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Why all political parties agree that the grocer code of conduct is necessary

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The grocer code of conduct promises greater transparency and stability in the Canadian food market

Sylvain Charlebois, Troy Media

In an effort to tackle high food prices, the Parliamentary Committee on Agriculture in Ottawa recently sent a letter to both Loblaw and Walmart, urging both retailers to voluntarily comply with the proposed grocer’s code of conduct or risk facing legislative action.

This move signals Canada’s potential shift towards a mandatory, industry-led code overseen by the government, a significant step that promises benefits for Canadians, though its importance may not yet be widely recognized.

The remarkable consensus across political parties highlights the grocery code of conduct as a key instrument for gradually stabilizing food prices. This code seeks to furnish food companies with a safe harbour for dispute resolution through a designated secretariat, offering an alternative to the current norm where companies have no recourse but to endure unfavourable conditions.

The code aims not to control prices but to guarantee equitable contract practices for all parties, including startups, farmers, and small family-run food processors, thus providing suppliers with essential financial stability. The industry, plagued by unilateral decisions and broken agreements by grocers, stands to gain from the equitable playing field this code promises.

The code’s introduction might seem paradoxical to staunch free-market advocates and conservatives who typically view government intervention with skepticism. Companies like Walmart and Loblaw, having achieved their market dominance through strategic decisions, are often celebrated for their success. However, the issue at hand transcends their accomplishments.

The food industry is distinct for two primary reasons:

            •           It operates on razor-thin margins across the entire supply chain, necessitating meticulous planning and coordination.

            •           The power dynamics are skewed, with suppliers needing to pay substantial fees to grocers for the privilege of doing business with them.

This situation has granted grocers considerable gatekeeping authority, allowing them to shape the market to their advantage. It doesn’t work that way in other sectors.

This dominance not only stifles competition but has also marginalized independent grocers, particularly affecting Canadians in smaller towns by limiting their access to nearby stores. The upward trend in grocery fees (payments made by suppliers to many retailers in exchange for stocking products on shelves), primarily driven by Loblaw and Walmart, exacerbates the challenges for suppliers and independent grocers alike.

It’s crucial to understand that the code’s goal is not to reduce prices – such expectations would be fanciful – but to mitigate price volatility, a pervasive issue that overshadows the more fundamental problem of food inflation. While higher prices are concerning, it’s important to recognize food inflation as a normal economic phenomenon, essential for businesses to thrive and ensure the safety of food products. Achieving a food inflation rate of 1.5 percent to 2.5 percent – a range last seen in the summer of 2021 and anticipated to return by year’s end according to Canada’s Food Price Report forecast – is ideal.

Price volatility, exacerbated by increased grocery fees and the manipulation of prices around blackout periods, remains a significant concern if the aim is to reduce price volatility. Although the code of conduct may not eliminate these practices, it is poised to significantly decrease their impact on retail food prices.

Moreover, the code of conduct promises greater transparency within the food chain. An annual report by the secretariat detailing compliant companies and highlighting those failing to adhere introduces an unprecedented level of accountability in Canada’s food industry.

While the grocer’s code of conduct may initially seem counterintuitive to some, its benefits for consumers, suppliers, and the overall market cannot be overstated. It represents a step towards a more equitable and stable food industry in Canada.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Not all freezes on food prices benefit consumers

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Some could be deemed anti-competitive and might result in food price collusion among rivals

Sylvain Charlebois, Troy Media

Consumers often assume that price freezes are always in their favour. However, it’s important to recognize that not all price freezes are equal, especially when it comes to products further up the supply chain. Every year, between Nov. 1 and Feb. 1, grocers request suppliers not to increase prices for undisclosed reasons.

This unspoken agreement between grocers and suppliers, which likely started decades ago, may not ultimately benefit consumers. In October, as suppliers renegotiate contracts with grocers, prices are often adjusted, and many increase just before the three-month price freeze.

Now that the “blackout” period has ended, we should anticipate food prices rising again, as even Metro CEO Eric Laflèche himself warned consumers during his recent earnings call. Price hikes are likely to affect non-perishable products, primarily those in the centre of the store.

While high food inflation is certainly a concern for consumers, price volatility can be even more detrimental, and that’s exactly what these blackout periods bring to the market. Sudden spikes in food prices can surprise consumers and force them to temporarily abandon certain food categories, often including healthier options, leading to nutritional compromises. Once consumers perceive a food category as financially out of reach, it takes them a while to return.

In his efforts to stabilize food prices in Canada, françois-Philippe Champagne, the Minister of Innovation and Technology, should be aware of these blackout periods and target them as market-distorting mechanisms that ultimately harm consumers.

According to Statistics Canada, over the last 15 years, some of the highest month-to-month food price increases have occurred either in November or February. The highest month-to-month food price increase was in November 2008 at 2.5 percent, followed by February 2011 at 2.2 percent. Statistics Canada also recorded above-average month-to-month food price increases in November 2016 (1.6 percent) and November 2022 (1.7 percent). Despite the seasonality factor, blackout periods don’t shield budget-strapped consumers, as evidenced by increases in January 2016, January 2022, January 2020, and December 2018.

Coincidentally, these three months, January, February, and November, have experienced the highest month-to-month food price increases in the last 30 years, except for May. But we’ll get to that later.

