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Government grocery stores can’t make life more affordable

Author: Gage Haubrich 2026/07/15

If Canadians can’t afford necessities, not much else matters.

Prices at the grocery store are skyrocketing and families are feeling the crunch. Governments need to offer real solutions that make life more affordable.

That means cutting taxes, not gambling taxpayers’ money on government-owned grocery store schemes.

The latter is gaining traction across the country. Toronto city council voted on a motion to look into establishing four government-run grocery stores. New Democratic Party Leader Avi Lewis is pushing the idea nationally. The governments of Manitoba and Newfoundland and Labrador also floated it as a way to make life more affordable.

That proposal ignores the fact that taxes are the average Canadian family’s most expensive bill. The average family spends more on taxes every year than it does on housing, food and clothing combined.

A government grocery store is a bill of goods sold by economically illiterate politicians looking to avoid blame for the affordability crisis.

The reality is that a government-run grocery store won’t make food cheaper. It will cost taxpayers cartloads of cash in bailouts.

Private grocery stores already make food as affordable as possible precisely because they need to make money to stay in business.

Competitive corporations will do whatever they can to provide their products at the lowest price possible. That’s because if they don’t, their competitors will, and they lose the sale. Corporations want to make money, that’s how this works.

Loblaws is no friend of Walmart. And precisely because of their cutthroat competitiveness, they will undercut each other on price to win your dollar. That’s why they offer price matching with other stores.

This competition works. Grocery stores typically have profit margins of about 3.5 per cent. Does anyone seriously think that it’s possible for the government, an institution not known for running things efficiently, could do it cheaper?

Governments have no such incentive. If times get tough at Government Grocery Co., politicians will force taxpayers to bail it out. That moves the cost from the grocery till to your tax bill. And that’s exactly what happens when these schemes are tried.

Kansas City spent more than $24 million on a government grocery store since 2016. The store closed in August 2025 due to financial troubles and struggles to keep food on the shelves.

So why is everything getting more expensive at the grocery store?

Supply is one reason. Wars in the Middle East make it harder to ship oil and fertilizer, increasing growing and shipping costs.

Tomato prices increased by more than 45 per cent in a year. Tomato farmers didn’t just decide to raise prices. Bad weather wrecked the Mexican crop while Canadians fired up the barbecue.

A government grocery store can’t do anything about either of those problems.

And then there’s inflation. Part of the Bank of Canada’s mandate targets one to three per cent inflation every year. Making sure everything is more expensive next year is the goal of the system.

A government grocery store doesn’t stop the central bank printing press.

Canadian politicians can’t control what happens in geopolitics. And they certainly can’t break the laws of supply and demand, but they can control how much money they take out of your wallet. And they take a fortune.

The average family’s tax bill increased 2,784 per cent from 1961 to 2024, according to the Fraser Institute.

Family tax bills grew three times as fast as food costs since 1961.

Politicians are looking for a scapegoat and picked your local grocery store when they should be looking in the mirror.

The best way for governments to make life more affordable is substantial tax relief and to stop wasting your money.

That’s the reality and politicians can’t change it. No matter how hard they try.


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Franco Terrazzano
Federal Director

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