While putting a tax cut in the window is standard fare for Canadian political campaigns, the focus ignores a largely invisible tax on everyday Canadians and a growing threat to the future of Canada as an independent nation: monopolies. 

Before the election of Donald Trump in the United States, Canada was set to have an affordability election, driven primarily by the cost of housing and the prices shoppers saw on grocery store shelves. Grocery prices became a political flashpoint, with supermarket CEOs appearing before Parliament to justify their ballooning profits in the face of rising food insecurity and exploding food bank usage. Now in the rearview, the centres of electoral gravity for voters were split along generational lines between affordability and threats emanating from the Trump administration.

As part of its suite of policy responses to the cost-of-living crisis, in 2023 and 2024 the federal government strengthened Canada’s Competition Act, a relatively esoteric yet powerful piece of economic policy. The law polices the behaviour of large corporations and shapes the flow of mergers and acquisitions that can reduce choice and competition for consumers and businesses. Stronger laws meant Canada’s competition cop, the Competition Bureau, had more tools to go after the companies that had set themselves up as gatekeepers on the choke points of our economy.

There are many dimensions to the costs imposed by monopolies or oligopolies, shorthand terms for situations where one business or a group of businesses hold too much power relative to customers, workers or suppliers. The most common is price, which makes up the most visible component of the monopoly tax. Anyone buying a beer at a baseball game is familiar with the experience. With limited competing options, customers face high prices and can choose to stomach the inflated cost or do without. Those price premiums that would otherwise be competed away if the market was working correctly can be thought of as a monopoly tax on our economy.

Though a single economy-wide measure is not available, quick math in key sectors shows the potential return Canadians could stand to gain if we took monopoly seriously in our country. 

The amount the average Canadian hands a telecom each month was almost $70 in 2023. In Australia, the largest carrier brought in approximately $44 per user.

If Canada’s telecoms dropped their rates by just 20%, that would transfer $6 billion annually back to Canadians. 

In their study of the retail grocery space, Canada’s Competition Bureau found that grocers’ profit margins had risen by a “modest but meaningful amount” in the years following the pandemic. Make no mistake: grocery store margins are relatively thin, in the vicinity of 7% to 10% and typically lower on foodstuffs. But a monopolist can flex a low-margin business across high volumes to reap serious rewards. Contrast these findings with those of the United Kingdom’s competition law-enforcement agency, the Competition and Markets Authority. Since the onset of the pandemic, all but the largest U.K. grocery chains saw compression of their profit margins, suggesting that the burden of inflationary pressures was shared between retailers and shoppers rather than the Canadian model, which fully shifted it to consumers. 

While Canadian grocers have refused to reveal the margins they earn on food products, instead presenting blended margins across their entire business, major grocers saw profits rise in the years following the pandemic. Since 2020, Loblaw’s net earnings have risen more than a billion dollars, nearly doubling from $1.2 to $2.2 billion. But those profits paper over the dollars grocery giants used to buy back their own shares from existing shareholders. They do this to engineer healthy stock prices, rather than invest in their operations or lower costs to woo customers. From 2022 to 2024, Loblaw alone bought back nearly $5 billion of its own stock, with Metro and Empire trailing at $1.5 billion and $1 billion, respectively. In contrast, the more competitive market in the United Kingdom has giant grocers currently engaged in a price war that benefits shoppers. 

A familiar pattern 

What about another familiar monopoly pain point in Canada: the cost to access wireless services? In 2023, Canadians spent just over $30 billion keeping ourselves collectively glued to our phones. Breaking that down to the individual level, the Canadian Radio-television and Telecommunication Commission (CRTC) estimated that the average revenue per user (ARPU), how much money the average Canadian hands to a telecom each month, was almost $70. Looking at Australia, a market with similar geography and population density as Canada, the largest carrier reported wireless ARPU of approximately $44, with other carriers reporting even leaner figures. Even if Canada’s telecoms raked in ARPU that was just 20% lower than the current level, that would mean a transfer of $6 billion annually back into the pockets of Canadians.

Banking is another sector where a few familiar faces loom large. Though banking has more independent players than telecommunications – five players hold about 90% market share as opposed to three – outcomes are familiar to those on the lookout for monopoly. While the level of concentration in Canada’s banking sector is not unique, Canadian banks are some of the most profitable on the planet. That means that every dollar of deposits they take in or dollar of lending they send out generates a higher return compared to international counterparts. This is especially the case for the everyday banking services Canadians use, where the banks’ “stranglehold” reaps profit margins in the neighbourhood of 30%.

Banks make those margins from two major revenue sources: the difference between interest charged on loans and paid out on deposits, and the fees charged for access to banking services. Looking at just the fees side of the equation, economist Alain de Bossart puts the cost of Canada’s banking oligopoly at an extra $8.5 billion per year – or $250 per adult – when compared to countries like the United Kingdom with more competitive banking sectors. Bucking the idea that there is a tension between the level of competition and stability of the financial sector, the U.K. banking sector and its regulators have been able to deliver protection for the life savings of Brits while providing the lower prices and better services that competition brings.

This pattern is repeated in markets across the Canadian economy. Many of the intermediary industries that consumers rarely interact with directly have seen shocking levels of consolidation in the past decades. For example, nearly all beef processing that occurs in the country is handled by two foreign companies, JBS and Cargill, which have split the markets of the country regionally. This dominance gives the firms pricing power over ranchers, who face a take-it-or-leave-it choice to get their products to market. 

