Tough times for shoppers at the grocery store

Food inflation on the rise

It isn't a good time if you’re a consumer on a tight budget – and that means most of us. Consumers are under attack.

Canada’s food inflation rate was at a record 9.7 per cent in May and now everyone is noticing higher food prices and no section of the grocery store is immune.

What’s hitting Canada is a global phenomenon; food prices aren’t coming down anytime soon. The world will see a shortfall in commodity production this fall, which could push prices even higher worldwide. Supply chain issues, coupled with a new inflationary cycle triggered by the Ukrainian conflict, are impacting the food industry’s ability to fill shelves.

The shift is so incredibly sharp that many vendors can’t agree with grocers on pricing, pushing them to put their business on hold, as we saw with the Frito-Lay dispute with Loblaws earlier this year. There are many stop-sells out there.

The macroeconomic picture is one thing. But some policies in Canada are just making things worse.

The Canadian Dairy Commission (CDC), a Crown corporation, believed a second milk price increase was necessary for dairy farmers. Milk prices paid to farmers recently rose again by 2.5 per cent, after a record increase of 8.4 per cent in February. Last winter’s increase was so severe that most dairy alternatives are now priced the same as milk or lower.

The Dairy Farmers of Canada, one of the most powerful lobby groups in the country, requested another mid-year increase due to “exceptional circumstances” without telling us where the data is coming from.

To add insult to injury, the commission’s decision to raise milk prices was made by a federal public body operating for several months without a full complement on its board. The board only has two members and both are in dairy farming.

Conflicts of interest are rampant at the commission, just as in politics and academia. Many Canadian university scholars aren’t just researchers – they’re essentially advocates for their funding agencies representing the dairy industry. The dairy boards have power and influence beyond belief. If only Canadians realized. The fact that Dairy Farmers of Canada and the Canadian Dairy Commission work as one is deeply disturbing. Canadian consumers need to be heard.

Many Canadians would empathize with dairy farmers – who face higher production costs – if only the commission would share more data.

The lack of disclosure is very much about asking Canadians to support an inefficient dairy sector more than properly compensating farmers. And by fall, this new increase will price the dairy section at the grocery store out of the market for many consumers.

Ultimately, we stand to lose many more dairy farms as their sales decline.

The federal government is also coming forward with new labelling rules for saturated fats, sodium and sugar. Health Canada’s front-of-package labelling was long overdue, and it will make our food healthier. But the new policy also aims at a key single-ingredient product that many Canadians enjoy: ground meat.

Ground beef and pork are among the most affordable sources of animal protein we have. Based on the plans we’ve seen, only extra-lean ground meats are exempt from the new labelling. If this goes ahead, grocers will stop carrying more affordable ground meat, making the meat counter even more expensive. It’s just ridiculous.

The federal government is the consumer’s worst enemy right now. It needs to think through some of these ill-timed policies that will make food even more expensive.

Finance Minister Chrystia Freeland’s so-called anti-inflation plan presented recently won’t do much for Canadians at the grocery store. Many of us hoped for tax breaks, anything to ease our fiscal burden, as many countries have done in recent months. But Freeland opted to make a "microwave" announcement, basically reheating programs already in place – it’s like clapping with one hand.

NATO Secretary General Jens Stoltenberg recently said the war in Ukraine could last years. However regrettable this may be, this is what the Canadian government needs to focus on for the foreseeable future.

Farmers need help with inputs to prepare for fall, winter and next spring. The government should also become one of the world’s most influential trade advocates and prevent other countries from hoarding food. More nationalistic protectionism can only make things worse.

Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Economic opportunities missed during John Horgan’s reign

B.C.'s outgoing premier

There are three ways to discuss this.

1. As B.C. premier, John Horgan didn’t finish off business.

2. As premier, John Horgan is leaving unfinished business.

3. As premier, John Horgan has business to finish off.

There are three ways to describe the economic record.

