Algoma-Manitoulin-Kapuskasing MP, Carol Hughes writes a regular column about initiatives and issues impacting our community.
Inflation has been hitting people’s pocketbooks hard this year. The cost of nearly everything has gone up, to some degree, but nowhere is that price increase felt harder than the price of groceries.
Data collected by Statistics Canada recently shows that, for the end of August, inflation has cooled somewhat to seven per cent for goods across the board.
Seven per cent is still an astronomical increase in the price of goods by any measure, but it is cooling from the highs hit earlier this year on most items.
There are a number of factors to consider, but supply chain issues have been smoothing out and the cost of gas has stabilized (falling 9.6 per cent in August). What has not stabilized compared to other goods, however, has been the cost of food, which has increased by a staggering 10.8 per cent year over year, the fastest increase in food costs since 1981.
Obviously, 10.8 per cent is the baseline. Some food items have increased in price by less than 10.8 per cent, such as meat, which has increased by 6.5 per cent, dairy products by 7 per cent, and fish and seafood by 8.7 per cent year-over-year, but some other items have grown in cost even more.
Fresh fruit has increased by 13.2 percent; coffee and tea costs 13.5 per cent more; bakery products have risen by 15.4 per cent; condiments, spices, and vinegars have increased by 17.2 per cent; and, most astonishingly, edible fats and oils, such as olive or canola oil, have become a whopping 27.7 per cent more expensive.
Those prices are difficult for anyone to swallow, and while we may see some stabilizing of costs in the coming months, it still amounts to a significant increase to the amount of food cuts out of a family budget. In fact, according to Statistics Canada “as a result of rising prices, 20 per cent of Canadians reported that their households are very (7 per cent) or somewhat (13 per cent) likely to obtain food or meals from community organizations, such as food banks, community centres, faith-based organizations, school programs or community gardens, over the next six months.”
This is clearly concerning.
So where are these cost increases coming from?
It’s a difficult question to answer, but there are a number of factors. Increases in fuel costs across the globe have made transportation of goods, including food, more expensive.
Supply chain disruptions have made it more difficult for producers to get their products to market.
Labour shortages are affecting food costs as well, as Canada now has a structural shortage of workers as older Canadians start retiring at a higher rate than younger Canadians entering the workforce. In addition, there are not enough workers to fill vacancies while the unemployment rate is near historic lows at 5.4 per cent.
However, one relationship to the increasing costs of food has not been examined to the extent that may be necessary: corporate profiteering.
The largest grocery chains, Loblaws, Metro, and Empire (who own Sobeys and FreshCo) have raked in record profits this year on the back of inflation, but we have little data to ascertain how much this may play a factor in grocery prices. That’s why a motion was put forward at committee by the NDP which asks to examine profit-driven inflation by large grocery chains.
These are companies that have each reported record profits.
Last quarter, Loblaws reported $387 million in profits, $12 million more than the same quarter last year. Metro posted profits of $275 million, $22.6 million higher than the previous year’s quarter. All totalled, corporate grocery chain profits hit $3.5 billion.
It’s important that we get a sense as to whether these chains have played any form of an active role in increasing the costs of food for Canadians. It would certainly not be the first time that grocery chains have affected food costs, as some may remember Loblaws admitted to price-fixing the cost of bread in 2018, causing the price of bread to rise close to 100 per cent between 2001 and 2015.
Clearly, the cost of groceries isn’t smoothing out as quickly as other goods affected by global inflation. We need to know every reason why if we are to get food prices back to reasonable levels.