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Interest rate hikes have yet to bring down food prices. Here are the tools governments could try – CBC.ca
Your grocery bill is much higher than it used to be.
The latest inflation numbers from Statistics Canada show that while overall inflation fell to 5.9 per cent in January, food prices are up 10.4 per cent compared to last year. That number is up slightly from December’s 10.1 per cent.
“Since the onset of the COVID-19 pandemic, many factors have impacted prices at the grocery store, such as supply chain disruptions, labour shortages, changes in consumer purchasing patterns, poor weather in some growing regions, tariffs, higher input costs and higher wages,” StatsCan said in a Nov. 2022 report about the rising cost of food.
The report adds that Russia’s invasion of Ukraine has also played a part because of the importance of both countries in food production.
The issue has proven serious enough to convince a parliamentary committee to launch a study of higher food prices and how government might address them. But experts tell CBC News governments don’t have many good options to bring food prices down — although they could offer relief for the poor and hungry.
Going after the grocers
While StatsCan has pointed to a wide range of factors leading to higher food prices, NDP Leader Jagmeet Singh has blamed privately-owned corporations. Singh has labelled the rising prices “greedflation.”
Singh has called for a new tax on grocery chain profits to address the issue. He said revenue from that tax could be used to help those struggling with their bills.
“Fifteen super-profitable industries — including the grocery sector — are driving inflation in Canada,” Singh said in a Dec. 2022 news release.
“Prime Minister Justin Trudeau should implement a windfall tax to make these big grocery chains pay what they owe.”
Canadian grocery giant Loblaw reported $529 million in fourth quarter profits earlier this week, beating analysts’ expectations.
In testimony before the House of Commons agriculture and agrifood committee — the committee studying food price inflation — Jodat Hussein, Loblaw’s senior vice-president of retail finance, said most of the company’s profits are not coming from high margins on food. He said the company’s food suppliers increased their prices, which Loblaw then had to pass on to customers.
“We are dependent on what suppliers charge us when we set our retail prices,” Hussein told the committee in his December 2022 testimony.
“Fundamentally, grocery prices are up because the cost of what grocers buy from suppliers have gone up.”
Hussein said the company’s profits were coming from other areas Loblaw does business in, such as pharmaceuticals.
Mike von Massow, a food economist at the University of Guelph, said the committee’s questioning of grocery executives amounted to “political theatre.”
“I think there’s almost no evidence that the grocers are taking excessive margins right now,” he said. “It’s easy to blame the grocers because that’s where we’re feeling the pinch.”
Von Massow said sales of non-food items and a higher volume of grocery sales — driven in part by people eating out less — largely account for the higher profits.
But Valerie Tarasuk, a professor in the University of Toronto’s department of nutritional science, said the committee is doing important work by questioning the executives. She said there should be more government studies of how the Canadian grocery industry sets its prices.
“I think there needs to be more because I think it’s a very real question … There’s a lot of mystery in terms of how big food retailers operate,” she said.
“As we continue, month after month after month, to see these unprecedented levels of food price inflation, it begs the question of how come that’s happening, and what does it take to get it under control?”
The government could introduce price controls on certain food products to address food inflation. The move would effectively place a limit on how expensive those items could get.
Von Massow said such a policy could lead to empty store shelves.
“So if you say to a business … that there are two products that you can sell, one of which is price-controlled, the other one which you can make your normal margin on, you’re going to see them focus on the product that is that is more likely to give them a return,” he said.
Rick Barichello, a professor in the University of British Columbia’s food and resource economics program, agreed that price freezes aren’t a good solution.
“They don’t really solve the problem of how do you get more supply on the shelves. In fact, they make that worse,” he said.
Another option is to place export controls on the food Canada produces, barring it from leaving the country and possibly pushing down domestic prices.
Von Massow said such an approach could be more trouble than it’s worth, given Canada’s international reputation as a reliable trading partner. Export bans could damage that reputation, he said.
Yet another option is for the federal government to bring in food subsidies. The government currently does this in Canada’s North through its Nutrition North Canada programs.
But Barichello said a subsidy on food products could be an expense government can’t afford right now.
“It has to be paid for by the government,” he said. “With government budgets being relatively constrained, then that’s a problem.”
The supply management question
The federal government could also dismantle or change Canada’s supply management system. The system allows the Canadian dairy, poultry and egg industries to limit supply of those foodstuffs, sets minimum prices and provides those sectors with protection from foreign competition.
Critics of supply management have said it artificially inflates food prices. Its supporters say it’s necessary to financially support Canadian agriculture.
Tarasuk said it’s important to note that, unlike other products on grocery store shelves, the prices of supply managed items are at least partially under the federal government’s control right now.
“I think it’s worth the federal government thinking through what kind of leverage it has there,” Tarasuk said.
