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Federal Government ‘Is the Consumer’s Worst Enemy’ as Food Prices Rise in Canada [Op-Ed]

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It wasn’t a good week if you’re a consumer on a tight budget and that group includes most of us. Consumers are under attack right now, literally.

We’ve just learned that Canada’s food inflation rate was at a record 9.7%, in May. Everyone is noticing higher food prices, and no section of the grocery store is immune to what is going on right now. What is hitting Canada is a global phenomenon and food prices are not going to come down anytime soon. The world will see a shortfall in commodity production this fall which could push prices even higher worldwide. Supply chain issues, coupled with a new inflationary cycle triggered by the Ukrainian conflict are impacting the food industry’s ability to fill shelves. The shift is so incredibly sharp, many vendors can’t agree with grocers on pricing, pushing them to put their business on hold, as we saw with Frito Lay and Loblaws earlier this year. There are many stop-sells out there.

The macroeconomic picture is one thing. But some policies in Canada are just making things worse. The Canadian Dairy Commission (CDC), a crown corporation, believed a second milk price increase was necessary for dairy farmers. Earlier this week, we learned that milk prices on the farm will rise again by 2.5%, after a record increase of 8.4% in February. The increase this winter was so severe that most dairy alternatives are now either priced the same as milk or lower. This time, Dairy Farmers of Canada, one of the most powerful lobby groups in the country, requested another mid-year increase due to “exceptional circumstances,” without telling us where the data is coming from.

To add insult to injury, the Commission’s decision to raise milk prices was made by a federal public body operating for several months without its full complement on the board. The board only has two members – two – and both are in dairy farming. Conflicts of interest in the dairy sector are rampant at the Commission, in politics or even in academia. Many scholars in Canadian universities are not just researchers but essentially advocates for their funding agencies representing the dairy industry. The power and influence of dairy boards are beyond belief. If only Canadians realized. The fact that both Dairy Farmers of Canada and the Canadian Dairy Commission are one is deeply disturbing. Canadian consumers need to be heard.

More Canadians would empathize with dairy farmers who face higher costs of production, if only the Commission would share more data. The lack of disclosure is very much about asking Canadians to support an inefficient dairy sector, more than properly compensating farmers. But now, by fall, this newly announced increase will price the dairy section at the grocery store out of the market and we stand to lose many more dairy farms. 

Ottawa is also coming forward with new labelling rules for saturated fats, sodium, and sugar. Health Canada’s front-of-package-labelling was long overdue as it will make our food healthier. But the new policy is also aiming at a key single-ingredient product many Canadians enjoy: ground meat. Ground beef and pork are some of the most affordable sources of animal protein we have right now. Based on what is being presented, only extra lean ground meats are exempt from the new labelling. If this goes ahead as planned, grocers will cease to carry more affordable ground meat, making the meat counter even more expensive. It’s just ridiculous.

Ottawa is the consumer’s worse enemy right now. It needs to think through some of these ill-timed policies which will make food even more expensive. Minister Freeland’s so-called anti-inflation plan presented last week won’t do much for Canadians at the grocery store. Many were hoping for tax breaks, anything to ease our fiscal burden, as many countries have done so in recent months. But Freeland opted to make a ‘microwave’ announcement, basically ‘reheating’ programs that are already in place, just like clapping with one hand, if you will.

Recently, the NATO Secretary General claimed the war in Ukraine could last years. However regrettable this assessment may be, this is what Ottawa needs to focus on for the foreseeable future. Farmers need help with inputs to prepare for fall, winter, and next spring. Ottawa should also become one of the world’s most influential trade advocates and prevent other countries from hoarding food. More nationalistic protectionism can only make things worse.  

Article Author

Sylvain Charlebois
Sylvain Charlebois
Dr. Sylvain Charlebois is Senior Director of the Agri-Foods Analytics Lab at Dalhousie University in Halifax. Also at Dalhousie, he is Professor in food distribution and policy in the Faculty of Agriculture. His current research interest lies in the broad area of food distribution, security and safety, and has published four books and many peer-reviewed journal articles in several publications. His research has been featured in a number of newspapers, including The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star.

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