Poverty Rates to Rise This Spring Due to Ongoing Food Inflation: Report

Prime Minister Justin Trudeau makes his way through the aisles of a grocery store, in Val d'Or, Que., on April 3, 2023. The Canadian Press /Adrian Wyld

As the cost of food creeps ever higher, so too will Canada’s poverty rate, according to the country’s Department of Social Development.

Ongoing food inflation will rise 14 percent or more this year, which will not only push up the price of pantry staples like peanut butter but will elevate the country’s poverty rate by spring, says a department briefing note obtained by Blacklock’s Reporter.

“As food prices increase poverty thresholds are likely to follow,” the November note, entitled Food Insecurity, reads. “This could impact poverty rates in Canada in the coming years. The impact of high inflation will be reflected in poverty statistics for 2022 expected to be released in the spring of 2024.”

The 2016 launch of the tax-free Canada Child Benefit is credited with reducing national poverty rates from 14.5 percent to 6.5 percent in 2020. The escalating cost of groceries bumped the poverty rate up to 7.4 percent in 2021, according to the most recent available data.

The Canada Child Benefit last year paid families up to $7,437 annually per preschooler and $6,275 for school-age minors under 18. Some 3.5 million families with six million children collected the benefit at a yearly cost averaging $25 billion, according to official estimates.

Cost of living adjustments to the program simply could not match higher food inflation, the note says, adding that approximately 13 percent of Canadians have “food insecurity,” up from 11 percent in 2020.

“Marginal food insecurity captures worry about running out of food or limited food selection due to a lack of money,” the note reads. “Moderate insecurity captures compromises in the quality or quantity of food due to lack of money; severe food insecurity captures missed meals, reduced food intake and at the most extreme going days without food.”

Food Prices on the Rise

Statistics Canada figures released Jan. 3 showed that of 110 food items being tracked through grocers’ check-outs across the country, only 47 saw minimal price declines between Sept. 1 and Nov. 30.

Of the 47 tracked items that decreased in cost, many had modest price drops like a one-cent savings on bananas which went from $1.68 to $1.67 per kilogram on average. Other minuscule savings included a one-cent drop on ground coffee, a two-cent decrease on toothpaste, and a three-cent reduction on frozen broccoli.

Produce was the worst offender for price increases, according to the StatCan report. The cost of apples rose 11 percent from $4.50 per kilogram to $5 while grapes increased 13 percent from $7.57 per kilogram to $8.52.

Citrus fruits, cantaloupes, strawberries, and a wide range of fresh and frozen vegetables also went up in price as did staples such as milk, butter, eggs, cheese, and bread. Infant formula and some cuts of meat also rose in price as did so-called bargain foods like pasta and cereal.

The report also found that year-over-year Canadians were paying:

• 6 percent more for potatoes to an average $4.97 per kilogram;
• 7 percent more for stewing beef to $20.48 a kilogram;
• 9 percent more for tea to $4.39 per 20 bags;
• 11 percent more for canned tuna to $1.82 per 170 gram can;
• 12 percent more for carrots to $3.65 per 1.4 kilogram bag;
• 14 percent more for hamburger to $11.72 a kilogram;
• 15 percent more for baby food to $1.64 per 128 millilitre jar;
• 18 percent more for peanut butter to $6.27 per one kilogram jar;
• 19 percent more for orange juice to $4.70 per two litre jug;
• 20 percent more for baby formula to $41.16 per 900 grams;
• 27 percent more for white sugar to $2.92 per two kilogram bag.

Prime Minister Justin Trudeau said last September that Ottawa expected major Canadian grocers to come up with a plan by Thanksgiving to stabilize prices.

Mr. Trudeau warned that if the plan did not go far enough the federal government would take further action, which could include tax measures. So far, the government has not implemented any measures to encourage cooperation.