1. The Horgan term can be described as not fixing what wasn’t broken.

2. The Horgan term can be described as trying but not succeeding to fix what wasn’t broken.

3. The Horgan term can be described as not quite breaking what didn’t need to be fixed.

There was, for example, the appeasement of the base of organized labour support. This has taken two shapes: the proposed elimination of the secret ballot when workers vote in favour or against forming a union (if more than 55 per cent sign union cards), and the narrowing of the labour supply to unionized trades only on infrastructure projects. One is democratically terrible, the other is fiscally so, but neither bad look was a concern in Horgan’s five years.

There was, for example, the appeasement of environmentalists with a forestry policy that offended Indigenous leaders and moved investment critical to employment in the sector to Alberta, the United States, even Sweden. On this file, in particular, the haste with which the policy was hatched and rushed through the legislature revealed much about the government’s true indifference to consultation and ineptitude on the larger parts of the province’s economic portfolio.

There was also, for example, the appeasement of the base that wanted a redistribution of wealth. Early on there was a shift to businesses of the burden of Medical Service Plan (MSP) premiums to an Employer Health Tax, the imposition of a batch of homeowner and homebuyer taxes and an increase in provincial income taxes in the upper third of the brackets. These were done under the guise of channelling funds into a stronger housing supply for the neediest, an easing of taxes on employees and a stronger hand into the pockets of those making more. When the pandemic hit, all but one of the proposed taxes in the 2020 budget were delayed – the exception being the additional surcharge at the top tax bracket. That was a clear signal that the government believed there was more to take from those who had found more to earn.

But these measures did nothing to improve the economy and missed the larger point of a health-care system revealed by the pandemic as laden with deficiencies and inefficiencies and a housing market that cannot be wrestled into affordability any longer, no matter the depth of taxpayer dollars.

As optics, though, under a premier with a publicly bonny disposition, these measures served to placate and even enlarge the base, no matter they were distractions from the more profound challenges that Horgan will leave to the next person.

The largest optical illusion, of course, was this year’s StrongerBC plan. This was the Horgan government’s most instrumental illustration of its vision for the economy: inclusive and clean growth, terms no one would find problematic. But in Indigenous etymology, it was big hat and no cattle. It set course for an economy without setting aside money to guide it. Apart from an announcement-day construction project – days before a provincial budget, where one would have expected an explosion of detailed spending plans – nothing constructive has come from it months later. Dust is settling upon its documentation as we speak.

The business community sentiment that greeted John Horgan to the job has not changed. The province is uncompetitive from a taxation standpoint and by no means a paragon of effective spending. If it is true that his administration did not take down the economy, it also cannot be said it has contributed to its growth. This is hardly the stuff of legend, yet Horgan must be identified as the first NDP premier to leave the role without an accompanying scandal.

The election campaign effectively started last week with Horgan’s announcement he is retiring as leader in the fall when the party chooses a new leader. In his gentle nudging of his party toward a more electable centrist position on some issues – energy development, for one – his successor will face the pressure to carry on that work to consolidate power.

Trouble is, like all party leadership contests, the races are rarely about moderation and conciliation. They’re typically rife with rhetoric and riddled with low-sense policy ideas that serve as red meat for the party stalwarts.

But by the fall we will know if a recession is in the making, if inflation has mauled the household budget and if higher interest rates are dampening the housing market and damning those in it. It is unlikely any of Horgan’s wannabe successors will focus much on that; economic stewardship has never been an NDP skillset, mainly because its leadership never draws from those environs.

What Horgan inherited from the previous administration was not squandered, per se, but the opportunity that existed with low-cost borrowing to lower taxes to generate growth has now passed. The next premier of British Columbia will not have John Horgan’s luck of the Irish. •

Kirk LaPointe is publisher and editor-in-chief of BIV and vice-president, editorial, of Glacier Media.

Pressure of homelessness builds as poverty accelerates

Poverty and homelessness

What causes homelessness in Kelowna?

