In this week's show, we talk to Dr. Sylvain Charlebois, the Director of the Agri-Food Analytics App at Dalhousie University, about why food prices are so different from what we see in the grocery store.
00:06:01.460In the last few months, it's been incredibly volatile. Why? Because of the pivoting. A lot of grocers had to source food beyond the United States. Canadians just weren't buying American products in the middle of winter.
00:06:17.560And so a lot of grocers have to pivot and find grapes in South Africa, find produce in Egypt and other places to make sure that Cays actually had something to buy during their visit to the grocery store at an affordable price.
00:06:36.860I see. All right. Well, that does answer somewhat the question.
00:06:40.880And Loblaws, before we leave the United States tariff situation, in their newsletter, which I just happen to have here, the food inflation report comes out of Loblaws is, I mean, for the benefit of viewers who may not follow the numbers as closely as you do, I think there's something like 2,400 stores across Canada that are owned by Loblaws under different brand names from No Frills to, I don't know what they all are.
00:07:09.180Shoppers, actually. Shoppers is a big piece of Loblaw, absolutely.
00:07:15.160Well, okay. So Loblaws, as a public service, puts this very, very, very good newsletter out.
00:07:23.240And their headline for the last one was that tariffs are going to cost Canadians more for food.
00:07:31.520So I would hope that Loblaws knows what it's talking about and is not giving us incorrect information just to scare us.
00:07:40.960But how does the tariffs affect food that you don't import?
00:07:49.200Loblaws' communication strategy is really interesting because we do have quite a few grocers in Canada.
00:07:54.640But Loblaw is the only one trying to get ahead of what's happening with inflation, warning consumers about what's happening up the food chain.
00:08:06.300And I think it's a smart way to do it.
00:08:08.700So they have this T right next to prices right now.
00:08:12.860If you go into a Loblaw-operated store, you'll know whether or not a product was impacted by tariffs if you see a T right next to the price.
00:08:22.640And just yesterday, Pure Bank, the CEO of Loblaw, who's been on my podcast, the Food Professor podcast, he actually acknowledged that the number of products with a T was at 1,000 right now.
00:08:38.600But that number could increase to up to 6,000 over the next few weeks because of counter-terrorists implemented by Ottawa.
00:08:47.480The concern that Loblaw would have is that a lot of Canadians just don't understand how terrorists actually work
00:08:54.980They think that if Trump applies terrorists on Canadian imports, it impacts Canadians
00:09:02.340Not necessarily, it's the response from Ottawa that will impact the lives of Canadians
00:09:07.920And so I think that's really the message that Loblaw is trying to convey here
00:09:12.000and those counter tariffs will impact an increasing number of products because
00:09:18.080well they're running out of inventory so the inventory that was not subject to tariffs before
00:09:24.000say March the 4th now are subject to tariffs and prices are likely to increase for many categories
00:09:32.940so that's kind of the warning that we got from Loblaws in that newsletter and yesterday on LinkedIn
00:09:39.380but you're not saying that i think you talked about getting grapes from south africa a few
00:09:46.620minutes ago you're not saying that if we bring in grapes from south africa that the canadian
00:09:53.940government is tariffing those it's just american products is that correct that is correct exactly
00:09:58.980so then why would the south african grapes have a tea beside them no they they wouldn't they wouldn't
00:10:06.860It's just products coming from the U.S.
00:10:09.700Or let's say that there's an ingredient bought by a manufacturer in Canada that comes from the U.S.
00:11:21.980And two, their economy is much stronger than ours right now.
00:11:26.780If you look at the unemployment rate, it's pretty idle.
00:11:30.360the Fed, the Federal Reserve is not cutting rates, whereas in Canada, the Bank of Canada
00:11:36.600is cutting rates. That's a sign. That's a sign that confidence is not necessarily there for
00:11:43.060Canada. The cane dollar is basically the same, has the same value versus the American greenback
00:11:50.640for months now, despite the fact that American policies have actually hurt the American dollar.
00:11:58.400And so that's another sign. And lastly, and this is the most important one, food inflation is actually dropping in the US. So America can afford to implement tariffs on goods coming into the US because their economy is much more competitive, much more productive.
00:12:18.900Consumers are not as much in debt as well.
00:12:22.680And so you have all that happening in the U.S.
00:12:25.140While in Canada, people are losing their jobs.
