Western Standard - Canadian food prices on the rise

00:00:00.000 the numbers don't lie and the numbers of food inflation in comparison with general canada's

00:00:05.120 general inflation don't lie either in august alone general inflation rose by 1.6 percent

00:00:11.680 while food prices rose by 3.5 percent hello my name is leah mushet i'm a reporter here at the

00:00:17.760 western standard and today i sat down with dr sylvian chalboa also known as the food professor

00:00:23.840 who went into what he believes is a policy driven issue that is causing the food prices to rise

00:00:29.920 for canadians can you explain like why it is that like you said the two biggest factors

00:00:36.880 was the gst holiday that was back in yeah december and up until february i'm pretty sure february

00:00:44.160 15th yeah okay yeah and also the ottawa counter tariffs as well contributing the most to the

00:00:50.400 inflated food prices so like how does it work exactly like walk us through that a bit well

00:00:57.360 both were policy decisions uh that that i personally opposed uh obviously in december when i testified

00:01:04.720 before senate uh against it uh i was concerned about opportunity pricing which means that whenever a tax

00:01:15.680 vanishes for a while typically you see prices cover that spread and then when taxes come back

00:01:22.800 they're slapped on higher prices that's what we saw in 2007 and 2008 when the gst

00:01:30.960 was reduced by one percent twice we were expecting inflation to drop but inflation actually went up

00:01:40.400 why because well uh retailers were motivated thinking well we'll just take over that one percent

00:01:50.560 uh essentially and that's kind of what happened and and so what i've advised the government is if you

00:01:56.480 are to play around with retail prices you want to make decisions at least permanently uh so it was much

00:02:04.400 worse than to do nothing uh the gst holiday and and we saw that in numbers from uh march and april uh clearly

00:02:13.360 and and and again it's not just uh people are saying well it's groceries very few products are taxed at

00:02:20.320 the grocery store the problem is that when when you actually see a few items go up you tend to see a

00:02:26.000 a title uh a tide effect everything goes up at the same time so whether it's in food service or retail

00:02:35.280 so that was the one piece that i i was concerned about and and i think actually contributed to a higher

00:02:42.000 food inflation rate and the other issue of course our counter tariffs we are the only country in the

00:02:47.520 world uh that have actually responded to the americans with counter tariffs other than china and uh we

00:02:56.480 actually were in breach of cosmo we actually did apply counter on a variety of different products

00:03:02.080 and nobody really paid attention and and politicians downplayed that quite a bit and and and the media

00:03:10.320 just bought into it they just bought into the narrative uh presented by ottawa until uh the u.s ambassador

00:03:19.760 to canada this summer acknowledged that canada was actually breached and we were tariffing a lot of

00:03:28.640 products uh that are supposed to be exempt and so a lot of sections that grocery store were impacted by

00:03:35.360 counter tariffs and so we were expecting higher a higher food inflation rate in august as a result of

00:03:42.000 that uh but all of these counter tariffs were uh paused on september 1st so we are expecting food

00:03:50.400 inflation to ease as we start the fourth quarter of 2025 so that's the good news okay uh on the thing you

00:04:00.400 were talking about for the gst holiday thing and then you said the retailers are then having incentive

00:04:06.240 to increase like the one percent that obviously the gst was taking off like so are you saying like for

00:04:13.040 example if one retailer does it most retailers are gonna like start doing it too like it's like kind of

00:04:17.360 like a trend yes absolutely so as soon as you disrupt market conditions uh with policy or through policy

00:04:28.880 you uh you bring two things to the market uncertainty and uh a negative impact uh penalizing consumers

00:04:38.080 essentially because uh companies and and and private sector players will always edge against uncertainty

00:04:45.280 that's i mean that's so if you if you buy ingredients uh and you know that your ingredients will become

00:04:51.360 more expensive uh or if you know that the market actually is getting more expensive you're just going to

00:04:56.800 play prices overall so that's that's the danger of of impacting or influencing market conditions over

00:05:07.040 time and that's exactly what we've seen with ottawa last decade or so my guess with mark carney uh

00:05:14.880 since he's an economist he knows all this and so since he's been in power you can see that there's

00:05:21.120 there's a bit of a change in in in in approach i i don't think we would have seen a gst holiday and i don't think

00:05:28.080 we would have seen a seen counter tariffs as a result of uh as with with mark carney as prime minister uh

00:05:33.840 justin trudeau just didn't understand border economics he didn't understand inflation or how