I get asked that question a lot and there isn’t a straightforward answer. Many people point to mental health and substance use. It’s true they can play a role, but there are people who experience homelessness who don’t struggle with substances or mental health, so it’s not the whole story. We also know that most people who drink alcohol, use drugs or encounter mental health issues never experience homelessness.

Poor physical health, discrimination, trauma and disability can lead to homelessness. As can where you live, the social supports available to you, your family structure, your level of education and even plain, dumb luck. Bad things happen sometimes for no good reason.

There’s one factor I want to pay special attention to here. It’s the most important one: Poverty.

Money provides a safety net when things go wrong. Imagine the townhome you’re renting goes up for sale and you have to move. You discover rent has increased more than 20% and that’s only in the last year. Can you make that work with your budget? Maybe your 2007 Toyota Camry that always starts, suddenly doesn’t. It’s $1,500 to fix it and you no longer have a way to get to your worksite.

There are a million hiccups that can happen and, when you don’t have savings and you’re struggling to keep up with the bills, even a tiny disruption can spell disaster.

It's true that many people who live in poverty never experience homelessness, but we’re seeing more and more people in Kelowna arrive into homelessness for purely financial reasons. It’s a troubling trend.

You may have seen it for yourself in the cars parked outside of big-box stores overnight, packed full of someone’s belongings, a clear sign it’s serving as their home. It might be home for a whole family. You may have a friend or family member who’s had to crash on your couch until they get back on their feet. It’s heartbreaking, but stories like these are becoming a lot more common not only here in Kelowna, but across Canada.

These are people who have never experienced homelessness before and never imagined they would. They’re terrified, they’re ashamed, and they often blame themselves. They shouldn’t.

In 2021, Living Wage for Families BC pegged Kelowna’s living wage at $18.49. This is well above B.C.’s current $15.65 minimum wage, but it’s also miles below today’s actual living wage. We see it in the grocery store, at the gas pump, and nearly everywhere else. Everything seems to cost so much more than it did last year.

We’re in a critical time where the economic dice we’ve thrown has landed and we’re feeling the effects in our community. People in Kelowna are squeezed, and the result is poverty that’s turning into homelessness, and that means suffering.

These negative social trends come to us as a result of systems failures and misguided policies that often date back decades. It’s time to change the way we think about poverty and the people who experience it. It’s time we stop blaming poverty on the poor.

So, what can we do about poverty in our community?

There are many things you can do as an individual. You can learn more about social issues like homelessness and poverty, you can donate to, or volunteer with, organizations that work to improve conditions for people experiencing poverty and homelessness, and you can support projects, policies and politicians who are focused on solving these issues.

If you’re an employer, see if you can increase employee pay, especially if they are lower wage earners. We’ve seen some great examples of local businesses taking steps to improve conditions in this challenging time.

One of the simplest, but most profound things you can do right now is to simply show kindness and compassion.

If you see someone who’s struggling, treat them like you would anyone else – flash them a warm smile and say “hello.” You’d be surprised how much of a difference this can make. It’s a small act but it has big meaning. It shows that person that they’re still welcome, that even if they’ve lost their home, they haven’t lost their community.

At the Central Okanagan Journey Home Society, we’ve had our Face Homelessness public awareness campaign underway since the beginning of April. We’ve highlighted the impact stigma has on people experiencing homelessness through videos, articles, and stories of real people in our community. Stigma creates real harm.

This is true for homelessness and it’s also true for poverty. It can prolong, perpetuate and worsen both experiences.

Let’s make our community better by solving stigma. Find out how at journeyhome.ca/stigma.

Stephanie Gauthier is the executive director of the Central Okanagan Journey Home Society.

Support grows for B.C. anti-corruption commissioner following report

Cullen Commission report

More than three years have passed since the provincial government chose to establish the Commission of Inquiry into Money Laundering in British Columbia, also known as the Cullen Commission.

