How the feds made your groceries more expensive

The rising cost of food

Photo: Pixabay

Food inflation in Canada has nearly tripled in the last few months.

It was expected, but still jarring. In April, food inflation in Canada surged to 3.8% — a full 2.1 percentage points above the national inflation rate, and nearly double the U.S. rate of 2%.

Once again, food is the primary driver behind Canada’s headline inflation, amplifying affordability concerns from coast to coast.

Behind that 3.8% figure lie significant increases across key food categories. Meat prices climbed 5.8% year-over-year, with beef leading the pack at a staggering 16.5%. Egg prices rose 3.9%, while fresh fruit and vegetable prices increased by 5.0% and 3.7%, respectively. These aren’t anomalies. They reflect underlying cost pressures exacerbated by recent shifts in trade policy and supply chain strategy.

Since March, when both Canada and the United States implemented a new round of tariffs, the divergence in outcomes has been striking. U.S. food inflation has continued to cool, while Canada’s has nearly tripled over the same period.

In two integrated economies, this growing disparity should raise red flags.

The root causes are increasingly evident. Ottawa’s earlier decision to implement counter-tariffs disrupted long-standing North American procurement systems. In response, Canadian grocers began pivoting away from U.S. suppliers — particularly in categories like fresh produce and frozen foods — and turned to costlier or less efficient alternatives. The results are now showing up on the grocery bill.

Fortunately, that policy direction has changed. According to a recent report from Oxford Economics, Prime Minister Mark Carney quietly eliminated many of the counter-tariffs that had been inflating food costs. The decision, while politically delicate, was economically sound — and long overdue. Easing those restrictions is already beginning to relieve pressure along the supply chain. Over time, this could help stabilize or even slow food price growth.

But broader context matters. Among G7 nations, Canada now has the second-highest food inflation rate — behind only Japan. Food price increases in France, Germany, Italy, the United Kingdom, and the United States remain well below Canada’s. That begs the question: Why is food more expensive in Canada than in almost every other advanced economy?

The answer is not just international volatility or climate shocks. It’s also about domestic choices. Tariffs, protectionist procurement practices, and structurally limited trade flexibility have created a uniquely Canadian inflation narrative — one driven more by internal policy than by external pressures.

And Canada’s geoeconomic leverage simply doesn’t compare to that of the United States. Not even close. That’s why Carney’s reversal on food-related tariffs represents an opportunity — to reset policy priorities and adopt a more pragmatic, less performative approach to affordability.

Canadians should welcome this shift. But they also deserve transparency. Food inflation cannot be solely blamed on global disruptions or seasonal cycles. It’s time we acknowledged how much of it is homegrown.

Moving forward, federal and provincial governments must coordinate more effectively, communicate with greater clarity, and ensure that access to affordable, nutritious food remains a national priority.

Of course, there’s nothing inherently wrong with patriotic consumerism. But “maplewashing” — the marketing of imported goods under misleading “Canadian” banners — is misleading and risks undermining public trust. Worse, it can distort markets and push prices even higher. Grocers should not abuse.

As for the federal government, symbols like “Elbows Up” and “Canada’s Not For Sale” may have mobilized support during a volatile political moment, but they should never substitute for sound economic governance. Rhetoric can only go so far — and, in some cases, it blinds policymakers to the very consequences of their actions.

Canada’s food inflation story didn’t have to unfold this way. Now that we have an opportunity to correct course, let’s not waste it.

Sylvain Charlebois is the director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Kirk LaPointe: Carney’s cabinet is built to stabilize, not to soar

This cabinet won't soar

Photo: Mike Howell/BIV

Prime Minister Mark Carney at a rally in Metro Vancouver. in the final days of the 2025 federal election campaign.

Few prime ministers have arrived needing a great cabinet quite like Mark Carney.

What became evident Tuesday was that, despite a towering résumé and fresh mandate, he leaned heavily on his unpopular predecessor’s leftovers—less by choice than necessity. With the clock ticking from the moment he became Liberal leader, Carney assembled a cabinet built more for containment than inspiration. It's not yet the army for transformation—just the best field medic unit he could deploy on short notice.

Carney brought back many of the usual suspects mainly as a practical necessity, because he had a matter of days once he was elected Liberal leader to recruit significant numbers to change the channel as he called an election.

The product is a bulbous, two-tiered, gender-equal, 38-person cabinet—an inner circle of 28 full ministers, then a foggier assemblage of 10 ministers of state—to contend with not only the madness of the Donald Trump administration but the exceptional homegrown challenges of affordability, housing, immigration, health care, security and whatever suits your grumpy fancy.

Great prime ministers rarely govern alone—they govern beside a ballast.