The excuse often cited is that grocers don’t have time to deal with price changes during the busy holiday season. However, this argument may have been valid years ago when grocers manually updated prices on every item. Today, many prices are digital and displayed electronically, raising questions about the need for such blackout periods.

More fundamentally, since these blackout periods are industry-wide, one could argue that this practice could be considered anti-competitive and may lead to price co-ordination among competitors. Although we still don’t know the precise reasons behind past price-fixing scandals, blackout periods may indicate a broader culture of price-fixing in the industry, to the detriment of consumers.

This issue goes beyond blackout periods. Recently, Loblaw informed its suppliers that their fees will increase once again. In the agri-food sector, suppliers must pay grocers to do business with them. Distribution centre charges will rise from 1.17 percent to 1.22 percent, and direct-to-store delivery (DSD) charges will increase from 0.36 percent to 0.38 percent. While these may seem like minor changes to most of us, they can amount to millions of dollars for suppliers.

These yearly unilateral increases, imposed by Loblaw, will take effect on Apr. 28 without any dialogue or negotiation. While major multinationals like PepsiCo, Mondelez, Lactalis, Kraft-Heinz, and Kellogg may adjust their prices to offset higher fees from grocers, many smaller Canadian food manufacturers may struggle financially and even exit the industry. This results in higher prices and reduced competition, which is counterproductive for consumers.

Once again, by coincidence, May, the one month when we typically anticipate price hikes due to conflicts in the food supply chain, experienced the second-highest month-to-month average increase in the last 30 years.

To address these issues, we need more discipline and oversight, including the implementation of a mandatory code of conduct to ensure fair practices in the industry.

It’s time to put an end to this insanity.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Let’s pause before we OK the killing of the mentally ill

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Expanding MAiD to the mentally ill takes on a slippery slope of politicians using it as a way to cut healthcare costs

Doug Firby, Troy Media

A close friend of mine died a few days ago. Her painful end came three years after her husband died of complications related to COVID.

Losing him drove Sheila into a pit of despair so deep she couldn’t crawl out. While I and one of her sisters tried to lift her up with empathy and words of encouragement from afar – we both live in the West, and Sheila was in Ontario – she descended into the darkest of places. Lonely days of endless grieving were blotted out with alcohol and self-starvation.

By the time she was admitted to hospital with a ruptured gall bladder, her 80-pound frame was too fragile to survive the trauma of emergency surgery. She got her heart-breaking wish to be reunited with her life partner.

Sheila’s ordeal and her steadfast decision to slowly take her own life made me reflect on the fraught debate over when, or perhaps even whether, to expand the mandate of MAiD, or medical assistance in dying. A simpler and older term for this is euthanasia. The ethical issues in this debate are agonizing and complex, and will profoundly affect the national consensus on when it is right to help someone bring about their own end.

For those reasons, I welcome the federal government’s decision to pause for three years the planned access to MAiD for individuals whose sole underlying condition is mental illness. The expansion was to come into effect in March, but most provinces, much of the medical community, and even the Canadian Mental Health Association warned they simply were not ready to implement this radical shift in health care.

The extension, the second one so far, will allow for a committee of MPs and senators to reconvene in two years to assess the state of readiness for the extension of MAiD. And there is good reason for the pause. At the moment, there are no finalized national standards to determine whether a mentally ill person might qualify for MAiD, and no transparent review process is in place.

Some critics, including Dying with Dignity Canada and three senators, see a further delay as an issue that affects constitutional rights. Senator Pamela Wallin said it appears the government no longer subscribes to “the notion of choice and how important it is.”

But put yourself in the position of the medical experts who will be asked to decide whether someone is too mentally ill to continue living. It is clearly at odds with their bio-ethical training to “first, do no harm.”

Decisions involving people who have incurable physical diseases that are certain to bring about painful deaths, such as cancer, are relatively straightforward. It is indeed compassionate to allow those individuals to make a peaceful exit while they are of sound mind and can surround themselves with loved ones.

MAiD essentially improved on a practice that has been going on for many years. Physicians have for decades administered a powerful brew of painkillers to terminal patients in their final hours that they know will bring about their deaths. It is known as the Brompton cocktail, and it has been allowed because doctors are technically just treating the pain symptoms.

The big difference between the cocktail treatment and MAiD is that, invariably, the Brompton cocktail is employed only when death is imminent.

Decisions involving people with incurable and severe mental illness are more difficult to assess. A physician must somehow find objective evidence that the patient’s illness will produce “intolerable suffering,” and that there are no viable treatment options to relieve that suffering. As many critics of expanded MAiD point out, would such suffering be inevitable if the treatment of mental illness was better funded?

There’s another important consideration, however. As anyone who has tried to support a suicidal person knows, a person who is set on ending their own life will find a way to make it happen. Often, as with Sheila, it will be slow and painful. Canadian author Miriam Toews brilliantly described the futility of trying to save a loved one bent on her own destruction in her novel All My Puny Sorrows.

I frankly don’t know whether Sheila could have been saved with better mental health support. What I do know is that her friends had not given up on hoping she could find a reason to live right up until the moment her heart stopped. For that reason, I would never want to see someone in circumstances like hers have access to MAiD.

Of course, there is another worry about state-sanctioned euthanasia that has always made me uneasy. And it is that it can become a cost-saving convenience for governments looking to save taxpayer dollars. We introduced MAiD as an act of compassion for terminal patients but there are dark forces that will eventually realize there is a strong business case to see it expanded. Think of the thousands of dollars per patient that can be saved! It is a slippery slope.