Tallying up all of the above estimates on a handful of sectors suggests that the monopoly tax for Canadians runs up to tens of billions annually, dwarfing the income tax cuts proposed by either the Liberals or Conservatives in their election platforms. 

From tax to sovereignty

While the dollar costs of monopolies may be the most in-your-face component of their cost, the early months of the second Trump administration have been a reminder that the cost of monopolies runs much deeper. One that we ignore at our own risk.

Moving beyond just price, monopolies are really about control: who has it and who does not – in markets, in the economy and in our lives. When we are subject to a monopoly, our freedom is curtailed by the interests of that monopoly. This concept scales easily from the very micro to the macro. You lack control when your building has a single internet provider, when an employer slaps a non-compete clause on your employment contract, when a company limits the stream of information fed to you and your community, and when a single country is responsible for much of the global production of an important product, or inversely, the lion’s share of your exports.

In response, we attempt to offset these lacks in our economy and society through a variety of methods. We set the rules of the road for markets and allow individuals and companies to compete, and we create institutions and checks and balances to ensure that no individual institution becomes too powerful. The results are imperfect and evolving, but they stem from an understanding that being on the wrong side of a monopoly is hazardous to us and our society.

This is part of the reason why it’s important to understand that the economic volatility and national soul-searching of late in Canada that appears to be a Trump problem is, ultimately, a monopoly problem. In ways we are now being reminded of daily, we have integrated our economy with a country with a much greater gravitational pull than our own and are now faced with the consequences as it charts a very different course for itself and the rest of the world. 

The danger that slims the pockets of Canadians is the same one that puts the future of our sovereignty at risk. We need to take a broader view of the risks present from our not-so-friendly neighbour to the south so that we can begin the process of mitigating them. 

The cost of Canada’s banking oligopoly is pegged at an extra $8.5 billion per year, or $250 per adult, compared to countries like the United Kingdom.

No picture summed up one of the key monopoly risks of the current state of play more than the front rows at Trump’s inauguration. After feting the president with millions in donations, the billionaire CEOs of the world’s largest technology companies were front and centre as the new president was sworn in. These people represent not only vast wealth but control over the main methods that Canadians use to access information, communicate with one another and build their businesses. As Canada enters a new era of its relationship with the United States, we should realize the ability of these firms to shape the information environment around us and expect access to critical services like cloud computing to become tokens to be exchanged for deeper incursions into our sovereignty. The Trump administration has made clear that it considers attempts by other countries to police the operations of tech platforms within their jurisdiction as affronts to U.S. innovators. The assumption that these threats will extend only to seemingly esoteric policies like competition and online safety is likely to prove short-lived.

Thankfully, Canada is not alone in re-evaluating the risks posed by its integration with U.S. technology companies. While the United Kingdom has taken the tack of placating Big Tech to gain favour with the Trump administration, the EU has signalled that it is ready to stand firm on its efforts to maintain its sovereignty over firms operating in its jurisdiction with legislation like the Digital Markets Act. 

Standing up to monopolies at home will mean embracing competition, empowering other firms that are seeking to disrupt the status quo and strengthening the Competition Bureau so that those firms can compete freely and fairly. Standing up to the monopolies that span far beyond our borders will mean a deeper level of partnership and coordination with allies that understand that the sovereignty of nations is a value worth fighting for.

The task of Canada’s new federal government is not enviable. The monopoly threats from abroad to Canada’s independence have never been greater, and we must forge a path divergent from the pro-consolidation and U.S.-centric consensus that drove the past 40 years of policy-making. But while a Team Canada approach is appealing amid a surge in nationalistic sentiment, we cannot lose sight of the monopoly tax that has been levied on Canadians year after year by companies operating within and across our borders. 

In both cases, the task for Canadians is to prove that we are masters in our own house, in control of our economic destiny. 

Keldon Bester is the executive director of the Canadian Anti-Monopoly Project, a fellow at the Centre for International Governance Innovation, and a former special adviser at the Competition Bureau.

The post The other sovereignty threat appeared first on Corporate Knights.

There was an unmistakable pause on the other end of the phone.

As the customer noted, a pricing error like this gone unchecked may have racked up thousands in lost revenues for the grocer.

At a time when trust and respect for grocers might be at an all-time low, this was a window into an alternate reality. This customer genuinely cared about the business because he’s one of 16,000 customers who own it.

Known as “food co-ops,” these consumer-owned grocery stores number in the hundreds across the United States and Canada, with many commanding generous market share in the communities in which they operate. Nelson’s Kootenay Co-op,* where this story unfolds, competes successfully with supermarkets owned by Western Canada’s “Big Three”: Jim Pattison Group, Sobeys and Loblaw. With revenues of $26 million, Kootenay Co-op is the third largest private employer in the city of 11,000. The head office? Inside the store. The CEO? Sitting around the corner from the teenaged dishwasher. The board of directors? One-hundred percent local.

Most food co-ops share similar origin stories. At some point, people became fed up with the grocery stores they relied on, and, rather than continue finger-pointing, they chose a more empowered position and built their own. Co-ops often arise as the “new growth” that follows the metaphoric wildfires of war, greed, oppression, economic inequality or collapse, and they’re a product of social revolution – a vision for a new way of living. Whatever the cause, co-ops often materialize when people are ready for change.

We seem to be at another one of those junctures. With tempers flared over food prices and trust eroded by price-fixing scandals, it is safe to say consumers are fed up with Big Grocery. But are they fed up enough?