Stephen Harper had Jim Flaherty to steer through the 2008 financial storm. Pierre Trudeau relied on Marc Lalonde to reassert federal strength after the October crisis in Quebec. Lester Pearson summoned the “three wise men” from Québec—Pierre Trudeau, Jean Marchand and Gérard Pelletier—to lend his minority heft and credibility. Mackenzie King unleashed C.D. Howe to run the cabinet like a business empire, and Wilfrid Laurier elevated Joseph-Israël Tarte to assert himself beyond the Ottawa bubble.

Carney’s version of that stabilizing force appears to be Dominic LeBlanc, handed a political Rubik’s Cube of responsibilities: U.S. trade, intergovernmental relations and stitching together what’s being called a “One Canada Economy.” A steady hand, yes—but not yet the bold stroke that redefines an era.

Contemporary cabinets bring with them expectations of economic rebound, of regional repair and even dividends arising from diversity. Carney’s selections owe more to improvisation of his quicky election as leader and prime minister, with eyes on Trump and more of a glance at the long list of local issues that in other administrations would be the focus. It’s more of a wartime cabinet with one mission: to seek something approaching peace to quell the threat from the ruler on the other side of what he unamusingly calls the “line drawn with a ruler.”

Some of the appointments Tuesday are deft: Chrystia Freeland, a leadership rival who got the ball truly rolling on the departure of Justin Trudeau, takes on a seemingly impossible role to eliminate interprovincial trade barriers by July 1. (Granted, Carney hasn’t said which year.)

Tim Hodgson, a former Goldman Sachs colleague of the prime minister, takes on energy and resources and ought to apply a more generous approach to pulling our prosperity from the ground. Carney’s environment and climate change minister is thankfully not Steven Guilbeault but Julie Dabrusin, who has been a parliamentary secretary in both the environment and energy portfolios that presumably conferred a less activist perspective. François-Philippe Champagne, his finance and revenue minister, can expect to feel Carney over his shoulder and not shudder (Justin Trudeau didn’t fare well with that portfolio’s occupant).

There was a significant British Columbian changing of the guard: Gregor Robertson, the former Vancouver mayor, takes on the gigantic task of the government’s massive “build, baby, build” initiative as housing and infrastructure minister and the senior role in B.C. Jonathan Wilkinson, the North Vancouver—Capilano MP who was the most experienced option available to Carney as a former energy minister, was surprisingly dropped from cabinet altogether. (Full disclosure: I ran against Robertson for mayor in 2014.)

An intriguing appointment is Kelowna MP (and former fighter pilot) Stephen Fuhr as a minister of state for defence procurement, a subsidiary role to the defence minister that will have some large decisions ahead to appease American demands.

The obsession with Trump was, after all, what made sufficient numbers of voters forget the three Liberals terms for five weeks so as to grant Carney the job. But it isn’t a permanently repressed memory; before long, it will create a two-track test of one issue in the White House and all sorts of issues in our own houses if Carney doesn’t lead differently and more substantively.

The true political challenge before long for the prime minister—more vexing than the negotiation over our capacity to avoid economic ruin by the United States—is to shed sufficient skin of Justin Trudeau’s calloused cabinet and governing style so he brandishes his version of Extreme Makeover: Home Edition by next election.

It is unfair to liken it to walking and chewing gum at the same time—more like conducting an orchestra with one hand and wrestling an alligator with the other.

Kirk LaPointe is a Lodestar Media columnist with an extensive background in journalism. He is vice-president in the office of the chair at Fulmer & Company.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Sylvain Charlebois: Why tipping in Canada needs a rethink

Reaching a tipping point

Photo: The Canadian Press

Tipping in Canada needs to be looked at says columnist Sylvain Charlebois.

Tipping fatigue is real — and it’s spreading.

What was once a gesture of appreciation has become an increasingly opaque and frustrating part of dining out. In our cashless, digital economy, Canadians are now routinely nudged — or guilted — into tipping more, often through emotionally manipulative interfaces.

Sad emojis for selecting a 15% tip? Prompts for 20% on a $6 latte? This phenomenon, known as “tip creeping,” has become a serious irritant for consumers.

But there’s a deeper issue, one that many don’t notice. In most provinces, tips are calculated after sales tax is added to the bill. That means a 20% tip on a $100 meal with a 15% tax becomes $23, not $20. This hidden markup adds confusion and undermines consumer trust, especially when it’s unclear whether the extra money, also known as “tipflation,” is going to the server, shared with staff or kept by management. Most diners never check.

Last week, Quebec decided to do something about it. It is now illegal in that province for payment terminals to calculate tips on post-tax amounts. Tips must be applied to the pre-tax total. In addition, restaurant operators must clearly display the total bill, including the tip. No emojis, no games, just transparency.

