Top 10 food news stories of 2023

Daily Herald Contributor
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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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Canada’s Premiers have failed the basic needs test

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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Canadians brace for food price surge in 2024

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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The truth behind Canadian grocers’ alleged profiteering

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.

Study finds rural disparities in access to life-saving cancer trials

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Study finds rural disparities in access to life-saving cancer trials

People living in rural and remote areas are missing out on cancer clinical trials and possibly life-saving treatments

Michael Brown, Troy Media

People living in less populated, rural or remote areas are missing out on last-ditch but potentially life-saving cancer clinical trials, according to a recent study by a University of Alberta oncologist that puts the onus on Canada’s health regulatory bodies to ensure equity.

Omar Abdelsalam, an associate professor in the Department of Oncology, undertook the study to evaluate geographic disparities in access to cancer clinical trials across Canada.

“Oncologists like to say the best treatment for cancer is being part of clinical trials,” said Abdelsalam.

“Clinical trials give hope when you have exhausted all other standards of care.”

For the study, Abdelsalam looked at Canadian cancer clinical trial data recorded in clinicaltrials.gov between 2005 and 2023, and separated them by province, main urban centres and cancer types.

The data revealed that the number of cancer clinical trials per 10,000 individuals in each province or territory varied between 6.79 in New Brunswick and zero in the three territories.

“There is clearly a disparity. Three territories and not a single clinical trial conducted in two decades,” said Abdelsalam.

Abdelsalam notes many Indigenous patients live in the territories, and this geographic disparity might conceal a form of ethnic disparity in access to cancer clinical trials.

“Although I don’t have the data to support specifics about Indigenous representation, geographically speaking, I would not be surprised if their participation was the lowest.”

Even between Canada’s top 10 urban centres, disparities exist. His study showed Vancouverites have the best chance at a clinical trial – 14.66 trials per 10,000 individuals. Edmontonians have the fourth best chance with just over 10 clinical trials per 10,000 individuals, while Calgarians have access to fewer than six trials per 10,000 people, to sit seventh in Canada.

Beyond access to a possible life-saving opportunity, limiting the population draw works against the standard evidence-based way to determine what is and isn’t working.

“Clinical trials represent an important approach to advancing our understanding of cancer and improving the quality and quantity of life among cancer patients,” he said.

“We are driving in the dark if you are not including samples from everyone.”

The study also showed lymphoma clinical trials were the most common, with almost 33 per 1,000 projected cancer cases, while there were only seven bladder cancer clinical trials per 1,000 cases.

Abdelsalam said this discrepancy likely signifies differences in advocacy efforts and subsequent funding allocated to different tumour types. His study showed that 69 percent of trials have industry funding over the 18 years of the study. More concerning is that over a three-year interval starting in 2005, 56 percent of trials included industry funding. For the interval starting in 2020, that number had jumped to 75 percent.

Abdelsalam said the concern with the slow decline of government investment is that pharmaceutical companies, while welcome, are typically interested in questions that help market their product and not about equitable access.

“Government has to ensure that all cancer patients – regardless of primary tumour type – enjoy an equitable chance of accessing clinical trials,” he said.

Given the geographic disparities of access to clinical trials, particularly among patients living in remote and rural areas, Abdelsalam said several initiatives should be undertaken to bring clinical trials to the largest pool of possible cancer patients in Canada.

“While few good things came out of the pandemic, we did learn that we can deliver a relatively high standard of oncologic care through virtual means,” he said.

So why can’t clinical trial-related activities be conducted virtually as well? Abdelsalam sees no reason why they can’t be, adding the regulatory bodies need to start mandating a certain percentage of representation of patients from under-represented communities, or else the current disparity will continue.

“If the government is providing money, they should make sure everyone has an equal opportunity to participate,” he said. “If equity is a priority, then we have to think of solutions.

“We need to stop recruiting by convenience and start recruiting by equitability.”

This article was submitted by the University of Alberta’s Folio online magazine, a Troy Media Editorial Content Provider Partner.

Air travel cost too much? Blame the feds

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Air travel cost too much? Blame the feds

A significant portion of the air travel ticket price goes toward taxes and fees that are beyond the airline’s control

Gabriel Giguere, Troy Media

Flying in Canada is expensive.

