Grocery Cart | Canada in Food Crisis

Last week, Feed Ontario revealed that more than 1 million residents of Ontario, Canada’s wealthiest province, used food banks during the year.

This revelation highlights a stark contrast with the situation in the United States. In 2023, while 13.5% of American households experienced food insecurity characterized by low or very low food security (USDA-ERS, 2024), the rate in Canada was significantly higher, reaching 22.9% (Proof Toronto, 2024). Food insecurity in Canada is therefore 69.6% more prevalent than in the United States, a deeply troubling statistic.

The challenge of getting food in Canada is exacerbated by a context of anemic food sales, particularly compared to the United States, where grocery sales increased by 1.8% over the last 12 months, according to economic data from the Federal Reserve. In contrast, Statistics Canada reports that sales in Canadian grocery stores fell by a worrying 3.2%. This decline reflects increased pressure on Canadian households, already grappling with faster food price increases than those observed in our neighbours to the south.

This disparity is due to very high interest rates in Canada, which impose a greater financial burden on Canadian households than their American counterparts. Indeed, the average household debt is considerably high in Canada, making these rate hikes even more punishing. The Bank of Canada, in its quest to stabilize inflation, is on a tight track, as evidenced by the ten consecutive rate hikes last year. This has forced many Canadians to cut back on spending, particularly on groceries, to offset the increased cost of servicing their debt.

By 2024, an estimated 9.39 million Canadians will be affected by food insecurity, according to Statistics Canada. In 2015, that number was about 4.45 million. Since Justin Trudeau was elected, the number of Canadians experiencing some level of food insecurity has increased by 111%.

Another worrisome factor is Canada’s stagnant economic growth. Unlike the United States, Canada is experiencing a contraction in its per capita economy. In Canada, gross domestic product (GDP) per capita is declining, reflecting a lack of wealth creation, compounded by an increased reliance on immigration and government spending to stimulate the economy. According to the World Bank, in 2002, the U.S. GDP per capita was 56.6% higher than Canada’s, an unprecedented gap reached under the government of Jean Chrétien. Today, the gap stands at 53.07%, dangerously close to that historic high, highlighting a structural deterioration in Canadian competitiveness (see GDP per capita graph).

Canada’s key growth drivers, immigration and government spending, appear insufficient to generate sustainable GDP growth. In the absence of new sources of value creation, the Canadian economy is consistently dominated by government spending to compensate for a weakening private sector. This has a direct impact on food retailers, who are facing weakened demand and an erosion of consumer purchasing power. This dynamic exposes the agri-food sector to increasing risks and poses major challenges to ensuring food security and long-term economic viability.