Why is there so much secrecy when it comes to food inflation in Canada?
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Why is food inflation so runaway in Canada when we grow so much food?
General question.
There are two main reasons: rising fuel costs increase farmers’ output and transport costs.
Since we import different foods, the exchange rate is also important.
A weaker Canadian dollar means imported goods are more expensive for consumers.
Sylvain Charlebois, a food researcher at Dalhousie, said the lack of competition in the food space also contributes to higher food costs:
“All of these discount stores are affiliated with a handful of grocers that dominate the Canadian market — they’re not competitors, they’re joint arms of the major supermarkets.”
Speaking at the Agriculture and Agri-Food Standing Committee (AGRI) last week about major supermarkets, parliamentarians questioned the CEOs of some of Canada’s largest grocers about food inflation.
Canadian grocery giant Loblaws CEO Galen Weston was once asked, “How much profit is too much profit?” He asked.
Mr. Weston’s response was: “We’re a big company and the numbers are huge, but it still translates fundamentally to the dollar. [of profit] for $25 worth of groceries.”
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Companies like Loblaws have always been successful and continue to see their earnings increase due to inflation and population growth.
In February 2023, Loblaws reported a profit of $529 million in the fourth quarter. This fourth-quarter profit was nearly ten percent higher than last year’s fourth quarter.
On the subject of Loblaws, in 2019 the Trudeau Liberal government gave this highly profitable company $12 million to purchase new, energy-efficient refrigerators.
I will be following this topic closely and look forward to reading the AGRI Committee’s final report on this important topic.
The Trudeau Liberal government recently announced that Volkswagen will build a “gigafactory” in St. Thomas, Ontario, to manufacture electric vehicle batteries.
While commodity news on many levels, this raises the critical question of how much the new Volkswagen battery plant will cost Canadian taxpayers.
The answer to that is: we don’t know.
The Trudeau Liberal government has declined to say how much taxpayers will have to pay Volkswagen to build the plant.
Volkswagen, like Loblaws, is a highly profitable company.
The same can be said about tire manufacturer Michelin.
Prime Minister Trudeau announced this week that Michelin will receive $44.3 million in federal funding to modernize its Bridgewater, Nova Scotia tire plant.
Selective taxpayer-funded subsidies to wealthy corporations are not a new topic in Canada – at the provincial or federal level.
What’s new is that the amounts are surprisingly high.
This latest announcement regarding the Volkswagen Gigafactory sets a new standard of secrecy.
My question this week is:
Are you concerned about the Trudeau government’s lack of information on taxpayer funds with such corporate subsidies?
I can be reached at [email protected] (mailto:[email protected]) or call toll free at 1-800-665-8711.