With Canadians facing record-high rates of inflation, politicians across the country are promising a wide range of policies they say would bring down the cost of food.
Grocery prices were up nearly 10 per cent last month compared with April of 2021, according to Statistics Canada. And Dalhousie University’s Canada Food Price report, which recorded a 4-per-cent increase over the course of last year, predicted another 5-per-cent to 7-per-cent increase for 2022.
As such, two words have become ubiquitous in the various campaign speeches and political debates of the past few months: “Food prices.”
In Ontario, where a provincial election is set to take place this week, Liberal Leader Steven Del Duca bemoaned “skyrocketing” prices, while NDP Leader Andrea Horwath vowed to target “colluding” grocery retailers. And, in Ottawa, several of the Tory leadership hopefuls have made the issue a central part of their campaigns.
This despite the fact, experts say, that governments largely have their hands tied when it comes to the problem of food prices.
“Food prices are up for a variety of reasons,” said Michael von Massow, a food economics professor at the University of Guelph.
He listed the many global factors behind the current inflation crisis: Russia’s invasion of Ukraine, which cut off access to one of the world’s most significant agricultural (and energy-producing) regions; lingering pandemic supply chain disruptions, including labour shortages and transportation blockages; and major weather events, including low water levels in California, and last year’s drought in the Prairies.
When it comes to those factors, he said, “there’s not a lot governments can do.”
Sophia Murphy, executive director of the Institute for Agriculture and Trade Policy, echoed this. Ms. Murphy, who is Canadian, lives and works in the United States. She pointed to record-high food inflation there, too.
“They are facing food inflation, too, and for similar reason. [Americans] are also importing a lot of food, they’re still caught up in these global food systems,” she notes, adding that the prices are affected as well by the cost of labour, the cost of rent and various other overheads for businesses.
“Canada is not alone.”
On the policy ideas brought forward so far, experts have had mixed reviews.
In Ontario, Mr. Del Duca has vowed to remove the province’s portion of the harmonized sales tax on prepared foods at the grocery store. While helpful, the promise – of an 8-per-cent reduction on items under $20 – is far too limited in scope, and “not going to provide broad-based relief,” Prof. von Massow said.
Another idea that has received support in the Ontario race (at least from the NDP, the Green Party and the Liberals) is the development of a code of conduct to govern the relationship between grocery stores and their suppliers. This would help to mitigate the power imbalance between giant grocers and food producers, and build transparency into negotiations.
“It makes sure there’s no bullying going on, essentially,” said Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University.
In a statement, Retail Council of Canada spokesperson Michelle Wasylyshen called grocery “a very lean, low-margin” business. Despite the volatile global situation, she said, “grocers across Canada continue to do everything in their power to ensure Canadians have access to food, choice, and competitive pricing.”
A working group brought together by the federal and provincial governments – which includes some of the country’s largest food companies – has already been working since 2020 to develop such a code.
But whether this could help with prices is subject to debate. In the U.K., where they’ve had a similar code of conduct since 2001, food inflation has remained, on average, lower than in Canada, according to Prof. Charlebois. He believes such a code could help stabilize prices here, too.
But Prof. von Massow pointed to Australia, which also has a code of conduct, and where he said prices have continued to climb.
Prof. von Massow had a similarly bleak view on other potential policy options, including the idea of a price ceiling for food, or implementing protective export measures. The former could make it unprofitable for retailers to stock certain food items, leading to potential shortages, he said. And limiting exports could flood the domestic market with supply, causing food prices to drop – but at the expense of farmers.
Instead of trying to bring down prices, he and others said, a more effective method for targeting affordability might be to tackle the issue of income.
“I would say the objective isn’t that we have to keep food as cheap as possible,” said Ms. Murphy – especially, she said, because “cheap” food has historically been associated with environmentally unsustainable practices, and low-paying labour.
Instead, she said she’d like to see “more money put in the hands of lower-income people such that food is not something they’re short of.”
Food Secure Canada chair Melana Roberts echoed this. “The reality is, although food prices have increased significantly, the challenge is really around people not having adequate income to respond to those challenges,” she said.
Effective policies would focus on liveable wages, pharmacare, affordable housing, and targeting the systemic inequality that results in Black, Indigenous and racialized communities facing disproportionate levels of food insecurity, she said.
“The piece we’re missing here – that, all of a sudden, this is an issue – is that, in fact this has been an issue for quite some time,” she said.
But now that prices are affecting a wider swath of the voting public, “we see the politicization of the issue.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.