Commentary
By Sylvain Charlebois
It wasn’t a good month if you’re a consumer on a tight budget, and that group includes most of us. Consumers are under attack right now.
We’ve just learned that Canada’s food inflation rate was a record 9.7 percent in May. Everyone is noticing higher food prices, and no section of the grocery store is immune to what is going on.
What is hitting Canada is a global phenomenon, and food prices are not going to come down anytime soon. The world will see a shortfall in commodity production this fall that could push prices even higher worldwide. Supply chain issues, coupled with a new inflationary cycle triggered by the Ukrainian conflict, are affecting the food industry’s ability to fill shelves.
The shift is so incredibly sharp, that many vendors can’t agree with grocers on pricing, pushing them to put their business on hold, as we saw with Frito Lay and Loblaws earlier this year.
The macroeconomic picture is one thing, but some policies in Canada are just making things worse.
The Canadian Dairy Commission, a Crown corporation, believed a second milk price increase was necessary for dairy farmers. This week we learned that milk prices on the farm will rise again by 2.5 percent after a record increase of 8.4 percent in February. The increase this winter was so severe that most dairy alternatives are now either priced the same as milk or lower.
This time, Dairy Farmers of Canada, one of the most powerful lobby groups in the country, requested another mid-year increase due to “exceptional circumstances,” without telling us where the data is coming from.
To add insult to injury, the commission’s decision to raise milk prices was made by a federal public body operating for several months without its full complement on the board. The board only has two members, and both are in dairy farming.
Conflicts of interest in the sector are rampant at the commission, in politics or even in academia. Many scholars in Canadian universities are not just researchers but essentially advocates for their funding agencies representing the dairy industry.
The power and influence of dairy boards are beyond belief. If only Canadians realized. The fact that both Dairy Farmers of Canada and the Canadian Dairy Commission are one is deeply disturbing. Consumers need to be heard.
More Canadians would empathize with dairy farmers, who face higher costs of production if only the commission would share more data. The lack of disclosure is very much about asking Canadians to support an inefficient dairy sector, more than properly compensating farmers.
By fall, the newly announced increase will price the dairy section at the grocery store out of the market, and we stand to lose many more dairy farms.
Ottawa is also coming forward with new labelling rules for saturated fats, sodium and sugar. Health Canada’s front-of-package labelling was long overdue, as it will make our food healthier, but the new policy is also aiming at a key single-ingredient product many Canadians enjoy: ground meat.
Ground beef and pork are some of the most affordable sources of animal protein. Based on what is being presented, only extra lean ground meats are exempt from the new labelling. If this goes ahead as planned, grocers will cease to carry more affordable ground meat, making the meat counter even more expensive. It’s ridiculous.
Ottawa is the consumer’s worst enemy right now. It needs to think through some of these ill-timed policies that will make food even more expensive.
Finance Minister Chrystia Freeland’s so-called anti-inflation plan presented last week won’t do much for Canadians at the grocery store. Many were hoping for tax breaks, anything to ease our fiscal burden, as many countries have done in recent months. But Freeland opted to make a microwave announcement, basically reheating programs that are already in place.
This is what Ottawa needs to focus on for the foreseeable future: farmers need help with inputs to prepare for fall, winter and next spring.
Ottawa should also become one of the world’s most influential trade advocates and prevent other countries from hoarding food. More nationalistic protectionism can only make things worse.
Sylvain Charlebois is professor in food distribution and policy, and senior director of the AgriFood Analytics Lab at Dalhousie University.
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