Canada's hunger games

Last week, Feed Ontario disclosed that over a million residents in Ontario, Canada’s wealthiest province, sought assistance from food banks over the past year. A million people. That’s essentially Nova Scotia’s entire population as a province. This revelation presents a stark contrast when juxtaposed with the situation south of the border in the United States. In 2023, while 13.5% of American households grappled with food insecurity—characterized by low or very low food security (USDA-ERS, 2024)—the rate in Canada was significantly higher at 22.9% (Proof Toronto, 2024). This suggests that food insecurity in Canada is a staggering 69.6% more prevalent than in the United States—a deeply unsettling statistic.

The challenge of affording food in Canada is exacerbated by anemic food sales, particularly stark when compared to the United States where grocery store sales increased by 1.8% in the last 12 months, according to the Federal Reserve Economic Data. In stark contrast, Canadian grocery store sales have plummeted by a worrying 3.2%, according to Statistics Canada (see graph on retail sales). One plausible explanation for this disparity lies in the higher interest rates in Canada, which likely impose a heavier burden on Canadian households than on their American counterparts, given that the average debt per household is considerably higher in Canada. The Bank of Canada’s pathway to achieving a more stable inflation rate without detrimentally affecting Canadians appears much narrower than that of the U.S. Federal Reserve, evidenced by the harsh reality of ten consecutive rate hikes last year, compelling Canadians to economize particularly on food expenditures.

READ: Canada’s unemployment rate rises to 6.6% in August amid challenging summer job market

It is becoming increasingly apparent that Canada's per capita economy is contracting, devoid of the wealth creation observed in the United States. Notably, according to World Bank Data, in 2002, the United States' GDP per capita was 56.6% higher than Canada's—a record high during the tenure of another Liberal Prime Minister, Jean Chrétien. The current gap, at 53.07%, is perilously close to this historical peak (see GDP Per Capita graph).