As the country wrestles with the complex ethical issues that arise from MAiD for the mentally ill, three years will go by in a flash. It is a debate that all Canadians would do well to be engaged in.

Doug Firby is an award-winning editorial writer with over four decades of experience working for newspapers, magazines and online publications in Ontario and western Canada. Previously, he served as Editorial Page Editor at the Calgary Herald.

Cutting the Saskatchewan gas tax is a no-brainer

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Cutting the gas tax will provide immediate relief to the people of Saskatchewan

Gage Haubrich, Troy Media

Saskatchewan is a land of long commutes and even longer road trips.

Farmers drive into small towns from their farms to pick up parts, and people who live in those small towns commute to the city for work. Then, on the weekend, everyone packs up their vehicles to trek across the province to fish, visit family or catch a game at Taylor Field in Regina.

You’d be hard-pressed to find a place that drives more than Saskatchewan. It’s a necessity; you can’t take a train from Regina to Prince Albert for a meeting. You must get in your car and hit the highway.

And with all that driving comes a hefty fuel bill.

Recently, the Saskatchewan NDP renewed its call for the provincial government to cut its 15-cent per litre tax on gasoline and diesel. NDP leader Carla Beck said: “Premier (Scott) Moe has the power to act today and suspend the gas tax … People are breaking the bank just to fill the tank.”

Cutting the gas tax is a no-brainer. The government can act on it quickly and save Saskatchewanians money instantly.

Unlike sending cheques, as the government did in 2022, or any other complicated affordability measure, a gas tax cut has no bureaucracy behind it. The government can just stop collecting the tax and Saskatchewan drivers can start saving.

The provincial government currently charges 15 cents per litre on both gas and diesel. A two-car family, with a minivan and a lighter duty pickup, would be saving $11 and $15 respectively every time they fill up. If that family fills up those vehicles once every two weeks, they would be saving more than $600 a year. That’s a monthly payment on one of those vehicles or a couple of trips to the grocery store.

In response to the NDP, the government says the roughly half a billion the government rakes in from the fuel tax is used to pay for government services.

Is that really what the money is spent on? According to the Fraser Institute, the government also spends an average of $869 million a year on corporate welfare, and that’s the most per person of any province.

Instead of taking money out of the wallets of Saskatchewan taxpayers at the gas station to give to corporations, the government should axe all its corporate welfare. That would be enough money to fully cut the gas tax, with a couple hundred million dollars left over.

The government then goes on to say the federal carbon tax is the real cause of unaffordability, citing its recent move to help by stopping the collection of the carbon tax on home heating in the province.

But the federal carbon tax is also one of the reasons why the government should move on this now. Even though Saskatchewanians aren’t paying the carbon tax on their heating bills this month, the carbon tax on fuel isn’t going anywhere fast.

Currently the carbon tax costs 14 cents per litre of gasoline, but come April, that cost jumps to 17 cents per litre. By 2030, it will be 37 cents per litre and cost the average Saskatchewan household $1,723 per year, according to the Parliamentary Budget Officer. And that’s including the rebates.

Premier Moe knows how much the federal carbon tax hurts the province. He has been fighting it longer than anyone else in the country, first as provincial environment minister and now as premier.

The move to stop collecting carbon tax on natural gas for home heating put up a shield for Saskatchewan residents against the carbon tax. But the government should go further and cut the provincial fuel tax to put up a wall.

If the government wants to continue to fight the carbon tax, it needs to keep taking action; it can’t rest on past achievements. The government needs to cut the gas tax and get Saskatchewanians some relief at the pumps.

Gage Haubrich is the Prairie Director for the Canadian Taxpayers Federation.

Loblaw decision to maintain 50 percent discount on expiring food a win for consumers

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by Sylvain Charlebois

It all started with an email from Loblaw last week announcing its plan to reduce the discount on soon-to-expire fresh food items. They intended to lower the discount from 50 percent to 30 percent in stores where the previous discount policy was still in place.

This adjustment was scheduled to be rolled out gradually over several weeks across the country, impacting a range of Loblaw’s store banners, including Zehrs, Loblaw, Provigo, and Atlantic Superstores.

It’s worth noting that many other stores had already abandoned this practice years ago. However, the timing of this decision, in January 2024, when many consumers are grappling with financial challenges, did not sit well with Canadians. Not one bit.

Fortunately, Loblaw eventually reconsidered its decision and opted – in the face of the concerns voiced by the public – to maintain the 50 percent discount on expiring food items. It’s not the first time Loblaw has reversed a decision in response to public sentiment.

In 2016, Loblaw reversed its decision to stop carrying French’s products after facing a significant public backlash, famously known as the “Ketchup Wars.” During that time, consumers boycotted the stores, driven by a sense of patriotism and a desire to support tomato farmers in Leamington, whose Heinz plant had recently been saved by a contract with French’s – a major competitor to Heinz – to produce tomato paste. Loblaw saw its sales plummet within days.

This time around, however, the public outcry was driven by sheer desperation.

While some called for a boycott in response to Loblaw’s discount decision, the company’s rationale for the change prompted many to reconsider. Loblaw argued that it was aligning its discounting policy with competitors, a common industry practice. However, the concern was that consumers would now see similar discounts everywhere, with 30 percent becoming the new benchmark. Some politicians even called on the Competition Bureau to investigate the matter.

