Canada's escalating food prices: the obvious solution and the systemic one

For the past several months, we’ve reported on the rapidly rising numbers of food bank users across Canada as inflation, a lack of rent-geared-to-income housing, and stagnant wages have reached a critical point for families nationwide. This is the final installment in a three-part series called Feeding Change, which focuses on innovative ways food banks across Canada are meeting the demand – and what they’re doing to reduce it. Read part one and part two here, and read all our stories on food and housing insecurity here. 

Montreal Centre-Sud residents have access to an unusual grocery store; once at the cashier, customers decide how much they want to pay for their bill.

Each item in the store comes with three price options: below the margin, suggested retail, and subsidizing. For example, a jar of strawberry jam might be purchased for $4.95, $6.10, or $6.60.

The cashier presents customers with three possible totals and then allows them to select the one they prefer to pay.

“Centre-Sud is a gentrified neighbourhood; the financial means of the residents vary from one home to another and from one week to another,” said Beccah Frasier, co-director of Carrefour solidaire Centre communautaire d’alimentation.

“Some always pay the below-margin or solidarity price; others alternate among the three depending on the time of month,” said Frasier.

The model behind Epicerie les 3 paniers is called a solidarity grocery store, which is operated by non-profit Carrefour Solidaire Centre communautaire d’alimentation. Solidarity grocery stores are part of the mix of solutions aimed at correcting the flaws in Canada’s food system.

The flaws of Canada’s food system

According to the latest data from Statistics Canada, about one in four Canadians faces some form of food insecurity. 

For some, it means worrying about having enough to eat. For others, it can result in skipping meals due to financial constraints.

Food insecurity in the North is twice the national average, with Nunavut experiencing the highest prevalence at 57 per cent of the population. Northern Saskatchewan reported 27 cases of scurvy, a condition that is easily preventable with vitamin C, highlighting the implications of nutrient deficiencies in northern regions.

Over the last five years, the price of the Canadian grocery basket has increased by 27 per cent, with food prices in the Northwest Territories nearly four times higher than in urban cities.

According to the 16th edition of Canada’s Food Prices Report, a family of four will pay nearly $1,000 more on groceries in 2026.

Raise Canadian purchasing power with food vouchers

“An immediate solution to the food system flaws is to accelerate redistribution programs,” said American food system expert Errol Schweizer.

The Supplemental Nutrition Assistance Program (SNAP) has helped low-income Americans buy groceries for decades.

SNAP serves an average of 41.7 million Americans monthly. Remarkably, it accounts for nine per cent of U.S. grocery industry revenue—or $100 billion annually.

In some states, 1 in 5 people receive SNAP benefits. The redistribution amounts are $190/month for one person and $351/month for a family of four.

In Quebec, residents of Montreal and Laval have access to a similar program, called a Carte Proximité (proximity voucher).

This prepaid card is distributed to households experiencing food insecurity. The amount varies from $50/month for a single person to $125/month for four people or more.

It operates seasonally, with cards reloaded monthly from July 1 to Oct.31, and is accepted at participating merchants.

“Carte Proximité helps to make healthy food more accessible to all, while also promoting local producers and strengthening short supply chains,” said Frasier.

In the meantime, Canadian consumers and producers are paying the price for a food system dominated by four chains that control three-quarters of the market, including Loblaws, Sobeys, Metro, and Costco. Walmart rounds out the top five. 

“We need to distribute risk management more equitably among the various stakeholders in the supply chain,” said Patrice Léger Bourgoin, Executive Director, Quebec Fruit and Vegetable Producers Association. 

“In the current market, the producer assumes 100 per cent of all risks. The retailer assumes none.”

What influences current food prices in Canada

First, the tariffs imposed by the U.S. government on exports and the counter-tariffs imposed by the Canadian government on imports created price volatility throughout most of 2025.

Tariffs increased prices for poultry, eggs, alcohol, tea, coffee, sugar, and pork, according to the Quebec Ministry of Agriculture.

Global and local weather events added to the industry’s challenges. In June 2025, 66 per cent of Canadian agricultural land experienced moderate to extreme drought, according to Canada’s Food Price Report 2026.

