Food for Thought

This isn’t a left or right issue. It’s a kitchen-table issue — and every Canadian has a stake in fixing it.

Canada’s Grocery Crisis: A Policy Choice, and How We Fight Back

Canada is in a food affordability crisis. Families are stretching budgets at checkout, and food banks recorded about 2.2 million visits in a single month in March 2025 — roughly double the number in 2019. One in five people using a food bank now has a job. For years, grocery prices climbed faster than paycheques, and families have never caught back up.

This is not bad luck. It is the predictable result of two compounding failures: government policies that drive up the cost of producing and transporting food, and a grocery oligopoly that uses those costs as cover to expand its profits. Neither failure excuses the other. Governments of every stripe helped build this system over decades, so fixing it should not belong to any one party. It belongs to all of us.

The Profits Tell the Story

While Canadians cut back, the largest grocer in the country did the opposite.

• Profits more than doubled. Loblaw’s net income rose from about $1.1 billion in 2019 to $2.67 billion in fiscal 2025.
• Profit margins nearly doubled. Loblaw kept roughly 2.2 cents of every dollar as profit in 2019. By 2025 it kept about 4.2 cents.
• Customer benefits shrank. At the same time, programs that helped shoppers were cut back — including reducing the discount on soon-to-expire food from 50% to 30% in 2023.
• The trend started before the pandemic. The Competition Bureau’s own 2023 grocery study found grocer margins had been rising since 2017, before pandemic supply-chain problems and before the inflation spike.

The Grocery Code of Conduct: A Positive Step That Misses the Point

Canada’s Grocery Code of Conduct took full effect on January 1, 2026, and all five of the largest grocery retailers have signed on. We recognize it as a genuine attempt to bring order to the relationship between large retailers and their suppliers. But it does not address the underlying problems driving up what families pay.

What It Gets Right

• Suppliers and farmers: It offers meaningful protection from surprise fees, costly chargebacks and arbitrary delisting by powerful retailers.
• Supply chain stability: Clearer rules should reduce conflict and make the supply chain more predictable.
• Indirect consumer benefit: Fairer treatment of suppliers may, over time, ease cost pressures and slightly steady shelf prices.

Where It Falls Short

• Not a price control: The Code does not regulate grocery prices. Retailers remain free to set whatever margins they choose.
• Doesn’t increase competition: It does nothing to break up the oligopoly or bring in new competitors. Limited consumer choice remains untouched.
• Industry polices itself: The Code is voluntary and industry-led. After a short period of public start-up funding, the industry pays for the office that oversees it.

The Two Root Causes the Code Ignores

• Government-driven input costs: Carbon pricing on industry, fuel taxes, tariffs, supply management and overlapping regulations raise the cost of getting food from farm to shelf.
• Corporate price gouging: A grocery oligopoly with too much power uses those higher costs as cover to stack on even higher profit margins.

We cannot use one problem to excuse the other. We need government to be smarter about the costs its policies impose, and we need competition law that actually breaks the power of the oligopoly.

STEP 1: Fix the Competition Laws

The Oligopoly Problem

When we talk about the “grocery oligopoly,” we mean primarily Loblaw, Sobeys and Metro, which set the competitive landscape for the entire country. Walmart and Costco are the only meaningful checks on their power, and even they are not enough.

The national problem becomes a local stranglehold. In Kelowna’s Lower Mission, Save-On-Foods is the only grocery choice residents have. A family there has nowhere else nearby to go, which means no competition to keep prices honest. This is why solutions need national laws, provincial laws and local policies working together.

FRONT 1: FEDERAL — Fix the Broken Rulebook

What the 2023–2024 Reforms Got Right

Under public pressure over grocery prices, Parliament amended the Competition Act through Bill C-56 (December 2023) and Bill C-59 (June 2024) — the biggest changes to Canada’s competition rules in a generation. Some are genuinely useful:

• Compulsory market studies: During its 2023 grocery study, the Competition Bureau could not force companies to hand over data. It now has court-backed power to compel information.
• Stronger merger scrutiny: When a merger would create a very large market share, the companies must now prove it won’t harm competition, rather than the Bureau having to prove it will.
• Restrictive covenants targeted: The Bureau can now challenge lease clauses that lock competing grocers out of shopping plazas, even when the parties aren’t direct competitors.
• Private right of action: Suppliers, competitors and others can now take certain cases directly to the Competition Tribunal, which can order companies to pay back gains from illegal conduct.

Public Pressure Is Already Working

• The Bureau obtained court orders in 2024 to investigate Sobeys’ and Loblaw’s parent companies over property controls, and widened its investigation of Sobeys’ parent, Empire, across Canada in June 2026.
• In July 2026, Empire announced it would stop enforcing restrictive covenants and would not register new ones. Loblaw has also publicly committed to ending its property controls.
• In June 2026, the Bureau launched a broad examination of competition across the entire food supply chain, with recommendations to governments expected in spring 2027.

These are real wins, and they happened because Canadians spoke up. But a company’s promise is not a law. Promises can be quietly walked back once public attention moves on.

