Yes – there are hidden Liberal food taxes

Posted on March 5, 2026 by Ryan Dahlman

By Geln Motz, MP

For months in the House of Commons, Carney’s Ministers have been repeating their Prime Minister’s Office talking points, denying that hidden Liberal taxes on food are driving up costs for Canadians, including at the grocery store.

In fact, Steven MacKinnon, the Leader of the Government in the House of Commons said “These are imaginary taxes… there is no tax on food. There will never be a tax on food.” 

Let’s break down the taxes that impact the price of food:

The Clean Fuel Regulations

Since July 2023, the Liberals have required that gasoline and diesel used in Canada must meet carbon-intensity reduction requirements. Companies are required to either blend more expensive (often imported) lower-carbon fuels or buy compliance credits. Each cost is passed on to consumers.

That is also what makes the tax hidden. When consumers look at their receipt, they won’t see the cost of the tax. Instead, it’s baked in with higher prices whenever they purchase gasoline or diesel. According to the Liberal government’s own Parliamentary Budget Officer (PBO), using data from Environment and Climate Change Canada, it adds seven cents per litre this year, and will rise to 17 cents per litre in 2030.

This cost doesn’t just apply when Canadians fill up at the pump. When gasoline and diesel cost more, businesses face higher operating costs at every stage of production, packaging, and delivery. This includes running farm equipment, shipping food to producers and transporting goods to warehouses and stores. Every step with a higher cost for fuel means higher prices for consumers.

By 2030, the PBO estimated the annual extra cost for these Clean Fuel Regulations would average $573 a year per household. Based on the data the Liberal government provided, they also found that the regulations would reduce Canada’s real GDP by up to $9 billion in 2030. That’s more than the entire economic output of Prince Edward Island in 2024.

The Industrial Carbon Tax

While Carney set the consumer carbon tax price to $0, the Liberals have kept the industrial carbon tax, which continues to increase each year until reaching $170 per tonne in 2030. They claim the tax only applies to large companies, but just like the Clean Fuel Regulations, the price is added onto everything Canadians buy.

When the government taxes the factories, refineries, power plants, and farms that make and move the things you rely on, those costs don’t disappear. They get passed on to you in higher prices for things like gas, electricity, groceries, and housing. Every step it takes to grow, process, refrigerate, package, and ship food uses energy that’s taxed.

As Sylvain Charlebois, Professor of Dalhousie University’s Agri-Food Analytics Lab, noted, the industrial carbon tax “continues to erode competitiveness in the agri-food sector. Many Canadians are unaware that processors and growers shoulder heavy costs, particularly in comparison to their U.S. counterparts.” This explains why food inflation is double what it is down south, and according to Charlebois, “The cost gap is growing, not shrinking.”

Inflation

Inflation is the worst form of silent taxation caused by government spending that drives up food prices and increases the monetary supply. Under Mark Carney, the annual deficit in his recent budget is double the previous Fall Economic Statement.

As the amount of money in the economy increases, so too does the cost of goods. Combined, this means that we get less innovation and productivity, meaning weaker paycheques for workers to pay for a higher cost of living.

Under the Liberals, food inflation is now the highest in the G7, up 6.2 per cent year over year, double what it was when Carney became Prime Minister, and double that of the United States. According to the 2026 Food Price Report, it is now estimated to cost $17,600 to feed a family of four in 2026, $1000 more than last year. A quarter of Canadian households are considered food insecure and last year nearly 2.2 million people visited food banks in Canada monthly. A recent survey showed that almost 30 per cent of students are skipping meals because they can’t afford to eat. According to MNP’s latest report, 71 per cent of Canadians anticipate higher living costs in 2026, with 41 per cent now saying they are $200 or less away from bankruptcy.

Food Packaging Tax

For restaurants, fast food and take-out establishments, the increasing cost of food is compounded with the costs of the Single-use Plastics Prohibition. It applies to cutlery, containers, boxes, cups, plates, bowls and straws used in the food service industry. This tax on food packaging is projected, by the Liberal government itself, to cost $1.3 billion from implementation.

The food packaging tax comes after 7,000 restaurants were already forced to shut down in 2025 during a time when restaurant bills increased by 8.5 per cent year-over-year. According to a projection from Dalhousie University’s Agri-Food Analytics Lab, another 4,000 will close their doors this year, as both restaurants and Canadians struggle to keep up with ever-increasing prices

All these Liberal policies add costs to the food Canadians buy, which is why Conservatives call these government-imposed costs exactly what they are – a tax. Despite the Liberals denying that their policies make groceries more expensive, Prime Minister Carney recently introduced a boost to the GST credit called the Canada Groceries and Essentials Benefit – a recycled, half baked, Trudeau era policy as a stop gap. During his announcement, Carney admitted that he has no solution to stop the ever-increasing food inflation. The PBO estimates that this measure will cost the taxpayer $12.4 billion over the next five years, with approximately 12 million Canadians expected to be eligible for the new benefit. A recent article on the benefit quoted Marc Levesque, former chief economist at the Public Sector Pension Investment Board and former chief economics strategist at TD Securities, who said “This is not good policy. It’s just blatant vote-buying. 1. The GST credit is designed as an offset to the GST for low-income families, not as a general income-transfer mechanism. 2. If you want to provide relief, cut income taxes, not consumption taxes.”

It’s time to make life more affordable by axing the fuel standard and industrial carbon tax, ending inflationary spending and scrapping the food packaging tax. While Canadians continue to struggle with rising costs at the grocery store, Conservatives are ready to work with all parliamentarians to cut the hidden Liberal taxes on food and deliver long term, permanent affordability, for all Canadians.

Glen Motz

Medicine Hat – Cardston – Warner MP