00:05:41.760 things work so i think the industry and i and i've spoken to quite a few leaders in the industry uh were

00:05:49.440 i mean a lot of people are still nervous obviously because of what's happening in washington but were

00:05:53.840 much less nervous uh by ottawa uh in general because some of the decisions were uh unfortunately not

00:06:06.880 not strong in the last i'd say six months or so okay well on that note um you also said in one of your

00:06:16.000 ex posts that you don't expect well lots of experts also don't expect the um food prices out

00:06:23.840 oh no is beef prices prices specifically as well to stabilize until 2027 so like yes why is it gonna

00:06:32.080 take like well i guess it's not exactly two years but like that long for it to stabilize uh we actually

00:06:39.840 have seen this uh picture before in 2014 there was there was a drought uh impacting uh the cattle industry

00:06:48.960 when when when a drought impacts uh a a market typically feed costs go up and uh the cost to

00:06:57.680 feed one cow per day at maturity is 75 a day so you want to get rid of them and so that's exactly what

00:07:06.320 happened in 2014 and inventories became quite low there was a a jump in prices this time around it's a

00:07:14.960 little different for two reasons one the drought actually impacted uh about 18 months ago 24 to 18

00:07:23.360 months ago a larger portion of north america uh so people sold off their herds the problem is that

00:07:32.800 they're cashing out a lot of producers are cashing out so there's less production going on right now

00:07:37.680 uh around north america so our herd size is the same right now as it was back in 1989 uh in in the us

00:07:47.600 it's the same as it was back in 1951 so uh so if you're um if you're a beef lover out there uh it's

00:07:57.520 it's it's gonna be tough for a while yeah no pun um yeah but there's actually the thing is that

00:08:06.960 there's actually mexican beef and australian beef on the market right now and mexican beef is actually

00:08:13.200 tougher not as tender comes from older animals basically so the australian beef is actually in my

00:08:21.920 view much better uh actually i've tried it it's actually not bad and it's actually cheaper so you

00:08:28.240 just have to look for it but there are deals out there but most of them most of these deals are

00:08:36.480 australian beef that's really hmm okay that's also kind of another question i had because i was looking

00:08:43.200 at like those stats can like they were saying like strip loin had increased i think it was like

00:08:48.720 from my math it was like 16 from june to july um and you wrote in your ex post also that in june

00:08:58.080 from the start of january 2025 to june 2025 there was like a 34.2 percent increase in strip yeah

00:09:07.040 strip line okay yeah so for those ones but then there was like a different cut and i'm pretty sure

00:09:12.240 it's like a more expensive cut i can't recall right now but it was like it decreased i think by like

00:09:16.640 one percent or something so is it because like because i know like strip loin and stir loin for

00:09:21.440 example are like really popular cuts i feel like they are portable yeah they're the most popular

00:09:27.680 premium cuts yes exactly so then i was wondering did also the fact that like most people are buying those

00:09:34.000 ones have like a a contributing factor to why it also increase because of like the demand for it as well

00:09:41.680 um well demand is is still strong it's just people aren't buying as much in volume i guess they're a

00:09:52.160 little bit more careful and uh because prices are well really high and so so there's there is a higher

00:10:00.560 conversion rate between beef and pork and beef and and chicken as well because people are looking for

00:10:07.440 animal proteins in fact um you can see that the entire food industries is is is recognizing this

00:10:14.640 as an opportunity because you're starting to see proteins in all sorts of things even coffee or

00:10:19.680 breakfast cereals uh why because animal proteins are becoming more expensive for 40 of the money you

00:10:26.240 spend at the grocery store um is spent on animal proteins like dairy and meat and so that 40 became more

00:10:35.040 expensive so people are are are looking elsewhere for their protein fix if you will okay that's interesting

00:10:44.880 um okay i have another question about like the tariff policies that you said all obviously also

00:10:51.360 contributed to the rising cost of food um do you think without these policies like ever put in place

00:10:57.360 from the beginning of the tariff war that we were having with the us if they hadn't been put in place do

00:11:02.960 you think we'd be in the same position we are now no not at all uh in fact i'm puzzled by by how

00:11:12.480 politicians are minimum minimizing the impact of counter tariffs at the grocery store and how media

00:11:18.960 also uh to a certain extent is not recognizing this at all uh yesterday when cpi numbers came out

00:11:26.880 they focused basically on meat because meat was a climate change issue which is true but

00:11:32.800 the mass the vast majority the vast majority of items that have gone up confectionary sugar uh