A lot has changed since May 2019, when it seemed that the final report would be released just a few days before an expected electoral campaign. COVID-19 happened, and with it, the opportunity for the provincial government to call an election and get a renewed mandate from voters.

In the end, the final report made its way to our desks and computers last week. Some of the conclusions fell short of the expectations of some political observers, who may have hoped for severe punishments for politicians and bureaucrats. For others, the fact that the commission could not unequivocally ascertain the existence of corruption led to peculiar victory laps and recriminations on social media.

Research Co. and Glacier Media last asked about the Cullen Commission in October 2021 and found a public that welcomed a deeper analysis into how people were illogically allowed to bring in hockey bags full of cash into casinos.

This month, upon the release of the final report, the level of satisfaction is higher. In our latest survey, more than three in five British Columbians (62 per cent, up five points) believe the provincial government made the right decision in establishing the Cullen Commission. A similar proportion (60 per cent, up seven points) feel we have learned more about why money laundering became a problem in British Columbia, and a majority (54 per cent, up five points) say we now know more about what to do in the future to curb money laundering in the province.

There is some movement when British Columbians are asked about who deserves “all of the blame” or “most of the blame” for the situation that transpired. More than two in five respondents (41 per cent, up two points) point the finger at the previous provincial government headed by the BC Liberals, while 31 per cent (down five points) think the responsibility primarily belongs to the British Columbia Lottery Corp. (BCLC).

Fewer residents openly blame the current federal government headed by the Liberal Party of Canada (27 per cent, up seven points), the current provincial government headed by the BC New Democratic Party (NDP) (20 per cent, up three points) or the Royal Canadian Mounted Police (RCMP) (18 per cent, up one point).

In spite of the Cullen Commission’s findings, the level of support for a new type of relationship between governments and contractors has grown. More than three in four British Columbians (78 per cent, up seven points) would welcome the creation of a Quebec-style Office of Anti-Corruption Commissioner "to ensure the co-ordination of actions to prevent and fight corruption in the public sector, including in contractual matters."

When we asked British Columbians to rate the veracity of a couple of statements, the numbers were extremely high. Almost seven in 10 (69 per cent) think it is “definitely true” or “probably true” that executives at the BCLC allowed suspicious cash transactions to continue in their casinos because these transactions resulted in higher revenue and pay bonuses. This is a troubling statistic for a Crown corporation that is looking to restore goodwill with the public.

For two-thirds of British Columbians (66 per cent), the notion that former minister of public safety and solicitor general Rich Coleman knowingly ignored warnings about suspected drug-money laundering in casinos rings true. This includes 75 per cent of those aged 55 and over and 67 per cent of residents of southern B.C. – two demographic groups that are crucial to the electoral success of the probably-soon-to-be-renamed BC Liberals.

More striking, only 12 per cent of BC Liberal voters in the 2020 provincial election consider the statement about Coleman – who according to the report failed to recognize that action was needed to bring “an immediate end to the suspicious activity” – as “untrue.” This explains why current BC Liberal leader Kevin Falcon was quick to “apologize unreservedly” for the situation. Only one of these two men has a political career to protect.

The final report from the Cullen Commission invites us to look carefully into the future. It recommends the appointment of an independent commissioner to oversee the provincial response to money laundering, as well as the reporting of all five-figure luxury goods transactions to a central authority.

The province’s authorities and ministers responsible must focus on identifying new scams and schemes, with a public that is happy to have learned about the past. Omission and incompetence may bizarrely seem like morally superior options to corruption in the minds of those eager to put the money laundering ordeal behind them. At this point, the court of public opinion is not convinced that there is much of a difference.

Mario Canseco is president of Research Co.

Results are based on an online survey conducted from June 17 to June 19, 2022, among 800 adults in British Columbia. The data has been statistically weighted according to Canadian census figures for age, gender and region in British Columbia.The margin of error – which measures sample variability – is plus or minus 3.5 percentage points, 19 times out of 20.