This might be the most opportune time in the last 50 years to question our deepest assumptions about how we buy our food.

Privatization, prices and profits

Imagine a world where nearly 80% of the sale of and access to drinking water is handled by five corporations. That is Canada’s grocery landscape – how we access food. And with the pending merger of two of the U.S.’s largest grocers – Kroger and Albertsons – concentration in that country’s grocery sector may become quite similar.

With less competition comes higher prices. Look no further than Canada’s mobile phone market – where infamously high cellphone bills have become a red flag to consumers worldwide regarding the risks of market concentration. Canadians were hopeful when Wind Mobile entered the market in 2008, but the “Big Three” telecom companies fought hard to keep it out. Canada’s telecommunications regulator found that Wind was charged “many times more” to roam on the Rogers network than the price the telecom giant offered its customers or other mobile carriers. Wind struggled until it was eventually acquired by another telecom giant, Shaw, in 2016.

Should we expect any different from Big Grocery?

For decades, grocery giants have placed entire neighbourhoods at the mercy of property controls – used to keep other grocery stores from being constructed nearby. When a vacant 2.26-acre site in Dundas, Ontario, was put on the market in 2021, residents learned of a restrictive covenant registered on the land by grocery giant Metro Inc. The restriction prevents any grocer from competing with Metro’s nearby store, a 12-minute walk away, and it protects Metro’s monopoly position as the only full-service grocery store in Dundas. Similar restrictions appear on deeds across Canada and the U.S. Grocery giants are in the business of selling food – and restricting access to it.

But behaviours like these can easily take a back seat to prices. Price has always been the dominant lens through which consumers engage with grocers. Not surprisingly, recent grocery grievances have zeroed in on profits – and for good reason: two-thirds of shoppers are feeling pinched by rising grocery bills, and media reports have focused considerable attention on surging profits and alleged greed among the giants.

Yet, grocer profits offer a murky field of view into the complexity of food prices, particularly the challenge of parsing out the origin of profit margins at these more-than-just-food mammoths. Add in geopolitical instability, supply chain disruptions, record-smashing droughts and floods, labour shortages and currency fluctuations, and it becomes clear that even if greed is in the mix, it is but a thin slice of influence on recent price increases.

More meaningful would be to use the dramatic rise in food prices for a wider inquiry into the privatization of food access, grocer accountability and how lack of competition affects prices and innovation throughout the food supply chain.

To what degree have recent breakdowns of supply chains been a burst bubble on the promise of a low-cost globally dependent food system? Has 100 years of demanding low-priced food pushed the food system to hit the food-price floor? Is “lower” sensible, given the externalized costs of cheap food on consumer health, worker welfare and the environment? And if not, might our focus turn to boosting the capacity of people to pay for food – living wages, housing affordability – and protecting any gains from being extracted in the marketplace? By increasing consumers’ capacity to pay for food, we put a stop to the possibility that the race to the bottom on price has perverted our sense of what food is actually worth. We also protect the possibility of a viable alternative: the independent grocers, the small- to mid-scale food producers, who would no longer be at the mercy of consumers’ distorted food-price expectations.

The shadow of restraint

The common assumption is that the best way out of overly concentrated markets is through intervention.

In May, Australia’s Competition & Consumer Commission blocked Woolworths’ proposed acquisition of a single independent grocer in a Canberra suburb. With Australia’s whopping grocery duopoly commanding 65% of the market, the blocking of this acquisition is notable. It does, however, demand deeper reflection on how industries respond to regulatory restraint.

In the U.S, post-Depression-era restraints – which limited price increases, protected wages and required suppliers to offer independent grocers the same pricing offered to the chains – compelled American grocers to form the National Association of Food Chains and the Super Market Institute. The lobbying and public relations efforts of the two groups helped shape the modern grocery industry; they eventually merged to become what today is FMI – a powerful food-industry trade association influencing public policy and setting industry standards.

Strengthening the regulatory environment has often strengthened the industry being regulated – forming deeper coordination among the dominant players.

In Canada, market dominance in grocery may already be beyond a “tipping point.” A Competition Bureau report released in June suggested attracting new international players to increase choice and ultimately lower food prices. But it’s a rather fanciful proposition to any grocer not already a member of the inner circle. Five years after Canada’s bread price-fixing scandal erupted, no charges have been laid against any grocer, and Loblaw was granted immunity for its cooperation in the Competition Bureau’s investigation. As industry expert Sylvain Charlebois told Global News, “Why would you go into a market where there are suspicions of collusion when you are not part of the family?”

Greed-free grocery

Embedded in politicians’ and consumers’ recent rebuking of Big Grocery is an expectation that grocers should act in the best interests of customers, workers, suppliers, communities and planet. While that’s an ideal behind stakeholder capitalism, where businesses serve the interests of all their stakeholders, not just shareholders, it has yet to materialize among the grocery giants. But a grocery store akin to a non-profit that uses its bottom line to achieve these “best interests” is no dream.

In April, the Sacramento Natural Foods Co-op returned US$200,000 of its profits to more than 9,000 of its customers as store credit. Each customer’s portion was determined by their annual purchases. It was as if the grocer was apologizing for charging its customers too much. But this is business as usual at food co-ops.

The remainder of the grocer’s profits remained within the store, benefiting customers, workers and community – effectively making this grocer a for-profit non-profit. With transparency like this, customers can trust that prices are the best the grocer can sell at. Otherwise, the customer directly receives or benefits from the excess.

