Canada’s inflation rate tumbled to 2.8 per cent in June, reaching the country’s target range for the first time in more than two years — what Deputy Prime Minister and Finance Minister Chrystia Freeland hailed as “a milestone moment.”
So why are Canadians still feeling the pinch at their local grocery stores?
“(There’s) a combination of very many different things pretty much working collectively to push food prices higher,” Claire Fan, an economist at RBC, told CTVNews.ca in an interview.
“Everybody would love there to be a single demon we could name, but the truth is that there’s a bunch of little factors, there’s a bunch of straws building up on the camel’s back,” said Will Huggins, who teaches finance and business economics at McMaster University in Ontario.
Deputy Prime Minister Chrystia Freeland grocery shopping in Toronto on Monday April 3, 2023. THE CANADIAN PRESS/Frank Gunn
Here’s a look at what’s behind Canada’s high grocery prices and what to expect in the coming months.
With extreme weather events like droughts, wildfires and flooding becoming more frequent in Canada and around the world, as a result of climate change, Fan said farm production and supply chains are impacted, applying some pressure on overall food inflation.
Extreme weather is one of the major threats that RBC has identified for food inflation for the upcoming decade, Fan noted, because it will likely lead to “a lot more volatility and uncertainty.”
“When you have one weather event impacting one type of crop largely, you wouldn’t see persistently high food inflation,” she explained.
“But when you have the scale of these severe weather events happening frequently enough, and especially in the United States, which is our top importer, where we import most of our fruits and veggies from … and we have this happening elsewhere as well, where we import some of our other grocery products, that’s when it really becomes a problem.”
Throughout human history, the weather has “enormously affected” food production and costs, said Huggins, noting that extreme weather events “can complicate things without question” by damaging farm equipment and infrastructure, as well as creating a delay in getting materials or goods to the market, which has a direct cost as well.
However, barring “enormous climatic changes,” the economist said he doesn’t expect climate change to create “continued major pressure” on food prices in Canada and that the country could actually stand to benefit from certain climatological shifts.
“Even though there will be adjustment costs, obviously, our super cold country is about to become a little bit warmer, so it creates opportunities to some extent for us in that regard,” said Huggins.
“We will gain some, we will lose some without question, but compared to many other countries, we’re in a great position when it comes to climate change.”
GEOPOLITICAL TURMOIL
The Russia-Ukraine war is another factor that has led to higher food prices in Canada.
Russia’s invasion of Ukraine in February 2022 resulted in additional upward pressure on global food prices due to the role the two countries play in agricultural and oil production. It led to a surge in prices of wheat, fertilizer and natural gas.
And while the potential impacts of the collapse of the Black Sea grain deal have yet to be seen, Huggins said there could still be reason for concern.
Brokered by the United Nations and Turkiye in July 2022, the deal allowed Ukraine to export grain from its seaports despite the ongoing war. Russia walked out of the deal last month after saying its demands to ease sanctions on its own grain and fertilizer exports had not been met.
Workers load grain at a grain port in Izmail, Ukraine, on April 26, 2023. NATO said Wednesday July 26, 2023, it was stepping up surveillance of the Black Sea region as it condemned Russia’s exit from a landmark deal that allowed Ukrainian grain exports through the Black Sea. (AP Photo/Andrew Kravchenko, File)
The damage to Ukraine’s food growing and processing industry during the war is also going to create “major problems,” he said.
“We usually keep inventory against disruptions, but the fact is that there’s not as much coming into the back end of the warehouse anymore; certain things are actually starting to seriously get disrupted,” he said.
“The collapse of the Black Sea grain deal has the potential to create a lot of problems. The grain deal worked a little bit for a while, but we’re going to start feeling the pain that we anticipated last year.”
Fortunately, North America is “largely insulated” from these problems because it does have a lot of domestic food production, Huggins noted.
