Question Period Note: FOOD PRICES AND FOOD SECURITY

Q1 – What action is the government taking to stop the persistent rise in grocery prices? Q2 – What is the government doing to support Canadians who are struggling with affordability of food and turning to food banks? Q3 – What action will the government be taking to respond to the AGRI Committee's report on Food Price Volatility?

R.1 - Our Government is committed to ensuring a fair, transparent and competitive marketplace to make life more affordable for Canadians.

On December 15, 2023, Bill C-56, the Affordable Housing and Groceries Act, received Royal Assent. This includes changes to the Competition Act to increase competition, and help stabilize prices for Canadians, particularly in the grocery sector. Other legislation that the government has recently introduced, including the Fall Economic Statement Implementation Act, 2023, will modernize competition in Canada and help make life more affordable for Canadians.

The Government is also committed to improving the availability and accessibility of information on prices along the food supply chain. The Government of Canada launched a Food Price Data Hub to provide consumers with timely data on food prices in Canada in a central and easy-to-access location. This information is provided through a partnership between Statistics Canada, Innovation, Science and Economic Development Canada and Agriculture and Agri-Food Canada.

Responding to the Government’s call for immediate action, on October 5, 2023, Canada’s top five grocery chains identified initial actions to help stabilize food prices (e.g., through price freezes and price-matching campaigns). R.2 - The Government has been working to provide relief for Canadians struggling with the increased cost of living. The 2023 federal budget included a new, one-time Grocery Rebate to offer inflation relief to lower-income families. This is in addition to broader social programming that was previously announced such as more affordable child-care and the development of a national dental care program.

The government is committed to making life more affordable, supporting and protecting Canadians, including stabilizing food prices. To help achieve these goals, the Government of Canada is strengthening support for consumer advocacy groups, funding projects to investigate practices that are harmful to consumers and working to support consumers in making informed choices and reducing household costs. These actions build on previously introduced measures such as increases to the federal minimum wage, the Canada Child Benefit, Canada Workers Benefit, and Old Age Security. R.3 - On May 23, 2024, the House of Commons Standing Committee on Agriculture and Agri-Food presented a report in the House of Commons entitled A Call To Action: How Government And Industry Can Fight Back Against Food Price Volatility.

The report contains 10 recommendations to the Government of Canada to respond to ongoing challenges in the Canadian food supply chain. My colleagues and I will work together to prepare a Government Response that will be presented to the Committee on Agriculture and Agri-Food and the House of Commons by September 19th, 2024.

Food Prices
According to the latest monthly Consumer Price Index data for April 2024, price increases for food purchased from stores (groceries) have slowed to 1.4% and increased slower than headline inflation (+2.7%). Grocery price increases vary across regions. Manitoba’s April 2024 grocery prices increased the slowest (+0.6%) while prices rose faster in New Brunswick (+2.9%). Prices grew faster than the national average in Whitehorse (+1.5%) and Yellowknife (+2.3%), no data is available for Iqaluit.
Inflation slowed in many key categories compared to a year earlier. Inflation varied across categories, including dairy (+1.2%), eggs (+4.4%), beef (+4.4%), pork (+1.5%), chicken (+3.2%), bakery products (+0.0%), fresh fruit (-4.4%), and fresh vegetables (+3.1%). Price increases for edible fats and oils continued to be much higher (+12.2%) than other sub-categories.
As of March 2024 (latest comparable data), Canadian grocery price inflation was the fourth lowest among G7 countries, behind Germany, the United States, and France.
Consistent with Canada’s World Trade Organization (WTO) commitments, provincial and federal governments deliberately have minimal direct involvement in managing food prices or production decisions in Canada. Their influence is mainly through measures to ensure an efficient and fair market, and by measures to mitigate the impact on vulnerable Canadians.
2024 Food Price Forecast
Canada’s 14th annual Food Price Report, a collaboration between Dalhousie University, the University of Guelph, the University of Saskatchewan, and the University of British Columbia, projects that food prices will rise by between 2.5% to 4.5% in 2024. The authors expect inflation to ease slightly during 2024. The anticipated food price increases are attributed to climate change, input costs, inflation, geopolitical risks, policies and regulations, and consumer trends and debt levels. The report is a forecast based on the current and historical economic environment, and what actually transpires may be different.
Recent announcements related to grocery affordability
The cost of food has increased in recent years and many Canadians are struggling with the price of groceries. The Government has been taking action to stabilize the price of groceries and deliver targeted support for those who need it most. However, a lack of competition in Canada’s grocery sector means Canadians are paying higher prices. Given this, the Government has been reforming competition law to create a grocery market where grocers compete to attract customers by offering the best prices.
A recent Competition Bureau study of the grocery sector found that profit margins have increased since 2017, and concluded there is room for more competition in the Canadian grocery sector. The government has already strengthened competition to make it easier for more grocers to set up shop and compete to bring down prices for Canadians, and will keep working to do this.
Through Budget 2024, the Government committed to supporting competitive prices for groceries and other essentials, and give Canadians more choices by:
• Monitoring the grocers’ work to help stabilize prices, as well as investigating other price inflation practices in the grocery sector, through the Grocery Task Force.
• Maintaining the Food Price Data Hub to give Canadians detailed information on food prices that helps them make informed decisions about their grocery options.
• Tackling shrinkflation and dequalification, including through the Office of Consumer Affairs, which has launched research projects to investigate and reveal price inflation and harmful business practices that reduce the quantity and quality of groceries.
• Enhancing competition through the Affordable Housing and Groceries Act, which amended the Competition Act to enhance competition, including in the grocery sector, by giving more power to the Competition Bureau to crack down on unfair practices; removing the efficiencies defence; and empowering the Competition Bureau to block corporations from stifling competition.
Budget 2024 also launched a National School Food Program, which is expected to provide meals for up to 400,000 kids each year. For families who manage to put enough food on the table but struggle to pay for it, this program is expected to save the average participating family with two children as much as $800 per year in grocery costs, with lower-income families benefitting the most.

