Business
Your $350 Grocery Question: Gouging or Economics?
Dr. Sylvain Charlebois, a visiting scholar at McGill University and perhaps better known as the Food Professor, has lamented a strange and growing trend among Canadians. It seems that large numbers of especially younger people would prefer a world where grocery chains and food producers operated as non-profits and, ideally, were owned by governments.
Sure, some of them have probably heard stories about the empty shelves and rationing in Soviet-era food stores. But that’s just because “real” communism has never been tried.
In a slightly different context, University of Toronto Professor Joseph Heath recently responded to an adjacent (and popular) belief that there’s no reason we can’t grow all our food in publicly-owned farms right on our city streets and parks:
“Unfortunately, they do have answers, and anyone who stops to think for a minute will know what they are. It’s not difficult to calculate the amount of agricultural land that is required to support the population of a large urban area (such as Tokyo, where Saitō lives). All of the farms in Japan combined produce only enough food to sustain 38% of the Japanese population. This is all so obvious that it feels stupid even to be pointing it out.”
Sure, food prices have been rising. Here’s a screenshot from Statistics Canada’s Consumer Price Index price trends page. As you can see, the 12-month percentage change of the food component of the CPI is currently at 3.4 percent. That’s kind of inseparable from inflation.
But it’s just possible that there’s more going on here than greedy corporate price gouging.
It should be obvious that grocery retailers are subject to volatile supply chain costs. According to Statistics Canada, as of June 2025, for example, the price of “livestock and animal products” had increased by 130 percent over their 2007 prices. And “crops” saw a 67 percent increase over that same period. Grocers also have to lay out for higher packaging material costs that include an extra 35 percent (since 2021) for “foam products for packaging” and 78 percent more for “paperboard containers”.
In the years since 2012, farmers themselves had to deal with 49 percent growth in “commercial seed and plant” prices, 46 percent increases in the cost of production insurance, and a near-tripling of the cost of live cattle.
So should we conclude that Big Grocery is basically an industry whose profits are held to a barely sustainable minimum by macro economic events far beyond their control? Well that’s pretty much what the Retail Council of Canada (RCC) claims. Back in 2023, Competition Bureau Canada published a lengthy response from the RCC to the consultation on the Market study of retail grocery.
The piece made a compelling argument that food sales deliver razor-thin profit margins which are balanced by the sale of more lucrative non-food products like cosmetics.
However, things may not be quite as simple as the RCC presents them. For instance:
- While it’s true that the large number of supermarket chains in Canada suggests there’s little concentration in the sector, the fact is that most independents buy their stock as wholesale from the largest companies.
- The report pointed to Costco and Walmart as proof that new competitors can easily enter the market, but those decades-old well-financed expansions prove little about the way the modern market works. And online grocery shopping in Canada is still far from established.
- Consolidated reporting methods would make it hard to substantiate some of the report’s claims of ultra-thin profit margins on food.
- The fact that grocers are passing on costs selectively through promotional strategies, private-label pricing, and shrinkflation adjustments suggests that they retain at least some control over their supplier costs.
- The claim that Canada’s food price inflation is more or less the same as in other peer countries was true in 2022. But we’ve since seen higher inflation here than, for instance, in the U.S.
Nevertheless, there’s vanishingly little evidence to support claims of outright price gouging. Rising supply chain costs are real and even high-end estimates of Loblaw, Metro, and Sobeys net profit margins are in the two to five percent range. That’s hardly robber baron territory.
What probably is happening is some opportunistic margin-taking through various selective pricing strategies. And at least some price collusion has been confirmed.
How much might such measures have cost the average Canadian family? A reasonable estimate places the figure at between $150 and $350 a year. That’s real money, but it’s hardly enough to justify gutting the entire free market in favor of some suicidal system of central planning and control.
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The Justin Trudeau and Jagmeet Singh charges of “greedflation” collapses under scrutiny.
“It’s not okay that our biggest grocery stores are making record profits while Canadians are struggling to put food on the table.” —PM Justin Trudeau, September 13, 2023.
A couple of days after the above statement, the then-prime minister and his government continued a campaign to blame rising food prices on grocery retailers.
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The line Justin Trudeau delivered in September 2023, triggered a week of political theatre. It also handed his innovation minister, François-Philippe Champagne, a ready-made role: defender of the common shopper against supposed corporate greed. The grocery price problem would be fixed by Thanksgiving that year. That was two years ago. Remember the promise?
But as Ian Madsen of the Frontier Centre for Public Policy has shown, the numbers tell a different story. Canada’s major grocers have not been posting “record profits.” They have been inching forward in a highly competitive, capital-intensive sector. Madsen’s analysis of industry profit margins shows this clearly.
