John Robson: Feds’ Plan to Tax Grocery Firms Until Prices Drop Is Economic Baloney

People shop at a Loblaws store in Toronto in a file photo. The Canadian Press/Nathan Denette

Commentary

So I have a beef with the Trudeau administration’s plan to tax grocery firms until prices fall. And it’s not their milking it for partisan gain. It’s that it’s economic baloney.

The policy does have a greasy flavour about it. They’d been savouring their own sublime excellence until some polls landed like rotten tomatoes, then they whipped up this populist appetizer to combat Pierre Poilievre’s mysterious gift for proposals that make voters salivate. But as David Hume said, “Though men be much governed by interest, yet even interest itself, and all human affairs, are entirely governed by opinion.”

Even the most cynical operator is looking for a recipe they expect to succeed, whatever motivated them in cooking it up. Thus in announcing 39 parliamentary secretaries over the weekend, the prime minister must think they will serve him loyally in return for the tasty extra salary and perks that, added to 39 full ministers, let half his caucus access the supplementary trough, but the public won’t get indigestion from this bloated cabinet.

Also, as I previously noted, when they butter themselves with the word “continue” they count on us to swallow it readily. As in, from the same announcement, “This summer, we heard from Canadians about the issues that matter most to them. From putting more money back in the pockets of families, to building more homes, faster, and helping stabilize grocery prices, we are taking real and serious action. As the House returns this Monday, I know this team is ready to work hard to continue delivering real progress for Canadians.”

Alas, in the long run it is not the adjectives on the menu but the meal on the plate that matters, and this one is inedible. To descend from the galley (kitchen) to the galley (slaves), the new policy essentially amounts to continuing floggings until morale improves.

Whether they are serving up this gruel because they like it or because they think we do, virtually everything this administration has done has tended to increase the price of groceries, from runaway deficits to runaway inflation to a carbon tax designed to starve us of reliable energy, including those who grow, ship, and sell food, to endless woke regulations that make every form of cooperation harder, except predation. And all are concocted, explicitly or implicitly, deliberately or cluelessly, without the central ingredient in economics: healthy incentives.

The prime minister, with a heaping side of Jagmeet Singh, evidently views corporations as cornucopia from which bounty flows by magic, not hard work and expensive inputs, so any profit they gobble is unnecessary to wealth creation and gluttony, not legitimate appetite. Hence no amount of evidence of poor productivity growth in Canada due to excessive taxes and regulations induces him to consider cutting either. But if he and his colleagues fail to sow or reap diligently, they’re looking at some lean years.

Or rather we are. Trudeau picked from Singh’s plate the gripe that “Large grocery chains are making record profits ... on the backs of people who are struggling to feed their families.” Then, The Canadian Press reports, “He said the government will be asking the five largest grocery companies, — Loblaw, Metro, Empire, Walmart and Costco — to come up with a plan by Thanksgiving.”

He is literally trying to brew up a conspiracy in restraint of trade. And trying to explain that what matters isn’t the total profit but the margin would be like objecting to excess salt in raw tripe. Especially as we’re still trying to spoon-feed basic economics.

In a free market, grocers can’t gouge customers. From bargain-basement to high-end, stores must offer a combination of price and quality appealing to clients’ particular tastes and budgets, and somehow cover their costs while doing so, because if a store really is ripping people off, they’ll shop somewhere else… if they can. But when it comes to milk or butter, the state makes sure they can’t, and isn’t just surprised that these products are expensive, it can’t see it.

Predictably, food prices are rising especially fast in the government-monopoly aisle. As one commentator observed acidly, “Let’s look at CPI components under government price controls: Chicken: up 12.2% Milk: up 14.1% Eggs: up 16.9% But, go ahead with faux outrage about grocery stores.” But Jagmeet Singh is as starved for understanding on this point as on who’s propping up the Liberals, something he blames in his all-you-can-stand press release buffet on the Conservatives.

It’s not obvious that Poilievre’s Tories ever ordered economics in the educational cafeteria either. And the prime minister now wants to pour the same gall-heavy sauce over everything in the shop.

This policy would make a plaster statue gag. And I wouldn’t even put it in a doggy bag. It needs to be composted and used to grow a new and healthier crop pronto.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.