B.C. well-positioned to avoid recession, but risks looming

Economic concerns persist

The past three months have brought a caravan of negative news about the global economy.

Amid the war triggered by Russia’s invasion of Ukraine and the continued ructions stemming from the stubborn COVID-19 pandemic, the world is dealing with a toxic mix of escalating inflation, soaring oil and food prices, gummed-up supply chains and rapidly tightening monetary policy in the major advanced economies.

Since the beginning of June, both the World Bank and the Organization for Economic Co-operation and Development have sharply downgraded their economic growth projections for 2022 as well as 2023.

Measures of consumer sentiment have plunged in the United States, and housing markets have started to wobble. Soaring energy prices and trade disruptions linked to the Russia-Ukraine conflict have set the stage for a probable recession in Europe.

Of greatest concern, inflation readings are running at three to four times the official targets set by central banks, including the Bank of Canada. Equity markets have been tanking, shaving many trillions of dollars from worldwide wealth as investors recalibrate previous frothy valuations distorted by a long stretch of near-zero interest rates. Indeed, after two years of serving as cheerleaders for bloated asset markets, central bankers have radically shifted course. They are now the principal enemies of what, until recently, were sky-high valuations for public equities, private businesses, crypto assets and real estate.

This is the uncomfortable backdrop for Canadian forecasters struggling to update their assessment of what lies ahead for our economy.

At first glance, it is hard to see evidence of an imminent slump in the Canadian context– still less in B.C.

The job market is drum tight. Employment in B.C. now stands 100,000 above the pre-pandemic benchmark, and employers are scrambling to fill vacant positions. Canadian household net worth reached an all-time high in March 2022. Moreover, high global prices for energy, foodstuffs and some parts of the minerals/metals complex have worked to Canada’s economic advantage, generating a significant positive “terms of trade” shock.

In the year to April 2022, due mostly to rising commodity prices, the value of Canada’s exports surged by 21 per cent, while the cost of imports climbed by 11 per cent. The export lift has translated into tens of billions of dollars of additional income for Canadian businesses, employees, investors and governments. Closer to home, the improved terms of trade have also boosted B.C.’s merchandise exports, which were up 40 per cent in April over the previous year.

The challenge for forecasters is that the positive data noted above reflects the recent past. The key question is how runaway inflation and higher borrowing costs will weigh on the economy going forward.

Most forecasters – including the Business Council of BC – still see B.C. posting solid GDP growth in the range of three to four per cent this year, before dipping to around two per cent in 2023. But this projection rests on a few key assumptions: most importantly, that the world economy continues to expand, even if modestly, and that higher interest rates don’t crush the housing and real estate sectors, which play an outsized role in B.C.’s economy.

A few other factors should also help B.C. avoid a pronounced economic downturn. One is the elevated level of construction spending, flowing from a handful of large projects and further augmented by robust growth in public sector capital outlays. Second is the demographic picture.

Last year, B.C. saw a net inflow of 100,000 migrants, as international immigration roared back following a brief hiatus in 2020. The number of interprovincial migrants arriving in B.C. also rose.

The Trudeau government has settled on accelerating immigration as the main plank in its overall economic strategy. Whether this is a wise choice is debatable, but it will result in an expanding domestic economy as a growing population bolsters spending on goods, services and housing. A third factor that’s particularly relevant to B.C. is the expected rebound of international tourism, following two years of pandemic carnage. International visitors are by far the most lucrative slice of the broader tourism market, and they should be returning in large numbers over the balance of 2022 and beyond. That, too, should provide a boost for the province’s economy

From today’s vantage point, B.C. looks reasonably well-positioned to steer clear of a recession, even as the global economy loses steam. But the external backdrop has deteriorated dramatically, and the threat of more persistent inflation means downside risks are mounting.

Jock Finlayson is the Business Council of British Columbia’s senior policy adviser. Ken Peacock is the council’s senior vice-president and chief economist. This column first appeared in Business In Vancouver.

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