The reasons are obvious when you consider that nearly a third of the price of a plane ticket is made up of taxes and fees outside of the airline’s control.

For example, imagine that you want to book a flight from Montreal to Vancouver to go skiing during your spring break.

Even before adding a single bag, the least expensive return trip with Porter will cost you $512.05. Yet, from the airline’s perspective, this trip is offered to you at $332.00.

The other $180.05 represents the various charges and taxes you have to pay, of which the federal government is one of the largest beneficiaries.

The biggest slice, making up $102.00 in this case, is due to what is known as airport improvement fees.

Although these fees are charged by the non-profit airport authorities responsible for managing Canada’s large airports, these could be much lower if not for the elevated rents they must pay Transport Canada each year.

The Montreal airport, for example, paid the federal government an amount in rent equivalent to a little over a third of what it collected in airport improvement fees last year. The proportion was similar in Vancouver.

And although the air travel and tourism sector is still trying to pick itself back up after the pandemic, that’s not stopping the federal government from continuing to raise the rent.

In the last fiscal year, the total amount paid to Ottawa in rent by the country’s large airports was $419 million, 42.5 percent more than they paid 10 years ago.

This is due to the fact that instead of seeing Canadian airports as transportation infrastructure that’s important for our communities, the Trudeau government seems to think of them as cash cows.

If the money from these increasingly expensive rents could be put into infrastructure instead, the airport improvement fees paid on this return trip would fall from $102 to $66.

Then there’s the matter of the air travellers’ security charge, introduced following the September 11, 2001 attacks and representing air travellers’ contribution to airport security measures.

If your trip is in March, and the flight is domestic, you’re in luck! This only adds $14.24 to the price of your ticket. But if you are travelling after May 1, 2024, and you are leaving the country, it will cost you $34.42.

While the goal is valid, we wonder why our neighbours to the south limit the charge to a maximum of $15.30 Canadian per return trip, or less than half the maximum amount charged by the Canadian government.

The fees listed on your receipt also include the applicable sales taxes for both the ticket price and the various fees you are required to pay. For that $512.05 ticket, these come to $63.81.

But wait – there’s more! There are also hidden taxes that the federal government charges you on each plane ticket.

The most obvious is the excise tax on aviation fuel, which is 4.0 cents per litre. Again, the federal government is greedier than its American counterpart, whose equivalent tax works out to 1.55 cents Canadian per litre.

When you add it all up, it’s easy to see why travelling is so expensive in this country. It’s also clear why so many travellers choose to drive a couple of hours to fly out of Plattsburg, Burlington, or some other airport near the border rather than a Canadian airport.

It’s time for Ottawa to realize that air travel is not a cash cow to milk but an essential means of connecting our communities.

Gabriel Giguère is a public policy analyst with the Montreal Economic Institute.

Overregulation threatens Canada’s natural health product sector

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Overregulation threatens Canada’s natural health product sector

Regulatory changes, particularly those related to labelling, are poised to unravel the significant progress made in the natural health sector

Sylvain Charlebois, Troy Media

Many companies harbour a general aversion to regulations, often perceiving them as excessive burdens that hamper their ability to navigate an intricate web of rules. In sectors like food production, which encompasses areas such as food safety, fiscal constraints, and labelling requirements, these challenges are a constant struggle.

Some of this resistance to regulation is undoubtedly rooted in corporate interests, but it is increasingly evident that the regulatory burden on companies, especially within the food industry, is exacting a toll.

Let’s examine Canada’s thriving Natural Health Product sector as a case in point. This sector has emerged as a significant contributor to the national economy, showcasing robust growth and innovation. However, its promising trajectory is currently under threat due to what many perceive as overregulation, mainly stemming from new labelling rules that present substantial challenges for the industry.

The health products sector encompasses a wide range of products, from vitamins and herbal remedies to traditional medicines and organic hygiene products. According to a recent Deloitte report, sales in this sector have surged from an estimated $4.3 billion to approximately $13.2 billion in recent years, with exports also expanding from $0.7 billion to $3.6 billion. This growth is not only reflected in sales figures but also in its significant contribution to Canada’s GDP and employment, providing livelihoods for approximately 92,000 full-time equivalent jobs – a truly substantial impact.