Another peculiar aspect of Loblaw’s strategy this time was its decision not to engage with reporters. Instead, the news of the policy change came from Dalhousie’s Agri-Food Analytics Lab, which received confirmation from Loblaw about the adjustments to its discounting approach. This lack of communication raised questions about corporate transparency, a crucial element of corporate compassion.

Loblaw may be hesitant to communicate with the public due to the widespread negative sentiment towards the leading grocery chain. However, why the company would make such a decision remains incomprehensible, especially now.

Discounting expiring products has traditionally been a win-win situation for consumers and retailers. Consumers save money, while grocers reduce food waste at the retail level – a straightforward benefit for all. The policy can lead to significant savings for consumers, with the 20 percent difference between a 50 percent and a 30 percent discount translating to $10 on a $50 piece of meat, a common scenario in today’s market.

Before the change, Loblaw had planned to encourage its customers to use the FlashFood app, which had recently been revamped and saw a triple increase in downloads this week after Loblaw’s decision became public, according to the company. Food-rescuing apps like FlashFood, FoodHero, and Too Good To Go are valuable for those looking to save money, but they lack the tactile experience of inspecting expiring products in a physical store. Many consumers prefer the advantage of personally assessing expiring food items in-store before making a purchase.

It’s never too late to do the right thing, and Loblaw eventually showed its compassion by reversing its initial decision. Most Canadians can appreciate that retailers have the flexibility to adjust their discounting policies to stay competitive.

However, this decision had the potential to generate a significant public relations crisis, as it touched upon issues of food affordability, food waste, and Loblaw’s reputation. And it did. The initial decision itself was flawed, and the timing couldn’t have been worse. Thankfully, the company ultimately made the right choice for all of us.

Now, if we can encourage other grocers to follow Loblaw’s lead by offering a 50 percent discount on expiring food items, that would truly be a welcome development.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Government overspending is literally killing our country

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Canada’s debt exceeds $1.2 trillion, or nearly $31,000 for every person in the country

Doug Firby, Troy Media

New Year’s and hangovers go together like rum and eggnog. Some hangovers can be eased with a fistful of Tylenol and rehydration. Others, however, linger on, causing long-term damage to our future health.

Such is the crapulence imposed on us by our recklessly free-spending federal government. The hangover from ill-considered mission creep has set poor Canadian working stiffs on course for choking tax increases and an underperforming economy in what should be one of the most prosperous countries in the world.

The alarm a lot of people feel when they step on the scales in January drives them into action – the familiar quest to cut back on the things that have made us too fat. (Sadly, I include myself in this cohort.) Yet, federal politicians don’t seem to share such alarm; they just keep packing on the fiscal pounds.

Numbers can be numbing, so I’ll try not to overwhelm you. But a few figures are necessary to illustrate just how big the problem is.

The federal government’s current debt is more than $1.2 trillion, or nearly $31,000 for every person in the country, according to debt.ca. If you’re counting, that number has 12 zeros and it’s bigger than the 2023 Gross Domestic Product of Saudi Arabia.

The amount we owe is scary enough, but even more alarming is the rate of debt growth. The federal government alone is adding $878 of new debt every second, or nearly $110 million of new debt every day.

Don’t forget each province is racking up its own debt as well. Alberta, so proudly “debt free” just 20 years ago, now carries a debt of $78.5 billion. You can check your own province’s debt status at the Canadian Taxpayer’s Federation website. Click Provincial Debt Clocks in the top right-hand corner and scroll down to your province.

A lot of factors have conspired together to create this growing crisis. The Trudeau government spent like drunken sailors during the COVID-19 pandemic with the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Response Benefit (CERB), supposedly to help small businesses avoid bankruptcy. Such support was well-advised, but the level of waste and general lack of accountability around the handouts was simply criminal.

The Fraser Institute estimates that of the $359.7 billion of the federal government’s COVID spending, 25 percent ($89.9 billion) was wasted. Total federal COVID spending has added $8.3 billion to present-day interest costs.

There are many harmful effects to carrying a massive debt. For one, the government spends huge amounts of money each year just on interest charges. That is money that could have been spent on other priorities. (The $34.7 billion the feds spent on debt servicing charges in 2022/23 is more than it spends on child-care benefits. See the cause/effect?)

There is also no money left to spend on areas where we are vulnerable. In 2013, for example, Canada promised NATO it would work toward military spending equal to two percent of GDP. Yet, last year, the budget for the Canadian military was $36.7 billion or just 1.29 percent of GDP. This is happening at a time when international threats are increasing. We have, in effect, given up on having the capacity to defend ourselves.

As the minority federal Liberal government kowtows to the NDP in an effort to cling to power, it keeps agreeing to new spending on social programs that will – quite regrettably – be financed through more borrowing. Do you see where this is heading?

Meanwhile, the feds are adding costs in areas where they don’t really get any political points. The Public Service Commission of Canada recently reported that federal public service reached a record size in 2023. The 274,219 employees at the end of the March 31, 2023, fiscal year, as defined by the Public Service Employment Act, is 40.4 percent higher than in 2014-15, when the Liberals regained power under Justin Trudeau.

The Treasury Board of Canada Secretariat puts the figure even higher by including departments and agencies not included in the PSC count. It puts the total at 357,247 people.

It’s important to be clear about where this debt train is headed. As debt grows, our currency devalues. We become less competitive on the world stage. Ultimately, we lose jobs and our standard of living slips into a death spiral.

