Budget blues and our food future

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Last week was important for economic indicators. The Bank of Canada chose to hold its benchmark interest rate steady, while the latest data showed U.S. inflation picking up again.

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The U.S. economy appears robust, in stark contrast to Canada, where there are expectations of a “soft landing” — a scenario that involves avoiding recession while reaching full employment. However, Canada's economic data show significant fluctuations in productivity and wealth creation.

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There is widespread speculation about an interest rate adjustment in North America.

The US Federal Reserve is planning to hike, which is already putting downward pressure on the Canadian dollar. It has weakened significantly and may fall below 70 cents against the US dollar in early May. This devaluation could make imports, including food, more expensive.

Amid this economic turmoil, Canada has announced budget plans that include more than $20 billion in new spending after two weeks of extensive deliberations.

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With its budget to be presented on Tuesday, the Trudeau government is convincing Canadians that there will be less need for provincial involvement, and that only Ottawa can deliver on its promises. This centralized approach is also evident in the agri-food sector and food security measures.

Despite the National School Food Program, expect the budget to remain silent on new measures to stabilize or grow our agri-food economy.

Food inflation will fall, but so will per capita food spending. The average Canadian now spends about $248 each month on food at retail outlets, a significant drop from the $339 it takes to eat a healthy diet. This decline is evident in the shift to cheaper, nutritionally deficient alternatives—a trend not previously seen in Canada.

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The root cause goes beyond just food prices. The cost of living, primarily housing, has prompted many Canadians to save on groceries. In response, the Trudeau government has focused heavily on housing policy in recent weeks, although the strategies used are open to debate.

A clear, actionable vision for Canada's agri-food sector is clearly lacking. The National School Food Program was supposed to be an integral part of a sustainable Canadian agriculture partnership that ends in 2028.

Logically, it seems easy to align what we grow with what kids eat at school, but Canada makes food initiatives difficult. This discrepancy extends to supporting food banks and food rescue organizations.

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Three years ago, Ottawa created a Food Policy Advisory Council to shape Canada's approach to agri-food, but it has had little impact, with many members resigning and little attendance at meetings.

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Instead, the United States is poised to introduce a new farm bill to lawmakers, a $1.4 trillion initiative over five years that will set the future of agriculture and nutrition policy. That amount exceeds Canada's entire national debt and is $820 per American annually, compared to just $17 per Canadian.

United States policies, including the Supplemental Nutrition Assistance Program, reflect its deep commitment to supporting the agri-food sector in the national interest. We may not agree with their views on agriculture and agri-food, but at least they have a clear vision.

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At the same time, Canada is still grappling with how to protect its outdated supply management regime at all costs, particularly through the controversial Bill C-282. We do not care about priorities of agricultural products.

It would be unfair to attribute all of our challenges solely to the Trudeau government, which undoubtedly has a unique opportunity to shape its vision for the future for the agri-food sector. Its commitment to environmental protection may play a key role, but Ottawa should also consider expanding its influence into provincial domains that significantly affect agriculture and food security.

However, don't hold your breath for transformational results from the budget. Significant progress is unlikely.

– Dr. Sylvain Charlebois is Senior Director of the Laboratory for Agri-Food Analytics and Professor of Food Distribution and Policy at Dalhousie University.

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