Power is evenly distributed in other ways, with the thousands of owners at a food co-op empowered to vote annually for their grocery store’s board of directors. Unlike corporate shareholders, a food co-op shareholder is entitled to only one vote.

Co-ops are price competitive, too. Notwithstanding the efforts of food co-ops to pay their suppliers well, particularly on local and traceable products, Kootenay Co-op’s pricing of national brands is on par with Loblaw – Canada’s grocery Goliath – according to research conducted in 2020. Community Food Co-op in Bellingham, Washington, compared thousands of products with nearby Fred Meyer (Kroger), Whole Foods (Amazon) and Haggen (Albertsons) and found its pricing on par with or lower than all three.

To support its lower-income customers, the Sacramento co-op offers a daily 15% storewide discount.

While Canada’s Competition Bureau failed to mention co-operative grocers as an alternative in its report, food co-ops are serious players on both sides of the border. Combined sales of the 320 food co-ops in the U.S. tops an estimated US$3 billion.

Today, the success of the more seasoned American co-ops is directly supporting what has become the most significant wave of new food co-op development since the 1970s. Many of the stores in development are targeting low-income neighbourhoods with little or no access to grocery stores or healthy food – with some looking to reverse decades of structural racism.

Meanwhile, in Western Canada, the largest food co-ops – operating under the brand “Co-op” and with hundreds of locations – own their own wholesale distribution system that also services a network of Inuit- and Dene-owned co-ops in Canada’s North.

While a co-operative grocer can fail like any other business, no food co-op has ever been sold to private interests. Such a move would require a vote by its thousands of customer-owners who depend on the store. This makes co-operatives a seriously durable model to protect the neighbourhood grocer.

Whatever it is that prompts the development of a co-operative, the common denominator is a shared belief that people, not government or private interests, are most capable of stewarding that which is most important to them.

If a grocery store being held accountable by its customers sounds radical, perhaps it shouldn’t. The climate emergency, corporate concentration in food and rising costs of living are nothing short of dramatic. Maybe the response should be too.

Jon Steinman is the author of Grocery Story: The Promise of Food Co-ops in the Age of Grocery Giants. He lives in Nelson, B.C.

The post Are we fed up enough with grocery giants to revolutionize the way we buy our food? appeared first on Corporate Knights.

Canada’s Food Price Report warns us that food price inflation will continue throughout 2023, especially for dairy, vegetables and meat, and that a family of four will need an additional $1,000 to feed themselves. This is not a short-term crisis. Many of the crop losses that caused prices to rise were caused by the increase in dramatic floods, droughts and storms, courtesy of the climate crisis, which is just getting started. Meanwhile, politicians on Parliament Hill held committee hearings last week to grill grocery-store CEOs on their part in the sky-high prices.

If you were minister of agriculture, what would you do? Websites are full of advice on how to shop more wisely, but this is not the way to address a food crisis.

1. Form community food hubs

Most of the work needed to increase food security is local, requiring partnerships and planning. Every neighbourhood, county or town needs a community food hub to promote best practices and policies, taking inspiration from the Food Hub Network in British Columbia. Community food hubs are often community-led initiatives that distribute local food to those who need it. Governments could provide start-up grants to launch food hubs where they don’t yet exist.

Through strong partnerships, local governments can work with community organizations to turn vacant urban land into allotment gardens. Local farmers can benefit from the shared distribution systems of community networks; schools can develop year-round food gardens; residents can be encouraged to grow food on public boulevards; fruit-tree gleaning projects can be started; and much more.

In B.C., the provincial government has announced a $200-million investment to spend on a variety of measures to increase local food security and reduce the cost of food.

2. Launch a nationwide grow-your-own-food campaign

Throughout history, people have dug into the soil to grow the food they needed. When hunger demanded it, they terraced entire mountainsides to create new beds. At Kiwi Cove outside Ladysmith, on Vancouver Island, 10 volunteers meet for three hours each Tuesday and Thursday morning from spring to fall to grow food for the Ladysmith Food Bank on a 4,750-square-metre plot of land. Together, they grow almost two tonnes of vegetables total, or 200 kilograms per volunteer, in a growing season. In Montreal, volunteers with Carrefour solidaire are growing vegetables in a plastic greenhouse in the middle of winter with thick snow on the ground outside, raising lettuces, cabbages, bok choy and many other vegetables.

We need a nationwide campaign to persuade Canadians to grow their own food, just as we did in wartime with victory gardens and like efforts launched by non-profits during the early months of the COVID-19 pandemic. A survey by the National Gardening Association showed that Americans could save more than US$500 a year by growing their own food. To encourage Canadians to grow their own food, the federal government could give a $500 grant to any group of five or more neighbours who help each other to convert their lawns into food gardens. In a city of a million people, the government could issue 1,000 grants that would cost $500,000, or $19 million for the entire nation.

To encourage more home-grown food, the government could also remove GST from gardening tools, equipment and bedding plants and set up a fund for garden clubs to help new food gardeners. If the government distributed the grants through community food hubs, this could accelerate the formation of hubs in communities where they don’t exist, as residents (having seen the benefits in other communities) would pressure their government to set them up.

3. Protect farmland

In Ontario, 319 acres of high-grade agricultural land – equal in size to 58 city blocks – are lost to development every day, according to the Ontario Federation of Agriculture. Since the beginning of the pandemic, municipal zoning orders have been used six times in Ontario to rezone farmland for urban use. For sure, we need to build a massive amount of new housing, but there is more than enough land to build two million new homes in the Greater Golden Horseshoe area around Toronto by 2031, without touching the Greenbelt or expanding urban boundaries.