By September 2025, 8.3 million hectares of land will have been burned due to wildfire activity, and rainfall activity below normal impacted fruit and vegetable production.

Retail business models also influence prices. Profits drive inflation in this sector.

A Canadian Centre for Public Policy report showed that grocery stores once kept $1 of every $50 in sales; now they keep $1 of every $28. Concentration drives higher profits.

A concentration ratio (CR4) of the top 4 firms in a given industry above 40 per cent signals a moderately high level of concentration, leading to market distortion and increased risk of collusion. A CR4 above 60 per cent is considered highly concentrated and at an elevated risk of competitive concerns. 

The Canadian food market CR4 is at 75 per cent. Price-fixing scandals have also plagued it in recent years.

A recent report from the Canadian Anti-Monopoly Project said that out of 27 mergers or acquisitions in the food supply chain reviewed by the Competition Bureau since 2001, not a single one was successfully blocked.

The obvious solution: create new store models

Zohran Mamdani, the new mayor-elect of New York City, garnered significant attention by promising to establish a chain of public grocery stores. Each NYC borough would have its public supermarket operating as a non-profit, and the city would cover the rent and property taxes.

The U.S. already has a chain of public grocery stores.

“The U.S. military commissary system has existed for decades,” said Schweizer.

There are 235 commissaries worldwide, serving approximately 8.3 million military members, veterans, and their families. These stores are located on military bases and operated by the Defence Commissary Agency.

“Producers love distributing to the American army stores,” said Aaron Vansintjan, policy manager at Food Secure Canada. 

“They can trust their price; they get a fair deal. Canadian producers would love to get a fair deal from grocers.”

The Mexican government has operated a chain of public grocery stores called SuperISSTEs since 1953. It had its ups and downs, but at its peak, the company had 336 stores. Currently, there are 43, primarily located in Mexico City.

Mexican President Claudia Sheinbaum is currently aiming to revitalize Mexico’s public grocery system. Since her election, it has been brought under national jurisdiction, more local products have been added, and a new distribution center has been opened.

“The only way to make public grocery stores work is for them to be subsidized, so that pricing can be dramatically lower than other alternatives. Just like social housing is subsidized,” said Jon Steinman, author of “Grocery Story”.

The comparison to housing is relevant, added Vansintjan.

“The government acknowledged the market failure and the need for non-market housing solutions. We have the same issue with food; it’s a total market failure; Canadians want alternatives,” he said.

The co-operative model

“I own a grocery store with 17,999 other folks,” said Steinman. He’s a member of the Kootenay Co-Op in B.C.

“Every time I walk into the store, I feel a sense of pride and trust that the grocery store where I shop is working in my best interests. Kootenay Coop is an economic incubator; it supports small businesses and sustains community institutions.”

There are more than  500 Canadian grocery store locations operated by co-operatives; 45 per cent are in Quebec.

The co-operative structure is flexible, said Daniel P. Brunette, Senior Director of Co-operation and Engagement at Co-operatives and Mutuals Canada.

“Cooperatives meet community needs; options vary. Stores can form or join a co-op for storage, transport, or group buying,” said Brunette.

For instance, Alberta’s and Saskatchewan’s independent grocers and producers have access to cooperative railways.

Southern Rails Co-operative Ltd. has been operating in Saskatchewan since 1989, maintaining local rail service after smaller provincial branches were closed.

Battle River Railway is based in Forestburg, Alta. In 2010, local producers and residents purchased the line from CN to keep grain hauls local—loading producer cars through Canadian Wheat Board programs.

Meanwhile, Montreal Solidarity Stores created La Mutuelle d’approvisionnement des marchés solidaires Montréal to increase their purchasing power.

“Our solidarity store favours local producers, but at some point, there was no other way to offer affordable butter than to buy it in bulk at Costco,” said Frasier. 

“We must develop ways for independent and non-profit grocers to get competitive prices other than at Costco.”

An employee of La Mutuelle visits La Place des producteurs at 3 a.m. for a group purchase. The goods are then delivered to the four solidarity grocery stores in Montreal.