“Because to see the price of commodities like milk rising in the way that it has, from a nutrition perspective, that’s very concerning.”
But von Massow said abolishing supply management would be a long and complicated affair — and would be unlikely to bring down prices significantly. He cited research he and colleagues have done on the subject.
“[It’s] always worth having a conversation about supply management, but there’s not a switch we can click and change that,” he said.
“I think people would be surprised at how how small the the benefit of getting rid of it might be.”
Tarasuk and von Massow agreed that governments’ best short-term option would be to provide targeted financial support to those affected most by food inflation, such as the poor and those on fixed incomes.
“There are a lot of people who are the working poor, people who are on assistance, people who are on fixed pensions who are struggling and already aren’t eating out and already are buying as cheaply as they can,” von Massow said.
“Perhaps there would be some justification to say rather than providing a universal subsidy for everybody, we provide some some direct payments to those people who need it the most.”
Long-term solutions
Governments may have to concede that there’s little they can do over the short term to address rising food prices.
But Barichello said the federal government can take steps to improve the resiliency and productivity of Canadian food production and supply chains, which could lower prices over the long run. He said those efforts could include loosening border restrictions for goods and farm workers, investing in research and innovation to improve food processing and supply chains and promoting more competition in the food industry.
“Even if governments started being more active on this now, you wouldn’t get any clear benefits on inflation for probably five years or more,” Barichello said.
“So those are long-run things that we can be doing, and should be doing, but in the short run there’s very little we can do.”
Von Massow said there’s another issue the government could address to bring down food prices in the longer term.
“Perhaps the best thing for us to do in the long run is to take more concrete action on climate change,” von Massow said.
“That’s a big part of what’s driving these extreme weather events and what’s driving some of these price increases.”
Toddlers ran through aisles filled with snacks and candies. Adults slumped in chairs. Multiple cellphones were plugged into a single wall socket. Backpacks and suitcases were scattered among the two rows of tables in a corner of this small-town bus stop and gas station.
After they were turned away at the Canadian border and spent three days in detention, the roughly 15 asylum seekers at the Mountain Mart No. 109 in the town of Plattsburgh, N.Y., south of Montreal, on Tuesday afternoon were trying to figure out what to do.
They had tried to get into the country at the popular unofficial crossing on Roxham Road in the hours after a new border deal between Canada and the U.S. came into effect late last week.
Alan Rivas, a Peruvian man who was hoping to reunite with his girlfriend who’s been living in Montreal for two years, said he’d spent $4,000 on making it this far.
“I’m trying to think about what to do now.”
A sense of solidarity emerged as people recognized each other from various parts of their time stuck on the border, along with a sense of resignation and deep disappointment.
“Disappointing and heartbreaking,” said a man from Central Africa, whom CBC agreed not to identify because he fears it could affect his asylum claim process in the United States.
He had shared a cab ride with a man from Chad, who fled to the U.S. after the government of his country led a violent crackdown on opponents last fall.
“It’s unfair. We are not home and we suffer. We’re looking for a better life,” the man from Central Africa said.
The man from Chad looked up and said: “No, looking for protection is not having a better life. I had a life.”
The Chadian was not let into Canada despite his wife and child being Canadian citizens, he said. Having a family member with legal status in Canada is one of the few exemptions to the strict new rules that make it nearly impossible to claim asylum at the Canada-U.S. border. His wife and child fled to a nearby country after the crackdown in Chad, but he explained that his wife’s family is still in Canada.
Other exemptions include being an unaccompanied minor and having a work permit or other official document allowing a person to be in Canada.
“They made me sign a paper without giving me time to read it. They didn’t explain anything,” said the man, whom CBC also agreed not to name because he fears for his family’s safety in an African country near Chad.
The Canada-U.S. deal was implemented swiftly before the weekend, leaving local governments and organizations little time to respond and turned-away asylum seekers struggling to find food, shelter and rides.
The man from Central Africa was trying to round up enough money to pay for a $200 bus ticket to Houston, where he would stay with a friend. The man from Chad gave him the $40 he was missing.
The Central African said he had spent his savings on coming to Canada. His hope was to live here until obtaining residency, and then arranging for his family to come to meet him.
“I know a guy in Houston who hasn’t seen his family in 10 years. He still doesn’t have status,” he said.
A young Haitian mother cradled her baby as her toddler made friends with another child. Her family had paid an acquaintance in New Jersey $300 per adult to get to Roxham Road before midnight Friday, but the driver got lost and they arrived at 12:03 a.m.
Steven, a 24-year-old Venezuelan who attempted to cross into Canada at Roxham early Saturday morning, mingled with the people he’d met in detention. Then he tried to call his mom.
