Adam Pankratz: David Eby’s new big idea — food shortages

B.C. NDP Leader David Eby Photo by Jason Payne/PNG

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David Eby has looked at his election campaign struggling to find its feet and decided that while socialism is good, even more socialism would be better. And so, last week, British Columbia’s stumbling premier announced a cap on corporate grocery profits on milk, eggs, butter, cheese, chicken and turkey. How this will actually address the affordability crisis that has flourished under Eby’s watch is unclear. What is, however, clear is that under Eby no private business will be permitted to move or operate without government restrictions, involvement or extra taxes.

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At his news conference Eby did not spell out exactly what capping profits entailed, but one must assume it means price controls. This is for a simple reason. There are ultimately only three ways any corporation can raise its profits: sell more, raise prices or cut costs. Presumably, Eby isn’t going to stop stores selling more if British Columbians want more butter on their bread, nor can he lower a store’s input costs. This means price controls are the only mechanism left to achieve his profit cap goal. Welcome to Soviet British Columbia.

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Price controls have widely been shown by economists to have significant negative effects on an economy as well as the people they are purported to benefit. The reason is straightforward: by artificially capping prices, transactions which would otherwise occur at the higher, market price are not realized. Without a clear price signal (and thus profit incentive) the market will not produce the correct amount of the price-controlled product. As a result, the market will be undersupplied for the products it would otherwise purchase. True demand, in other words, will not be met. This has consequences, and they are not good.

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What Eby’s grocery store folly would mean in practice for British Columbians is that grocery stores will shift away from selling the correct, market demanded amount of milk, eggs, butter, cheese, chicken and turkey, and focus on selling other products at likely higher prices to make up for their profit shortfall in the price-controlled areas. The result is terrible for consumers and families. Those who can quickly get the products they want before the stores run out may have lower prices, but families who aren’t as fast won’t get anything because the product doesn’t exist in sufficient quantities to meet market demand. Lower prices resulting in empty shelves isn’t a solution to anything.

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David Eby’s economics are both further ludicrous and insulting. Ludicrous because Canadian grocery store profits are extremely low already. In 2025, Loblaws, for example, noted that margins in the sector average three to four per cent. This is not indicative of an industry which is gouging consumers, but rather one which operates extremely efficiently in a competitive, price sensitive market.