Ryan Labatich of Prince George, British Columbia, is a disability recipient who has recently found it difficult to juggle his benefits to cover living expenses. He told CKPG Today that frozen meals have gone up in price by $4 in a year, leading to smaller portions for the same amount (or more), and he's had to make more frequent trips to food banks.
Labatiuk isn't alone. Recent data shows millions of people are experiencing the same thing. A shocking statistic shows that one in five Canadians were food insecure (lacking access to food or fearing they will lack access to food) in 2023. Severe food insecurity, which refers to skipping meals or going without food for days at a time, increased by 50 percent.
These are tough times.
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Well, not everyone: The Globe and Mail reported that Loblaw Companies' new CEO, Per Bank, will make $22 million for two months in 2023, including an $18 million signing-on bonus — 500 times the average annual salary in Canada.
With inequality like this, it's no wonder people are frustrated. On May 1, 2024, a Reddit group called “Loblox is out of control” called for a month-long boycott of the company and many of its stores, including Shoppers Drug Mart, No Frills, Provigo, and Maxi.
In response to the boycott, Parr Bank drily told the Globe and Mail: “If you don't like what we're offering, just shop somewhere else tomorrow.”
This is not only unrealistic, but also a classic distraction from the real problem: life in Canada is becoming increasingly unaffordable.
Why did this happen?
Loblaw president Garren Weston Jr. blamed suppliers for forcing “unfair” price increases on the company. Others, including the Conservative Party, have blamed the carbon tax for the price increases. A report by the Center for Future Studies found that the correlation between carbon prices and inflation is extremely small, at just 0.15%.
The #carbontax is not the real cause of rising food prices – we need to look deeper at systemic causes, including the impact of corporate-driven global supply chains on climate change, say Marissa Alexander and Wade Thorhaug @FoodSecureCAN.
But climate change plays a key role. For example, “just-in-time” multinational supply chains are particularly vulnerable to shocks such as extreme weather and other disruptions, as we have seen during the pandemic. Droughts, floods and other crises linked to climate change are destroying crops around the world. And because food is considered a commodity, despite being a human right, disruptions to supplies lead to investor speculation, pushing prices even higher. These costs are passed on to consumers, but have nothing to do with carbon pricing.
Blaming the carbon tax is a convenient talking point to distract Canadians from the role of corporate-driven global supply chains in climate change and the real causes of rising food prices.
When prices soar, companies take advantage: Food prices were double the overall rate of inflation, the highest in nearly 40 years, according to Statistics Canada. Meanwhile, since 2020, Canadian food retailers have nearly tripled their profit margins and doubled their profits, raking in $6 billion a year.
It's not difficult to calculate.
This is called “greedflation,” where companies use inflation to drive prices up even further.
Food retailers also use sneaky tactics like shrinkflation (selling less of a product at the same price) and skimflation (substituting cheaper ingredients) in the hopes that consumers won't notice, but often they do it overtly, by charging exorbitant prices for basic goods.
Meanwhile, the top three food retailers in Canada (Loblaw, Sobeys, and Metro) account for 57% of food sales, with Loblaw alone accounting for 27% in 2022. Costco and Walmart make up the rest, accounting for 11% and 7.5%, respectively.
And with 90 percent of Canadians living within 10 kilometers of a Loblaw store, many simply don't have a choice. No, Per Bank, we can't “choose to shop elsewhere tomorrow.”
Even the federal government acknowledges that there is a food retail monopoly in Canada. No one should be allowed to make exorbitant profits off a basic need like food when many people have nowhere else to shop.
Real action is needed
Where is the leadership? Instead of instituting voluntary codes of conduct and attracting more multinational companies to Canada's grocery industry, the government should consider strengthening laws against cartels and monopolies and making shrinkflation and skimpflation illegal.
They could also impose maximum prices on basic food items. This is less extreme: it is a common practice in countries such as India and was recommended by some of the most respected economists after World War II. Governments could also impose “temporary taxes” to curb greed flation.
The bottom line is that serious action is needed to address food insecurity. Income must match the cost of living. People like Ryan Labatiuk desperately need adequate income, provided through policies like enhanced disability and child support, higher minimum wages, and minimum income floors. The evidence is clear that these are the most efficient and cheapest ways to eradicate food insecurity.
Why stop there?
The problem with our nation's grocery industry isn't just a few bad items, it's entire baskets that are chalky and out of date.
Many Canadians want a different food system. In a 2023 survey, Statistics Canada found that 86% of Canadian consumers want locally grown food. A 2020 McGill University survey found that 89% of respondents believe that “well-developed” local and regional food systems are more trustworthy. To meet this overwhelming desire to build a truly resilient food system, governments need to support holistic approaches that include food co-operatives, public markets, Indigenous food cultures, and publicly-run non-profit grocery stores.
What is being done?
The federal government has not been completely idle either. Last year, in the House of Commons Food Prices Inquiry Committee, MPs grilled CEOs of major retailers, including Galen Weston Jr., who drafted the aforementioned voluntary, unenforceable Grocery Stores Code of Conduct, but their response has fallen woefully short. Voluntary codes are non-binding and therefore ineffective, and while subsidizing multinational supermarkets may put a small dent in prices, they also reinforce a corporate food system that is already working against consumers and farmers.
Meanwhile, the demands of the Loblaw boycott organizers include a 15% price cut, a price freeze until 2024, and price caps on essential items. While it may not seriously damage Loblaw's profits, it has certainly tarnished the company's public image. A recent poll showed that 70% of respondents were aware of the boycott, and 60% supported it. The boycott organizers have also launched a website, altgrocery.ca, to provide information on smaller grocers that can be shopped as alternatives to the Big Three.
The boycott has focused the country's attention on the perils of price gouging and corporate profiteering, but the onus for change lies not with consumers but with governments that ultimately have the means to curb corporate greed.
Curbing corporate profiteering, shrinking monopolies, building a holistic approach to food supply and supporting living incomes are the real change we need.
On May 30th at 1pm ET, Food Secure Canada will be hosting a webinar called “Greedflation: The role of big business in rising food prices and what to do about it,” which you can register for here.
Marissa Alexander and Wade Thorhaug are co-executive directors at Food Secure Canada. Marissa has spent most of her career exploring the intersection of food security, equity and social justice. Wade Thorhaug has extensive experience advocating for affordability in northern Canadian communities, local Indigenous food systems and reform of northern Canadian nutrition ministries.
