10/10/2026
David Eby recently made a campaign promise to control prices at the grocery store.
Price controls do not work. If you believed that the only root cause of higher grocery prices was greed on the part of retailers, that may be emotionally or politically convenient but economically incorrect.
But we need to peel back a few layers just to see how misguided such a policy would be.
Have grocery prices increased? Yes.
Is Eby identifying the affordability problems in BC? Yes.
Has he misdiagnosed the cause and now is proposing a mechanism with historically unsatisfactory results which grants him more political power over the economy? Also, yes.
𝟭- 𝗧𝗵𝗲 𝗲𝘃𝗶𝗱𝗲𝗻𝗰𝗲 𝗱𝗼𝗲𝘀 𝗻𝗼𝘁 𝘀𝘂𝗽𝗽𝗼𝗿𝘁 𝗘𝗯𝘆’𝘀 𝗰𝗹𝗮𝗶𝗺
The election announcement says corporate retailers are “using inflation as a cover to jack up prices on essential goods.” It points to soaring grocery-company profits and rising billionaire wealth as evidence.
And while it’s true that profits did increase and billionaires did benefit, rising prices and rising absolute profits do not establish that expanding retailer margins caused the inflation. In fact, Competition Bureau Canada makes the case in their June 2023 𝘙𝘦𝘵𝘢𝘪𝘭 𝘎𝘳𝘰𝘤𝘦𝘳𝘺 𝘔𝘢𝘳𝘬𝘦𝘵 𝘚𝘵𝘶𝘥𝘺 𝘙𝘦𝘱𝘰𝘳𝘵 that retailers can earn more dollars without increasing their margin at all. If the wholesale cost of a product rises and the retailer maintains the same percentage margin, both the shelf price and the number of profit dollars rise automatically. In fact, the report correctly pointed out that the market would benefit from increased competition as a solution, not price controls.
Further, the Bank of Canada found in their October 2023 report 𝘜𝘯𝘥𝘦𝘳𝘴𝘵𝘢𝘯𝘥𝘪𝘯𝘨 𝘵𝘩𝘦 𝘶𝘯𝘶𝘴𝘶𝘢𝘭: 𝘏𝘰𝘸 𝘧𝘪𝘳𝘮𝘴 𝘴𝘦𝘵 𝘱𝘳𝘪𝘤𝘦𝘴 𝘥𝘶𝘳𝘪𝘯𝘨 𝘱𝘦𝘳𝘪𝘰𝘥𝘴 𝘰𝘧 𝘩𝘪𝘨𝘩 𝘪𝘯𝘧𝘭𝘢𝘵𝘪𝘰𝘯, retail food prices moved roughly in lockstep with costs during the inflationary period and that markups across most Canadian industries had remained roughly stable since early 2022.
And as recently as September 2026, the Competition Bureau published another report (Assessing progress on the Competition Bureau’s retail grocery recommendations) that identified higher import costs, supply-chain disruptions, a weaker Canadian dollar and extreme weather among the major pressures on grocery prices.
𝟮- 𝗘𝗰𝗼𝗻𝗼𝗺𝗶𝗰𝗮𝗹𝗹𝘆, 𝘁𝗵𝗲 𝗱𝗶𝗮𝗴𝗻𝗼𝘀𝗶𝘀 𝗶𝘀 𝗯𝗮𝗰𝗸𝘄𝗮𝗿𝗱𝘀.
Prices are information. They are not the underlying disease.
Prices coordinate information about scarcity, demand, and costs of providing goods to the market. Suppressing or controlling the price mechanism does not make those underlying costs or demands disappear.
The classic example illustrated by Ludwig von Mises is appropriately the price of milk, to explain that when governments interfere in the price of a good, that intervention creates distortions that invite 𝘧𝘶𝘳𝘵𝘩𝘦𝘳 interventions, progressively replacing market coordination with administrative control:
Government decides milk is too expensive, especially for poor families, so it imposes a maximum price below the market price.
That produces two effects:
- consumers want to buy more milk because it is cheaper;
- marginal producers can no longer cover their costs, (because input costs such as feed, energy, and transportation costs are not controlled) so they produce less milk, and divert production into butter, cheese or meat, or sell cows.
