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).
The primary drivers of GDP growth in Canada are currently immigration and public spending, with the government undertaking the bulk of economic heavy lifting. The situation is indeed dire. Moreover, the enthusiasm once held for the economic greening championed by the Trudeau administration is showing signs of significant fatigue. The carbon tax, Trudeau’s principal policy for fostering an eco-friendly economy, is increasingly losing traction due to the prevailing economic challenges. Dissenting voices from within the Federal NDP and the BC NDP government now challenge the carbon tax as the optimal path forward.
READ: Debating the path to carbon pricing
The failures of the carbon tax are emblematic of a broader trend in recent policymaking endeavors: the implementation of populist policies devoid of rigorous metrics for evaluating their success over time, all while constructing an expansive communications strategy designed to convince Canadians of the policy's merits. The federal carbon tax is set to escalate to $95 per metric ton by April 2025, marching inexorably towards the 2030 goal of $170 per metric ton. Despite the mounting pressure, the Trudeau government has neglected to assess whether the policy meaningfully impacts our climate and emissions or to evaluate how the policy might influence the economy over time, with a particular focus on the ramifications for the agri-food sector from farmgate to plate.
The design of the rebate system ostensibly allows Canadians to overlook the real costs of this poorly-conceived policy. However, administering this massive program is not only costly but also fails to leverage the Canadian economy effectively. It is imperative to devise policies that genuinely foster both economic and environmental sustainability for the nation.