Take Loblaw. Its EBITDA margin (earnings before interest, taxes, depreciation, and amortization) averaged 11.2 per cent over the three years ending 2024. That is up slightly from 10 per cent pre-COVID. Empire grew from 3.9 to 7.6 per cent. Metro went from 7.6 to 9.6. These are steady trends, not windfalls. As Madsen rightly points out, margins like these often reflect consolidation, automation, and long-term investment.
Meanwhile, inflation tells its own story. From March 2020 to March 2024, Canada’s money supply rose by 36 per cent. Consumer prices climbed about 20 per cent in the same window. That disparity suggests grocers helped absorb inflationary pressure rather than drive it. The Justin Trudeau and Jagmeet Singh charges of “greedflation” collapses under scrutiny.
Yet Ottawa pressed ahead with its chosen solution: the Grocery Code of Conduct. It was crafted in the wake of pandemic disruptions and billed as a tool for fairness. In practice, it is a voluntary framework with no enforcement and no teeth. The dispute resolution process will not function until 2026. Key terms remain undefined. Suppliers are told they can expect “reasonable substantiation” for sudden changes in demand. They are not told what that means. But food inflation remains.
This ambiguity helps no one. Large suppliers will continue to settle matters privately. Small ones, facing the threat of lost shelf space, may feel forced to absorb losses quietly. As Madsen observes, the Code is unlikely to change much for those it claims to protect.
What it does serve is a narrative. It lets the government appear responsive while avoiding accountability. It shifts attention away from the structural causes of price increases: central bank expansion, regulatory overload, and federal spending. Instead of owning the crisis, the state points to a scapegoat.
This method is not new. The Trudeau government, of which Carney’s is a continuation, has always shown a tendency to favour symbolism over substance. Its approach to identity politics follows the same pattern. Policies are announced with fanfare, dissent is painted as bigotry, and inconvenient facts are set aside.
The Grocery Code fits this model. It is not a policy grounded in need or economic logic. It is a ritual. It gives the illusion of action. It casts grocers as villains. It gives the impression to the uncaring public that the government is “providing solutions,” and that “it has their backs.” It flatters the state.
Madsen’s work cuts through that illusion. It reminds us that grocery margins are modest, inflation was monetary, and the public is being sold a story.
Canadians deserve better than fables, but they keep voting for the same folks. They don’t think to think that they deserve a government that governs within its limits; a government that accept its role in the crises it helped cause, and restores the conditions for genuine economic freedom. The Grocery Code is not a step in that direction. It was always a distraction, wrapped in a moral pose.
And like most moral poses in Ottawa, it leaves the facts behind.
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The Canadian Taxpayers Federation is criticizing Prime Minister Mark Carney for announcing that the government is expanding automatic tax filing within hours of the government’s consultation ending.
“There’s no way government bureaucrats pulled an all-nighter reading through thousands of submissions and survey responses before sending Carney out to make an announcement on automatic tax filing the next morning,” said Franco Terrazzano, CTF Federal Director. “Asking Canadians for their opinion and then ignoring them isn’t a good look for Carney, it makes it look like the government is holding sham consultations.”
The government of Canada announced consultations on automatic tax filing so Canadians could give the government “broad input through an online questionnaire.”
The government’s consultation ended on Thursday, Oct. 9, 2025.
Hours after the consultation ended, Carney today announced the government would expand automatic tax filing.
The CRA is already one of the largest arms of the federal government with 52,499 bureaucrats.
The CRA added 13,015 employees since 2016 – a 33 per cent increase. For comparison, America’s Internal Revenue Service has 90,516 bureaucrats. The CRA has one bureaucrat for every 800 Canadians. The IRS has one bureaucrat for every 3,800 Americans.
“The CRA can barely answer the phone, so Carney shouldn’t be giving those bureaucrats more busy work to do,” Terrazzano said. “The CRA is a bloated mess, and Carney should be cutting the cost of bureaucracy not scheming up ways to give the bureaucracy more power over taxpayers.”
The CRA only answered about 36 per cent of the 53.5 million calls it received between March 2016 and March 2017, according to a 2017 Auditor General report. When Canadians were able to get the CRA on the phone, call centre agents gave inaccurate information about 30 per cent of the time.
“The CRA acting as both tax collector and tax filer is a serious conflict of interest,” Terrazzano said. “Trusting the taxman to do your tax return is like trusting your dog to protect your burger.
“Carney should stop the CRA power grab and instead cut taxes and simplify the tax code.”
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