David Clinton

Dr. Sylvain Charlebois, a visiting scholar at McGill University and perhaps better known as the Food Professor, has lamented a strange and growing trend among Canadians. It seems that large numbers of especially younger people would prefer a world where grocery chains and food producers operated as non-profits and, ideally, were owned by governments.

Sure, some of them have probably heard stories about the empty shelves and rationing in Soviet-era food stores. But that’s just because “real” communism has never been tried.

In a slightly different context, University of Toronto Professor Joseph Heath recently responded to an adjacent (and popular) belief that there’s no reason we can’t grow all our food in publicly-owned farms right on our city streets and parks:

“Unfortunately, they do have answers, and anyone who stops to think for a minute will know what they are. It’s not difficult to calculate the amount of agricultural land that is required to support the population of a large urban area (such as Tokyo, where Saitō lives). All of the farms in Japan combined produce only enough food to sustain 38% of the Japanese population. This is all so obvious that it feels stupid even to be pointing it out.”

Sure, food prices have been rising. Here’s a screenshot from Statistics Canada’s Consumer Price Index price trends page. As you can see, the 12-month percentage change of the food component of the CPI is currently at 3.4 percent. That’s kind of inseparable from inflation.

But it’s just possible that there’s more going on here than greedy corporate price gouging.

It should be obvious that grocery retailers are subject to volatile supply chain costs. According to Statistics Canada, as of June 2025, for example, the price of “livestock and animal products” had increased by 130 percent over their 2007 prices. And “crops” saw a 67 percent increase over that same period. Grocers also have to lay out for higher packaging material costs that include an extra 35 percent (since 2021) for “foam products for packaging” and 78 percent more for “paperboard containers”.

In the years since 2012, farmers themselves had to deal with 49 percent growth in “commercial seed and plant” prices, 46 percent increases in the cost of production insurance, and a near-tripling of the cost of live cattle.

So should we conclude that Big Grocery is basically an industry whose profits are held to a barely sustainable minimum by macro economic events far beyond their control? Well that’s pretty much what the Retail Council of Canada (RCC) claims. Back in 2023, Competition Bureau Canada published a lengthy response from the RCC to the consultation on the Market study of retail grocery.

The piece made a compelling argument that food sales deliver razor-thin profit margins which are balanced by the sale of more lucrative non-food products like cosmetics.

However, things may not be quite as simple as the RCC presents them. For instance:

• While it’s true that the large number of supermarket chains in Canada suggests there’s little concentration in the sector, the fact is that most independents buy their stock as wholesale from the largest companies.
• The report pointed to Costco and Walmart as proof that new competitors can easily enter the market, but those decades-old well-financed expansions prove little about the way the modern market works. And online grocery shopping in Canada is still far from established.
• Consolidated reporting methods would make it hard to substantiate some of the report’s claims of ultra-thin profit margins on food.
• The fact that grocers are passing on costs selectively through promotional strategies, private-label pricing, and shrinkflation adjustments suggests that they retain at least some control over their supplier costs.
• The claim that Canada’s food price inflation is more or less the same as in other peer countries was true in 2022. But we’ve since seen higher inflation here than, for instance, in the U.S.

Nevertheless, there’s vanishingly little evidence to support claims of outright price gouging. Rising supply chain costs are real and even high-end estimates of Loblaw, Metro, and Sobeys net profit margins are in the two to five percent range. That’s hardly robber baron territory.

What probably is happening is some opportunistic margin-taking through various selective pricing strategies. And at least some price collusion has been confirmed.

How much might such measures have cost the average Canadian family? A reasonable estimate places the figure at between $150 and $350 a year. That’s real money, but it’s hardly enough to justify gutting the entire free market in favor of some suicidal system of central planning and control.

From the Fraser Institute

By Fred McMahon

While the Canada-U.S. trade negotiations continue, with much speculation about potential deals, one thing is certain: Canada’s agricultural marketing boards remain a barrier to success.

A White House official said as much: “[Canada] has repeatedly demonstrated a lack of seriousness in trade discussions as it relates to removing trade barriers.” That’s a clear reference to agricultural marketing boards, our Iron Curtain trade barrier. International trade lawyer Lawrence L. Herman aptly described boards as “Canada’s Soviet-style supply management system.”

Agricultural marketing boards are as Canadian as maple syrup, but more so. Maple syrup is international. Supply management is uniquely Canadian. No other country has such a system. And for good reason. It’s odious policy, favouring an affluent few, burdening the poorest, and creating needless friction with allies and trading partners.

President Trump’s distaste for the boards is well known. But, it’s not just Donald. The European Union, the United Kingdom, the World Trade Organization (effectively all of Canada’s trading partners)—and, wait for it, the majority Canadian farmers—all oppose the boards.

Canada claims to support free trade, except when we don’t. Canada seals off a large portion of its agricultural market with the system, but gets irritable when another country closes part of its market—say for autos, aluminum or steel.

Marketing boards employ a variety of tools, including quotas and tariffs, and a large bureaucracy to block international and interprovincial trade and deprive Canadians of choice in dairy, eggs and poultry. Without competition, productivity stagnates and prices soar.

The cost of living in the United States is 8.4 per cent higher than in the Canada, rent 14.9 per cent higher. But, thanks to our marketing boards, milk is twice as expensive—C$3.07 a litre on average in Canada versus C$1.47 in the United States. The most recent estimate of the cost of the system revealed, using 2015 data, that the average Canadian household pays an extra $300 to $433 annually because of marketing boards, hitting hard poorer Canadians, who spend a higher portion of their income on food than affluent Canadians.

Martha Hall Findlay, former Liberal MP and leadership contender, now director of the University of Calgary’s School of Public Policy, wrote with outrage, “The average Canadian dairy farm’s net worth is almost $4 million…. This archaic [supply-management] system forces a single mother on welfare to pay hundreds of dollars more per year than she needs to, just so we can continue to enrich a small number of cartel millionaires… members of the oft-vilified ‘one-percent’.”

Don’t expect meaningful negotiations. Canada’s Parliament, endorsed by the Senate, recently unanimously passed Bill C-202, which prohibits the foreign affairs minister from negotiating increased quotas or reduced tariffs for imports of supply-managed products.

The dairy industry, particularly in Quebec, is the big player. To protect this mighty lobby, Bloc Québécois Leader Yves-François Blanchet proposed C-202, backed by all parties, fearing a Quebec backlash if they stood up for Canadians, including for Quebecers who lack the privilege of owning one of province’s 4,200 multi-million-dollar dairy farms of Canada’s 9,400.

The Canadian Agri-Food Trade Alliance (CAFTA), Grain Growers of Canada (GGC), and other farm groups oppose C-202. Scott Hepworth, acting chair of GGC, said, “Parliament chose to prioritize one group of farmers over another. As a grain producer, I know firsthand how important international trade is to my family’s livelihood. Without reliable access to global markets, farmers like me are left behind.”

Canada has 65,000 grain farms and 53,000 pig and beef farms, compared to 14,700 supply-managed farms, less than one per cent of the total of 190,000 farms in Canada.

Marketing boards benefit a tiny minority of Canadian farmers while damaging the majority and increasing prices for all Canadians. One benefit of Donald Trump’s trade war against Canada has been the resolve on all levels of government to reduce home-grown obstacles to growth, including iron trade curtains between provinces.

The spineless response to C-202 reveals the weakness of that resolve and politician’s willingness to bend the knee to rich lobbies, toss other farmers under the bus, and carelessly pile on costs for Canadians, particularly low-income ones.

Fred McMahon

Senior Fellow, Dr. Michael A. Walker Chair in Economic Freedom