OP-ED: The checkout line at the grocery store is not the crime scene

Food inflation in Canada is once again moving in the wrong direction. In November, it rose to 4.2%, up from 3.4% the previous month.

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Author: Sylvain Charlebois

Food inflation in Canada is once again moving in the wrong direction. In November, it rose to 4.2%, up from 3.4% the previous month. More troubling still, inflation for food purchased in stores climbed to 4.7%, the highest level since December 2023. For households already stretched thin, these numbers are not noise—they are signals.

A comparison across the G7 underscores Canada’s vulnerability. The gap between food inflation and overall inflation—a measure of whether food prices are rising faster than the broader economy—places Canada near the top of advanced economies. Only Japan shows a larger divergence. Canada’s gap stands at +2.0%, compared with +1.3% in the United Kingdom, +1.1% in Italy, and +0.5% in France. In the United States, the gap is negligible (+0.1%), while in Germany food inflation is running below overall inflation (–0.5%).

When food inflation persistently outpaces general inflation, the explanation is rarely macroeconomic alone. It points instead to structural stress within the food system itself—how food is produced, processed, transported, regulated, and brought to market.

Canada’s public debate has often defaulted to blaming grocers. Yet it is worth noting an important, and underappreciated, shift in Ottawa. Not a single cabinet minister in the Liberal government has openly blamed grocery retailers for food inflation in nearly two years. That rhetoric has largely been confined to the NDP and the Green Party. This is an improvement—and a revealing one. It suggests that the federal government increasingly recognizes that Canada’s food inflation problem is neither simple nor linear, and that slogans alone will not bring prices down.

The data support that realization. Claims of “greedflation” are not borne out by the evidence. Gross profit margins—measured as revenues minus the cost of goods sold—have remained largely stable across Canada’s major grocery retailers. If profiteering were the dominant force, margins would be expanding. They are not. What consumers are experiencing is cost pass-through within a system under strain.

Those strains are structural and policy-driven. Input costs remain elevated, including energy, fertilizer, and labour. Regulatory complexity adds friction at multiple points in the supply chain. Trade constraints and domestic production limits reduce flexibility. Logistics costs remain stubbornly high in a geographically vast country with limited redundancy. And Canada continues to suffer from a lack of scalable mid-tier food processors and distributors—the “missing middle” that helps stabilize prices in other advanced economies.

The composition of food inflation today reinforces this diagnosis. All three components of the meat category—beef, pork, and chicken—are rising simultaneously, an uncommon and concerning pattern. Coffee prices are up. Pantry staples are more expensive. Vegetables continue to climb. This is not a narrow or temporary shock; it is broad-based and embedded.

Other G7 countries offer a contrast. In Germany and the United States, food inflation is easing relative to overall inflation. Their systems are not immune to global pressures, but they are better equipped to absorb them through scale, infrastructure, competition, and policy alignment.

Blaming greed may be politically convenient, but it does little to lower food prices. The path forward lies elsewhere: reducing regulatory drag, improving transportation and logistics capacity, encouraging investment in domestic food manufacturing, modernizing competition policy, and enabling firms to scale.

Food inflation is not a communications problem. It is a systems problem. And until Canada fully confronts that reality, food prices will remain uncomfortably high—for consumers and policymakers alike.

— Sylvain Charlebois is director of the Agri-Food Analytics Lab at Dalhousie University, co-host of The Food Professor Podcast and visiting scholar at McGill University.