“So as much as it hurts us, we have to remember that we don’t have to make questions about feeding which kid,” he added.
A family harvesting their wheat crop near Cremona, Alta., Tuesday, Sept. 6, 2022. THE CANADIAN PRESS/Jeff McIntosh
The bottleneck for machinery used on farms is one example that has driven up prices in Canada, said Huggins, adding there is a “backlog of orders for farm machinery in Canada stretching into next year.”
“The machinery backlog is working its way out; we don’t have as many supply side problems in terms of COVID compared to say, a year or two years ago,” he said.
“So we are still experiencing some of this sort of COVID hangover in the agricultural sector.”
Huggins said farmers moving into retirement and a lack of Canadians wanting to work in the agricultural sector are going to lead to a supply issue of physical workers.
Therefore, Canada may have to invest in more machinery, which will require fewer people to do the physical labour on farms, or employ more people to work in the sector.
“The idea is to be clear eyed about what our supply side problems are in food over the next few years and to try to get ahead of it,” said Huggins.
BIG GROCERS DICTATING FOOD PRICES
Many Canadians have pointed the finger at big corporations for how expensive groceries have become over the past few years, but Huggins said the issue of high food prices is a bit more complex.
In Canada, five retailers — Loblaw, Sobeys, Metro, Walmart and Costco — control an estimated 80 per cent of the grocery market share, according to a 2021 study from the federal government.
As Huggins pointed out, these companies make up an oligopoly, which is a market dominated by a small group of suppliers, so they are able to exercise their power in the market and have “very protected profit margins.”
However, he said there hasn’t been much evidence of them abusing their power in the market to drive up food prices in the last two years.
“In the early days of the pandemic, there was some jockeying for price increases, mostly because there were big supply disruptions happening, but we haven’t seen an enormous amount of it,” he added.
“They’ve certainly been able to prevent their profits from coming down, but I haven’t seen a lot of exploitative size numbers.”
WHEN WILL FOOD PRICES GO DOWN?
Canada’s Food Price Report 2023 from the Agri-Food Analytics Lab at Dalhousie University said consumers can still expect a five to seven per cent food price increase in 2023, with the most substantial increases in vegetables, dairy and meat. The report predicts that an average family of four will spend up to $1,065 more on food compared to 2022.
Although they don’t expect food prices to decrease dramatically overnight, Fan and Huggins said they expect food inflation to slow in the coming months.
“For food inflation to ease persistently, you kind of need all these things to reverse course and work in the other direction collectively. And we have seen most of them coming down, but it really is the fact that it takes a lot,” said Fan.
“It takes all these things to start to normalize — the supply chain, which it did since late 2021, wage growth in Canada is still kind of elevated at the moment, … the impact on commodity prices from the Russian invasion to Ukraine.”
People shop for produce at the Granville Island Market in Vancouver, on Wednesday, July 20, 2022. THE CANADIAN PRESS/Darryl Dyck
Huggins shared a similar remark.
“My best assessment is that things will get a little bit better than they are based off of conditions that they are at the moment and so they’ll slow down, which will be nice, quite frankly, because there’s a lot of people who are remarkably angry about prices that have sort of risen in the last few months,” he said.
“The sticker shock has been quite painful for people, to see food prices up like 20 per cent in two years.”
WASHINGTON (AP) — An Alaska man accused of sending graphic threats to injure and kill six Supreme Court justices and some of their family members has been indicted on federal charges, authorities said Thursday.
Panos Anastasiou, 76, is accused of sending more than 465 messages through a public court website, including graphic threats of assassination and torture coupled with racist and homophobic rhetoric.
The indictment does not specify which justices Anastasiou targeted, but Attorney General Merrick Garland said he made the graphic threats as retaliation for decisions he disagreed with.
“Our democracy depends on the ability of public officials to do their jobs without fearing for their lives or the safety of their families,” he said.
Anastasiou has been indicted on 22 counts, including nine counts of making threats against a federal judge and 13 counts of making threats in interstate commerce.
