Making economic sense of city-owned grocery stores

In an opinion piece for the Toronto Star, David Olive makes the case that, while a "noble idea," Toronto's plan to open city-owned grocery stores is not the most effective way to help Toronto families that need food assistance.

According to Olive, other places that have tried the strategy have not managed to reduce costs for consumers by very much — at least not without a massive government subsidy. Such a subsidy, Olive argues, could be used to give more Canadian households direct payments or other forms of assistance. "The means-tested, tax-free Canada Groceries and Essentials Benefit rolled out this year provides a family of four as much as $1,890 this year and about $1,400 a year for the next four years." That program will benefit roughly 12 million Canadians.

Toronto nonprofit Daily Bread Food Bank has asked the city to reconsider the initiative. "Instead, Daily Bread proposes that Toronto make more of its municipally owned properties available to its own and other non-profit food programs. That would increase access to affordable food without straining the City’s budget." The organization says the city-owned stores would only offer a modest reduction in household food spending while putting an "additional burden on an already fiscally challenged Toronto government."