“She doesn’t know,” said Steven, who didn’t want his last name used in this story because of fears it could affect his U.S. asylum claim. “I know I seem happy but I am sad.”
Carmen Salazar, 45, also from Venezuela, watched him from another table.
“It’s hard, really hard,” she said.
The group of asylum seekers at the Mountain Mart had found comfort in finding each other. They all boarded a bus leaving Plattsburgh at 7:45 p.m. Tuesday. Its main destination was New York City.
Others haven’t been so lucky finding a way out of Plattsburgh.
The night before, a woman who was seen at Roxham Road early Saturday, sat alone at the bus stop crying.
3 nights in a motel and no plan
Across the street, in a small motel, a 34-year-old Haitian man and his pregnant girlfriend had one night left out of three that had been paid for by local emergency housing services. But they had no plan and only $41 to their name.
“We’re here. I don’t know what’s going to happen, but we’re going to look for ways to be able to live. What I’m looking for — nothing more — is a place to rest and a place to work. Nothing else,” said the man, sitting in the lobby of the motel. CBC is not naming him because of fears it could affect his American asylum claim.
The couple had intended to stay in the U.S. after crossing the Mexican border, but the woman became pregnant and developed constant pains. In the U.S., they had to stay with separate family members far from each other and the man worried about his wife and being able to afford medical bills, so they decided to try to get to Canada, having heard it was easier to find work and that health-care was more affordable, he said.
In an interview with Radio-Canada Monday, a man from another Central African country struggled to hold back tears.
He said the confusion after being taken in at Roxham Road by RCMP officers was hurtful because it wasn’t clear if he’d be accepted into Canada or not. When they called his name, he was filled with hope, only to be told he was being sent to U.S. Border Patrol.
“I don’t know, I don’t know, I don’t know where to go. I don’t have anyone who will take me in,” he said.
The response from U.S. Border Patrol appears to be uneven. Some asylum seekers CBC spoke with had taxis called for them, having to pay another $70 to get to the Mountain Mart. One woman was found on the side of the service road by the border and given a ride by a social science researcher and documentary photographer met by CBC.
The man interviewed by Radio-Canada was part of a group who were given a ride to the gas station by a Greyhound bus heading back to New York from Montreal.
CBC reached out to U.S. Customs and Border Protection on Monday, asking what happens to asylum seekers rejected by Canada, but did not receive a response.
Although in favour of some kind of change to reduce traffic at Roxham Road, one local official wants help from the federal governments to deal with the fallout.
Michael Cashman, supervisor for the Town of Plattsburgh, says Canada and the U.S. to come up with a response to help asylum seekers get to where they want to go in the U.S.
He isn’t against the move to restrict access to Canada at Roxham Road.
“There had to be a change,” he said, noting residents had been asking for one, but compared the way it was done to turning off a light switch before entering a room: “You’re going to bump into some furniture.”
The area is rural and has its share of struggles with transportation and housing, Cashman said.
“There isn’t a robust infrastructure to be able to take on this humanitarian crisis as it develops.”
On Monday and Tuesday, buses coming from New York carried only a few asylum seekers hoping to cross the border. Most knew about the new rules, believing their cases would fit some of the exemptions. Others still did not know.
By Tuesday, cab drivers were no longer ferrying people to Roxham Road, taking them to the official border crossing at Champlain, N.Y., and Lacolle, Que., instead.
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Canada’s economy might be recovering from the pandemic, but many Canadians are still struggling with the cost of living, thanks, in part, to the impacts of global inflation.
To help offset rising living expenses, the Government of Canada has built some benefit increases and fee reductions into its 2023 budget. Among these measures is a new grocery rebate in the form of a one-time payment for middle- and low-income Canadians that is designed to offset food inflation.
“Our more vulnerable friends and neighbours are still suffering from higher prices,” Minister of Finance Chrystia Freeland said after tabling the budget on March 28. “That’s why our budget contains targeted, temporary relief from the effects of inflation for those who need it.”
Here’s what we know about the rebate.
HOW WILL THE GROCERY REBATE WORK?
According to the budget, the benefit will be rolled out through the GST/HST rebate system, once a bill implementing it passes in the House of Commons. This move essentially re-ups and re-brands the recent GST rebate boost.
While no specific date for the payments has been announced, upcoming GST/HST credit payment dates for 2023 include April 5, July 5 and Oct. 5. Because the rebate is automatically rolled into the GST/HST credit, eligible Canadians shouldn’t need to do anything besides file their tax return in order to receive the payment.
WHO GETS THE GROCERY REBATE IN CANADA?
The Grocery Rebate is earmarked for 11 million low- to modest-income Canadians. It will provide eligible couples with two children with up to $467, single Canadians without children with up to $234 and seniors with $225 on average.