While some critics argue this is government overreach, the truth is inaction from the food service industry has made regulation necessary. The tipping model, once rooted in merit and service quality, has evolved into something that more closely resembles a wage subsidy. In many cases, consumers feel pressured into tipping simply to compensate for inadequate base pay, rather than to reward good service.

Some restaurateurs are now experimenting with tip-free models, incorporating service charges directly into menu prices. That eliminates guesswork and creates a more predictable income for staff. However, that shift isn’t without consequences. Top-performing employees may seek out tip-based restaurants where they can earn more, leading to talent drain.

There is also credible academic research suggesting tipping perpetuates discriminatory behaviour. Studies have shown tip amounts can be influenced by arbitrary and biased factors, like a server’s appearance or accent, rather than the quality of service.

Unlike in Europe, where gratuities are typically included in the bill, North America has clung to an outdated and often chaotic tipping culture. The restaurant industry has failed to establish coherent standards or lead a serious discussion about reform.

That vacuum has opened the door for governments to intervene, as Quebec has now done.

If the industry does not self-correct, we can expect more provinces to follow suit. For the sake of both consumers and workers, tipping practices need to be more transparent, equitable and consistent. Otherwise, public trust — and the sector’s integrity — will continue to erode.

Sylvain Charlebois is the director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Charlebois: Why Canada will lose half its dairy farms by 2030 — with supply management

Protecting dairy industry

Photo: Castanet file

Food profesor Sylvain Charlebois says Canada's dairy industry is in trouble.

Prime Minister Mark Carney is no Justin Trudeau. While the team around him may be familiar, the tone has clearly shifted. His first week in office signaled a more data-driven, technocratic approach — grounded in pragmatism rather than ideology.

That’s welcome news, especially for Canada’s agri-food sector, which has long been overlooked.

Historically, the Liberal Party has governed with an urban-centric lens, often sidelining agriculture. That must change. Carney’s pledge to eliminate all interprovincial trade barriers by July 1 was encouraging — but whether this includes long-standing obstacles in the agri-food sector remains to be seen. Supply-managed sectors, particularly dairy, remain heavily protected by a tangle of provincially administered quotas that limit flexibility, stifle innovation, and restrict national productivity.

Consider dairy. Quebec produces nearly 40% of Canada’s milk, despite accounting for just over 20% of the population. This regional imbalance undermines one of supply management’s original promises: Preserving dairy farms across the country. In reality, the number of dairy farms continues to decline, with roughly 90% now concentrated in just a few provinces — mirroring patterns in the U.S., where there is no federal supply management system.

On our current path, Canada is projected to lose nearly half of its remaining dairy farms by 2030 — even with supply management in place. Consolidation is accelerating, and it disproportionately benefits Quebec and Ontario at the expense of smaller producers in the Prairies and Atlantic Canada.

The prime minister must put dairy reform back on the table, regardless of campaign promises. The dairy sector represents just 1% of Canada’s GDP, yet its outsized influence on policy continues to distort economic priorities — benefiting fewer than 9,000 farms out of more than 175,000 nationwide. This is not sustainable. Many Canadian producers are eager to grow, trade and compete globally, but are held back by a system that prioritizes insulation over opportunity.

It’s also time to decouple dairy from poultry and eggs, which — though also supply-managed — operate with far more vertical integration and competitiveness. Industrial milk prices in Canada are nearly double those in the U.S., undermining both our domestic processors and consumer affordability.

The coming CUSMA renegotiation is a chance to reset. Rather than resist change, the dairy sector should seize the opportunity to modernize. Reforms could include a more open quota system for export markets, and a complete overhaul of the Canadian Dairy Commission to increase transparency around pricing. Canadians deserve to know how much milk is wasted each year — estimated at up to a billion litres — and whether a strategic reserve for powdered milk (much like our existing butter reserve) would better serve national food security.

Global milk demand is rising. According to The Dairy News, the world could face a shortage of 30 million tonnes by 2030 — three times Canada’s current annual production. Yet under current policy, Canada is not positioned to contribute meaningfully to meeting that demand. The domestic focus on protecting margins and internal price fairness is blinding the sector to the broader market realities.

We’ve been here before. The last time CUSMA was renegotiated, Canada offered modest concessions to foreign competitors and then overcompensated its dairy sector for hypothetical losses. This created an overcapitalized industry, inflated farmland prices, and diverted attention from more pressing trade and diplomacy challenges — particularly with India and China.

If Carney is serious about rebooting the Canadian economy, agri-food must be part of the conversation. But that means agriculture itself must step up. Industry voices across the country need to call on dairy to evolve, embrace change, and step into the 21st century.

Sylvain Charlebois is the Director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.