Murphy’s Logic: Taxes contribute to higher food prices

Murphy’s Logic: Taxes contribute to higher food prices Opinion: Steve Murphy discusses how cutting the HST on grocery store items could help people afford quality food.

The federal government is putting pressure on the country’s major grocers to lower prices -- even threatening to tax their profits if they don’t.

Apparently, an industry that has been accused of colluding to fix higher prices is now supposed to collude to fix lower prices.

With so many families struggling to make ends meet, the industry and the rich and well-paid people who own it and run it, are attractive targets for a government languishing in the polls.

But rather than threatening to bring in a new tax, one likely to be passed on to hard-pressed consumers, Ottawa and the provinces should eliminate the HST on a lot of grocery store items that many people are turning to in hard times.

Prepared foods, salads and sandwiches, products sold in single-serving packages, including granola bars, fruit bars, cereal bars, yogurt bars, pudding, and many beverages, are all taxed. While these foods may not be healthy choices, for some families they are the only choices they can afford, particularly when they’re marked down for quick sale.

Ironically, vitamins and supplements, which are considered healthy, are also taxed.

Lowering grocery bills will take time and effort. And more would be preferable to industry acting in lockstep. But government should also consider the role taxes play in inflating the bottom line on the cash register tape.