TORONTO - Canada's plan to bring down food prices by tightening regulation could backfire and fail, raising the cost of doing business in the country without providing relief to consumers, lawyers and economists said.
Trudeau's move comes as many Canadians reel under an affordability crisis with food prices jumping 25% since the start of the COVID-19 pandemic in 2020. At the same time, the central bank's efforts to bring down inflation by raising interest rates to a 22-year-high have pushed up mortgage costs for homeowners and made buying a home unaffordable for others.
Omar Wakil, a partner at law firm Torys LLP who specializes in competition law, said the proposed amendments will increase the cost of doing business in Canada and provide no benefit to consumers. But the large grocery chains have pushed back against accusations of price gouging and blamed higher prices on vendors passing on input costs to the grocers. On Monday, the government said the heads of five major grocery chains had agreed to support the government in its efforts to stabilise prices.
"Our government is taking short-term and long-term measures, including a strong stance against future consolidation in the sector, to improve competition and stabilize food prices," said a spokesperson for the industry minister under which Competition Bureau falls.