The Competition Bureau recently launched an examination of competition across Canada's food supply chain to understand why food prices keep rising. However, columnist Matthew Lau argues that no lengthy investigation is needed—the federal government itself is the primary driver of anti-competitive forces that inflate costs and restrict choice.
Supply Management Quotas Worth $49.2 Billion
Just two days after the bureau's announcement, Statistics Canada data revealed that as of December 31, the Canadian agricultural sector held $49.2 billion worth of quota—artificial, government-enforced monopoly rights to sell agricultural products at inflated prices. This amount exceeds the total value of crop, poultry, and market livestock inventories, which stood at $47.0 billion. According to Lau, these quotas represent a massive government-imposed barrier to competition.
Cost to Consumers and Poverty Impact
A new report from the Montreal Economic Institute estimates that supply management—through production quotas and high tariffs—costs each Canadian $224 per year in inflated food prices. Using Statistics Canada income surveys and low-income cut-off thresholds, the report suggests these excess costs push approximately 120,000 Canadians below the poverty line. Lau emphasizes that this anti-competitive measure disproportionately harms the poor.
New Tariff on Canned Vegetables
Last Friday, Ottawa announced a 10 percent tariff on imports of canned vegetables for up to 200 days, further underscoring its commitment to policies that raise food prices. This move came weeks after Food Banks Canada reported that food bank usage has more than doubled since 2019, reflecting growing household instability. However, due to international trade obligations, canned vegetables from the United States, Mexico, Israel, Chile, and developing countries are exempt from the new tariff.
Government Spending on Anti-Competitive Programs
Quotas and tariffs are not the only government-enforced anti-competitive behaviors. The Department of Agriculture and Agri-Food, Canadian Grain Commission, and Canadian Dairy Commission employ over 6,000 bureaucrats and are expected to spend $3.7 billion this fiscal year on activities that stifle competition. These include more than $180 million for three supply management initiatives that subsidize producers already benefiting from $49.2 billion in monopoly rights; $55 million in grants to support the Canadian wine industry; over $110 million for agricultural climate solutions; and $18 million for an agricultural clean technology program. Lau argues that such government picking of winners and losers through subsidies and central planning is the opposite of market competition, which requires businesses to deliver better products, greater choice, and more affordable prices to satisfy consumers.
