Finance Minister Chrystia Freeland talks about the Liberal government’s one-time grocery rebate payment in Toronto, July 5, 2023. Note the ‘Making Life More Affordable’ podium sign. Photo credit: Twitter/Chrystia Freeland
With much of central Canada under a heat warning this week, many of us are now feeling the heat of the summer. However, it is more than the weather that is making Canadians uncomfortable. Many are stressed with the increasing pressures felt by the rising cost of living — and the federal government’s fiscal policies are seemingly making matters worse.
This week, 11 million “low- or moderate-income” Canadians received a one-time grocery rebate from the Trudeau government. The cash handout was part of the 2023 federal budget and is being provided to help individuals with their rising grocery bills. The opposition has tagged the relief payment the Liberals’ Food Stamp Program.
If you earn under $35,000 and are single, you would have received a maximum payment of anywhere from $234 (no children) to $548 (with three children). A married or common-law couple received a maximum payment of $306 (no children) to $628 (with four children).
Finance Minister Chrystia Freeland announced the government’s summertime grocery cheques at a Toronto corner store grocery chain. Freeland hailed the Liberals’ fiscal record and credited her government’s fiscal acumen with wrestling the country’s inflation rate to 3.4 per cent in May. (Freeland likely chose her neighbourhood corner store to highlight this week’s multi-million-dollar giveaway to individuals and families because she did not want a comparison with another photo op staged a while ago at a Loblaws where the Liberals gave $12 million to that grocery chain to subsidize new fridges.)
What was not accounted for in the finance minister’s calculations on grocery prices was the hefty rise this past year in the cost of food, nearly triple the general inflation rate. Compared to 12 months ago food prices have risen on average a total of nine per cent – bakery products have risen 15 per cent. StatsCan’s latest report on Monthly Average Retail Prices For Selected Products shows yearly increases of:
- 7 per cent more for white bread from $3.37 per loaf to $3.59
- 9 per cent more for ground beef from $10.32 per kilogram to $11.23
- 10 per cent more for ground coffee from $6.03 per 340 grams to $6.62
- 19 per cent more for margarine from $6.25 per 907 grams to $7.46
- 20 per cent more for spaghetti from $2.92 per 500 grams to $3.51
- 34 per cent more for grapes from $7.56 per kilogram to $10.14
These rising prices are making many nutritious food products unaffordable, as reported in the federal report Evaluation Of The Office Of Nutrition Policy And Promotion. Evidently, 70 per cent of Canadians are not eating the recommended minimum five servings of fruits and vegetables daily. The report states: “There has been a decline in the consumption of fruits and vegetables…. Recommended foods like nuts and seeds or fruit may not be easily available in some parts of the country or may be unaffordable.”
What was also not accounted for in Freeland’s announcement was the added cost to Canadians of her government’s rising carbon taxes — including a new clean fuel regulation introduced on July 1. Starting this week, the federal government grabs a total of 14.3 cents tax per litre at the pump, which amounts to more than $8 with every fill up. Now they will add another eight cents on top of that by way of new regulations to fuel companies (taking another approximately $5 of tax with every fill-up).
So, for those individuals who are getting a maximum grocery rebate cheque of $234 this week, assuming you fill your car twice a week, you will pay out that money in the hikes to the carbon tax by just after Labour Day. In other words, that summertime grocery cheque is no more than a summertime carbon tax relief cheque.
There is another recent significant announcement that Chrystia Freeland chose not to comment on when she was walking the aisles and smiling before the cameras. Around the time the Bank of Canada raised its interest rate in early June, the bank’s Governor Tiff Macklem made comments that signaled interest rates in Canada would not be coming down in 2023 – and would remain in the range of 4 per cent through 2024. Macklem also suggested that there would be a further rate increase this year, perhaps as early as next week, July 12.
The prolonged high interest rates forecast a whole lot of hurt for Canadians who are weighed down with consumer debt and mortgages. The reality is rather ugly given Canadians have the largest household debt as a percentage of income of all G7 countries (185.2 per cent according to the Organization for Economic Co-operation and Development (OECD) numbers – more than 80 per cent greater than our American neighbours).
Like the hot-under-the-collar situation individual Canadians are feeling with these heightened inflation rates, the federal government debt load is also adversely impacted. Expect that as interest rates rise, the interest payments on the government’s debt will proportionally increase. It is a matter of record that the Trudeau government has added more federal debt to the country’s balance sheet than all previous governments since Confederation — combined. The Trudeau government’s fiscal approach of “having budgets balance themselves” and “growing the economy from the heart out” has increased each and every Canadian’s share of federal debt by 35 per cent.
So, in Canada’s last fiscal year the government paid $43.9 billion in interest charges to carry the national debt. In future years, with the higher interest rates, this debt service payment will be significantly more. Bottom line: money spent on interest means there is less money available for government programs and services.
Beyond this atrocious debt load, consider some of the dark economic realities Canadians now must face because of the Trudeau government’s fiscal mismanagement.
- Canada is experiencing its worst economic growth since the depression era of the 1930s. Canadians’ measure of wealth, as factored by the GDP per person, has been essentially stagnant since 2016 (and the election of the Trudeau government), according to the Fraser Institute. This is not a global phenomenon but rather a domestic issue. Real per capita GDP in Canada from 2016 to the end of 2022 was only 2.8 per cent. Comparatively, the U.S. experienced a real per capita rise in GDP of 11.7 per cent.
- There is a serious lack of confidence in doing business in Canada. Since the fourth quarter of 2014, business investment in this country has fallen 17.6 per cent in volume even as it has risen 23.5 per cent in the U.S. (a 41 per cent spread!). Another way of looking at this: When Trudeau was elected Canadian businesses were investing 79 cents per worker for every dollar invested in the U.S., but by 2021, investment had fallen to 55 cents for every U.S. dollar.
- Canadian trade exports other than natural resources have actually declined with the Trudeau government. Since 2015, the volume of Canada’s merchandise exports has fallen 0.4 per cent, while in the U.S. it has risen 14.0 per cent. If it were not for the increased trade exports of Canadian resources – oil and gas, lumber, mining – the country would be dealing with annual trade deficits.
- A recent survey by the Canadian Federation of Independent Business shows that nearly a fifth of companies – close to 250,000 across Canada’s economy – may close their doors in the next 12 months due to debt and lost business through the pandemic years.
Largely due to the dismal fiscal performance of the federal government in the last five years, the OECD projects growth in living standards in Canada will rank last among its 38 developed member-countries over the next 40 years. Canadians’ standard of living will be in a steady decline.
As it is, Justin Trudeau and Chrystia Freeland may wish to tout the hundreds of dollars of cash relief they are doling out this week, but the forecast for Canadians looks much hotter and more uncomfortable than what we are currently experiencing through this sticky start to the summer.
Chris George is an advocate, government relations advisor, and writer/copy editor. As president of a public relations firm established in 1994, Chris provides discreet counsel, tactical advice and management skills to CEOs/Presidents, Boards of Directors and senior executive teams in executing public and government relations campaigns and managing issues. Prior to this PR/GR career, Chris spent seven years on Parliament Hill on staffs of Cabinet Ministers and MPs. He has served in senior campaign positions for electoral and advocacy campaigns at every level of government. Today, Chris resides in Almonte, Ontario where he and his wife manage www.cgacommunications.com. Contact Chris at chrisg.george@gmail.com.