The Food Policy for Canada
The Food Policy for Canada seeks to create a healthier and more sustainable food system in Canada; one that builds on the Government’s ambitious agenda to support the growth of Canada’s farmers and food businesses. The Food Policy brings a coordinated approach to dealing with food issues in Canada by building stronger linkages across existing federal initiatives that affect food. During Food Policy consultations, food security was identified as a priority issue that required greater government attention. The Food Policy includes the following four near-term action areas, to address key gaps:
1. Help Canadian communities access healthy food;
2. Make Canadian food the top choice at home and abroad;
3. Support food security in Northern and Indigenous communities; and,
4. Reduce food waste.

As part of the Government of Canada's Food Policy for a healthier and more sustainable food system in Canada, the Local Food Infrastructure Fund (LFIF) was created, which is a 5-year, $70 million initiative ending on March 31, 2024.
The fund supports community-based, non-profit organizations to improve their food systems through investments in infrastructure that are directly related to addressing food insecurities and increasing the accessibility of healthy, nutritious, and ideally, local foods within their community.
Since inception, there have been five intake periods, each with differing characteristics. Over 1,100 projects have been supported, with projects ranging in funding size from $5,000 to $500,000 and spanning across all provinces and territories.
Budget 2024 announced the provision of $62.9 million over three years, starting in 2024-25, to renew and expand the Local Food Infrastructure Fund. This investment will support community organizations across Canada to invest in local food infrastructure, with priority to be given to Indigenous and Black communities, along with other equity-deserving groups. Part of the expansion will support community organizations to improve infrastructure for school food programs as a complement to the National School Food Program.
Food Security in Canada
Food insecurity is a persistent problem in Canada, with higher rates among Indigenous, racialized people, and persons with disabilities. Local food programs enable communities to grow, process, store, and distribute food to those in need within the community, improving the availability of and access to nutritious, local food and reducing the need to shop at major grocery chains.