Canadians seem to have a disconnect between how they feel about debt and what they do. A July 2023 survey conducted by Ipsos for the Montreal Economic Institute, for example, found that Canadians are generally dissatisfied with the federal government’s management of public spending and nearly two-thirds think the government is “not doing a good job at allocating funds to the most important issues facing Canada today.” Amen to that. More than 55 percent of Canadians believe government spending is too high, while just 27 percent believe it’s acceptable, according to the survey.

And yet, even as Canadians say they are concerned about government debt, they are piling on personal debt, according to a report from TransUnion. Canadian consumer debt hit an all-time high of $2.32 trillion in the first quarter of 2023.

Now, barring a bolt of lightning from the Heavens, the Liberal regime is a dead government walking. Canadians, exasperated with Prime Minister Justin Trudeau’s incessantly hollow blather, are turning toward the federal Conservative Party despite its snivelling and singularly unlikeable leader, Pierre Poilievre. Part of the appeal is the promise to reduce the deficit by cutting government spending while encouraging growth by eliminating red tape. (No mention of the pain such cuts will inflict.)

We may not have any other choice. Eventually, a government that can never say no to ever-expanding social programs simply collapses upon itself, bringing catastrophic consequences for its people and draconian measures to restore order.

Reducing spending without gutting services is a multi-year project that needs to be implemented thoughtfully. It starts with reducing the size of government and attacking a culture that seems to encourage waste. Let’s not be naïve, however; slaying the debt dragon will also inevitably lead to some hard decisions about programs we may have to live without.

You don’t have to wait for a change in government to see change. If there’s one thing we know about politicians, it’s that they read polls and respond to letter campaigns. If you demand action, you can expect some response – although perhaps not as forceful a change as we’d see with a new party in power.

Now, like a lot of you out there, I am a pretty typical Canadian. I am fiscally conservative and socially progressive. (As I wrote this, I had the disturbing realization that Alberta Premier Danielle Smith describes herself the same way.) I buy my coffee from Tim’s, not Starbucks. I look for bargains at Canadian Tire. I raise my eyebrows at the taxes I pay, but I never try to dodge my share. I embrace our flawed but communitarian public health care system. I believe in all for one and one for all.

And, like many of you, I believe we are a great society because we aren’t afraid to use public money to help people who need it. If there is one thing that distinguishes us from our polarized neighbours to the south, this is it.

One day, however, our capacity to share our prosperity with those in need will run out if we can’t get our spending back to sustainable levels. The debt train will take us off the rails unless we act decisively to slow it down.

Stop being a spectator. Get involved.

Doug Firby is an award-winning editorial writer with over four decades of experience working for newspapers, magazines and online publications in Ontario and western Canada. Previously, he served as Editorial Page Editor at the Calgary Herald.

Top 10 food news stories of 2023

From farmland protection scandals to gene editing and milk dumping, here’s what made headlines in the food industry this year

Sylvain Charlebois, Troy Media

As we approach the end of 2023, it’s always interesting to reflect on the year that was. Selecting the top story from our list of the year’s top 10 food news stories presented a challenge, primarily due to the pervasive coverage of food inflation, which made headlines for both favourable and less favourable reasons.

Given the overarching theme of rising food prices, this list is composed of stories linked to or triggered by these price increases. Furthermore, while issues related to weather and climate change remained paramount, I opted not to incorporate them into this year’s top 10, as they exert a substantial and enduring impact on the agri-food industry year after year.

Here are this year’s top food news stories:

10) The Greenbelt scandal

In 2023, farmland protection became a headline across the country for the first time in many years. The Ford government was accused of allowing private developers to influence the Ontario government’s decision to allow some protected land to be used for new housing districts. After several investigations and a few cabinet ministers’ resignations, the Ford government reversed its plan to open the protected Greenbelt lands for housing development and committed to no further changes to the Greenbelt in the future. It was fascinating to see farmland management take the forefront this year, emerging as a significant political issue in Canada’s largest province.

9) Grocer code of conduct announced

It was both surprising and refreshing to witness the prominence of the code of conduct, a rather unsexy topic, making repeated headlines this year. Federal Minister of Innovation, Science, and Industry François-Philippe Champagne championed Ottawa’s efforts to achieve greater stability in food prices this year, ultimately determining that a code of conduct for grocers is the most effective solution to enhance competition within Canada’s food retail and manufacturing sectors. The implementation of such a code was announced this year. The United Kingdom, Ireland, and Australia already have similar codes that have proven to stabilize food retail prices and provide more variety for consumers.

While there is widespread consensus on the necessity of a code of conduct in Canada, the debate persists regarding whether it should be mandatory. Both Loblaw and Walmart Canada object to a compulsory code, and some argue that, without universal participation, the code will be ineffective.

8) Milk dumping viral video and baby formula shortages

A video of an exasperated Canadian dairy farmer, Jerry Huigen, went viral this year. For perhaps the first time in Canadian history, a Canadian dairy farmer was filmed discarding milk on his farm. The video garnered millions of views and shocked many Canadians, who questioned why such wastage occurred when food prices were soaring in grocery stores. Some reports suggested that millions of litres of milk are dumped every year, but the Dairy Farmers of Canada have consistently denied the issue, labelling Huigen’s video as an isolated incident.

