Biting back against ‘greedflation’

Another spring is coming, but the rising cost of living—especially in food—is evergreen. Food is the great equalizer, as everybody eats. The present food inflation crisis started rising in 2021, a year in which about 5.8 million people across the 10 provinces suffered food insecurity for any period. The situation has worsened since. Many factors are responsible for food inflation. While we know supply chain issues following the pandemic have contributed to cost increases, New Democrats have been very concerned about “greedflation,” where companies use the expectation of inflation as an excuse to mask corporate greed, and jack up prices more than necessary to bring in record profits at the expense of Canadians struggling to keep up. The House Agriculture and Agri-Food Committee unanimously agreed to a motion I introduced proposing a study into greedflation, and has held six meetings so far, investigating food price and those who profit from it. D.T. Cochrane of Canadians for Tax Fairness and Jim Stanford of the Centre for Future Work have testified and argued that it isn’t the fault of the carbon tax, as the Conservatives have tried to insist. Oil and gas companies are raking in massive profits, reporting increased profits of 1,011 per cent over pre-pandemic levels in the last quarter of 2022, which is also driving up the cost of living. Some people might think the issue has more to do with problems in our food supply chain than anything else. It is true that more than half of retailers have said, in the second and third quarters of 2022, that they expected at least six months’ worth of trouble acquiring inputs, products, or supplies or keeping their inventories steady. But these facts don’t fit with the skyrocketing rates and levels of big grocery profit—these are net profits, after costs. Month-by-month, inflation rates have been falling since last June. Rates of food-specific inflation, however, have not only been more than a full percentage point higher for most of the twelve months between February 2022 and January 2023, but they’ve also climbed most months during that period. Food retailers, according to Stanford’s figures, are among fifteen sectors in the Canadian corporate landscape that made more net income between October 2021 and September 2022 than they did in 2019. On Feb. 13, I introduced another motion at the House Agriculture Committee to summon the CEOs of the big three grocery retail giants: Loblaw, Metro, and Empire. My committee colleagues unanimously agreed, and the CEOs finally appeared before the committee on March 8, where they were grilled with questions by MPs, including NDP Leader Jagmeet Singh. What can we do about this out-of-control greedflation? Corporate power and market dominance is the back story to all of this. Relying on the charity of CEOs to voluntarily lower prices that consumers are forced to pay is a fantasy proposition Canadians don’t have the luxury of relying on. Instead, we should solve the problem at its source. Fortunately, there are promising signs that the government is starting to get the message, if only under pressure from the NDP. Last year, the government did announce plans to review the Competition Act. Today, the Competition Act doesn’t forbid drip pricing or wage fixing, for example. Beefing it up by increasing the maximum fines for violations would discourage such practices—something the NDP has been pushing for: a stronger crackdown on anti-competitive behaviour. Progress towards another regulatory reform took a step forward this January, with some movement, finally, toward a mandatory Grocery Code of Conduct. Producers have supported a mandatory code of conduct at the retail level for some time now: it’s crucial to their economic survival. If it stopped retailers from double-charging producers, imposed stronger penalties for violating the terms of their contracts, or any number of other things, it would be a big improvement. There’s also an economic reform: a windfall profits tax. The NDP has been pushing this option to return money from large corporations to Canadians. The Parliamentary Budget Office found last November that applying a windfall profits tax on fossil fuel and grocery companies together could raise over $4-billion a year. Think how much that could do for people. Under intense questioning at the March 8 House Agriculture Committee, the big CEOs wouldn’t clearly state a position on a windfall profits tax. Big grocers are eating through our wallets. It’s time Canadians bit back, and I won’t stop pushing the government to find the political will to balance the scales for families and everyone who relies on big grocery chains for food. NDP MP Alistair MacGregor represents Cowichan-Malahat-Langford, B.C., and is his party's for Agriculture and Agri-Food, and Food Price Inflation.