Critics and members of the opposition have expressed concern over the federal government’s talk of potentially imposing additional taxes on major grocers. They argue that this move could worsen the affordability crisis faced by Canadians who are already grappling with rising food prices.
The same day, the Canadian Taxpayers Federation (CTF) called on Mr. Trudeau to “rescind his grocery tax threat.”
“The last thing Canadians need is a grocery tax,” CTF Federal Director Franco Terrazzano said in a statement. “Instead of hammering Canadians with a grocery tax, Trudeau should scrap his carbon tax, which is making food prices more expensive.”
“And let me be very clear: if their plan doesn’t provide real relief for the middle class and people working hard to join it, then we will take further action, and we are not ruling anything out, including tax measures,” he said.
Supply Chain Pressure
While Mr. Trudeau said in his announcement that major grocery stores in Canada were “making record profits,” the Retail Council of Canada (RCC) said the elevated food prices have little to do with grocer prices and profit.Agri-food professor Sylvain Charlebois from Dalhousie University, with whom Mr. Champagne has worked with to tackle food inflation issues, conveyed his unease with the idea of pressuring grocers on pricing, but said it was a decision made by the minister.
He also raised concerns about major brands leaving Canada, noting if prices are being mandated, the pressure will be felt throughout the supply chain.
“As an economist I’m worried, I’m really worried, because we’ve seen Nestlé get out of frozen food in Canada, Kleenex left, other brands left in recent years. If we want to increase competition, the last thing we need is an interventionist state,” said Mr. Charlebois.
“It’s a dangerous game to intervene that way, especially in the food industry when margins aren’t that big.”
He emphasized that the primary message he conveyed to Mr. Champagne was the importance of distinguishing between inflation and consumer confidence.
The professor noted that Quebec, where retail milk prices are regulated, has the highest milk prices. In terms of bolstering consumer confidence, Mr. Charlebois recommended a reform of the Competition Bureau, advocating for increased authority and expedited investigation processes.
Mr. Trudeau also said on Sept. 14 that his government is taking steps to reform the Competition Act to make “large businesses more accountable to Canadians.”