Mr. Speaker, I apologize for leaving my phone on the desk. I was using it to keep an eye on the time, but I understand. I will also try to be more measured with my remarks because I see that it is causing some commotion.
I was talking about deflation and saying that we do not want to trigger deflation. At the same time, we recognize that the cost of living is very high and that this is affecting different people differently. We are saying, and rightly so, that average wages have increased faster than inflation. That is true. However, average wages vary widely. Not everybody earns average wages. Those at the low end of the pay scale have not experienced these wage increases.
This relates to food inflation because it is particularly problematic when it comes to daily living expenses and essential household spending, including housing and food. Food inflation is very high in Canada, just as it is in all G7 countries.
Let us talk about food inflation. What is driving it, what set it off and what fuels it? Generally, inflation stems from a mismatch between supply and demand. Food inflation in particular is driven by the mismatch between supply and demand. Since 2022‑23, it has been primarily due to supply issues. The pandemic and the period that followed caused major disruptions across supply chains. A series of shocks affected markets in developed countries and saw food inflation soar at an exceptionally high rate.
It is not quite accurate to say that government policies caused these shocks. That is not the case. The Canadian governments public policy has nothing to do with the shortage of coffee on the market. I have never seen any coffee plantations in Saskatchewan. There are none. Canada does not produce coffee, so we have to import it. Global markets are facing a coffee shortage. I mentioned coffee because our Conservative friends always talk about coffee when they list all the items that have gone up by 30%, 40% or 50%. There is a global coffee shortage.
On top of that, our American neighbours decided to put a tariff on Brazilian coffee because they dislike the Brazilian government. Just like that, Brazilian coffee is suddenly subject to a tariff. Much of the coffee we drink in Canada is produced in the United States, so we are feeling the impact of this U.S. tariff as well.
Another very important factor in the rising food inflation seen in North America—in the United States and Canada—is the higher cost of meat.
Beef prices are very high in Canada and in the United States. It has nothing to do with government policy and everything to do with climate change. Crop failures, forest fires, droughts and all of that have made it so that cattle producers have had to sharply reduce the size of their herds. There is no meat available, which is why prices have gone through the roof. It is supply and demand. Supply has been hit by a sequence of of events, and demand has remained relatively stable; therefore, prices go up, and they have gone up very rapidly in Canada and the United States.
One of the solutions would be to open up and import more beef from overseas, but even overseas the quantities available are rather limited, so that is a major issue. Then, as beef prices increase, there is a cascading impact on many other types of protein available in supermarkets as people try to substitute other products for beef, so many other prices also go up. This is a major issue that affects food prices.
Let us go back to those base effects. As for our friends on the other side, I congratulate their strategists because they chose the right time to come up with the 6.2%, which is a real number. It exists, but it is entirely misleading because it is a base effect.
What happened one year ago, in December 2024? There was a temporary three-month reduction in the GST on many products, including some prepared foods, meals in restaurants, etc. That made it so that food prices one year ago dropped sharply, so when we compare December 2024 to December 2025, we have this 6.2% increase.
The Conservatives then say, “It is the highest increase in the G7. My God, it is one of the highest in the world. Look at what the Liberals have done.” They forgot to look at the recent monthly pattern in food price increases. If they had done that, they would have realized there has been a significant slowdown in food prices from month to month. It was something like 0.8% in October, then it went down to about 0.1% or 0.2%, and I suspect in about a week or 10 days, when the next CPI report comes out, we will see that on a month-to-month basis, food prices continue to be moderate, even if, on a year-over-year basis, January will likely be even above 6%. It will probably be something like 7% or 8%, and the Conservatives will once again cry that this is terrible.
I ask members to please look at the month-to-month evolution of food prices, and they will notice, if they are honest with themselves, that there is a marked slowdown in food prices. It is beginning to work. It is beginning to trickle down, and we are slowly but clearly bringing back food price growth to a more sustainable level.
Let us get back to the motion of our colleagues. I still have some time, but not much. The Conservatives keep coming back with the industrial carbon tax. They say, “If we just eliminate the industrial carbon tax, my God, the world will be so much better. Everything will disappear, and this will be a wonderful world.” This surprises me a lot coming from Conservatives. I have grey hair, so I remember things that happened in the past. I do not understand why our friends do not appreciate, or have ceased to appreciate, market-based mechanisms to resolve problems.
There were those raving lunatics, raving socialists, such as Brian Mulroney and Ronald Reagan, who came up with tough regulations and legislation to control acid rain, which was a huge problem. It was solved because those raving socialists, Mulroney and Reagan, did a bilateral agreement.
