The idea of government entering the grocery business is gaining traction among left-wing politicians across North America. New York Mayor Zohran Mamdani, Toronto city council, and federal NDP Leader Avi Lewis have embraced this concept as a solution to the food affordability crisis.
Toronto's pilot project and NDP's claims
In March, Toronto city council voted overwhelmingly to pilot four municipally operated grocery stores. The vote occurred without releasing a cost estimate or feasibility study to the public. Meanwhile, Lewis claims a national network of government-run stores could save consumers between 30% and 40% on grocery bills.
But is that true? According to the Montreal Economic Institute, retail grocery profit margins on food items are between 3% and 5%. Even if government-run stores eliminated that margin entirely, the average person would save only $11 to $18 per month. This does not account for the inefficiency of government management, which would likely increase costs through unionized workers, poor resource allocation, and lack of competition.
Real causes of high grocery prices
Grocery prices have climbed 22% over four years, but the solution is not more government. Instead, policies like supply management, interprovincial trade barriers, and the industrial carbon tax are driving up costs. Supply management restricts supply of dairy, poultry, and eggs, costing families hundreds of dollars annually. Interprovincial trade barriers create a de facto 9% internal tariff. The industrial carbon tax raises costs for fertilizer and transportation, which are passed to consumers.
Failed experiment in the U.S.
Government-run grocery stores have been tried and failed. In Erie, Kansas, a municipally owned store opened in 2018 but closed in 2025 due to empty shelves, safety issues, and tens of millions in losses. The concept would not work in Canada either.
Solutions exist: ending supply management, tearing down internal trade barriers, and eliminating the industrial carbon tax. These changes could be made unilaterally by Ottawa if politicians had the courage to act.
