Title: Experts Doubt Public Grocery Stores Will Lower Food Prices

OTTAWA — NDP leadership candidate Avi Lewis has proposed a national public grocery option aimed at reducing food costs for Canadians. However, economists warn that this initiative may not significantly impact grocery prices.

Lewis argues that the federal government could purchase food directly from distributors and sell it at cost through non-profit grocery stores. He stated, "People cannot get by when they’re paying 300 bucks for a cart of groceries … when the market fails any industry, the government has to step in and actually provide an alternative that is not in the market mindset, where everything has to make a big profit." He believes this plan could resonate with voters, calling it a “fantastically popular policy.”

Currently, five major chains dominate the Canadian grocery market, controlling about 75% of it. The concept of public grocery options has gained traction in democratic socialist circles, particularly in the U.S. New York City mayoral candidate Zohran Mamdani recently won a primary by promising to establish city-owned, low-cost grocery stores in each borough.

Jordan Leichnitz, a former advisor to ex-NDP leader Jagmeet Singh, noted the timing of Lewis's proposal, suggesting it reflects Mamdani's success in addressing affordability issues.

However, food policy analyst Vass Bednar highlighted key differences between the proposals of Lewis and Mamdani. She explained, "Lewis is talking about scaling up a national public option that can directly compete with the big chains, whereas the local experiments in the U.S. have been focused on solving market failure in underserved areas — your quote-unquote ‘food deserts.’"

Mike von Massow, a professor at the University of Guelph, expressed skepticism about the potential savings from government-owned grocery stores. He stated, "Even if you bought just as well as Loblaws or Sobeys do, you would only be able to reduce the cost at checkout by somewhere around five percent. And that’s not insignificant, but that’s assuming that they do it as efficiently as the big guys, and there’s no evidence that they can."

Profit margins for major grocery chains in Canada average between 3% and 4%, according to the Retail Council of Canada. Von Massow also pointed out that the government already has programs to assist food-insecure Canadians, such as the national school lunch program and Nutrition North.

Sylvain Charlebois, a professor at Dalhousie University, raised concerns about the impact of Lewis's proposal on the agri-food labor force. He warned, "Essentially, what Mr. Lewis is trying to do is make sure that food is sold at cost. But it’s incredibly dangerous to do that, because you basically undermine the value of the work that’s being done across the supply chain, from farm gate, to store, to restaurant."

Charlebois noted that the food industry increasingly relies on temporary foreign workers, who make up nearly one in four farm workers and over one in ten food processing workers in Canada.

Kent Fellows, an economist at the University of Calgary, attributed the concentration of grocery ownership in Canada to geography rather than the actions of large chains. He suggested that small-scale public grocers in underserved areas might be more beneficial than a national public option.

In response to inquiries, Lewis's campaign stated they aim to make the federal program flexible, allowing for innovation at various levels of government. They noted that federal purchasing and distribution could work in some jurisdictions, similar to public provincial cannabis retailers.

Rival NDP leadership candidate Heather McPherson is also developing a plan to address grocery prices. She has called for an emergency price freeze on staples and a windfall tax on large grocery chains to eliminate the federal sales tax on prepared foods and snacks.