Regrettably, most Canadians are unaware of the regulatory shifts occurring across various facets of this sector, including cost recovery, labelling, and health product regulations. While consultations are ostensibly carried out for each change, public authorities seldom heed the concerns raised by industry stakeholders.

For instance, the ongoing open consultation on cost recovery, which concluded in August, is poised to be implemented by 2025 with no significant adjustments. New labelling regulations were introduced in 2022, with a phased implementation plan stretching into 2025. Additionally, the recent Royal Assent for Vanessa’s Law in 2023, with implications for Natural Health Products, anticipates further regulations in 2025 and beyond, underscoring the evolving Canadian regulatory landscape, with one change following another in quick succession.

These recent regulatory changes, particularly those related to labelling, are poised to unravel the significant progress made in the natural health sector. Although well-intentioned, the regulations disproportionately impact the predominantly small and medium-sized businesses that dominate the sector. Many of these enterprises have already been severely affected by the COVID-19 pandemic and have limited capacity to absorb the additional costs associated with these new rules.

A recent Deloitte survey paints a grim picture: 50 percent of respondents foresee a negative impact on business attractiveness, 76 percent anticipate reducing their product offerings, and 21 percent are contemplating shutting down their operations in Canada. The prospect of one in five businesses exiting the industry is well beyond the norm, potentially fostering more competition and competitive pricing overall – a double-edged sword.

What makes these developments especially worrisome is that they revolve around health products, which have gained paramount importance for Canadians in the wake of the pandemic. As Canadians prioritize their health more than ever before, the competitiveness of our food sector becomes pivotal.

The repercussions of these regulations are vast, extending beyond stifling innovation and competitiveness to encompass significant job losses and reduced product diversity. This is deeply concerning, given that the health products sector has not only been a source of entrepreneurial potential but has also offered healthier lifestyle choices for Canadians.

Furthermore, the sector’s challenges highlight broader issues within regulatory policies. Initially designed to ensure safety and efficacy to protect the public, regulations can inadvertently stifle growth and innovation. This is particularly true in sectors like natural health, where small businesses dominate and lack the resources to navigate complex regulatory landscapes.

As Canadians and Ottawa grapple with ways to enhance competition in our nation, it’s crucial to strike a balance between consumer safety and health on one hand and innovation and business growth on the other. The current trajectory strongly suggests the need for a comprehensive review of these regulations, potentially exploring alternative policies that achieve the same objectives without jeopardizing this vital sector.

Only through such a reassessment can we ensure that our food sector, not just health products, continues to thrive, contributing to Canada’s economy and the well-being of its consumers.

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

Food price rise linked to factors beyond the grocery store

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Food price rise linked to factors beyond the grocery store

Production and transportation costs and the impact of climate change on agriculture are all having an impact on food prices

Sylvain Charlebois, Troy Media

The 2024 Food Price Report from Dalhousie University, in collaboration with the Universities of Guelph, Saskatchewan, and British Columbia, uncovers a multifaceted and intricate food pricing landscape in Canada. This intricate landscape is influenced by a wide range of factors that go beyond what you see on the grocery store shelves.

The report predicts that food prices will increase by as much as 4.5 percent in 2024, with meat, vegetables, and bakery products driving food inflation higher at the grocery store. While many Canadians may hope for price drops, it’s essential to understand that the issue is entangled with the complexities of the global economy, and no nation is immune to worldwide uncertainties.

As most Canadians are aware, except for those who subscribe to the notion that food prices are solely driven by one individual or one company, the persistent rise in food prices reflects broader inflationary trends affecting the economy. This surge in costs is not isolated to food alone; it’s a symptom of increased expenses in production, transportation, and the ripple effects of global economic shifts. These elements collectively contribute to the steady climb in food pricing, making it a multifaceted economic issue.

Climate change also plays a crucial role in shaping the food pricing narrative. Extreme weather events directly impact agricultural productivity, disrupting crop yields and the availability of essential food products. These incidents are a stark reminder of the food supply chain’s vulnerability to environmental changes and the urgent need for resilient and sustainable agricultural practices. Whether we employ carbon taxing or a cap-and-trade system, decarbonizing the food economy should remain a priority.

