Innovation, Science and Industry Minister François-Philippe Champagne listens to a reporter's question on Parliament Hill in Ottawa on Monday.Sean Kilpatrick/The Canadian Press
Innovation Minister François-Philippe Champagne said Tuesday that the federal government sees stabilizing food prices as bringing their cost “in line” with general inflation, but he did not provide a timeline to achieve it.
Mr. Champagne made the comment on Parliament Hill one day after he met with Canada’s biggest grocery retailers in Ottawa. He also pledged to “go after” big food manufacturers, and to have a meeting with them similar to the discussion he had with grocery chief executive officers.
In response to multiple questions on what the government meant by its intention to “stabilize” prices, Mr. Champagne said: “You want prices to be in line with what you see in terms of general inflation.”
The rate at which food prices are increasing outpaces overall inflation – something experts say is unmanageable. On Tuesday, Statistics Canada reported that annual consumer price index inflation was 4 per cent in August, while annual grocery price inflation was 6.9 per cent. However, the data show food inflation is already coming down, and is now at its lowest rate since January, 2022. Food inflation was in the double digits for much of last fall and winter.
Cost-of-living issues, including the price of food, have been a major focus as MPs return to the House of Commons after a summer break. Prime Minister Justin Trudeau’s Liberals have faced pressure from opposition parties to do more to address grocery prices, which pollsters say weigh heavily on many Canadians.
But food inflation was one of the bright spots in Tuesday’s data. The rate was down from 8.5 per cent in July, and a recent high of above 11 per cent a few months ago.
The Prime Minister said his government is working to ensure grocery store chains “work hard to stabilize and even bring down prices.”
Mr. Champagne did not specify when prices would stabilize when he was asked by reporters for a timeline. The country’s largest grocers need to submit their plans and come up with “meaningful action” by Thanksgiving, he said.
He added that there is movement not only in Canada, but also in Europe, to have large manufacturers be part of the solution, and that international co-operation may be required. He said Monday’s grocery store meeting was a “first step.”
“The second step is to go after the large manufacturers,” Mr. Champagne said.
Economists already expect food inflation to fall in the coming months. Canadian food manufacturers are raising their prices at a slower pace, and U.S. food inflation, which tends to lead Canada’s, has dropped considerably in recent months.
Michelle Wasylyshen, a spokesperson for the Retail Council of Canada, said after the Monday meeting with CEOs that there was “alignment that any discussions on food prices must include all members of the complex supply chain.”
She said 70 per cent to 80 per cent of grocery prices are in place before food arrives at grocers.
Prior to the discussion between grocery CEOs and federal ministers, the council pointed to reports published over the past year that show that food prices are driven by “increased vendor costs from food manufacturers and producers,” and are affected by global factors, including supply chain challenges, the cost of fuel, the war in Ukraine and climate events.
Mr. Champagne said it is now up to grocery companies to “compete amongst each other” because they are vying for customers.
The NDP say a lack of competition between big retailers is a problem. In a June Competition Bureau report, the industry watchdog said the sector has become even more concentrated in recent years and “it has become more difficult than ever” for new businesses to enter the field and compete.
The bureau found that while Russia’s invasion of Ukraine and supply chain disruptions have contributed to recent price increases, the trend of “Canada’s largest grocers increasing the amount they make on food sales” predates those factors.
Amongst its recommendations, the report said that federal, provincial and territorial support for the Canadian grocery industry should encourage the growth of independent grocers and their entry into the market.
Sylvain Charlebois, the director of the Agri-Food Analytics Lab at Dalhousie University, was part of Monday’s meeting in Ottawa with grocery executives, known as the “Big Five.”
The food inflation rate is “violently unmanageable for consumers” right now, Prof. Charlebois told The Globe and Mail. He said the ideal food inflation rate is anywhere from 1.5 per cent to 2.5 per cent. That range allows for innovation, while also ensuring food safety and affordability, he said.
Prof. Charlebois said he told the meeting that some consumer issues that could be addressed include volume discounting, which can involve asking people to buy three loaves of bread for the price of two.
“It is seen by many Canadians as discriminatory for people who live alone or seniors,” he said, adding these individuals do not eat as much as families. “That’s something that really resonates a lot with Canadians.”
On Monday, NDP Leader Jagmeet Singh called Mr. Champagne’s comments “ridiculous,” and said the goal should be to lower grocery prices, not just stabilize them.
Mr. Singh said food inflation has outpaced general inflation for 20 months. The NDP has proposed a law, which Mr. Singh wants passed before Christmas, to strengthen the ability of the Competition Bureau to take on corporations over issues such as “price gouging.”