Groceries will be a key issue in the upcoming provincial election

As of last Saturday, it’s official. Provincial election season is here and with it comes potential policies from each party to convince you that they can make your life better if they’re in power.

And there are few things that could make the lives of Nova Scotians better than making groceries more affordable.

Unfortunately, there’s only so much provincial governments can do about the rising cost of groceries. Most talks about the affordability of goods take place at the federal level, where broad changes can be made and corporations can be held to account, albeit rarely. However, that doesn’t mean the province can’t impact affordability.

The Nova Scotia Liberals, PC Party and NDP have spoken on their plans to make food and goods more affordable, primarily through HST cuts. Credit: NSLP/PC Party/NSNDP

Zach Churchill’s Liberal Party outlined their plan on groceries on Oct 29, offering to cut HST on all food at the grocery store. Basic groceries, such as your wheat and milk, are typically zero-rated, but goods like granola and meals made in-store are typically taxed. The Liberals’ plan would see that tax eliminated.

Tim Houston’s PC Party is also focused on affordability, having announced an overall HST reduction from 15% to 14% that they say would take place next year. They have also called the Liberals “sneaky” carbon tax lovers, stating the federal carbon tax will allow grocery prices to continue rising.

While the NSNDP hasn’t released a full statement on their plans for groceries and affordability, leader Claudia Chender said on local radio that they would consider cutting taxes on food and everyday goods.

But how do these plans stack up? Would they help make a dent in grocery prices and give people more financial wiggle room, or are they merely a gamble at your vote?

Liberal Party’s plan

Released on Oct. 29, the Liberal plan includes the aforementioned HST cut on grocery products that are taxed. This could range from granola to a rotisserie chicken. The impact this will have on families is truly dependent on what they buy—for those who frequently purchase pre-prepared meals, snacks or beverages at the grocery store, this may open up a little more room in their grocery budget, but it would more than likely be a few dollars per trip to the store. For those who are more keen to buy the essentials, this may have less of an impact. A cut to HST also means fewer tax dollars going to the provincial government to provide government services. Unlike the PC Party’s proposed HST cut, the Liberals have not said how much of an impact this would have on government revenue. Food items that do and do not have HST attached to their price can be found here.

The plan contains more than an HST cut for non-basic grocery items. The party also hopes to create more competition between grocery stores by removing limits on where new stores can open. The party claims this will create fairer prices—particularly in rural areas. This is in line with a 2023 report on Canada’s grocery industry, which recommended all levels of government provide support to independent grocers while allowing international grocers into the market.

To help achieve this, the party wants to cut all payments to Sobeys—which are currently being made under the Nova Scotia Loyal program—and redirect the funds to develop a marketing and growth strategy for local producers while supporting local businesses. They also plan to provide grants and loans to help independent businesses expand while investing in affordable food programs. The Liberals haven’t given an estimate on how much funding would be going towards these initiatives or said how much their HST cut would impact government revenue.

Furthermore, as of Oct 31, the Liberals have released their plan for a 2% cut to HST. The Liberals say this will save the average family $1,416 annually. They have also promised to lower income taxes by raising the personal exemption amount and doubling the basic personal amount adjustment for those who earn less than $75,000 a year, saving the average family $1,270 and $311 a year respectively according to their math. They have not said how much this could impact the government’s revenue streams, but if we were to double the PC’s estimate of their 1% tax cut, it could see HST revenue drop over $500 million.

PC Party’s plan

The big change that the PCs want to make is an overall HST cut of 1%, from 15% to 14%. Some are excited to see the sales tax get cut—after all, that’s a little more money in their pocket than before. However, cutting HST also means there will be less money coming in to provide for provincial services. As the Nova Scotia government reports, HST is the second-largest revenue source for the province at 17.1% of total revenue, at about $2.7 billion annually. A 1% cut would see revenue drop $260.8 million according to the government’s math.

The Nova Scotian government has been experiencing surpluses for the past two years despite expecting deficits, making this look feasible on the face of it. However, there is the question of how much Nova Scotians would save from an HST cut. The PC Party has not released that number, but if we were to take the Liberal estimate and cut it in half, it would result in around $700 for the average family—but that’s if the Liberals’ math is indeed correct.

It also wouldn’t be a PC Party campaign without a carbon tax-related beatdown on the Liberal Party. In a statement released Oct 29, the same day as the Liberals’ announcement of their plan, they condemned Churchill’s “sneaky carbon tax,” an attempt at connecting the provincial party to the divisive policy enacted by the federal party. PC candidate Barb Adams said it’s “a tax on farmers—that will make your groceries more expensive.”

In reality, the provincial Liberals are attempting to remove the carbon tax backstop in a bill tabled in September, which would “satisfy the requirements of the federal government’s climate action plan” according to a release from the Liberals. The cap and trade system would create a maximum amount of emissions rather than a minimum price on said emissions—currently set by the feds at $15 per tonne of GHG per year. The PCs, however, call this “a price on carbon by another name,” and say the cost of gas would be driven up by 26 cents a litre.

But that’s gas—what about groceries? Economist Trevor Tombe studied the impact of the carbon tax on consumer costs and, using Statistics Canada data, found that it contributes to a less than 1% increase in food prices. As a CBC article on the issue points out, 90% of this money is given as a rebate back to families, while the other 10% is issued to businesses, farmers and Indigenous communities. So while it may have some impact, it’s not nearly as dire a hit to groceries as the PCs may make it out to be.

Finally, as they are the current party in power, it’s worth looking at the rollout of their recent Nova Scotia Loyal program. While it was intended to help independent grocers get ahead of the multinational corporations they must contend with, Houston’s government scrapped the recommendations made to instead run with an untested model that essentially works as a Sobeys rewards program, offering extra Scene points to customers once a month for buying locally produced goods. Although independent retailers can claim Nova Scotia Loyal signage, several have come out against the program since its introduction.

New Democratic Party’s plan

The NSNDP have yet to release any sort of affordability plan that would similarly tackle grocery prices. Still, in an appearance on the Todd Veinotte Show on CityNews, Claudia Chender announced her party would also make cuts to the HST on “essentials and groceries,” which she says would make a difference for the people who need it.

With no numbers on this HST cut as of yet, it’s even more difficult to say how much of an impact this would have on either the people it’s meant to benefit or the government’s annual revenue.

The Coast reached out for comment from the NSNDP regarding their plans to address affordability and grocery prices. A spokesperson for the party says they have called for the removal of HST from all groceries—an effort they have already tabled legislation for—and added they would speak more on their plans within the coming days.

When their plan does eventually come out, The Coast will be sure to write on it. Make sure to keep up to date with our daily newsletter for more on the provincial election as it unfolds.

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1 Comment

RonStockton says:

November 4, 2024 at 1:22 pm

The minor tax cuts are a scam on those who work for a living and those who cannot work. These are the same people who will be most hurt by the cuts to services that will inevitably follow. Stopping price gouging by the grocery chains (primarily Loblaws and Sobeys in Atlantic Canada) and stopping the rip-off of “loyalty cards” (Scene, Optimum, and Loyalty Nova Scotia) would save shoppers more than the tax reductions. Properly and fairly taxing high income and rich people and going after those who sock their money away in tax havens would allow for guaranteed annual incomes at a living wage and making the minimum wage the living wage would mean workers could afford groceries. There are solutions, the politicians know what they are, the fact those solutions have not been implemented already is a deliberate, political choice. Poverty and hardship for workers is always a deliberate policy choice of corporations and government.