The chains would face "consequences" if they do not come up with a meaningful solutions to stabilize prices, authorities said
The Canadian government is taking aim at grocery giants warning them of "big consequences" if they fail to provide "relief for Canadians" by stabilizing food prices by October 9. The populist move comes amid the rising inflation in the country and PM Justin Trudeau's Liberal Party trailing badly in the polls.
Speaking at the Liberals' national caucus retreat in London, Ontario, on Thursday, Justin Trudeau said that he expects "to hear from them [largest grocery chains] by Thanksgiving on what their plan is to stabilize prices," adding that "if their plan doesn't provide real relief for the middle class and people working hard to join it, then we will take further action, and we are not ruling anything out, including tax measures."
The Minister of Innovation, Science and Industry, Francois-Philippe Champagne, confirmed in an interview with CIBC that he sent out invitations to CEOs of Loblaw, Sobeys, Metro, Costco and Walmart - the biggest grocery chains in the country - to attend in person a meeting in Ottawa on Monday in a bid to come up with a "meaningful action that would reduce price inflation in the grocery sector."
Champagne failed to elaborate on what kind of "tax measures" the Prime Minister had in mind, but instead reiterated that there would be "consequences" if they failed "to come to the table with a meaningful solution."
The move comes amid the rising cost of living in Canada and reports that the grocery giants have seen the record profits.
"It's not okay that our biggest grocery stores are making record profits while Canadians are struggling to put food on the table," Trudeau told a press conference Thursday.
The grocery CEOs denied the allegations of price-gouging and profiteering from the inflation, arguing that "the grocery chains operate with extremely small profit margins and have minimal influence on inflation."
The Retail Council of Canada that represents Canada's big grocery chains argues that focusing solely on grocery stores will not solve the problem of rising food cost as it is just a "tip of the iceberg" and instead urged the government to "look in the mirror." According to Karl Littler, senior vice president of public relations with the Retail Council, it's "the government public policies" such as ever rising carbon tax that affects farmers and food distributions, limiting the use of plastic that keeps the food fresh, fertilizer cost and vendor cost price increase that mainly contribute to price spikes.
"If they don't look at what's below the surface and what's actually driving food prices, then it's not going to be a very helpful exercise," said Littler.
The Trudeau government has come under fire for the weak response to the current financial crisis. The main issue remains housing affordability, with the benchmark housing cost doubling since 2013. The food cost has been rising at the rate exceeding the inflation, but in December 2022 Trudeau rejected taxing the profit of grocery stores arguing that the cost will be passed on to the consumers.
The public has been showing growing discontent with Justin Trudeau's handling of the economy, with the recent polls suggesting that only 26% of Canadians would vote for the Liberals if the elections were held today, with Conservatives taking the lead.
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