Toronto Mayor Olivia Chow and Ontario Premier Doug Ford help pack and sort donations at the Daily Bread Food Bank in Toronto on April 4.Sammy Kogan/The Canadian Press
Toronto City Council received a letter urging caution just ahead of its vote last month to establish a pilot project to create municipally run grocery stores. With margins in the grocery business so low – just 3 to 5 per cent – a city-run non-profit model would translate into a savings of just $11 to $18 per person per month, and likely less, once operating costs are considered, the letter warned. Such savings would not significantly help households struggling with high food prices without additional subsidy.
The letter wasn’t written by a right-wing think tank or a grocery giant, but by Daily Bread, a food bank that has fought for more than 40 years to end hunger and poverty.
The idea of publicly owned grocery stores resonates today, with many Canadians struggling with high food prices. However, this powerful fantasy of the left is an unhelpful distraction from the structural, if unglamorous, changes needed to help with the important issue of food affordability.
Public grocery stores were a key plank in New York Mayor Zohran Mamdani’s platform. Avi Lewis, the new leader of the federal NDP, is also pushing the idea, calling for a national network of publicly owned grocery stores.
New NDP Leader Avi Lewis, centre, holds a press conference with his caucus on Parliament Hill on Monday.Sean Kilpatrick/The Canadian Press
Toronto City Council and Mayor Olivia Chow jumped on the idea by asking staff to come up with a plan over the next year to open four city-run grocery stores in downtown Toronto, North York, Scarborough and Etobicoke. City councils in Ottawa and Vancouver have also explored the issue.
Toronto’s council proposes waiving the grocery stores’ property taxes and development charges, a de facto acknowledgment that these costs drive up prices for businesses and customers (a lesson that we hope they could apply more broadly). It’s unclear if these stores would occupy city-owned buildings and avoid the need to pay for rent.
Even with these perks, to bring down prices in a noticeable way, the stores would need hefty annual subsidies in perpetuity, something Mr. Lewis acknowledges. The cost and logistics would be a lot for the city to tackle, given it’s struggling to cover basic municipal functions such as running transit, tackling public disorder in parks and snow removal. Any new funding or resources would be better redirected to the many organizations already offering food to low-income residents.
And there are basic questions that need to be resolved. Could anyone shop at these stores, including wealthy people filling up their SUVs with cheap supplies? Or would there be some kind of income check – in which case, the city grocery store would function like a food charity with user fees?
Mr. Lewis’s proposal goes further than Toronto’s. He promises to hire unionized staff and purchase from small, local food producers, prioritizing entrepreneurs from historically marginalized communities. However worthy the ideals, they would likely add to costs or mean even higher subsidies.
For a single parent, food insecurity is a life of worries and ‘pain in my chest’
The NDP Leader says his plan would result in savings on groceries of 30 to 40 per cent. In a recent TV appearance, he proposed spending $350-million to launch a network of stores, with an annual subsidy of $300-million. The NDP plan is based on an analysis by the Canadian Centre for Policy Alternatives, which says a large network of 50 stores, including six distribution hubs, would increase buying power. Subsidies would cover operating costs, including rent and labour.
For the NDP, public ownership and endless subsidy is the answer to most of Canada’s woes, with Mr. Lewis also pitching municipally owned farmland, public cellphone and internet providers and having Canada Post provide banking services. These dramatic proposals attract attention, but they distract from more effective solutions.
The real reason that people can’t afford food isn’t simply because of “grocery store greed,” but because their income is inadequate. High inflation in food in recent years has made the problem worse. The painful reality is that there is no immediate solution. It will take time for wage growth to catch up with the surge in the cost of groceries. Politicians should be focused on making that happen as soon as possible.
The federal government’s move to boost the GST credit (rebranded as the Canada Groceries and Essentials Benefit) for lower-income Canadians is only a stopgap. Eliminating interprovincial trade barriers, dismantling supply management and increasing competition in meat production and grocery sales would also help keep a lid on prices.
Public grocery stores might be a grabby idea for getting attention on social media, but it’s a simplistic policy that should be left on the shelf.