Last January, the federal government introduced the Canadian Groceries and Essentials Benefit. It replaced the GST/HST benefit for an estimated 12 million lower-income Canadians. The Carney government also raised the payments by 25 per cent.
Of course, it hasn’t lowered the cost of groceries. At most, it has given low-income consumers more money to buy groceries. That’s not the same thing and Canadians know it.
The other drawback is it in no way makes groceries more affordable for the other 21 million Canadians who don’t receive the benefit.
There’s also a real possibility that the benefit is making groceries more expensive for everyone.
If you suddenly give one-third of Canadians another $1,800 a year to spend on groceries without simultaneously producing more food, you will be driving up the price of existing groceries by increasing the number of people chasing a finite amount of food.
Prices go up, affordability does not.
But politicians love to give voters money rather than dealing with the underlying cause of food inflation. It’s easier and often voters can be bought off with their own money. Cash giveaways are generally easier to understand than undoing all the government programs and regulations that are popular with small but vocal segments of the agriculture industry.
Take Canada’s 9,000 dairy farmers for instance, half of whom are in Quebec.
Because of supply management — the regulations that limit the number of dairy farms there are and the amount of milk and other dairy products they are allowed to sell — Canadian consumers pays a premium of as much as 40 per cent for milk, cream, butter, cheese, yogurt and other dairy products.
However, anytime a Canadian politician suggests dismantling supply management, dairy farmers scream blue murder and threaten that thousands of farms and farm jobs are at risk and (my favourite) Canadian milk will become unsafe to drink.
We would be getting more dairy products from Wisconsin and other northern-tier states, not Uganda.
I don’t know whether any of you have eaten Chobani yogurt on your trips to the States. I love it.
We could have had a Chobani plant in Canada employing hundreds or thousands of workers, but the Ontario dairy farmers supply management board refused to sell the milk the company needed to make yogurt.
Canadian yogurts are perfectly acceptable, but consumers should have the power to choose. Instead, Ontario dairy farmers go together to block another yogurt that would have been made in Canada from Canadian milk.
If you want to know why Canadian groceries are so high (the highest in the G7) it’s because of a hundred petty decisions like that that make no sense but limit the competition that drive up prices for consumers.
Interprovincial barriers to free trade across Canada remain a costly impediment, too, despite the Liberal government promising more than a year ago to pressure provinces to get rid of them.
High fuel taxes make trucking an expensive way to deliver food, but I know of no other way to get food from Point A to Point B as quickly and (comparatively) cheaply.
Canadians, however, are seeing through the Liberal charade. In an article about the Canadian Groceries and Essential Benefit in Tuesday’s Blacklock’s Reporter, focus-group testing by the Privy Council Office found Canadians were genuinely positive about the grocery benefit, but had no faith it would lower their grocery prices or make life more affordable for them.
The program costs more than $2 billion a year and yet it is having no effect on the mentality or lives of Canadians. It’s a very expensive placebo designed to keep the masses happy with the Liberal government
“The important thing was to leave more money in people’s pockets,” said Finance Miniter François-Philippe Champagne. “This credit makes a big difference in the family budget.”
Families don’t think so.