00:13:10.700uh i mean i would say that right now not necessarily with the exception of perhaps
00:13:17.580some dairy products and some meat products particularly poultry you may find some good
00:13:23.160deals but i've actually been in the u.s three times the last six months and i i do go to grocery
00:13:29.360stores all the time so i went to uh oklahoma texas and new york and uh each time i didn't
00:13:39.160see much of a difference because of the conversion rate. I mean, our dollars at around 71 US cents
00:13:46.780versus $1. So obviously you have to pay more than a 30% premium to get the same amount of food. And
00:13:54.420that's certainly not helping cross-border shopping. So my only comment about this is that you will
00:14:03.720not necessarily save but you will have more more choices you will have more choices there are more
00:14:10.920choices offered to canadians for sure okay um you know i do recall that prior to the last u.s
00:14:19.320election on november the 5th that uh food prices egg prices were were one of the the trump talking
00:14:28.200points. He managed to convince Americans that that was the fault of the administration, the Biden
00:14:34.580administration. And I'm hearing now that they actually are coming down a bit. And I think you
00:14:41.100confirmed that. It's just that they hadn't come down enough to really make it worth driving a
00:14:45.760long way to reap the savings. That's correct. And so I think President Trump is partially correct
00:14:54.660in blaming the former administration because the avian flu was not very well managed in the U.S.
00:15:00.640at all. They lost control way before Mr. Trump was elected. And of course, the implications
00:15:06.500came after with the loss of flocks and birds. And we're talking over 200 million birds that
00:15:14.020had to be called. So obviously, egg prices became a problem early in 2025. But things are actually
00:15:22.540getting back to normal slowly in most states so uh the beauty of the poultry industry is that
00:15:29.660it can recover very quickly the production cycle is eight to nine weeks so if you if you are to
00:15:37.280experience say a swine flu impacting the hog industry uh the recovery uh time is is is longer
00:15:45.520because of the production cycle that is longer it's three to four months for example eight weeks
00:15:51.020All right. I have to ask you this. How much has the carbon tax been responsible? And I'm not just talking about the 20 cents a liter or whatever it was on gasoline and diesel. I'm talking about the fact that the carbon tax is incurred at every level of production.
00:16:16.980How much is the carbon tax responsible for our high food prices in Canada?
00:16:22.060Well, this is the one question that I've received countless times in the last couple of years for sure.
00:16:29.140Why? Because the Canadian government has never bothered to assess how the carbon pricing policy implemented through the carbon tax would impact food affordability in Canada.
00:16:40.720The true answer to your question is that we can't really tell because food prices at retail are impacted by several factors, several factors, including the weather, our own behavior, what we buy, what we don't buy will impact prices, eventually promotions, loss leaders.
00:17:02.600So it's very difficult to correlate the policy with retail prices.
00:17:07.580However, our lab, we've done some work in this area only to realize that there is a strong correlation between wholesale prices, so prices up the food chain versus the carbon pricing policy.
00:17:22.440And you can see that really the common tax has compromised the entire sector's competitiveness, which could eventually impact prices and how prices are set at retail.
00:17:42.120If you hear an economist saying that there is no relation, there is no impact, or there's a huge impact, both of them are wrong, because you can't really state for sure exactly how the carbon tax is impacting food prices over time.
00:18:10.620You know, it just seems we have the big grocers saying it's going to get worse, and certainly the evidence every time you go to the stores seems to be getting just that little bit more and sometimes that rather much more expensive to buy the thing that you went in there for.
00:18:30.400Yeah. So two questions. First is, would you care to venture a long-term prognosis on how this is going to play out? Does this just keep going or is there some reason to think that you're going to hit a plateau at some point?
00:18:49.960And then the second thing is, what can the consumer do about it?
00:18:56.240Should they stockpile things that keep, for example, in the belief that, you know, you're going to be in a year's time paying, eating something that you paid last year's prices for?
00:19:13.960I would stockpile one thing, and that's coffee.
00:19:16.080coffee has gone way up and i don't see how prices will will go down the other product is beef beef
00:19:24.420is very expensive and we're not expecting prices to drop either so if you see any of these two
00:19:29.740products on sale buy as much as you can for sure but i am i am hopeful that things will stabilize
00:19:37.520The challenge that we have right now coming out of the Trudeau regime is that we have seen many policy-induced inflationary phenomena, essentially.
00:19:54.300The GST holiday, to me, was a bad idea because you're basically playing around with market conditions, allowing opportunistic pricing to occur.
00:20:08.120As soon as you actually eliminate a tax temporarily, retailers, restaurant operators will actually cover the spread.
00:20:15.420And that's kind of what we think has happened in the last several months after the GST holiday.
00:20:22.680And of course, we've talked about the carbon tax compromising our food security.
00:20:28.640There's been other issues, the bureaucracy, interprovincial trade barriers.
00:20:33.680But we're having discussions right now to eliminate all that or to at least look at some of the nonsense from a policy perspective.
00:20:44.380And that's a good sign. That's a good sign.
00:20:46.840So I'm hopeful that the new government, led by Mark Carney, will look at food security through an economic lens to make sure that there's no one left behind.
00:21:01.600Because the last 10 years have been really, really tough for many Canadians, especially the younger generations.
00:21:10.500The cost of living issue is real for many, many Canadians.
00:21:15.040well yes i mean you just you would probably is it your lab that follows the food bank numbers
00:21:25.040that's correct absolutely i'm actually keynoting the food bank of canada
00:21:29.600convention in june in montreal so i work very closely with you mean there's a convention for
00:21:35.440food banks we have that many and after in fact the convention is to raise money and awareness