything.”
2. Mortgage Renewals
When it comes to rising costs in 2026, Canada’s housing market is expected to post modest gains for this year. Royal LePage’s Market Survey Forecast predicts prices will remain essentially flat, rising just 1% year over year to an average of $823,016 country-wide by the fourth quarter of 2026. As sidelined buyers re-enter the market, sales activity is also expected to pick up.
That said, even those who aren’t in the market can expect to face some financial strain. Mortgage renewals will be rough, especially for those with five-year fixed-rate mortgages, the most popular type of mortgage in Canada. By the end of 2026, an estimated 60% of all outstanding mortgages will have been renewed, according to a report from the Bank of Canada.
A large number of these borrowers locked in at historically low rates during the pandemic, but are expected to be hit the hardest when they renew at today’s higher rates.
3. Home and Auto Insurance
Unfortunately, your home and auto insurance are another area where rising costs will become apparent. According to Statistics Canada, October 2025 saw notable hikes of 6.8% in home insurance and 7.3% in auto insurance. This trend is expected to continue into 2026.
“Premiums are always going up. The question is how much they are going up,” stated Daniel Ivans, an insurance expert at Rates.ca.
There are several reasons these hikes are occurring. For example, climate-related disasters such as floods, wildfires and severe storms have become more frequent and costly. Other pressures include tariffs, inflation and the impact of the geopolitical landscape. Ivan recommends Canadians do everything they can to keep insurance costs manageable.
It is recommended Canadian’s take steps such as reinforcing roofs and clearing gutters to reduce flood and storm damage. When it comes to auto insurance, maintain safe driving habits and consider winter tires to lower your chance of an accident. To add to this, drivers should always be asking their insurance broker how they can save money on their premiums.
4. Transportation
Whether you drive or take public transportation, getting around is another rising cost for 2026.
Public transit fares are going up and don’t show any signs of slowing down. In Ontario, OC Transpo fares in Ottawa rose by 10 cents at the start of 2026. MiWay, Mississauga’s transportation service, also saw an across-the-board increase in fares.
PRESTO, the method of paying for transportation across the GTA, also saw a price hike. Fares are now $3.50, youth fares are now $2.90, and cash fares are $4.50.
To add to this, higher car insurance premiums and fluctuating fuel prices are more apparent than ever. Many Canadians are now returning to the office under newly implemented return-to-office mandates so that transportation costs will rise for many commuters this year.
5. Labour and Services
Experts state that the labour market is contributing to what they call “wage inflation.”
“We have serious labour shortages at all levels of our labour market,” explains Kunin. “So that is going to push up wage inflation, which increases the costs for employers, and they will pass that on to their products and services.”
That said, the Bank of Canada sees signs of improvement. The central bank states expect solid job gains in the fall. On top of this, a drop in the unemployment rate to 6.5% come November. This is evidence that pressure on employers will ease compared to earlier last year.
Unfortunately, this change in rising costs isn’t coming anytime soon. In the third quarter of 2025, Canada recorded 492,500 job vacancies, according to Statistics Canada. This is listed as the 13th straight quarterly decline since the pandemic peak of 986,000. However, the labour market remains tighter than before the COVID-19 pandemic, so employers are still competing for talent.
“Finding people to fill minimum-wage jobs, whether they’re in coffee shops or things like that, is very, very difficult,” Kunin says.
Among the most brutal hits are fields such as construction, health care and hospitality. This results in higher prices for things like getting your car repaired or hiring a tradesperson.
Rising Costs For Canadians: Conclusion
Although overwhelming, Canadians can navigate the financial burdens of the rising cost of living by planning and staying informed. It is recommended that all Canadians seek out savings where possible, adjust their spending habits, and take extra care with their finances in 2026. Remember, if you are in the market for auto or car insurance and want to save, don’t hesitate to reach out to us at isure!
Drive with Confidence
Request your free car insurance quote now and get the coverage you deserve.
If you're thinking about buying a new car, you should Read more
When purchasing a new vehicle, deciding between new and used Read more
Car insurance in Ontario remains among the most expensive in Read more