In British Columbia, good farmland has been protected since 1973 through the Agricultural Land Reserve, but 50% of it is sitting empty, not used for farming. In Surrey, B.C., research found that if 3,300 hectares were used for small-scale, human-intensive, direct market production, it could supply 100% of Surrey’s seasonal consumption of 29 crop and animal products, and create 1,500 jobs.

The solution is to tax unused farmland at an annually increasing rate, forcing owners to either start farming, lease the land to a farmer, or sell. This would reduce the market price of farmland and open up opportunities for new farmers. Metro Vancouver has explored various ways of making farmland tax changes, but nothing has happened.

4. Save and distribute the food that’s wasted

Millions of Canadians are food insecure, yet 58% of the food produced in Canada each year is lost or wasted, according to Second Harvest, a food rescue organization. Of this, 32% (11.2 million tonnes) is edible food that could be redirected to support hungry Canadians. That’s 295 kilograms of dumped food per person per year, or 5.7 kilograms a week. We need to eat around 1.8 kilos of food a day, so that’s enough food for three days. Canada’s goal is to reduce the amount of food wasted by 50% by 2030.

France has set a goal to reduce its 5.5 million tonnes of food waste by 50% by 2025. In that country, 32% of food is lost during farming, 21% during food processing, 19% by consumers, 14% by grocery stores and 14% by restaurants. Since 2016, the French government has banned larger supermarkets from throwing away unsold food that could be donated to a charity. In return, they save on landfill fees and get a tax break of up to 60% on the value of the donated food.

But there are some holes in this plan. The French Federation of Food Banks found that every morning, 2,700 supermarkets send food that would otherwise be wasted to 80 warehouses, rescuing 46,000 tons a year. This, however, is just 6% of France’s grocery store food waste, and the system also assumes that struggling people will go to a food bank.

There’s a lot more that the supermarket industry could do, including training its staff and using demand planning to identify likely food waste. The online grocery store Spud offers imperfect produce at 50% of the price and donates what it can’t sell to charities. Since 2009, the non-profit Move For Hunger has delivered 32 million pounds to food banks across the United States and Canada, equivalent to more than 26 million meals, but that’s two million meals a year, or only 5,500 meals a day. And it still requires people to go to food banks. Across Canada, only 4% of the surplus edible food is being redistributed to charitable organizations. That means 96% is still being thrown away or turned into animal feed or biofuel.

In Italy, the city of Milan has launched three food-waste hubs. They look like regular grocery stores, but all the food is donated by local businesses and supermarkets, and families in need can use a prepaid card to buy what they need. Between them, the hubs recover 130 tonnes a year, around 260,000 meals, saving 30% of the city’s food waste.

An app from Too Good To Go, a certified B Corporation founded in Copenhagen, now in 17 countries (including Canada), seems very promising. It enables bakeries, grocery stores, restaurants and hotels to put surplus food in a bag, and consumers use an app to pre-pay for a bag at a third of the normal price. In Canada, it has saved 1.4 million meals through 5,000 partners, helped businesses to earn $5.5 million on food that would otherwise have gone to waste, and helped consumers to save $16.3 million on food they would otherwise have had to buy at full price. What would it take for every store to get on board?

5. Promote and adopt a plant-based diet

There are many reasons why we should reduce our consumption of meat and dairy, chief of which is that the livestock industry accounts for 60% of agriculture’s greenhouse gas emissions,  according to a University of Illinois paper. The reason for including it here is that meat is expensive, and a plant-based diet is a good way to reduce your grocery bills (as long as you avoid some of the more trendy plant-based brands).

One analysis found that the savings for a vegan are $4.50 a day, or $1,500 a year, entirely neutralizing the increased cost of food. A Harvard study put the saving at US$750 a year. Around 2.8 million Canadians describe themselves as primarily vegetarian, and 1.7 million as primarily vegan. That leaves 35 million Canadians who could be reducing their grocery bills by adopting a plant-based diet.

6. Stop food profiteering

Canadians for Tax Fairness reports that Loblaws’s markup increased from 32.5% in 2010 to 46.7% in 2022, and profits rose by 10%. “If they had maintained their 2019 markup, that would have saved Canadians almost $900 million,” economist D.T. Cochrane told the Toronto Star. Loblaws has 27% of Canada’s grocery retail market, or some 10 million Canadians, so that’s $90 per customer – or $1.73 a week. The price of two tomatoes. Not exactly a crisis-solver.

Loblaws’s recent quarterly profits also rose by $529 million, which the company says stems from the growth of non-food sales (such as clothing, personal care products and financial services). But even if it came from increased food prices, it’s only a dollar a week for their 10 million customers: half a cucumber. Parliament held hearings last week into possible grocery store profiteering, but I suspect that this may be a red herring ($1.72 for a tiny 3.5-ounce can of herring) as the evidence seems to show that if they have been profiteering, it’s on a very small level.

On the other hand, a report by Oxfam International found that 62 food capitalists became billionaires during the pandemic, amid record profits for the industry titans, whose wealth increased by 42% while global food prices soared by 33%. A small handful of corporations, including Kraft Heinz, General Mills, Conagra, Unilever and Del Monte, control the market share of 80% of the food products we buy, so governments need to cooperate to take a close look at monopolistic collusion in the industry, to find ways to reduce it.

