Why Justin Trudeau Is Blaming Grocers For Surging Meals Costs In Canada – OpEd

By Jon Miltimore

New authorities information emerged this week displaying that meals costs in Canada proceed to climb.

Although year-over-year inflation of client costs total cooled to three.8% in September, meals costs elevated 5.8% from a 12 months in the past, pushed by surging costs of bakery merchandise (up 8%), recent greens (7.6%), pasta merchandise (10.8%), and poultry (6.5%).

Meals costs have lengthy been a sore spot for Canadians. Even previous to 2023, statistics confirmed that some 7 million Canadians, together with 1.8 million kids, had been in households struggling to place meals on the desk.

As inflation continued to drive meals costs upward in 2023, client outrage rapidly mounted.

“If I’m paying that a lot, I hope there’s gold in that hen,” one person responded to a viral tweet in January displaying a $37 price ticket on a package deal of hen breasts.

The episode prompted accusations of value gouging and a high-profile story within the New York Instances — however the paper reported that outrage at grocers was misplaced.

“Whereas it’s simple to get indignant on the grocer, there’s little or no proof that the grocers are literally profiting from the scenario,” mentioned Mike von Massow, a meals economics professor on the College of Guelph in Ontario.

Meals costs have solely gotten worse since then, and Prime Minister Justin Trudeau, apparently not a reader of the New York Instances, has discovered the identical scapegoat as many others unversed in primary economics: grocers.

Final month, Trudeau threatened to slap grocery shops with new taxes in the event that they don’t discover a strategy to decrease meals costs.

“Giant grocery chains are making document income. These income shouldn’t be made on the backs of people who find themselves struggling to feed their households,” Trudeau instructed an Ontario crowd.

By taking purpose at grocers and “document income,” Trudeau is parroting the rhetoric of some U.S. politicians, together with Sen. Elizabeth Warren (D-MA), who has argued that inflation is being pushed by “corporate greed.”

The concept companies all of a sudden turned grasping within the aftermath of the pandemic by no means handed the financial odor check, and it was just lately rebutted in a Federal Reserve paper.

“Company revenue margins weren’t abnormally excessive within the aftermath of the COVID-19 pandemic, as soon as fiscal and financial interventions are accounted for,” famous Dino Palazzo, senior economist on the Federal Reserve Board.

But politicians akin to Trudeau, who lower than a 12 months in the past criticized the concept of utilizing a windfall tax on grocery corporations to decrease meals costs, have repeated the declare over and over that grasping companies are the basis reason for inflation. Why?

The reply is straightforward: the true blame for inflation lies with them.

Pierre Poilievre, chief of Canada’s Conservative Get together, hit the nail on the pinnacle in a latest interview when he identified that the Canadian authorities’s insurance policies are guilty for inflation — as are those that lead it.

“[Trudeau] prints $600 billion, grows our cash provide by 32% in three years,” Poilievre mentioned. “That’s rising the cash eight occasions quicker than the financial system. No surprise we now have the worst inflation in 4 many years.”

That is the thriller of inflation. (It’s probably not a thriller.) Politicians and central banks flooded the economy with money, which devalued the forex.

Primary economics teaches that rising the cash provide quicker than an financial system can present new items and companies will lead to value inflation, and that’s exactly what we’ve witnessed. Certainly, for a lot of recent historical past, inflation was outlined as enlargement of the cash provide, not a rise in costs (which is the consequence of increasing the cash provide). Henry Hazlitt famously defined the distinction in Economics in One Lesson.

“Inflation is a rise within the amount of cash and credit score. Its chief consequence is hovering costs,” Hazlitt defined. “Due to this fact inflation — if we misuse the time period to imply the rising costs themselves — is induced solely by printing more cash.”

Politicians such as Trudeau cannot, of course, admit it’s their own policies and money printing that are to blame for high food prices. So they hold speeches blaming grocery stores and food producers for the inflation they caused and threaten them with new taxes.

Whether Canadians will see through Trudeau’s crude charade is unclear. What is clear is that Canadian grocers are not responsible for the skyrocketing price of food in Canada. Justin Trudeau and the Bank of Canada are.

About the author: Jonathan Miltimore is the Editor at Large of FEE.org at the Foundation for Economic Education.

Source: This article was published by FEE and initially appeared on The Washington Examiner.