The result is a shortage: demand rises while supply falls. Consumers who could previously buy expensive milk now may not be able to buy milk at all.
Governments then continue to increase their control over more parts of the economy to attempt to control the prices of input costs up the supply chain.
To suggest that businesses only discovered greed recently is to misunderstand human nature. All human beings have self-interest. This drives them to act in a manner that becomes self-serving. This does not suddenly evaporate because of the role one has in a larger society (such as being a politician).
Ironically, the price controls Eby is suggesting sit downstream from Canada’s existing supply-management architecture. B.C.’s own Farm Industry Review Board explains that supply management uses production quotas, price setting and import controls, administered jointly by provincial and federal institutions. So the promise is simply MORE administrative policy downstream from the already controlled policies at the top of the supply chain.
𝟯- 𝗧𝗵𝗲 𝗲𝘃𝗶𝗱𝗲𝗻𝗰𝗲 𝗼𝗳 𝗽𝗿𝗶𝗰𝗲 𝗰𝗮𝗽𝘀 𝗶𝗻 𝗵𝗶𝘀𝘁𝗼𝗿𝘆 𝗶𝘀 𝗻𝗼𝘁 𝘃𝗲𝗿𝘆 𝗳𝗼𝗿𝗴𝗶𝘃𝗶𝗻𝗴
If government compresses the permitted return on particular products while costs continue moving, retailers have other margins on which they can act: reduce promotions, alter product mix, devote less shelf space to capped items, shift margins toward uncapped substitutes, change package offerings, or find other ways to recover overhead.
During the Nixon controls of 1971 to 1974, price and margin controls temporarily suppressed measured price increases, but Federal Reserve history records that they exacerbated shortages, particularly in food and energy. A Federal Reserve report from 1973 specifically noted that meat-price controls, combined with rising feed costs, contributed to reduced supplies of livestock, poultry, eggs and milk.
Hungary capped the prices of selected staple foods beginning in 2022. The International Monetary Fund concluded that the caps were ineffective in controlling food inflation because distributors and retailers increased prices elsewhere to preserve margins; food inflation continued rising. The food caps were eventually removed in August 2023.
Going further back in time, in AD 301, Roman Emperor Diocletian issued the Edict on Maximum Prices amid severe inflation and monetary disorder. It established maximum prices and wages across a vast range of the economy, violations of which could carry the death penalty.
The edict’s preamble attributed soaring prices substantially to avarice, greed and profiteering. Yet the Roman economy had experienced decades of fiscal stress, monetary expansion and currency debasement. Modern scholars generally regard the measures as having limited success, with enforcement breaking down relatively quickly. Sounds a lot like the same reasoning proposed by politicians today.
𝟰- 𝗧𝗵𝗲 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗔𝗿𝗴𝘂𝗺𝗲𝗻𝘁
I am always fascinated by the psychology of people swayed by incumbent politicians making grand gestures of benevolence…when they are already in power.
The BC NDP are not outsiders. The most recent iteration of NDP power in the province started in July of 2017 under then-leader John Horgan. David Eby entered Cabinet under that initial caucus under Horgan, and eventually became premier in 2022.
If grocery concentration, restrictive property agreements, regulated agricultural markets and affordability have been structural problems for years, why is a government that has held power since 2017 proposing retail margin controls as an election policy in late 2026?
In the 2024 provincial campaign, Eby promised a first-year rebate of up to $1,000 per household, transitioning into an income-tax cut, specifically framing it as relief from costs such as groceries. That first-year measure did not appear in Budget 2025 after the government changed course amid tariff and fiscal uncertainty.
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We don’t need more government control over the market.
If it’s true that the current grocery magnates are greedy, then need policies that allow for greater competition should be promoted.
If our money buys less of the things we need, we need Federal monetary policies that don’t inflate the supply of our currency to debase our money.
If input costs are spiralling out of control, we need policies that reduce regulation, controls and compliance.
And the voters need to realize that the job of a politician is to sell you on their altruism, care and benevolence, and that their policies will not deliver what they promised and carry unintended and negative consequences.
