A shopper compares packages of meat at a grocery store in Dallas, Tex. Government-run supermarkets have emerge as one idea to fight persistently high food costs in Canada and the U.S.Lm Otero/The Associated Press
The R-word looms over the Canadian economy in 2026.
That’s resilience, not recession. Businesses have slogged through trade war uncertainty for more than a year, and the Iran war has generated big increases in fuel costs. Yet the latest numbers tell us the economy delivered modest growth for four straight months, overall inflation remains subdued and the jobless rate has been steady.
Investors feel fine about how things are playing out in the economy – that’s a big reason why the S&P/TSX composite index gained nearly 8 per cent for the first five months of the year after rising almost 32 per cent in 2025.
But the broader population feels beaten down and powerless to do anything about it. The explanation for this disconnect is rising grocery prices.
High fuel costs are a big problem, too. But crude oil prices fluctuate according to market conditions and could easily fall if the Iran war is settled. There’s nil chance of food prices declining from current levels in a broad and noticeable way.
The only question is how much they keep rising.
High food prices might be the most toxic form of personal-finance adversity in the past six years. For one thing, food inflation seems unstoppable, particularly with high oil prices driving up the cost of processing and transporting food.
Decoder: Here’s everything that’s pushing up food inflation right now
Expensive food also feeds an anger in the populace at a time when separation is being talked about in two provinces and the federal government is fighting a trade war that may require financial sacrifices by individuals. Supporting the status quo seems less appealing when you can’t afford groceries.
In polling about the top issues facing this country, affordability consistently ranks No. 1. Buying food is the most universal problem in affordability right now.
Food prices in March were 35-per-cent higher than just before the pandemic, BMO Economics reported last week. When a brick of butter costs $8.99 and a kilogram of ground beef goes for $20 or more, you can’t enter a grocery store without feeling like you’re being punked.
It feels lame to offer bargain food-buying ideas at this late date, but here’s one. Always look for the house or generic brand of a particular item as opposed to the brand-name version. That $8.99 butter? A house brand version was available from the same grocery chain for $5.99. The same $5.99-to-$8.99 price spread applied to Greek yogurt.
Buying name-brand products today seems like an indulgence unless you take advantage of sales or the limited but undeniably cheap selection of packaged food at dollar stores.
There’s no doubt that running a chain of supermarkets is a lucrative business in Canada, but the main driver of food inflation recently is import costs, including shipping. The federal government has next to no control over food costs, but it is nevertheless held accountable for them.
Editorial: Leave public grocery stores on the shelf
This explains the upcoming rebrand of the GST/HST rebate as the Canada Groceries and Essentials Benefit. A one-off top-up payment will be made to eligible lower-income families in early June. After that, quarterly payouts will rise by 25 per cent over the old GST/HST rebate amount for five years. All payments are tax-free and enrolment for those who qualify is automatic if they file a tax return.
The grocery benefit is no solution to crushing food costs, but it does allow the federal government to answer with something specific when its record on affordability is challenged. The same applies to a recent cut in federal gasoline taxes and some minor affordability measures outlined in last week’s federal spring economic update. Notably, the contribution rate for Canada Pension Plan premiums will fall by a small amount.
A more concrete idea for making food more affordable is the non-profit, government-run supermarket. New York Mayor Zohran Mamdani has plans for five government-run grocery stores, the first of which is to open by the end of 2027. Toronto City Council recently passed a motion to introduce four non-profit, city-run food stores, and new NDP Leader Avi Lewis is a supporter of the idea as well.
The words “government-run” do not suggest managerial competence, but the idea of non-profit grocery stores is worth trying for the simple reason that nothing else has worked to make food feel less unaffordable.
Feelings about food affordability could be the most important variable in Canadian economics right now. GDP, the inflation and unemployment rates and trade numbers are as vital ever, but we have a consumer-driven economy and a lot of consumers feel pretty bad these days.
Rob Carrick is a personal finance expert and former Globe and Mail staff columnist.
