With the continued increase in COVID-19 cases across the globe, citizens in Quebec will see an increase in food prices. This will be accompanied by a decrease in the supply of food products. There are currently not enough laborers in agriculture, trucking services, and other related industries, resulting in difficulties for managers of supermarkets to replenish their supply of goods. Factories located in China also had to shut down this January due to lockdowns that were implemented. This has negative consequences for the global supply of imported goods. The local workforce has also been affected, with more employees catching the COVID-19 virus, leading to working days lost.
There has been a limited supply of oil, spices, vinegar, and turkey in the past few weeks. Some businesses have also reported difficulty obtaining shrimp, octopus, salmon, and tuna. When they become available, they are priced higher than before. Fees related to the shipment of imported goods are also increasing. Business owners still have to increase their prices despite adjusting their margins so that they can continue to sustain their businesses.
According to the 2022 Edition of Canada’s Food Price Report, the increase in food prices could go as high as 7%, which is the highest predicted value ever since 2010. There is an expected 6-8% inflation for dairy products and restaurant prices and a 5-7% inflation for bakery and vegetables. Globally, Canada also went down to the 24th place for food affordability. It was in 18th place in 2020. The situation is not expected to stabilize any time soon due to the unpredictable landscape brought about by the COVID-19 pandemic.
New Vaccination Requirements for Truckers
A new regulation has also been introduced, wherein non-Canadian citizen truckers arriving from the United States need to have received their 2-dose regimen of the COVID-19 vaccine in order to enter the country. On the other hand, Canadian citizen truckers who have not yet been vaccinated must undergo quarantine. The Canadian Trucking Alliance (CTA) claims that “seventy percent of the $460 billion worth of goods that traverse the Canada-U.S. border each year are shipped aboard trucks”
A minimum of 12,000 truckers will be affected by the implementation of this mandate. That involves 10% of those who usually traverse the borders of the country. It will lengthen the delay in the delivery of the affected goods. Mr. Marco Beghetto, CTA spokesperson, said that the regulation comes at an untimely period.
On January 15, 2022, the vaccination requirement took place. Individuals who are unable to comply with this requirement will not be allowed to cross the border. This regulation has further limited the ability of some trucking businesses to operate at their optimum capacity since a lot of truckers remain unvaccinated. Companies in the transportation sector don’t necessarily have a problem with this requirement. However, they find the timing of its implementation to be unfavorable due to the current congestion in ports, lack of employees, and increasing prices of goods. Some believe that enough time was given before the mandate was implemented. To prevent loss of workers, one company granted 10,000 dollars to employees who have received their first dose of the COVID-19 vaccine.
The decrease in available truckers will mean that the situation of shortages in grocery stores will be aggravated. This also becomes a problem for Canada because they purchase goods that are ready to be sold, instead of purchasing raw materials to be transformed into final goods. Some companies may be able to cope by assigning truckers who cannot comply with such regulations to domestic routes. However, smaller businesses might not have this much flexibility. The problems in the food supply can be seen until summer. Improvements are expected to be seen when the growing season starts, causing local production to contribute to the country’s supply.
2022 Edition of Canada’s Food Price Report
In 2022, food prices in Alberta, British Columbia, Newfoundland and Labrador, Ontario, and Saskatchewan are expected to undergo above-average increases. On the other hand, food prices in Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, and Quebec are expected to have a below average increase in food prices. In the past few years, food has only cost 10% of the income of individuals residing in Canada. But, there has been an increase in spending on food retail and services by 16.3%. This is further aggravated by the COVID-19 pandemic.
Inflation will mostly be felt by those belonging to the lower socioeconomic strata since they spend more of their income on food and housing. This will also negatively affect women, indigenous populations, and disadvantaged communities. They will have difficulty sustaining their lifestyle as long as the price of goods continues to rise. Wages in 2022 are expected to increase, but not at a rate that will allow individuals to cope with inflation.
Last year, workers in the accommodation and food services were still waiting to be filled. Factors that discourage employees from working in such industries even before the COVID-19 pandemic started include low wages, minimal to no benefits, demanding workload, and an increased likelihood of experiencing sexual harrassment and abuse. When the pandemic started, employees had more reasons not to pursue work. There is an increased risk of exposure to COVID-19, the requirement to wear face masks, and added work such as ensuring that vaccine passports of customers are valid. Altogether, employees would rather seek jobs in a more stable industry with fewer disadvantages than those mentioned above.
Moreover, ports in Canada and the US experienced congestion. In September – October 2021, those who manage the ports in Vancouver had difficulties with the schedule of cargo arrivals, increased imports, and decreased capacity to transport the goods from the port to its next destination. There are also increases in oil prices, which translate to higher food prices. Climate change has also been a factor in the increase in food prices. Wildfires, droughts, and water scarcity in different parts of the country affected the local output. This became a problem for the supply of meat and bakery products.
There is also a change in the profile of consumers. More and more individuals are concerned with sustainability and ethical production. When choosing stores to buy from, they take into consideration the packaging and source of their products. Some are willing to spend more for food that is produced locally so that they can practice conscious consumption.
Canadians are also becoming more food literate over the years during the COVID-19 pandemic. With more time at home, there are opportunities to learn new recipes and try ingredients they haven’t previously used. Choices about what to eat are highly affected by health, food prices, and the environment. These newly developed habits will be carried on even after the pandemic, with some planning to utilize online platforms for their needs in the grocery store. Independent retailers are gaining a stronger foothold with consumers compared to major food retailers. They prefer to enjoy the varied local options offered by stores, but less than half actually plan to purchase local products.
Climate change, input costs, energy costs, COVID-19, and consumer disposable income are very likely to cause an increase in food prices in 2022. Inflation and policies and regulations are likely to influence an increase in food prices. On the other hand, consumer awareness and trends and consumer indebtedness are likely to influence a decrease in food prices.
The higher costs of producing dairy products can be attributed to the more expensive feed, energy, and fertilizers used. Restaurants are also expected to increase their prices to consumers due to the increased cost of food prices, rent fees, and difficulties in employment. The annual food expenses for a family with two adults (male and female) and two children (male and female) are expected to increase by 14,767 dollars. This excludes costs related to food waste, eating out, and fees for online grocery stores.
With this, food insecurity will be a challenge for the country this year. There will be more individuals who would need food banks or government support if wages continue to be insufficient to meet the increased daily cost of living. Pickpocketing in grocery stores is also another challenge that is expected to become more prevalent. As some store owners have experienced, there has been an increase in cases of meat, cheese, over-the-counter medicines, and energy drinks being stolen. There needs to be a constant readjusting of policies and regulations to ensure that neither the response to the COVID-19 pandemic nor the food security of citizens are further negatively affected.