Questioning why grocery prices are so high

Rising grocery bills

Why does Canada have such runaway food inflation when we grow so much food?

It’s a common question. There are a couple of main reasons, such as rising fuel costs increase farmers' production costs and the cost of transportation. Because we import many different foods, exchange rates also matter and a weaker Canadian dollar means imported goods cost more for consumers.

Sylvain Charlebois, a food researcher from Dalhousie University, has said a lack of competition in the grocery space also contributes to higher food costs.

"All these discount stores are connected to just a handful of grocers controlling the Canadian market. They are essentially co-operative arms of the mainstream supermarkets, rather than competitors,” says Charlebois.

Speaking of mainstream supermarkets, at the Standing Committee on Agriculture and Agri-Food (AGRI) last week, parliamentarians questioned the CEOs of some of Canada's largest grocery store chains about food inflation.

At one point, Galen Weston, CEO of Canadian grocery store giant Loblaws, was asked, how much profit is too much profit?.

"We're a big company, and the numbers are very large, but it still translates right down to the bottom line at $1 [of profit] per $25 of groceries,” he replied.

There is no question companies such as Loblaws have always been profitable and continue to see increased revenue as inflation and population rise. In February 2023, Loblaws reported a fourth quarter profit of $529 million. That fourth-quarter profit was roughly 10% higher than last year's fourth quarter.

While on the topic of Loblaws, in 2019 the the government gave this extremely profitable company $12 million to purchase new, more energy-efficient, refrigerators.

I will continue to follow this subject closely and look forward to reading the final report on this crucial topic from the AGRI committee.

The government recently announced Volkswagen would build a "gigafactory" to produce electric vehicle batteries in St. Thomas, Ontario.

While undeniably goods news on many levels, it raises the critical question of how much this new Volkswagen battery factory will cost Canadian taxpayers.

The answer to that is we don't know. The government has refused to disclose how much taxpayers must pay Volkswagen to build this factory. Volkswagen, like Loblaws, is also a highly profitable company.

The same can be said for tire manufacturer Michelin. This week, Prime Minister Justin Trudeau announced Michelin would receive $44.3 million in federal funding to modernize a tire manufacturing plant in Bridgewater, Nova Scotia.

Selective taxpayer-financed subsidies to wealthy corporations are not a new topic here in Canada, provincially or federally. What is new is the amounts are becoming staggeringly high. This most recent announcement regarding the Volkswagen gigafactory sets a new standard for secrecy.

My question this week:

Are you concerned by the lack of disclosure about taxpayer funds by the government with corporate subsidies like this?

I can be reached at [email protected] or call toll-free 1-800-665-8711.

Dan Albas is the Conservative MPfor Central Okanagan-Similkameen-Nicola

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Dan Albas is the Member of Parliament for the riding of Central Okanagan-Similkameen-Nicola and the co-chair of the Standing Joint Committee for the Scrutiny of Regulations.

Before entering public life, Dan was the owner of Kick City Martial Arts, responsible for training hundreds of men, women and youth to bring out their best.

Dan  is consistently recognized as one of Canada’s top 10 most active Members of Parliament on Twitter (@danalbas) and also continues to write a weekly column published in many local newspapers and on this website.

Dan welcomes comments, questions and concerns from citizens and is often available to speak to groups and organizations on matters of federal concern. 

He can be reached at [email protected] or call toll free at 1-800-665-8711.

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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