A new Greenpeace report found that globally, 20 of the world’s biggest food corporations reaped such big profits in 2021 and 2022 that they were able to return US$53.5 billion to their shareholders. The United Nations, meanwhile, has recently issued an urgent humanitarian appeal to raise US$51.5 billion to help 222 million people who face acute food insecurity, including 45 million who risk starvation. Something is very rotten in the state of global food capitalism.

Back here in Canada, those of us who can afford the increased cost of food may not be worried. So, remind yourself: almost one in three Canadians are eating less healthy food because of rising costs. If we are to continue to think of ourselves as a caring people, our ministers of agriculture must step up: this is the time for big moves.

The post 6 ways to reduce the cost of food appeared first on Corporate Knights.

That new reality is evident in the business world’s response to the snowballing Black Lives Matter movement. Polling indicated that most Americans were opposed to BLM when it started taking hold in 2013. But in the weeks following the police killing of George Floyd in Minneapolis in May, BLM supporters had come to outweigh opponents by 28 percentage points, according to a survey by Civiqs, an online research firm.

Business reaction has hardened from feel-good statements against racism to more tangible measures with a longer-lasting impact. Netflix has promised to earmark 2% of its cash holdings – up to US$100 million – for banks to “directly support Black communities in the US.” That’s in addition to the US$120 million that Netflix CEO Reed Hastings donated to historically Black colleges and universities two weeks prior. Netflix has also added a Black Lives Matter genre to its lineup, celebrating the work of Black artists and Black history.

The power of social media has undoubtedly played a key role in shaping the response. Three of the United States’ biggest retailers – Walmart, Walgreens and CVS – said they would no longer display African-American beauty products behind locked glass after Twitter lit up with images of juxtaposed photos: one of easily accessible generic beauty products, the other of locked-away items aimed mainly at Black customers. One month later, Walmart also committed US$100 million over five years to create a new centre on racial equity.

Several companies have set specific targets for broader representation in their senior ranks.

Google, for example, has pledged to boost its leadership diversity by 30% within the next five years, in addition to pledging US$175 million to Black businesses and start-ups.

There is still a long way to go. While Black people make up about 13% of the U.S. population, they hold just 3.2% of executive and senior management positions and fewer than 1% of Fortune 500 CEO spots, according to the Center for Talent Innovation. Corporate Knights found that less than 1% of corporate leaders at TSX 60 companies are Black.

Zero

Yes, it is possible to go from Hero to Zero in a few short months. Just ask the workers at Walmart, Loblaws – Canada’s biggest supermarket chain – and the U.K.’s Tesco and Marks & Spencer, among others.

As the COVID-19 pandemic broke in early spring, food retailers lauded the contribution of cashiers, shelf-stackers and warehouse staff by jacking up their pay and benefits as compensation for the risks they were taking to get food to our tables. The typical raise was 10 to 15%, or about two dollars an hour.

Alas, Hero Pay did not last long.

By June, most of the companies had rolled back the increases. Loblaws chairman Galen Weston justified cancelling the “temporary pay premium” on the grounds that “things have now stabilized in our supermarkets and drugstores. After extending the premium multiple times, we are confident our colleagues are operating safely and effectively in a new normal.”

Some employers sought to soften the blow with other benefits. Loblaws added a one-time $160 bonus to workers’ July pay, pro-rated to a 40-hour work week. Walmart offered extra counselling services and higher staff discounts on purchases.

Not surprisingly, the workers, many of them at the bottom of the pay scale, are nonplussed. “The pandemic is not over,” noted Jerry Dias, the president of Unifor, Canada’s biggest private-sector union. “The danger has not passed. These workers are no less at risk and are no less essential today than they were yesterday.”

It’s not as if the employers could no longer afford to be generous. Empire Co., the Canadian group behind the Sobeys, FreshCo and Safeway chains, hiked its dividend less than a week after chopping its Hero Pay program. The company reported a 47% jump in net earnings for the quarter ended August 1.

Two dollars an hour may not be a huge amount of money – either for those giving or receiving it. But the extra wages did signal respect and appreciation for a group of workers who enjoy few other perks of corporate life and have exposed themselves to greater risks than most others outside the healthcare sector.

This was a perfect opportunity to narrow the widening gap in pay between those at the top and the bottom of the corporate ladder. Too bad that the grocers weren’t heroes for long.

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The federal government’s Canada Emergency Response Benefit was announced March 25 to the great relief of many workers and businesses across Canada. Regulations, released April 1, were quick to follow. But many vulnerable workers and people in insecure jobs who are afraid to keep going to work but can’t afford to stay home have no relief in sight.

At first glance, it looks promising. CERB will provide $2,000 in four-week blocks for up to 16 weeks for workers who “lose their income as a result of the COVID-19 pandemic.” It will be open to anyone who has earned at least $5,000 from paid work or Employment Insurance maternity or paternity benefits in the past year. Applicants must have COVID-related income loss for 14 consecutive days prior to application.

But who exactly qualifies for the benefit was the question on the minds of many workers in essential services, such as those who work at grocery stores across the country. The federal government said the benefit would apply to people in many different circumstances, including “Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.”

CERB, we were told, would apply to “wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI) . . . [and] workers who are still employed but are not receiving income because of disruptions to their work situation due to COVID-19.”

