Grocery chain CEOs fielded tough questions from MPs at a parliamentary committee meeting in March attempting to understand why Canadians face such high food prices. 
Dr. Sylvain Charlebois, senior director of the Agri-Food Analytics Lab at Dalhousie University in Halifax, NS also known as the Food Professor said there are other areas to look for that cause high retail food prices.  
“Is to recognize that there are some areas we need to look into and I don’t think that retail is the place.”   
Charlebois agreed there are issues with meat packing and some fundamental challenges dating back 20 years with BSE and mad cow fallout. The fish and seafood sectors have similar pricing issues to those involving cattle, beef and pork.   
“And so ranchers aren’t necessarily pleased, and rightly so, about what’s going on here. So those are the challenges that we face.” 
Canada’s grocery landscape needs more competition with more options for the industry and consumers.  
“The challenge for the committee is how to make Canada a more attractive place to invest, a more competitive place overall.” 
Retailers come and leave Canada, like Target, Sears, Lowe’s, and most recently Nordstrom because of huge interprovincial barriers and a super heavy fiscal regime.  
“We pay taxes on many things, including carbon, which scares many people away. Labour and rules between provinces are extremely restrictive. So honestly, it’s been cozy for grocers. The margins are steady. They’ve not taken advantage of anything, but it’s been cozy. Why? Because there’s just no competition.” 
The Food Professor said the carbon tax going to $65 per metric tonne on April 1 concerns him because no one has ever looked into how the carbon tax compromises Canada’s food affordability issue.  
“We’re slowly marching towards a carbon tax of $170 a metric tonne, more than double what it is now, and how will we deal with this? And so we need to know.” 
He cautioned on what this will do to Canada’s food security; this is about food here and can quickly get ugly if you can’t feed your people. 
Shrinkflation  
Shrinkflation describes a marketing strategy where a company reduces the quantity or size of a product while keeping the price the same or increasing it slightly. The company then maintains its profit margins while avoiding consumer backlash from a noticeable price increase. 
The Food Professor said the current Canadian fiscal regime and taxes have companies reducing quantities in manufacturing but prices remain the same.  
“When input costs go up in manufacturing, they don’t want to lose any market share so they don’t want to raise prices but reduce quantities.” 
More specifically in Canada, the Revenue Agency ruling clearly distinguishes snacking from basic groceries. Due to shrinkflation, some products ordinarily exempt from sales taxes suddenly become subject to a sales tax at the provincial and federal levels because they went from being an essential grocery item to a snack.  
“Granola bars had six bars in a box. Shrinkflation got a lot of companies to put in five granola bars instead of six granola bars. But if you go down from six to five, it becomes a snack.” 
When the consumer checks out those items cost an extra 15 per cent making the food more expensive.  
“It has nothing to do with industry, farmers, processing or grocers, it’s about our fiscal regime that is incredibly wacky, and that’s a scientific term.” •
— By Harry Siemens