We need a Better Solution for High Grocery costs
Author: Paul Bootsma - Policy Advisor for CFFO
“Canada possesses a wealth of natural resources that ought to be harnessed for the benefit of both its citizens and export opportunities”
We need a Better Solution for High Grocery costs
Recent news has frequently highlighted the escalating prices of groceries in Canada. In conjunction with this issue, there has been a noticeable rise in the number of individuals relying on food banks. In a previous commentary, the author explored the factors contributing to the high grocery costs, noting that “government intervention in private markets, such as grocery rebates or price controls, may provide temporary relief but ultimately serves as a Band-Aid solution that can hinder long-term resolutions.”
Prime Minister Carney has proposed assistance to a segment of the population through a revised GST rebate program, (the intelligence of my computer beat me with the word ‘scheme’, rather than program), hmmm. This initiative will replace the existing GST rebate program with the newly introduced Canada Groceries and Essentials Program. However, there are several concerns regarding this program, the foremost being that it will not be implemented until July, while many individuals have been in need of support much sooner.
In simpler terms, the GST rebate will now be provided as a cheque intended for groceries and essential items. However, how that money is spent depends on the recipient. If someone chooses to buy a big-screen TV instead of groceries, we're not addressing the real problem of individuals struggling to afford the food they truly need.
CFFO recently sent a letter to our prime minister and other cabinet ministers expressing concern over this program. There are many other costs that have added to the challenge of purchasing groceries, if these are dealt with, consumers will have more disposable cash to use for food.
If the rising cost of groceries is indeed the primary concern, it would be prudent to develop a program that ensures individuals utilize the increased rebate funds specifically for essential food purchases. One potential solution could involve implementing a prepaid debit card that deducts the expenses incurred from grocery shopping from the card. As previously noted in the commentary by John Zekveld, Executive Board Director of CFFO, there are alternative approaches to address this challenge, including the reduction of other expenditures.
Canadians spent approximately 10.8% of their disposable income on food and beverages in 2025. While this average remains relatively stable, food costs are a significant expense, often making up 10–15% of household budgets. Lower-income households face a disproportionate burden, spending up to 28.2% of their income on food. In 2024, the average Canadian family spent $12,925 on food, including food purchased from stores and restaurants.
The 10.8% figure represents one of the lowest percentages among developed nations in terms of food spending, which is often referred to as a ‘cheap food’ program in Canada. Given the rising costs of food for Canadian consumers, it may be more effective to explore comprehensive solutions rather than simply providing additional financial assistance to specific income groups. We should consider the broader context and approach this issue thoughtfully.
The cost of the actual food is not the issue here; the farmer or producer is not seeing any gains from the higher costs of groceries. The added costs come from increased costs of transportation, costs of processing, health and safety regulations, all add costs. A big factor is inflation, since it affects all the steps to the grocery store. Government actions can influence inflation, primarily through spending management, which has not received favorable evaluations over the past decade.
Canada possesses a wealth of natural resources that ought to be harnessed for the benefit of both its citizens and export opportunities, contributing to a robust economy. The Agri-Food sector has historically been one of the most stable and successful industries in our nation. Its unfortunate that after all these years, we are struggling with feeding our own people.
We can do much better, the government can do much better.
Paul Bootsma
Policy Advisor for CFFO
The CFFO Commentary represents the opinions of the writer and does not necessarily represent CFFO policy.