But, long as that list is, it’s not quite long enough. What about those who are not sick, don’t have kids at home to care for or don’t match any other criteria on that list but are afraid of going in to work but do so because they need the money? There’s no mention of those in essential sectors, such as grocery store clerks who come into contact with hundreds of people daily with little (if any) protective gear. Or pregnant women with little financial choice working in these essential jobs who see contradictory messages about the risks they and their babies face with regard to COVID-19. In Tennessee, pregnant women are being treated as a high-risk group. In Quebec, the latest word is that pregnant women are at higher risk of respiratory illnesses but should still be treated like the general healthy public. What’s a woman to believe?

Pregnant women with little financial choice working in these essential jobs see contradictory messages about the risks they and their babies face.

 

Earlier this week, Corporate Knights published an article on how grocery store workers should be treated as frontline workers, with a big bump in pay to time-and-a-half and at least 14 days of paid sick leave (21 would be more realistic in a time of pandemic) for every worker, regardless of their employment status. We argued that this kind of pay raise would ensure that people who are healthy and strong would keep coming in to work because that kind of pay would make a big difference in their lives. At the same time, people who need to stay home would stay home because they would not lose the income they and their families so desperately need.

Unfortunately, this is not what is happening for the majority of the most vulnerable. Grocery store workers are getting a $2-an-hour pay raise, not time-and-a-half. And few have access to any paid sick or emergency leave days, let alone 14. Most will not have the “choice” to stay home, and if they do, they risk having no job to come back to. The law does not yet protect jobs for workers who stay off work by their own choice because they feel their workplace is unsafe. A workplace has to be officially deemed to be unsafe, and the process for doing so is complex, takes time and puts vulnerable workers who raise the alarm at risk of reprisals. Employment Standards Act regulations have not been adjusted to take this COVID reality into account.

South of the border, we are beginning to see walkouts and strikes at Amazon, Instacart and Whole Foods. Better for Canada to act now to avoid that here.

What’s an employer to do? What should government do? Let’s start with government making provisions for the many extra-vulnerable workers out there, like low-paid, pregnant grocery store employees who need income support and health protection. Let’s also get our provincial governments to make emergency changes to employment standards to protect people who are afraid to keep going to work so that they won’t lose their jobs just because they “choose” to stay home. While they’re at it, the feds and provinces can work together to ensure that no one has to face 14 days of income loss before they can get help. And finally, let’s see all big employers, especially those still turning a healthy profit in the time of COVID, step up and give access to at least 14 days of paid sick and emergency leave. But if that doesn’t happen swiftly, let’s have our governments make them do it.

In a time where we all have to pull together, let’s share the burden among those that can handle it; let’s not put it on the backs of those whose backs are already breaking.

Michelynn Lafleche is a senior advisor to Corporate Knights. She is known for her research on precarious work and labour-market change in Canada.

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It doesn’t take an industry insider to tell us the plastic sector is losing its license to operate. In early April, a pregnant sperm whale was found dead off the coast of Italy with 22 kilograms of plastic in its belly. This just weeks after another dead whale was found with twice that amount of plastic in the Philippines. As the reality of waterways drowning in plastic sinks in, a growing number of cities, countries and companies are joining the worldwide revolt against the ‘miracle’ material.  And yet at a front line in the battle against throwaway plastics, most Canadian grocers have yet to take meaningful action.

Food packaging is responsible for about a third of all Canadian household waste, and just 20% of that gets recycled, according to Industry Canada. Even less if it’s the plastic kind. There are no hard stats for how much plastic trash grocers alone create in Canada, but over 800,000 tonnes of plastic packaging are generated by supermarkets in Britain every year. And that doesn’t include the roughly 1.1 billion plastic shopping bags and 1.2 billion clear plastic produce bags that supermarkets dish out annually.

The plastic pushback by shoppers and campaigners has been so intense across the pond that nearly every major supermarket signed onto the UK Plastics Pact last summer, promising to oust unnecessary single-use plastics by 2025 and use only reusable, compostable or recyclable packaging. British grocers are already way ahead of the curve. UK’s sixth biggest grocer, Co-op, cut plastic packaging by 44% in the last decade. Last month, Britain’s largest supermarket, Tesco, started trials to remove plastic packaging from 45 produce items in a handful of stores. The likes of apples, onions, bananas and avocados will only be sold in all-natural packaging – their very own skins and peels.

Tesco will also be purging all hard-to-recycle packaging (cling wrap, black plastic and that #3 PVC stuff) six years ahead of the Plastics Pact.  “Ideally we would like to move to a closed loop system,” said the grocer’s Chief Product Officer Jason Tarry.

A lot of closed loop talk is bandied about in this country, too. And some efforts are underway. But so far, major Canadian grocers haven’t done a whole lot about it. Walk into a Loblaws, Sobeys or Metro store and endless bags of produce sit alongside pre-portioned, pre-cut fruits and veg of every variety, often Styrofoam-backed and shrink-wrapped. Grocers can rightfully argue that packaging some foods in cling wrap extends shelf life and curbs food waste – a significant greenhouse gas contributor. But do Loblaw’s “farmer’s market” cucumbers really need to come double-wrapped in two layers of shrink wrap?

One large British grocery chain has found a compromise. Last year, Morrisons opted to ditch plastic packaging from its loose English cucumbers when they can be sourced locally between March and October. Shortening the supply chain and getting fresh cucumbers from farm-to-shelves faster will save 16 million plastic sleeves a year. Said Morrisons, “While plastic can serve a purpose we believe this move will remove it from the environment without leading to food waste.”