Food security goes beyond the production and supply of food to include the physical and economic ability to access food, as well as the availability of food that is nutritious, safe and culturally appropriate. Of these factors, income is the primary determinant of food insecurity in Canada. Based on the results from the 2022 Canadian Income Survey from Statistics Canada, in 2022/23, 22.9% of people lived in food insecure households, up from 18.4% a year earlier. That amounts to 8.7 million people, an increase of almost 1.8 million from the previous year. This is the second year that food insecurity has increased. The proportion of those who were marginally food insecure remained relatively stable over the past year, at 6.0%, while the proportions of those who were moderately (8.9% rising to 10.9%) and severely (4.0% rising to 6.0%) food insecure both increased.
Food insecurity is higher among female lone parent families (40.4%), Black persons (36.8%), Indigenous Peoples living off reserve (28.4%), and households with children (21.1%). According to other previous distinctions-based surveys, Indigenous people living in First Nations communities and Inuit Nunangat face higher food insecurity than the general population.
The percentage of children (persons under 18) who live in food insecure households has been increasing. In 2022/23, about 28.4% of children lived in food insecure households. This is an increase from the previous period (24.3%) and higher than 5 years ago (22.2%).
The HungerCount report, released by Food Banks Canada, is a survey of most food bank agencies, organizations and programs, within and outside of the Food Banks Canada network. The HungerCount provides a point in time snapshot of food bank use in Canada during the month of March each year. Food bank visits had been fairly stable prior to the pandemic, but increased sharply after 2020.
In March 2023, there were nearly 1.9 million visits to food banks reported in the HungerCount– up 32% from March 2022 and up 79% from March 2019.The report noted that about 42% of food bank visits were by those receiving provincial social assistance as their main source of income. However, the percentage of food bank visits by employed clients increased to a record high of 17%, up from 14% in March 2022. The top reasons cited for accessing food banks were food costs, housing costs, and low wages or not enough hours of work.
The report estimates that one third of food bank clients are children, consistent with previous years. In March 2023, food bank visits by those who identify as First Nations, Métis, or Inuit represented 12% of food bank visits. Clients from racialized communities represent about 40% of clients, up from about 33% in March 2022. The share of clients who have been in Canada for less than 10 years (newcomers) has increased to 27%, up from 17% a year earlier.
Food bank use does not represent the full scope of food insecurity in Canada. Many food insecure households will turn to other options before accessing a food bank, like delaying bill payments. Food insecure populations can face barriers to accessing food banks, like eligibility requirements or limited hours, in addition to stigma.
Grocery Affordability Report of the Standing Committee on Agriculture and Agri-Food
On October 5, 2023, the Government tabled its response to the Tenth Report of the Standing Committee on Agriculture and Agri-Food entitled Grocery Affordability: Examining Rising Food Costs in Canada, which was tabled in the House of Commons on June 13, 2023. For this report, the Committee studied food price inflation over the course of nine meetings between November 21, 2022, and April 17, 2023, reviewed five briefs and heard from 58 witnesses representing the primary production, food and beverage processing, and food retail sectors, as well as representatives from civil society groups. The Committee made 13 recommendations to address the impacts and drivers of food price inflation across the supply chain. The Committee highlighted the importance of improving relations and competition across the food supply chain, particularly in the grocery sector. The Committee also noted the importance of transparency in the food supply chain and how it can help consumers and firms make informed decisions to mitigate and address inflationary impacts.
Food Price Volatility Report of the Standing Committee on Agriculture and Agri-Food
On May 23, 2024, the Standing Committee on Agriculture and Agri-Food tabled their Eighteenth Report entitled A Call To Action: How Government And Industry Can Fight Back Against Food Price Volatility. In preparing this report, the Committee held seven meetings and heard from 27 witnesses on efforts to stabilize food prices between December 4th, 2023 and February 27th, 2024. Evidence provided during these meetings came from witnesses including the chief executive officers of Canada’s five largest supermarket chains, representatives from the primary production and food processing sectors, academics, and federal officials. The Committee made 10 recommendations to address ongoing challenges in the Canadian food supply chain. The Committee highlighted the importance of improving competition across the food supply chain, reiterated the importance of a grocery code of conduct as a solution to improve relationships in the grocery value chain and made recommendations on actions to assist Canadians experiencing food insecurity. The Committee also made several recommendations on areas where the federal government could provide relief, either in the form of greater support in addressing ongoing challenges, such as climate change and the reciprocity of standards, or regulatory relief from current or proposed federal policies that touch on food production.

• The Government of Canada believes food affordability is a critical issue and is taking action to stabilize grocery prices.

• The Government is amending the Competition Act to create a level playing field and improve affordability and consumer choice.

• We are also strengthening our food systems under the Food Policy for Canada.

• Budget 2024 announced key investments to strengthen food security in communities throughout Canada, such as $62.9 million in renewed investments for the Local Food Infrastructure Fund and $1B for a National School Food Program.

• The Government has also launched the Food Price Data Hub to improve the availability and accessibility of data on food prices.

• This is all part of the government's broader approach to putting healthy, sustainable, and affordable food on the table of Canadians.