In response to rising costs, Canadian consumers are adapting their spending habits. There’s a noticeable shift towards more budget-conscious shopping, with consumers increasingly seeking value and adjusting their dietary choices in light of price hikes. This change in consumer behaviour is a critical aspect of the food pricing equation, influencing retail and production strategies across the food industry. The recent string of interest rate hikes by the Bank of Canada has had a significant impact on households across the country, forcing many to reduce their food spending despite inflation.

The past year has been challenging, but there are signs of improvement as consumers gradually reallocate their budgets away from mortgage and rent payments towards food expenditures.

As we near the anticipated food inflation rate target of 1.5 percent to 2.5 percent, which is likely to be achieved in 2024, consumers should have specific expectations of our policymakers. The implementation of regulatory measures, such as a code of conduct for grocery stores, reflects a growing recognition of the necessity for increased oversight in the food retail sector. This initiative is aimed at restoring a fair balance in terms of costs and profits within the food supply chain, ultimately safeguarding consumers, promoting fairness in business practices, and fostering healthy competition. It’s important to highlight that Loblaw and Walmart currently wield significant influence in the industry, which calls for attention to ensure consumer benefits.

Canadians have valid concerns regarding the influence of companies like Loblaw and Walmart. Their practice of charging more fees to suppliers, who then raise prices to compensate for these elevated fees, ultimately leads to consumers bearing the burden. If Ottawa is genuinely committed to stabilizing food prices, it should make the Grocer Code of Conduct mandatory, ensuring that both Loblaw and Walmart adhere to it. This move would be in the interest of fostering competition and improving the food supply chain for the benefit of all Canadians.

Failure to do so may raise questions about potential inappropriate political interference between some grocers and the Liberal party.

The insights gleaned from Canada’s Food Price Report 2024 underscore the potential for Ottawa to make a difference with strong leadership. While Loblaw and Walmart are well-managed companies that have reaped the benefits of their success, their influence in the food industry has become a concern for the broader population.

Addressing this issue is crucial for the well-being of Canadian consumers and the overall health of the food supply chain.

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

Rich Canadians walked away from the pandemic much, much richer

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Rich Canadians walked away from the pandemic much, much richer

Katherine Scott and Jon Milton

A hundred Canadians are standing in a room together, with $100 on a table. They’re figuring out how to divide the money.

In this thought experiment, that $100 represents all of the income earned by all Canadians in 2021 – a year into the pandemic, when governments began to withdraw relief funds that had kept members of the public afloat.

Instead of dividing that $100 equally, where everyone would get $1, one person – the richest in the room – claims $13.40.

This isn’t just a thought experiment; it’s happening in real life.

That’s right – one percent of tax filers collected 13.4 percent of the total aggregate income in 2021. More than one out of every eight dollars went to just one percent of tax filers.

In 2021, that top one percent saw their incomes rise by an average of 9.4 percent. The bottom 50 percent saw their incomes actually decline – by 6.2 percent.

That’s only the beginning of the story. The real prize, for the rich, was not in their salaries and market income – it was in capital gains, or the increase in value of capital assets they already held. A rise in stock prices – or an increase in the value of your home – is capital gains.

Once we take capital gains into account, the top one percent earned a whopping 20.5 percent more than they did in 2020. The bottom 50 percent of Canadians lost 6.5 percent.

The one percenters took in an average of $223,400 in 2021 in capital gains alone – that’s not income they earned in any way. That’s purely money that they got from owning things. It is a payment for already being rich.

People in the bottom half of Canadian tax filers reported basically no capital gains income. Their average total income after capital gains was just $21,600 – only $500 more than their pre-investment income.

The top one percent is, for the most part, a boy’s club. Just over a quarter of the membership in this elite strata is women, while nearly three-quarters are men. The women who are part of that strata are much less likely to be living in couple families or to rely on the labour market – which means they are more likely to be single, older women with sizable (inherited) wealth and savings.

In 2021, Canada’s financial elites rode a wave of high stock markets and real estate values to sizable profits. They scooped up rentier checks and watched their assets’ value boom. There’s no question as to who “won” the pandemic – the rich made out like bandits.

Inequality is not some sort of inescapable fact of nature, like the first snowfall of the winter. It is the result of deliberate policy choices that governments have made over generations, and continue to make today.