He was released from detention late Thursday by a federal magistrate in Anchorage with a a list of conditions, including that he not directly or indirectly contact any of the six Supreme Court justices he allegedly threatened or any of their family members.
During the hearing that lasted more than hour, Magistrate Kyle Reardon noted some of the messages Anastasiou allegedly sent between March 2023 and mid-July 2024, including calling for the assassination of two of the Republican-appointed Supreme Court justices so the current Democratic president could appoint their successors.
Instead of toning down his rhetoric after receiving a visit from FBI agents last year, Anastasiou increased the frequency of his messages and their vitriolic language, Reardon said.
Gray-haired and shackled at the ankles above his salmon-colored plastic slippers, Anastasiou wore a yellow prison outfit with ACC printed in black on the back, the initials for the Anchorage Correctional Facility, at the hearing. Born in Greece, he moved to Anchorage 67 years ago. Reardon allowed him to contact his elected officials on other matters like global warming, but said the messages must be reviewed by his lawyers.
Defense attorney Jane Imholte noted Anastasiou is a Vietnam veteran who is undergoing treatment for throat cancer and has no financial means other than his Social Security benefits.
She told the judge that Anastaiou, who signed his own name to the emails, worried about his pets while being detained. She said he only wanted to return home to care for his dogs, Freddie, Buddy and Cutie Pie.
He faces a maximum of 10 years in prison for each count of making threats against a federal judge and up to five years for each count of making threats in interstate commerce if convicted.
Threats targeting federal judges overall have more than doubled in recent years amid a surge of similar violent messages directed at public officials around the country, the U.S. Marshals Service previously said.
In 2022, shortly after the leak of a draft opinion overturning Roe v. Wade, a man was stopped near the home of Justice Brett Kavanaugh with weapons and zip ties.
ROME (AP) — Canadian and Italian dignitaries on Thursday marked the successful recovery of a photo portrait of Winston Churchill known as “The Roaring Lion,” stolen in Canada and recovered in Italy after a two-year search by police.
At a ceremony at the Canadian Embassy in Rome, Italian carabinieri police handed over the portrait to the Canadian ambassador to Italy, Elissa Goldberg, who praised the cooperation between Italian and Canadian investigators that led to the recovery.
The 1941 portrait of the British leader taken by Ottawa photographer Yousuf Karsh is now ready for the last step of its journey home to the Fairmont Château Laurier, the hotel in Ottawa where it was stolen and will once again be displayed as a notable historic portrait.
Canadian police said the portrait was stolen from the hotel sometime between Christmas 2021 and Jan. 6, 2022, and replaced with a forgery. The swap was only uncovered months later, in August, when a hotel worker noticed the frame was not hung properly and looked different than the others.
Nicola Cassinelli, a lawyer in Genoa, Italy, purchased the portrait in May 2022 at an online Sotheby’s auction for 5,292 British pounds. He says he got a phone call from the auction house that October advising him not to sell or otherwise transfer the portrait due to an investigation into the Ottawa theft.
Cassinelli, who attended Thursday’s ceremony, said he thought he was buying a regular print and quickly agreed to send the iconic Churchill photograph home when he learned its true story.
“I immediately decided to return it to the Chateau Laurier, because I think that if Karsh donated it to the hotel, it means he really wanted it to stay there, for the particular significance this hotel had for him, and for his wife too,” Cassinelli told The Associated Press.
The famous image was taken by Karsh during Churchill’s wartime visit to the Canadian Parliament in December 1941. It helped launch Karsh’s career, who photographed some of the 20th century’s most famed icons, including Nelson Mandela, Albert Einstein and Queen Elizabeth.
Karsh and his wife Estrellita gifted an original signed print to the Fairmont Chateau Laurier in 1998. The couple had lived and operated a studio inside the hotel for nearly two decades.
