Grocers agree to 'stabilize' food prices by Thanksgiving amid threat of 'grocery tax'

Industry Minister François-Philippe Champagne and Finance Minister Chrystia Freeland met with Loblaws, Sobeys, Metro, Costco and Walmart on Monday to discuss the next steps.

Grocers agree to 'stabilize' food prices by Thanksgiving amid threat of 'grocery tax'
Facebook/ Jagmeet Singh and JHVEPhoto - stock.adobe.com
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After the federal government threatened to tax Canada's top grocers, the heads of those companies have "agreed to work with" Ottawa to provide relief for Canadians.

Industry Minister François-Philippe Champagne and Finance Minister Chrystia Freeland met with Loblaws, Sobeys, Metro, Costco and Walmart on Monday to discuss the next steps. 

"As you would expect, those are difficult discussions but much-needed discussions at a time when Canadians are feeling the high prices of groceries," Champagne said after the two-hour-long meeting.

Freeland only attended the meeting for a few minutes, reported the CBC.

"The bottom line is that they agreed to work with the government to stabilize food prices in Canada," Champagne told reporters.

A follow-up meeting in person is expected between the heads of each company and the two ministers later this week.

The mad dash to lower food costs artificially came after Prime Minister Justin Trudeau threatened to tax grocers last week.

"Large grocery chains are making record profits," he said on September 14. "Those profits should not be made on the backs of people struggling to feed their families."

"If their plan doesn't provide real relief [...], then we will take further action, and we are not ruling anything out, including tax measures," he said.

If a plan is not in place by October 9, punitive tax measures could be on the way for the five large grocery chains, confirmed Champagne.

The call for relief comes as grocery prices rose 8.5% in July — nearly three times the overall inflation rate.

In August, food inflation remained high (6.9%) but down from the month prior.

Canada's Food Price Report 2023 predicted a 5% to 7% food price increase in 2023 following 10% increases last year, with vegetables, dairy and meat becoming more expensive.

The average family of four is expected to spend up to $16,288.41 annually on food this year — up an additional $1,065.60 from 2022.

Trudeau and NDP leader Jagmeet Singh have repeatedly accused major grocers of 'profiteering' amid high inflation.

Loblaw, Metro and Empire denied these allegations before a parliamentary committee studying food inflation earlier this year.

"Sobeys, one of the large corporate grocery stores in Canada, just posted a 52% increase in profits on food alone [for the] first fiscal quarter [of 2023]," said Singh on September 14.

"This comes as no surprise as Canadians have felt the impact of high grocery prices," he said, blaming "greedy CEOs" for profiting on the backs of struggling Canadian families.

However, a fact checker on X, formerly Twitter, clarified that Sobey's net earnings dropped from $173.7 million on January 29, 2022, to $149.4 million on February 4, 2023.

The jump in profits quoted by Singh is from their parent company, Empire Co. Ltd., which sold 56 gas stations in Western Canada during that period.

On Monday, Trudeau renewed his threat to "make sure" grocers rein in food prices with a pledge to amend the Competition Act.

This story is still developing.

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