Meanwhile, Canada continued to experience baby formula shortages throughout the year, leaving many parents puzzled about the scarcity of products when milk dumping seemed to be a recurring problem. To add to the confusion, Ontario-based Canada Royal Milk, a Chinese-owned dairy processing plant, is Canada’s sole baby formula plant, yet little is known about its operations.

7) Gene editing approved in Canada

Ottawa’s environmental approval of gene editing is possibly the most significant news in Canadian agriculture this year. Gene editing in food refers to the use of techniques such as CRISPR to modify the DNA of plants, animals, or microorganisms used in food production. Unlike GMOs, which involve inserting foreign genetic material from a different species into an organism’s genome, gene editing allows scientists to make specific changes to an organism’s genome, potentially improving its nutritional value, disease resistance, or other desirable traits. Gene editing will create crops that are more resilient to pests, diseases, and environmental stresses, and can enhance their flavour, appearance, or shelf life.

Gene editing is expected to play a crucial role in helping agriculture and farmers adapt to climate change.

6) Lab-grown meat approved in the U.S.

A significant milestone has been achieved in the cultured meat industry, with the United States Department of Agriculture (USDA) granting regulatory approval to GOOD Meat and UPSIDE Foods for the commercial distribution of their cultivated chicken products within the country. The U.S. has become the second country this year to permit the commercialization of cultivated meat. Cultivated meat, also known as cultured meat, refers to meat-based products produced from animal cells cultured in a laboratory, offering a potential solution to the environmental and ethical challenges associated with traditional meat consumption.

In Canada, the regulatory framework is more complex, primarily due to the supply management regime governing the production of dairy, poultry, and eggs. Canada is expected to lag in cultivated meat regulatory approvals, but this year’s U.S. approval has added more pressure.

5) Record-breaking fine in bread pricing scandal

For the first time in nearly six years, there has been significant progress in the investigation of price-fixing within the bread market, which was launched back in 2015. Canada Bread, currently owned by Mexico-based Grupo Bimbo, acknowledged its culpability in two distinct incidents of price-fixing in 2007 and 2011, even though Canada Bread was owned by Maple Leaf Foods at the time.

Consequently, the Mexican group agreed to pay a fine of $50 million, marking the highest penalty ever imposed in Canada for price-fixing. Loblaws and Weston Bakeries had previously confessed to their involvement in the bread scandal: Loblaws extended an apology to all Canadians in the form of a $25 gift card in 2017 without being required to pay a fine. As of this year, four companies are still under investigation, even after eight years: Sobeys, Metro, Walmart Canada, and Giant Tiger.

4) Shrinkflation and skimpflation

Consumers were not only concerned about higher food prices but also annoyed by the food industry’s tactics to maintain prices while reducing quantities or changing ingredients. Shrinkflation occurs when food manufacturers and restaurants reduce quantities without lowering prices. Canada’s famous Kraft Mac and Cheese was the most well-known case this year, which upset many consumers. Skimpflation involves manufacturers changing product ingredients to cut costs, often replacing chocolate and cheese with artificial ingredients.

While the number of shrinkflation cases is expected to decrease due to lower commodity prices in 2024, more skimpflation cases are anticipated due to front-of-package labelling rules set to be introduced in Canada in 2026.

3) High-profile strikes in the food industry

When a labour dispute occurs in the food industry, it doesn’t take long to impact consumers. Windsor Salt, Sobeys, Metro, Olymel, The Rogers Sugar plant in Vancouver, the St. Lawrence Seaway, British Columbia Ports, and Agropur were affected by labour disputes. Although the number of work stoppages in Canada was not as high as in previous years, many strikes this year had longer durations, according to Economic and Social Development Canada.

After years of decline, organized labour seems to have gained more political capital and used it to its advantage this year. Interestingly, there was an increase in members rejecting tentative agreements, indicating that workers wanted their voices heard.

2) Competing necessities of life: shelter and food

Something unusual occurred this year, particularly between April and September. Despite higher food prices, Canadians were spending less on food than the previous year. The average Canadian spent about two to four percent less on food for a significant portion of 2023, surprising many. Canadians traded down on food because trading down on shelter was much more challenging. The Bank of Canada raised its benchmark interest rate 10 times in a row, catching many Canadian households off guard and forcing them to allocate more funds to housing costs.

While food prices presented a challenge, housing costs likely compelled many to make unwanted nutritional compromises this year.

1) The profiteering blame-game

Throughout the year, Canadians found themselves puzzled by the ongoing blame game. Some politicians, interest groups, and experts repeatedly used allegations of profiteering as a diversion from more substantial economic issues such as interprovincial barriers, carbon pricing, and Bill C-234. Despite statements from the Bank of Canada, the Competition Bureau of Canada, Dalhousie University, and even the Parliamentary Committee asserting no evidence of profiteering, many Canadians remained unconvinced.

The politicization of food inflation in Canada this year was marked by intense debates, often tainted by personal attacks and accusations of bias from various sides. In contrast, within the industry, food manufacturers and grocers blamed each other for higher food prices. This profiteering narrative is likely the biggest non-scandal of the year, exacerbating the plight of Canadians.

There you have it. My top 10 food stories for 2023.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Canada’s Premiers have failed the basic needs test

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The people are hungry and sleeping outside. Where are Canada’s premiers?

Randy Robinson, Troy Media

In days of old, kings and queens were often judged by some pretty basic criteria: Did the people have enough to eat? Did they have a safe, warm place to lay their heads at night?