Geneviève Dumas, general manager of the Fairmont Château Laurier, said on Thursday she felt immensely grateful.
“I would like to extend my deepest gratitude to everybody involved in solving this case, and ensuring the safe return of this priceless piece of history.”
Police arrested a 43-year-old man from Powassan, Ontario, in April and have charged him with stealing and trafficking the portrait. The man, whose name is protected by a publication ban, faces charges that include forgery, theft over $5,000 and trafficking in property obtained by crime exceeding $5,000.
CULIACAN, Mexico (AP) — Mexican President Andrés Manuel López Obrador blamed the United States in part on Thursday for the surge in cartel violence terrorizing the northern state of Sinaloa which has left at least 30 people dead in the past week.
Two warring factions of the Sinaloa cartel have clashed in the state capital of Culiacan in what appears to be a fight for power since two of its leaders were arrested in the United States in late July. Teams of gunmen have shot at each other and the security forces.
Meanwhile, dead bodies continued to pop up around the city. On one busy street corner, cars drove by pools of the blood leading to a body in a car mechanic shop, while heavily armed police in black masks loaded up another body stretched out on a side street of the Sinaloan city.
Asked at his morning briefing if the U.S. government was “jointly responsible” for this violence in Sinaloa, the president said, “Yes, of course … for having carried out this operation.”
The recent surge in cartel warfare had been expected after Joaquín Guzmán López, a son of former Sinaloa cartel leader Joaquín “El Chapo” Guzmán, landed near El Paso, Texas on July 25 in a small plane with Ismael “El Mayo” Zambada.
Zambada was the cartel’s elder figure and reclusive leader. After his arrest, he said in a letter circulated by his lawyer that he had been abducted by the younger Guzmán and taken to the U.S. against his will.
On Thursday afternoon, another military operation covered the north of Culiacan with military and circling helicopters.
Traffic was heavy in Culiacan and most schools were open, even though parents were still not sending their children to classes. Businesses continue to close early and few people venture out after dark. While the city has slowly reopened and soldiers patrol the streets, many families continue to hide away, with parents and teachers fearing they’ll be caught in the crossfire.
“Where is the security for our children, for ourselves too, for all citizens? It’s so dangerous here, you don’t want to go outside,” one Culiacan mother told the Associated Press.
The mother, who didn’t want to share her name out of fear of the cartels, said that while some schools have recently reopened, she hasn’t allowed her daughter to go for two weeks. She said she was scared to do so after armed men stopped a taxi they were traveling in on their way home, terrifying her child.
During his morning press briefing, López Obrador had claimed American authorities “carried out that operation” to capture Zambada and that “it was totally illegal, and agents from the Department of Justice were waiting for Mr. Mayo.”
“If we are now facing instability and clashes in Sinaloa, it is because they (the American government) made that decision,” he said.
He added that there “cannot be a cooperative relationship if they take unilateral decisions” like this. Mexican prosecutors have said they were considering bringing treason charges against those involved in the plan to nab Zambada.
He was echoed by President-elect Claudia Sheinbaum, who said later in the day that “we can never accept that there is no communication or collaboration.”
It’s the latest escalation of tensions in the U.S.-Mexico relationship. Last month, the Mexican president said he was putting relations with the U.S. and Canadian embassies “on pause” after ambassadors criticized his controversial plan to overhaul Mexico’s judiciary by requiring all judges to stand for election.
Still, the Zambada capture has fueled criticisms of López Obrador, who has throughout his administration refused to confront cartels in a strategy he refers to as “hugs not bullets.” On previous occasions, he falsely stated that cartels respect Mexican citizens and largely fight amongst themselves.
While the president, who is set to leave office at the end of the month, has promised his plan would reduce cartel violence, such clashes continue to plague Mexico. Cartels employ an increasing array of tactics, including roadside bombs or IEDs, trenches, home-made armored vehicles and bomb-dropping drones.