The budget doesn’t pinpoint any eligibility brackets based on income, but outlines hypothetical scenarios where a couple earning $38,000 per year and an individual earning $32,000 both received the maximum rebate.
Since the rebate will be rolled into the GST/HST credit, the eligibility criteria for that credit might offer some insight into who will be eligible for the maximum Grocery Rebate amounts.
The GST benefit is reduced as income rises. It’s phased out entirely once income reaches just over $49,000 for a single person, $50,000 for a couple without children and more than $60,000 for a couple with four children.
HOW MUCH DOES IT COST TO FEED A FAMILY OF 4 IN CANADA?
The average family of four will spend up to $16,288.41 on food this year, according to the latest Canada’s Food Price Report, published by the Agri-Food Analytics Lab at Dalhousie University.
“For a family of four, their food bill will increase by about $1,100 this year,” the lab’s director, Sylvain Charlebois, told CTV News Calgary on Tuesday.
The cost of staple grocery items based on March 2023 prices listed on Fortinos.ca. (CTV’s Your Morning)
The most substantial increases will be in the cost of vegetables, dairy and meat, according to the report. Food inflation has softened somewhat in recent weeks, Charlebois said, but even with that softening and the extra cash in their pockets from the grocery rebate, Canadians aren’t out of the woods yet.
“We are expecting things to be a little more manageable for households probably in the summer, (but) not before then,” he said. “We are expecting to finish the year with a food inflation rate of about four to five per cent. It’s still high, but it’s better than 10 per cent.”
HOW CAN I SAVE MONEY ON GROCERIES IN CANADA?
As finance commentator Pattie Lovett-Reid pointed out during an interview on CTV’s Your Morning on Tuesday, a maximum grocery rebate of $467 for a family of four doesn’t even offset half of the additional $1,100 families can expect to spend on groceries in 2023.
“It’s a small amount that will help a family of four,” she said. “But, is it enough? No, it’s not, we’ve got to get inflation down.”
With their spending power significantly weakened, a growing number of consumers are looking for new ways to save on their grocery bills.
According to a March 22 report published by the Agri-Food Analytics Lab, in partnership with Angus Reid, some of the methods Canadians are using to save money at the grocery store include reading weekly flyers, using coupons, taking advantage of volume discounting and using food rescue apps such as Too Good To Go and the Second Harvest Food Rescue App.
– With files from Senior Digital Parliamentary Reporter Rachel Aiello
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D HOWELL
Drops
“MAN DEM”
By way of Spanish Town
Toronto, On – International selling Pop/ Reggae artist, D Howell drops his new single, “Man Dem “available now, on all major music platforms. The release featuring Ding Dong & Nicky B follows a long list of hit music from the talented pop-reggae artist. Howell’s single, ’Wine Bounce” with Jamaican born reggae artist Dominant ft. Nick B was picked up by Universal Music, solidifying Howell’s career with the likes of Sean Paul, Elephant Man and Sarani. The artist contributes his Jamaican roots to the success of his brand. Keeping his early beginnings in Spanish Town, Jamacia close to his heart, “Man Dem” (meaning multiple men) was created. The single is inspired by the multicultural people of Toronto with special consideration to the immigrants from Jamaica. Their specific style of talking is heard on every street corner in Toronto. The new generation have made it their own, a way of bringing and keeping their heritage alive. Howell’s music speaks to that, making the heritage & the music one. The highly anticipated release of “Man Dem” will take you home to Spanish Town.
DJ, producer and artist, D Howell knows what it takes to make hit singles. It’s not just talent that makes a single a hit, but the chemistry & respect for your fellow artists. Knowing what works and what doesn’t between artists is key. Mixing different instruments, sounds and styles to create his always evolving pop reggae sound has made Howell an in-demand producer and artist. From the super hit ‘Jumanji’ to a lineup of multi-selling collaborations featuring his unique reggae influence, Howell makes it work. Collaborations with Karl Wolf (“Fall in Love”), Danny Fernandes (“Party”) and the man himself, Sean Paul (“Time to Party”). Howell writes for and brings together a wide range of artists from different genres into his studio to create a combination of sounds that works on the music charts today. D Howell brings the love, nurture & music of his early beginnings to his seat at the industry table. “Man Dem” takes you on that journey…
Listen to Man Dem”
https://open.spotify.com/album/7nW1yToUEz2I2OUdZ9jVso?si=DxAcnCwbTNOwkQvwhaFvUA
Follow D Howell:
https://soundcloud.com/realdhowell/nicky-b-man-dem-clean
https://www.instagram.com/realdhowell/
https://www.youtube.com/@diamienrecords
https://twitter.com/realdhowell
Media Inquiries:
Sasha Stoltz Publicity:
Sasha Stoltz | Sasha@sashastoltzpublicity.com | 416.579.4804
https://www.sashastoltzpublicity.com
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