Looking around Canada today, it’s pretty clear that our elected leaders wouldn’t pass these simple tests. Food bank use is at record levels. Practically every city has a tent city, populated by people who can’t find – or can’t afford – a bed indoors.

Your local radio station may be playing Andy Williams singing “It’s the Most Wonderful Time of the Year,” but for too many people, it’s not: winter is the hardest time. And with very few exceptions, Canada’s premiers, snug in their beds, don’t seem to see it. Or if they do, they don’t seem to care.

In recent years, Canadians have seen the federal government take concrete steps to reduce poverty. For example, Ottawa introduced the Canada Child Benefit in 2016 and passed the Canada Disability Benefit Act in 2023. The former has cut poverty for children and families across the country. When implemented, the latter will do the same for Canadians with disabilities.

These are essential programs that improve the lives and prospects of millions. But it’s possible that such measures have an unintended side effect: they may let Canada’s premiers off the hook.

With the feds putting money into income supports, child care, and dental care, it’s easy to think frontline services are a federal responsibility. They are not. In Canada’s loose federation, it’s up to the provinces to regulate housing and pay for health care, schools, social services, and more.

Federal investment in these areas is always welcome. But provincial investment is absolutely essential.

Fast-rising food and housing costs have taken a big bite out of most Canadians’ household budgets, and the lower your income, the more inflation hurts. For those already experiencing poverty, higher costs aren’t just bad – they are catastrophic.

Provincial governments can do something about it.

Ninety-four percent of jobs in Canada are provincially regulated, which means minimum wage rates and other workplace rules are primarily a provincial matter. So is the regulation of rental housing. Social assistance rates are set by the provinces, too. Higher minimum wages, real rent controls, and higher social assistance rates could go a long way toward getting people through the winter – and beyond.

This past summer, a study by the Canadian Centre for Policy Alternatives found that minimum wages in all 10 provinces were too low to cover average rents on a one-bedroom apartment. Of 37 cities examined across the country, only three – all in Quebec – offered one-bedroom apartments that a minimum-wage earner could afford. Minimum wages would have to rise by anywhere from $2.52 an hour (in Quebec City) to $16.71 an hour (in Vancouver) to make a one-bedroom unit affordable for a minimum-wage worker.

Minimum wages are far too low – everywhere.

Meanwhile, low social assistance rates don’t lift people out of poverty – they lock them into it. Research by the Maytree Foundation found that social assistance rates in all provinces in 2022 kept people below Canada’s official poverty line with only one exception: in Quebec, a couple with two children could escape poverty by combining social assistance with the Canada Child Benefit and other payments.

In 2022, most social assistance recipients across Canada were not just living in poverty but in deep poverty, which is exactly as bad as it sounds. Households in Quebec and Prince Edward Island were slightly better off, but deep poverty was the norm for social assistance recipients in every other province.

So what have our premiers done for the people lately?

Good question. Here’s what we know for sure: Whatever they’ve done, it hasn’t reduced food bank use. It hasn’t made our tent cities any smaller. And it hasn’t kept people warm.

Not even at the most wonderful time of the year.

Randy Robinson is Ontario director of the Canadian Centre for Policy Alternatives.

Canadians brace for food price surge in 2024

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Expected food price increases will lead to shifts in shopping and dining out habits

Sylvain Charlebois, Troy Media

As we approach 2024, Canadians are confronted with a landscape profoundly altered by the surge in food prices. The most recent survey, conducted by the Agri-Food Analytics Lab at Dalhousie University in partnership with Caddle, provides valuable insights into these shifts.

It reveals the resilience and adaptability of Canadian consumers while also shedding light on the underlying economic pressures that could reshape the food industry. These findings suggest that 2024 will bring about noticeable changes at the grocery store.

Canada’s Food Price Report 2024, released a few weeks ago, predicts a more moderate increase in food prices, with the average family expected to allocate up to $700 more for groceries in 2024. This projection represents over 30 percent less than last year’s forecast. As a follow-up, this new survey captures the perspectives of 5,000 Canadians, offering us a glimpse into their expectations for the coming year concerning food in general.

A staggering 80.3 percent of Canadians anticipate further price hikes in the upcoming year, which is hardly surprising. This expectation is driving significant shifts in shopping habits, with 43.3 percent of respondents planning to focus more on promotions, 34.6 percent on using coupons, and 33.6 percent on loyalty programs. Additionally, 30.6 percent are contemplating switching stores to secure better deals in 2024.

These trends signify a heightened consumer sensitivity to prices, which will likely exert pressure on retailers and food producers to maintain competitive pricing structures. This is why Canada’s Food Price Report 2024 suggests that price wars might be a strategy to regain consumer loyalty – good news for consumers, something we all need.

The survey also uncovers a shift in product preferences. Only a small percentage of Canadians (14.9 percent) plan to purchase more organically grown products in 2024, and 12 percent intend to buy more fair-trade products. This highlights a nuanced balance between ethical consumption and financial constraints.

One of the most remarkable aspects of the survey is the emphasis on reducing food waste. The average Canadian household generates 140 kilograms of food waste annually, equivalent to more than $2,500 in wasted food, representing a significant expenditure. In response, 48 percent of Canadians intend to enhance their meal planning and shopping strategies in 2024, 36.2 percent plan to consume leftovers more frequently, and 32.7 percent aim to employ better preservation methods.

