A couple of months ago, at a Foodland in the Beaches, I saw cucumbers priced at $4 each and I was pissed. Just a year ago cukes were $0.99, but the cost had been slowly creeping up. You probably have your own version of cuke-gate. Maybe it’s ground beef or Greek yogurt.
According to a recent StatsCan report, grocery store food prices increased 3.8 per cent from April 2024 to April 2025 — the third straight month this year that grocery prices have surpassed the overall inflation rate. And now U.S. tariffs are complicating the picture of cost of living. I reached out to David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives, for some clarity.
What should people be thinking about when reading headlines about rising food costs due to inflation and tariffs?
Part of what they should be thinking about is, “Who’s making money from this?” Corporate execs are still getting paid massive bonuses. The other thing to be aware of is that often it’s the last link in the chain that people blame, for example the grocery store. But there’s a lot of blame further down the chain, particularly with energy companies.
Will food costs ever go down?
Food prices are up 30 per cent since 2020. The increases in grocery store food prices really peaked in 2022 and 2023, where they were nine, 10, 11 per cent over previous years. That’s a big increase in food prices in a single year. In the last year the increase has been much more normal, in the two to three per cent range. Food prices aren’t going back to where they were in 2019. There may be a world where they don’t increase rapidly year to year, but they’re going to keep going up — just slower, hopefully. The only time inflation goes negative is if you’ve got a severe recession, and you don’t want that.
Where does that extra money that we now pay for groceries go?
There was a huge boom in profits starting in 2022 through to today. We’ve never seen profit-taking like this. It was an unbelievably great time for corporate Canada. When you break it down by industry, most of those profits were going to oil and gas. For example, in the supply chain of potato chips there’s diesel used to farm the potatoes, cook them, and move them to stores. A lot of that increase didn’t go to the grocery store selling the chips. It went to energy companies.
Why should the average person care that corporate profits are up?
Everyone’s like, “My company made all this money” but it’s not because you’re some super genius — it’s because you jack your prices up. It doesn’t take a PhD. And so when people think, “I can’t afford stuff at the grocery store. It’s hard to make ends meet” — well, it’s not hard for everyone. What’s worth understanding is that if you are the head of a big company, or if you own stock in a big company, you have had a great couple years. Corporate profits and executive bonuses are at obscene levels.
What about the threat of U.S. tariffs? Will that become another justification to jack up prices for consumers?
We don’t have a lot of broad-based counter tariffs against incoming American agricultural or food products. That’s not to say that can’t change very rapidly. We are counter-tariffing some things like orange juice and citrus fruits coming from Florida, so those will get more expensive. It’s possible for grocery stores to change where they get those products from, so instead of Florida it comes from Mexico, for instance.
Transport costs are plummeting right now, in part because shipping companies are doing a lot less shipping into and out of the U.S. as a result of all this uncertainty. Oil and diesel costs have come down as a result. If we had a perfectly competitive system that would result in lower food prices. But we have an oligopolistic system with two or three big providers of food — or, in some communities, only one — and so they might just pocket profits. Just because you’ve got some savings at the corporate level doesn’t mean that food prices will go down.
Is it possible for food prices to be regulated?
There are case studies out there. The Mexican approach was a basket of 32 staple goods, including bread and cheese. Each grocery store had to offer this for a maximum price, and the Mexican government actively pitted grocery store chains against each other. I think this is a viable approach to controlling food prices and making it affordable for people to spend money. All the big grocery store chains have house brands and if food prices were to go through the roof again, you could easily implement this.
This interview has been edited for length and clarity.
This article appeared in the 2025 Summer issue.