Ready-to-eat trend fuels rise in single-serve plastics

In the lead up to SIAL Canada, North America’s biggest food innovation trade show (Toronto, April 30 to May 2), SIAL experts chipperly forecasted that “in 2030, ready-to-eat will be the dominant force in Canadian grocery stores, and it will take up more than 80% of retail space.” What goes unsaid is how much plastic is involved in fueling the food industry’s ready-to-eat megatrend. As Dalhousie U profs Sylvain Charlebois and Tony Walker have written, “Canada’s food industry continues to generate more waste from single-use plastic food packaging every year” in part because of the expanding single-serve economy feeding a growing population of Canadians living alone. A trend they say will increase “at alarming rates” – if left unchecked.

Canadian grocers respond  

So, what are Canadian supermarkets doing about plastics?

Despite repeated requests for comment, Empire (the conglomerate behind Sobeys, Safeway, Farm Boy, IGA, Price Chopper and Foodland) didn’t respond to inquiries about its plastic policies. Neither did the Toronto-area chain Longo’s, which also owns Grocery Gateway. 

Walmart Canada’s gone further than most major food suppliers in this country, announcing back in January that it would joining Ellen MacArthur Foundation-led commitments to use 100% recyclable, reusable or compostable packaging by 2025 – at least for Walmart’s in-house private labels. Walmart Canada also says it’s developing design guides to help its private label suppliers “reduce unnecessary plastic packaging.”

Loblaw (No Frills, Valu Mart, Superstore, Maxi, Zehrs, Fortinos, T&T) has yet to announce any commitment to the 2025 targets that over 250 other companies have signed onto globally. A Loblaw rep said in a statement that the company is working with Canadian Stewardship Services Alliance Inc. and the Circular Economy Leadership Coalition to “promote a whole new approach to sustainable management of the use and ideally the re-use of product and packaging materials.”

Loblaw is right to call it a “huge task” and to note that the plastics challenge “requires the work of industry, government and consumers – and a system built to address the environmental, social and business opportunities and risks associated with waste.”

British grocers have, nonetheless, proven that individual supermarket chains can take the bull by the horns and eliminate plastic from thousands of products in their own stores, as has Toronto’s Organic Garage chain, which has already purged all of its bagged produce.

To its credit, Loblaw says it has reduced packaging in its private brand products by 4.9 tonnes since 2009. It’s taken some constructive steps, including using reusable produce containers to ship produce. But wander its aisles and you’ll still see plenty of unnecessary plastic (including those double-wrapped cucumbers).

Like Loblaw, Metro has yet to release an official packaging policy, but Metro’s VP of Public Affairs, Marie-Claude Bacon, says the grocer is finalizing a packaging policy to be launched in the first half of 2019. “We recognize that waste, including plastic waste, is a concern for our customers, as it is for us,” says Bacon.

In the meantime, all of its Quebec locations are, as of April, letting customers fill their own containers from home (glass containers excluded) when buying from Metro’s meat, fish, prepared foods and pastry departments. The practice is already common at indie bulk stores and zero waste stores like Unboxed in Toronto, Nada in Vancouver and Ottawa’s Nu, but large supermarkets have been resistant up until now.

Greenpeace’s plastic campaigner, Sarah King, says the move alone won’t necessarily cause a large reduction in plastic use, unless there’s a massive uptake by customers or Metro also removes single-use packaging in these departments. Still, she says, “It can help create the conditions for larger change.”

Canadian cities beat feds to the punch

The vast majority of Canadians believe the government should be doing more to tackle plastic –– 82%, according to an Angus Reid poll conducted for CBC Marketplace. So far, lower levels of government are taking the lead. Montreal, Victoria and soon PEI and Newfoundland are all outlawing plastic bags. Following in Vancouver’s footsteps, Montreal announced last week that it’s hoping to ban single-use plastics by 2020 (including Styrofoam-backed meat, fish and veg). Despite gutting other environmental regs, even Ontario’s Progressive Conservative government is considering a single-use plastic ban knowing the issue has broad support across political divides.

Environment Minister Catherine McKenna has promised a concrete plastic strategy is coming in June. Hopefully, the feds go beyond voluntary measures and half-baked solutions, including incinerating plastics (which disincentivizes reduction strategies) and biodegradable plastics that aren’t wanted in recycling or compost bins and, sadly, only belong in trash bins.

A federal EU style ban on a dozen single-use plastics would be a solid place to start. A coalition of nearly 50 environmental orgs, including Environmental Defence, Greenpeace and the David Suzuki Foundation, have called on the feds to ban all hard-to-recycle plastics and bring in a national 75% recycled content standard for single-use plastics, along with other measures that would help lay the foundation for a circular economy that doesn’t just trash its plastics.

Back in Texas, the plastics industry is already bracing for change. Bob Patel, CEO of LyondellBasell (one of the world’s largest plastics makers), told World Petrochemical Conference goers that the industry should prepare to sacrifice 1 to 2% of the plastic stream. “If certain single-use applications should no longer be in plastics, then let it be what it is.” Packaging consultant, Victor Bell, was less optimistic, suggesting the backlash against plastics could potentially cut growth in demand for new resin by half, as regs mandating more recycling come into force in the European Union and beyond.

If we do this right, Canadian grocers and governments can make sure this country is a leader in slashing demand for water-clogging disposables made of virgin resources. Let’s just hope they don’t let this crisis go to waste.

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