While things are projected to improve at the grocery store in 2024, restaurants are not expected to have it easy. The survey further reveals a decline in dining out, with 38.3 percent of Canadians planning to eat out less frequently in 2024 and 12.2 percent not at all. This could have substantial implications for the restaurant industry, potentially leading to reduced revenues and necessitating shifts in business models. However, this trend is not surprising considering the increasing costs of shelter and other essentials.

As a result, we anticipate a growth in ready-to-eat counters, with “dining in” becoming more popular in the coming months.

The survey also inquired about Canadians’ New Year’s resolutions for 2024. It’s always interesting to learn what Canadians intend to do in the new year, especially when it comes to food. Health appears to be the top priority for Canadians in 2024, with 14.9 percent planning to make healthier food choices. This is followed by cooking more at home (13.7 percent). Drinking more water and staying hydrated ranks as the third most popular resolution, followed by exercising more to complement a balanced diet.

The findings from the Dalhousie University survey reveal a broader economic narrative: Canadians are increasingly concerned about rising food prices, leading to a shift in their food consumption habits. From relying more on promotions and loyalty programs to placing a greater emphasis on reducing food waste, Canadians are adapting to manage their food expenses in various ways. This change goes beyond economics; it represents a cultural shift in how we approach our food choices and consumption patterns.

The survey paints a picture of a population proactively adjusting to economic realities. Canadians are becoming more savvy about food and food expenditures. The implications of these changes are far-reaching, affecting everything from household spending to industry practices and policy decisions.

As we enter 2024, it will be crucial for all stakeholders in the Canadian food economy to understand and respond to these evolving consumer trends.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

The truth behind Canadian grocers’ alleged profiteering

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by Sylvain Charlebois

When selecting the most significant non-scandal of 2023, the “greedflation” campaign is by far the absolute winner. Politicians, and even some knowledgeable economists, have convinced many that Canadian grocers have taken advantage of the recent inflationary cycle to profit unfairly.

Despite compelling data and many reports pointing to the contrary, many Canadians, including several reporters, remain convinced of this narrative.

Jim Stanford, an economist known for commenting on food prices, is the most recent example of how Canadians seem to be embracing arguments against food companies without questioning their validity. Stanford recently claimed that net profits for grocers in 2023 would surpass $6 billion for the first time, a statement that gained significant attention and raised the ire of politicians and many Canadians. The media largely accepted these claims as fact without delving into the source of the data.

It’s important to note that the figures provided came from Statistics Canada rather than corporate financial statements, which arguably would be more reliable. Statistics Canada’s Table 33-10-0225-01, which was used for the $6 billion argument, can include convenience stores, specialty food stores and not just major grocers.

Net profits are not a suitable metric to consider unless the intention is to sensationalize the issue of profiteering. To assess whether a grocery chain is indeed profiteering, one can look at gross profit margins, calculated as revenues minus the cost of goods sold. It’s worth mentioning that the gross profit margins for our major grocers have remained relatively stable over the past five years, based on data from their financial reports. Since 2019, only Metro saw an increase of two percent, while other changes were minimal, barely exceeding one percent.

Now, let’s also examine profits, a topic that politicians often emphasize. The combined net profit for the three major Canadian grocery chains (Loblaw, Sobeys, and Metro) in the past 12 months amounted to $3.808 billion. It is highly unlikely that this figure will exceed $6 billion in the current year, as Stanford claimed. To reach such profits, these chains would need combined revenues totalling $110.6 billion over the past year.

When considered as a percentage of total sales in the last 12 months, the combined profits represent only about 3.4 percent, which is an incredibly modest return. Additionally, this figure includes non-food items like cosmetics and prescription drugs, which typically have higher profit margins.

In essence, though, there is nothing inherently wrong with profits, and in a functioning economy, companies should report increased profits annually due to inflation. Canadians should understand this. People’s salaries increase, the prices of goods and services rise, and naturally, net profits increase in dollar terms. This is why it is critical to analyze percentages over time for a more comprehensive assessment.

In 2023, emotions overshadowed a proper understanding of the food business world and food supply chain economics among many Canadians. Blaming the food industry has been, and continues to be, a convenient diversion for politicians, diverting attention away from the real issues impacting inflation, such as public overspending and fiscal policies, among others.

However, grocers are not without blame either. Beyond profiteering, the industry has some challenges to address. Regulatory compliance has been an issue, and the bread price-fixing scandal has undoubtedly tarnished the industry’s reputation. While it’s true that some level of greed exists in the food industry, as in any economic system, it can also be taken to an extreme.

Our grocery chains here in Canada are well-managed, but it is also worth noting that profit margins in other countries like the United Kingdom and the United States are about half of what they are here. While acknowledging that the evidence of profiteering in Canada is weak at best, there is a need for more competition in the market.

François-Philippe Champagne, the Minister of Innovation, who is on a mission to increase competition, has called upon other grocers abroad to invest in Canada. However, the challenge lies in making Canada an attractive destination for investment, which cannot be achieved without a mandatory code of conduct that levels the playing field between the major grocery chains, independent grocers, and suppliers. Right now, players like Loblaw and Walmart have way too much influence and are dictating supply chain rules, a dimension consumers don’t necessarily see. It’s been like that for a while now.

Even with a well-defined mandatory code of conduct, Canadians may have to wait a considerable amount of time before witnessing the entry of new grocery players into the Canadian market.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.