Every dollar of workers’ pay gets taxed, but only half of capital gains – the income from buying and selling financial assets – gets taxed. Over half of this income goes to the richest one percent. The federal government could tax capital gains like income by raising the inclusion rate for capital gains to 75 percent – a move which would bring in more than $9.5 billion.

When the federal government gives preferential treatment to financial activity, it widens the wealth gap and costs the federal government over $20 billion every year. The feds could implement a progressive wealth tax beginning on net worth over $10 million, which would bring in $32 billion in the first year and $409 billion over 10 years.

It’s time that our governments started making different choices.

Katherine Scott is a senior researcher and Jon Milton is a senior communications specialist with the Canadian Centre for Policy Alternatives.

Carbon tax, not carve out, Trudeau’s real failure

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Carbon tax, not carve out, Trudeau’s real failure

Franco Terrazzano

Prime Minister Justin Trudeau stepped in it when he removed the carbon tax from furnace oil while leaving 97 percent of Canadians out in the cold.

Even in Atlantic Canada, where Trudeau tried to buy off MPs with the carve-out, 77 percent of people in the region support carbon tax relief for everyone.

But Trudeau’s mistake wasn’t providing relief. The real lesson here is that Trudeau never won the hearts and minds of Canadians. And he lost credibility early on.

Months before the 2019 election, former environment minister Catherine McKenna said the government had “no intention” of raising the carbon tax beyond 11 cents per litre of gas.

After the election, Trudeau announced he would keep cranking up his carbon tax until it reached 37 cents per litre.

Trudeau and his ministers repeat the myth that eight out of 10 families get more money in rebates than they pay in carbon taxes.

Their favourite talking point limps on despite the obvious reality that a government can’t raise taxes, skim money off the top to pay for hundreds of administration bureaucrats and still make everyone better off.

In fact, the carbon tax will cost the average family up to $710 more than they get back in rebates this year, according to the Parliamentary Budget Officer.

The government also said carbon taxes reduce emissions.

But emissions rose even in British Columbia, which had the first and (for years) costliest carbon tax. B.C. imposed its carbon tax in 2008. B.C.’s emissions increased between 2007 and 2019 – the last year before the pandemic brought economic activity to a screeching halt.

And even had the carbon tax cut emissions at home, “Canada’s own emissions are not large enough to materially impact climate change,” as the PBO explains.

Making it more expensive to live in Canada won’t reduce emissions in China, Russia, India or the United States.

This leads to a Trudeau diplomatic failure.

The Trudeau government launched the Global Carbon Pricing Challenge at the United Nations to get more countries to impose carbon taxes because, it acknowledged, “The impact and effectiveness of carbon pricing increases as more countries adopt pricing solutions.”

Unfortunately for the Trudeau government, even the United States, the world’s largest economy, rejects carbon taxes. President Joe Biden, a Democrat, hasn’t imposed a carbon tax. Good luck convincing a Republican president to impose one.

The U.S. rejection of a carbon tax is the rule, not the exception.

According to the World Bank’s Carbon Pricing Dashboard, about three-quarters of countries don’t have a national carbon tax.

Meanwhile, as Trudeau increased taxes, countries such as the United Kingdom, Sweden, Australia, South Korea, the Netherlands, Germany, Norway, Ireland, India, Israel, Italy, New Zealand and Portugal, among others, cut fuel taxes.

Finally, if Canada’s carbon tax is essential for the environment, shouldn’t all taxpayers pay the same rate?

A driver in Alberta pays a carbon tax of 14 cents per litre of gas. In Quebec, the carbon tax is about 12 cents. By 2030, that gap will grow to more than 14 cents per litre. Quebec’s special deal proves Trudeau’s carbon tax is about politics, not the environment.

When crafting the carbon tax, the government never honestly asked the people what they thought. While everyone wants a better environment, did anyone ask Canadians if they support a carbon tax even if it means average families will lose hundreds of dollars every year? Did anyone ask Canadians if they support a carbon tax even though most countries don’t?

Trudeau is displaying rank regional favouritism. But his real mistake wasn’t the carve-out that favoured Atlantic Canada. It’s that he never won the hearts and minds of the people and failed to acknowledge carbon taxes cause real pain.

Franco Terrazzano is the Federal Director of the Canadian Taxpayers Federation.

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