If it were in Ontario, La Mutuelle d’approvisionnement des marchés solidaires could purchase its food at the Ontario Food Terminal.

The OFT operates within the Ontario Ministry of Agriculture, Food and Rural Affairs, and it is funded through fees charged to users.

The transformative solution: create a new distribution system

La Mutelle des marches solidaires is a small-scale solution to a big problem.

Most independent stores must utilize the distribution systems of the four major chains, a result of the industry’s high level of concentration.

“Relying on your competitor’s supply chain means your prices are rarely going to be lower. In fact, they will be higher,” said Vansintjan.

Western Canada independent grocers have an option. There is an independent logistic chain serving communities from Vancouver Island to northwest Ontario and into the Arctic.

Federated Co-operatives, Canada’s largest non-financial cooperative, created the Co-operative Retailing System, which gave rise to The Grocery People.

The Grocery People delivers fresh groceries to independent and corporate retail stores, restaurants, and other food establishments across Western Canada.

There was once a cooperative distribution system in the Atlantic as well. Co-op Atlantic was owned by local community-owned retail, farmers, and a few other co-operatives across Atlantic Canada. 

At its peak, the Co-op Atlantic system generated nearly $1 billion in annual sales.

However, it closed in 1995, after operating for 90 years. Now, Atlantic independent grocery stores, co-ops, and producers have to use Sobeys’ distribution system.

“We have a distribution problem,” added Schweizer. “You can fix the stores, add co-op and public stores, but at some point you have to work on the whole system.”

All experts interviewed for the article agree that a national food distribution system is crucial for controlling the price and accessibility of food for all Canadians.  

How do we start?

This first step would be to create food hubs in various cities to supply the hospital and school food systems, said Vansintjan.

“If you run a small chain of public stores, you probably could reduce the prices by five per cent, because it’s publicly run in public buildings,” said Vansintjan. “However, if you build a public wholesale operation, like in Mexico, prices could be 20 to 30 per cent lower. That is significant,” he added.

The new national school food program could catalyze the development of this new distribution channel.

“The channel would serve the school program, the producers, public grocery stores, independent and non-profit grocers and the citizens, ”said Vansintjan.

The challenge is to get the government’s attention.

“We lack knowledge of the costs and profits at each stage of the food chain. However, I note that members of the House of Commons Standing Committee on Agriculture and Agri-Food are beginning to take an interest in this,” said Léger Bourgoin.

The current government’s focus is on purchasing Canadian and local goods and services through its procurement process. 

A public distribution option aligns with the concept of public infrastructure, said Vansintjan.

“What we did for the school food program, we will repeat for the food system. We build a coalition of organizations and advocate until it becomes a political issue.” 

“Then, when we meet people in government, we can say: ‘Here is what Canadians are asking for, here is what you could do, we’re available for more input,’” he added.

“À prix comptant”, a Quebec pilot-project

In Quebec, a coalition of 20 stakeholders, driven by the Quebec Public Health Association, is working on a non-profit organization called “À prix comptant” (At cost).

“Too many Canadians make economic choices when it comes to food, cutting on quantity and on quality. Low-cost choices are often ultra-processed, taking a toll on public health,” said Thomas Bastien, Executive Director of Quebec Public Health Association.

À prix comptant aims to democratize the Quebec food system through a participatory and regional governance model, collaborating with local producers to promote short supply chains.

Two key features will be a supply centre and distribution centres to ensure smooth distribution for solidarity grocery stores, community markets and food banks.

In addition to the benefits for producers and consumers, À prix comptant would hire workers through social and professional integration programs.

“We are ready to begin the feasibility study in 2026,” said Bastien.

This involves mapping needs and taking inventory of existing resources. 

“For the pilot project, we have identified two primary partners: a food bank, which will serve as a storage facility, and a network of community stores that will act as a distribution centre,” he added.

However, no government financing is currently foreseen. 

“We look for impact investors, either private or philanthropic capital. The long-term objective is financial self-sufficiency with a revenue model covering the cost,”  he added.

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