Putting executives of Canada’s grocery store chains on the hotseat in Ottawa may have been good political theatre but it kind of misses the point.
Every good story line needs a villain and the politicians in Ottawa, especially the NDP leader, want to put the black hat on grocery stores because food prices are going up.
That is like the post office raising the cost of a stamp and the blaming the letter carrier for delivering more expensive envelopes.
And we should get ready for even more food inflation because the Canadian dollar is taking a beating this week.
When the Bank of Canada held the line on interest rate hikes and its American counterpart suggested they would be raising rates, global cash flows moved to the US. That drove up the American dollar which, in turn, lowered ours. And now when we buy things like fresh fruit or vegetables, we’ll shell out more of our lower-valued dollars to buy the higher-valued US produce.
In short, lower interest rates mean higher food costs and blaming grocers misses the point.
