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?

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. On June 20, 2024, Bill C-59, the Fall Economic Statement Implementation Act, 2023, received Royal Assent. It modernizes all aspects of the law to facilitate enforcement and increase competition in Canada to help make life more affordable for Canadians. Changes to the Competition Act have also allowed the Competition Bureau to advance its investigations into large retailers’ use of anti-competitive restrictions, known as property controls, that impact competition in the retail sale of food products.

Furthermore, the Government is 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. Budget 2024 also launched a National School Food Program, which is expected to provide meals for up to 400,000 kids each year and save the average participating family with two children around $800 per year in grocery costs.

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.

Food Prices
According to the latest monthly Consumer Price Index data for October 2024, price increases for food purchased from stores (groceries) was 2.7%, above headline inflation (+2.0%). Grocery price increases varied across the country. Grocery inflation continues to be lower in Quebec (+0.6%). Across the provinces, prices rose the most in Manitoba (+4.6%). For the territorial capitals, prices grew faster in Yellowknife (+4.9%) than Whitehorse (+3.6%) and no data is available for Iqaluit.
Inflation continues to be slower than last year across many key categories. Inflation varied across categories, including dairy (+3.8%), eggs (+2.3%), beef (+7.0%), pork (+9.4%), chicken (-0.3%), bakery products (-0.2%), fresh fruit (+0.3%), and fresh vegetables (+ 4.9%). Price increases for edible fats and oils have continued to slow (+6.0%) compared to their consistent double-digit inflation over the past three years.
As of September 2024 (latest comparable data), Canadian grocery price inflation (+2.4%) was the second highest among G7 countries, behind Japan (+3.7%).
Consistent with Canada’s World Trade Organization 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.
2025 Food Price Forecast
Canada’s 15th annual Food Price Report, jointly developed by several Canadian universities (Dalhousie, Guelph, Saskatchewan, and British Columbia), projects that food prices will rise by 3%-5% in 2025. The anticipated food price increases are attributed to a variety of factors including climate events; geopolitical risks; domestic and international policy development, particularly potential shifts in US policy following the election; labour disputes; changing global commodity prices; and fluctuations in exchange and interest rates. The report is a forecast based on the current and historical economic environment, and what actually transpires may be different.
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 2023 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 to 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 around $800 per year in grocery costs, with lower-income families benefitting the most.

The Food Policy for Canada
Launched in 2019, 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.
Budget 2019 announced programming investments of $134.4 million over five years including the Local Food Infrastructure Fund ($50 million over five years with an additional $20 million in top-ups), and the Food Waste Reduction Challenge ($20 million over four years) led by Agriculture and Agri-Food Canada (AAFC), and the Northern Isolated Community Initiatives Fund led by the Canadian Northern Economic Development Agency ($15 million over five years).
Budget 2024 included new investments to strengthen Canada’s food systems and make progress toward the Food Policy for Canada’s vision to ensure access to safe, nutritious, and culturally diverse food. These investments included $62.9 million over three years to strengthen local food security (Local Food Infrastructure Fund) and $42.8 million to strengthen access to culturally important foods (Northern Isolated Community Initiatives Fund, Canadian Shellfish Sanitation Program and implementing the United Nations Declaration on the Rights of Indigenous Peoples Act).
Local Food Infrastructure Fund
Budget 2024 announced $62.9 million over three years, starting in 2024-25, to renew and expand the Local Food Infrastructure Fund (LFIF) to support community organizations across Canada to invest in local food infrastructure. The next phase of the LFIF was launched on September 6th, 2024, and will continue to help improve community food security by supporting increased access and availability of local, healthy, and culturally appropriate foods, with a priority focus on equity-deserving groups within communities.
When the Food Policy was introduced in 2019, the Government of Canada invested $50 million over five years in the LFIF with an additional $20 million in top-ups through Budget 2021 and Budget 2023. Since 2019, approximately 1,110 projects were funded through LFIF over five intake periods, representing $65 million in AAFC funding. Projects ranged in funding size from $5,000 to $500,000 and spanned across all provinces and territories.
School Food Infrastructure Fund
On September 6th, the Minister of Agriculture and Agri-Food announced the launch of the new School Food Infrastructure Fund (SFIF). The SFIF will help not-for-profit organizations invest in infrastructure and equipment to support school food programming across Canada.
The $20.2 million SFIF is delivered as a complement to both the National School Food Program, and the guidance provided under the National School Food Policy.
Food Security in Canada
Food insecurity is a persistent problem in Canada, with higher rates among Indigenous Peoples, 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 ensuring that enough food is produced, it also includes ensuring that people in Canada can obtain safe, nutritious, and culturally appropriate food from sustainable food systems that are resilient and promote well-being and equity. Of these factors, income is the primary determinant of food insecurity at the household level 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 (46.0%), Black persons (40.4%), and Indigenous Peoples living off reserve (36.8%). According to other previous distinctions-based surveys, Indigenous people living in First Nations communities and Inuit Nunangat also 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 were fairly stable prior to the pandemic but increased sharply after 2020.
In March 2024, there were over 2 million visits to food banks reported in the HungerCount– up 6% from March 2023 and up 90% from March 2019.The report noted that about 40% 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 18%, up from 12% in March 2019. The top reasons cited for accessing food banks were food costs, housing costs, and low/delayed wages or not enough hours.
The report estimates that one third of food bank clients are children, consistent with previous years. In March 2024, food bank visits by those who identify as First Nations, Métis, or Inuit represented 9% of food bank visits. Clients from racialized communities represent over 45% of clients, up from about 39% in March 2023. The share of clients who have been in Canada for less than 10 years (newcomers) has increased to 32%, up from almost 27% 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, limited hours, lack of foods that meet cultural and dietary needs and stigma.

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 and made 13 recommendations to address the impacts and drivers of food price inflation across the supply chain, including improving relations and competition across the food supply chain.
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 and made 10 recommendations to address ongoing challenges in the Canadian food supply chain, including improving competition across the food supply chain and recommended actions to assist Canadians experiencing food insecurity.

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

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

• We are continuing to take action to strengthen 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 $1 billion 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.