00:11:43.280 cookies crackers pasta sauces spices nuts citrus uh there's a long list of products that that were

00:11:54.160 terrorists i mean all of these things are are up five to twenty four percent coffee tea

00:12:02.640 included and so i'm i'm and actually the highest item uh was coffee at 22.4 percent and nobody was

00:12:11.680 talking about it yesterday because it's linked to a very very politicized policy decision which were

00:12:19.840 counter-terrorists okay yeah damn so i guess yeah yeah yeah but you're media but you're the western

00:12:29.760 standard so you know you're you're not biased at least i think i mean we're probably biased in our own

00:12:36.960 ways but like you know well you're biased it's just you're i mean the the problem right now is that every

00:12:43.440 single media outlet are extremely careful not to to to avoid politicize issues and uh inflation is one of

00:12:54.800 them counter-terrorists are are one of them a lot of people believe that counter-terrorists were necessary

00:13:01.440 to go up against trump uh the trump regime and i've always believed that you know there are other ways

00:13:09.200 to uh to uh work with the united states or send signals uh but counter-terrorists and and and taxing your

00:13:18.800 own people is certainly not a good idea well at least not for food prices for sure no because margins

00:13:26.320 are so low i mean that's the difference between food and other things that you're tariffing is that

00:13:32.160 in food there's just no margin of error you basically have to adjust prices very quickly and so we were

00:13:39.840 expecting the cpi to reflect that decision very quickly as well well let's see what i have that i

00:13:49.840 also wanted to ask you here yeah okay so i remember i kind of asked you this like um unlike another

00:13:58.800 article i was doing for like the steak like picture one and you were telling me that you don't you're not

00:14:04.960 certain as to why like beef prices in particular is so expensive canada because even you said in

00:14:10.800 comparison to the us like our prices for beef are much higher so like what's your like best hypothesis

00:14:19.360 as to why this is like if you could yeah just given all the stuff you know my best hypothesis as to

00:14:27.520 as to why it's like for example why is it more expensive i guess than the us and then also just like

00:14:34.080 yeah in beef yes well yeah i have a strong hypothesis i mean i i do think there's something

00:14:41.600 going on with processing packing uh the white house actually went after natural national beef tyson uh gbs

00:14:50.000 cargill and uh then they all they ended up writing checks to stay away from courts and uh that pressure

00:15:01.680 doesn't exist in canada and uh right now uh beef packing is controlled by two privately owned

00:15:09.200 companies cargill and gbs nobody has access to their books so you tell me so farmers are making more

00:15:16.400 money yeah obviously don't get me wrong they're making good money but what about cargill and gbs i mean

00:15:24.400 that what's going on there so there's just no clarity there and i'm concerned

00:15:28.560 i'm concerned i'm concerned the point i was making on x is something is going on here uh and uh and

00:15:38.960 yeah so i think it's it's it's it's long overdue i mean we just actually we're we're still dealing

00:15:45.360 with the bread price fixing scandal and um the investigation is still ongoing after 10 years

00:15:53.120 uh i don't think we actually take some of these cases very seriously and um that's damaging for

00:16:01.840 the industry's reputation for sure because everyone is saying well uh loblo is responsible for high

00:16:07.840 prices and sobeys is responsible for high prices it's a little bit more complicated than that

00:16:12.560 um is there more so there's probably more packaging like uh companies in the us for beef right

00:16:23.440 of course they are there are more players but uh there's it's still an oligopoly in the us

00:16:30.160 as it is in canada yeah okay so probably i would say from like what i'm hearing you speak right now it's

00:16:37.600 probably a contributing factor is the fact that it's owned by so few people or companies i i would

00:16:44.160 say so and the other thing when people actually are accusing retailers of gouging i i i immediately

00:16:52.480 call uh call them out because there there's just no evidence all these companies are publicly traded

00:16:58.560 you can look at their gross margins look at same stores through food sales look at there are several

00:17:03.200 metrics we have access to but for gbs and cargill you can't you just can't that's kind of crazy

00:17:12.320 well well it's it's i mean it's it's been like that for a long time it's just when food inflation

00:17:18.160 becomes a problem you want some answers yeah so then they should probably get more attention put on

00:17:23.600 them i would say so yeah so yeah thank you very much i appreciate you coming on today my pleasure yeah

00:17:32.240 it was interesting talking to you enjoy the rest of your day you too

Western Standard - September 19, 2025

Canadian food prices on the rise

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