OTTAWA – Today’s report from the Competition Bureau confirms large corporate grocery chains are increasing profits while increasing the price of food, a longer-term trend predating supply chain interruptions that the government must immediately address with a windfall tax.
“We now have clear evidence that large profitable corporations hiked prices to reap soaring profits, while households continue to make difficult choices about what they can afford to eat. It’s time for Parliament to move forward with the House Committee’s recommendation of a windfall profits tax,” said Katrina Miller, executive director of Canadians for Tax Fairness.
On June 14, the Standing Committee on Agriculture and Agri-Food released its report on food cost, calling on the government to implement a windfall profit tax if the Competition Bureau found evidence of profiteering off of rising costs. The Bureau points out that “the price Canadians pay for groceries has been rising fast” in part because of higher profit margins, noting this longer-term trend predates factors such as higher input costs and supply disruptions.
This trend exists beyond the food sector. Research by Canadians for Tax Fairness showed that in 2021 corporations brought in unprecedented levels of profit largely by increasing what they charge for their goods and services. This allowed corporations to almost double profit margins in 2021 to 16%, compared to the 9% average for 2002 to 2019. While food retailers have received the most attention in the past year, other sectors such as oil and gas should also be held accountable for their role in the affordability crisis.
“The corporate pursuit of higher profits through price increases has made life harder for all Canadians” said C4TF economist and researcher Dr. DT Cochrane, who testified at the House committee on food price inflation. “It’s time for the government to return that money to public hands.”
C4TF also encourages the government to follow other recommendations from the committee such as giving the Bureau more power to conduct investigations including compelling large corporations to provide more detailed financial information. The government should also act on the Bureau’s observation that there is room for more competition in Canada’s food sector.
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Canadians for Tax Fairness | Canadiens pour une fiscalité équitable
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Canadians for Tax Fairness is a non-profit organization that advocates for progressive taxes to fund important public services, reduce inequality and strengthen the economy.