Why the Reforms Still Fall Short

• No real break-up power. This is the critical gap. The Bureau can only seek to force a chain to sell stores after winning a long, costly case proving abuse of dominance. It has no power to fix a market simply because that market is dangerously concentrated. Merger rules only govern future deals and do nothing about the dominance that already exists.
• Restrictive covenants are challenged, not banned. They remain legal. The Bureau must fight them case by case, lease by lease, city by city. A blanket ban would be faster, cheaper and more effective.
• Enforcement depends on resources and political will. New tools only matter if the Bureau has the budget and backing to use them aggressively. Its budget is a small fraction of what a single grocery chain earns in profit each year.
• Market concentration remains intact. The reforms improved the Bureau’s ability to watch and investigate, but they have not changed who controls the grocery market.

What We Must Demand From Parliament

• BREAK THEM UP: Give the Competition Bureau power to force dominant chains to sell stores in over-concentrated markets, without first having to win a years-long abuse case.
• BAN THE BLOCK: Make restrictive covenants in grocery leases illegal across Canada, not just challengeable.
• FUND THE FIGHT: Dramatically increase the Bureau’s enforcement budget so its powers are actually used.

This isn’t radical. The United Kingdom’s competition regulator can order structural remedies after investigating a market, and it has restricted grocery land controls for more than a decade. U.S. and European competition law also allow dominant companies to be broken up. Canada is the outlier.

FRONT 2: PROVINCIAL — Follow Manitoba’s Lead

Manitoba has already passed the Property Controls for Grocery Stores and Supermarkets Act, which voids restrictive covenants that keep grocery competitors out. It proves this can be done in Canada, right now. British Columbia should pass the same law.

FRONT 3: MUNICIPAL — Stop the Squeeze at Home

While we push for federal and provincial change, our city halls can stop making it worse. Ask your Mayor and Council to:

• BAN THEM HERE: Pass a bylaw prohibiting restrictive covenants on all new city-owned or city-influenced developments.
• ZONE FOR COMPETITION: Use zoning to prioritize space for new and independent grocers, especially in underserved neighbourhoods like the Lower Mission.

STEP 2: Deal With the High Cost of Goods

The Input Cost Layer: Government-Driven Costs

Before a single product reaches the shelf, government policy adds cost at every stage of the supply chain:

• Carbon pricing: The carbon tax was removed from consumers’ gas bills in April 2025, but carbon pricing never left the food supply chain. Large industrial emitters still pay it, and those costs flow down to the checkout. Removing the tax people can see is not the same as removing the cost.
• Federal and provincial fuel taxes: These directly raise the cost of moving food across a vast country.
• Duties and tariffs: Any remaining tariffs on imported foods, especially fruits and vegetables Canada cannot grow in winter, make everyday essentials more expensive than they need to be.
• Supply management: This government-enforced system for dairy, poultry and eggs keeps prices higher to protect domestic producers. It is a direct, policy-driven price increase that falls hardest on lower-income families.
• Overlapping regulation: Food safety matters. But duplicated and inconsistent federal and provincial rules add overhead for producers and processors, and those costs inevitably reach consumers.

What We’re Calling For: A Food Affordability Act

We call on every Member of Parliament, of every party, to support a legislative package that would:

• Exempt the food supply chain from industrial carbon pricing, and publish an independent, public accounting of how much carbon pricing still adds to what families pay for food.
• Launch a formal review of supply management to modernize it for affordability.
• Eliminate remaining tariffs on essential imported fruits and vegetables.
• Cut duplicated regulation that adds cost without adding safety.

These are direct, practical steps that would bring relief at the checkout. They are not ideological. They are the obvious next steps for any government that takes affordability seriously.

How Can You Help?

We don’t need a formal group to create change. We need a wave of public pressure. It takes five minutes:

1. Contact your MP. Find yours at ourcommons.ca by entering your postal code. Call, email or write:

2. Contact your MLA. “I’m asking you to pass a law, like Manitoba’s, that bans restrictive covenants keeping grocery competitors out of B.C. communities.”

3. Contact Kelowna City Council. “I’m asking Kelowna to ban restrictive covenants on city-influenced developments and zone for grocery competition in underserved neighbourhoods like the Lower Mission.”

4. Share this. Send it to friends, family and neighbours. Every message to an MP counts, and every voice adds pressure.

The Bottom Line

Canada’s food affordability crisis is not an act of nature. It is a policy choice: the cumulative result of government-driven costs left unaddressed and a grocery oligopoly left unchallenged.

Progress is real. The Competition Bureau has better tools and is using them, the largest chains are backing away from property controls under pressure, and Manitoba has shown that provinces can act. But tools without the power to force structural change are not enough. The oligopoly remains intact, profits keep climbing, and Canadians are still paying the price.

We need government to reduce the costs its policies impose on the food supply chain, and we need competition law with enough teeth to break up entrenched market power. This is not about blaming one party or another. It is about doing what is right for every family in Canada. Half-measures have been tried. It’s time to demand the full fix.

Sources

Loblaw Companies Limited, annual financial results, 2019–2025

Competition Bureau Canada, Retail Grocery Market Study (June 2023)

Competition Bureau Canada, announcements on property control investigations (2024–2026) and the food supply chain examination (June 2026)

Empire Company Limited, statement on property controls (July 2026)

Food Banks Canada, HungerCount 2025

Manitoba, The Property Controls for Grocery Stores and Supermarkets Act

Office of the Grocery Sector Code of Conduct