Millions of Canadians are set to receive a new grocery rebate intended to offset rising food costs. A University of Guelph food business researcher says while the rebate is beneficial, it is a temporary solution and does not sufficiently address affordability challenges.
“There is still the necessity for measures that would reduce or stabilize food prices,” says Dr. Sadaf Mollaei, professor at the School of Hospitality, Food and Tourism Management. “This rebate is mostly a form of short-term relief rather than a comprehensive solution.”
The Canada Groceries and Essentials Benefit, announced by the federal government in January, is expected to support an estimated 12 million Canadians early next month.
Mollaei, the Arrell Chair in the Business of Food, studies consumer behaviour and sustainable food systems. She says the benefit is valuable because it will enable families to allocate funds based on their most urgent needs, whether groceries, rent or utilities. Still, the underlying issue of affordability remains.
“The rebate remains helpful, but its impact may be less noticeable to households if it is counterbalanced by rising grocery bills,” she says. “It does not reduce prices or address the underlying drivers of food price increases.”
Grocery prices have climbed more than 30% since 2020, according to Statistics Canada. The war in Iran continues to drive up the price of food and oil, creating ripple effects through the food system, Mollaei points out. Goods that are energy-intensive or rely heavily on global supply chains, like fresh produce, meat, dairy, grains and packaged foods, are most impacted.
Mollaei believes a more comprehensive approach that combines income support and other policy reforms pertaining to food systems is more likely to be effective in improving long-term affordability.
Income supports like the rebate are important for immediate relief, but they should be complemented by structural measures, she explains. These include strengthening competition in the grocery sector, improving price transparency and investing in food production here at home in Canada to reduce our vulnerability to global disruptions.
Housing affordability is also critical as food insecurity is closely tied to high rent burdens.
“Still, with rising food and housing costs placing significant pressure on household budgets, additional income, even in modest amounts, can provide breathing room and reduce the likelihood of more severe forms of food insecurity.”
Dr. Mollaei is available for interviews.
Contact:
Dr. Sadaf Mollaei
smollaei@uoguelph.ca