Whether you’ve heard the word by now or not, greedflation could be impacting you. What does it mean exactly, and how is it impacting prices? We’re going to jump in to better understand what it is and how it is impacting the numbers using real data.
What Is Greedflation?
Greedflation is when companies raise prices higher than their rising costs require. Often using inflation as the sole reason. Instead of price increases that maintain their profits, businesses add extra costs to increase profits.
Even though food inflation and grocery store bills get the most attention, the term can apply to energy prices, housing, telecom bills, and every area of our spending. Low competition plays a role too. Companies can use rising consumer prices as an excuse to pad their profit margin.
The term became popular during the COVID pandemic. At the time, supply chain issues collided with strong consumer demand. Shipping delays, labour shortages, and supply and demand patterns pushed costs up everywhere. Some economists argue that companies simply passed those costs along. Others argue that some businesses used the chaos to raise prices far beyond what was needed.
How Does It Actually Happen?
Here’s a simple example. Let’s say a company makes a product for $1 and sells it for $2. If their cost to make the product rises to $1.50, math says the new price for consumers should be $2.50. At $2.50, the company still sees $1 in profit. Greedflation happens when that company decides to charge $3 instead, often using price inflation as an excuse to increase its profits to $1.50.
These situations are easier to put in place when a handful of large companies control a market. In Canada, we can see this with groceries, banking, telecom, or energy, to name a few. They can raise prices together without losing customers. Economists call this market power. Normal supply and demand rules keep it in check, but only if real competition exists. Our reality is that, in many areas of our spending, we don’t have a lot of options.
It’s Bigger Than Groceries
While food prices get most of the attention, the greedflation conversations stretch beyond that. Oil price swings ripple through food, energy costs, transportation, and manufacturing. When energy companies post strong profits during price spikes, the same questions come up. You’ll also see below in The Bank of Canada’s sector breakdown that manufacturing markups grew faster than agriculture’s. Is this the market working, or corporate greed at play?
Rising interest rates add pressure too. When borrowing costs increase, businesses sometimes point to them to explain price increases. Statistics Canada’s Consumer Price Index report for May 2026 has the numbers. Canada’s inflation rate sat at 3.2% year over year. With food inflation at 3.8% and gasoline prices up 33.2%. Both are driven largely by disruptions to global energy supply. Add in ongoing supply chain problems, and it becomes tough to tell where legitimate cost increases end and extra profit begins.
What Does the Research Say?
This is where expert opinion gets interesting, because economists do not fully agree.
A Bank of Canada staff note from 2023 studied company markups. Growth was highest in manufacturing, at 22%, and lowest in agriculture, at 2.2%. Researchers looked at company markups in agriculture, manufacturing, retail, and energy. They used CPI data (Consumer Price Index) from 2018 to 2022. The same report concluded that rising corporate markups explained less than one-tenth of inflation in 2021. It even fell to near zero or negative by 2022. In the Bank of Canada’s own words, this suggests cost increases, not corporate greed, drove most of the price surge.
Dalhousie University’s Agri Food Analytics Lab reached a similar conclusion after examining grocery chain financial statements. Its 2022 report found:
- Loblaw’s gross profit margin moved from 3.57% in 2018 to 3.76% in 2021
- Empire’s (Sobeys) margin moved from 1.64 % to 2.08 %
- Metro’s margin moved from -0.24% to 0.44%.
Researchers called this “relatively consistent.” Thus leaving little public evidence of greedflation at the grocery level.
How consumers feel, however, tells a different story. A March 2023 Mintel survey found 83% of Canadian grocery shoppers believed grocers and food producers were using inflation as an excuse to price gouge. Another 73% said rising food prices added to their stress.
Real Canadian Examples
Bread is where price gouging in the food sector moved from theory to fact. Loblaw and its parent, George Weston Limited, admitted to an industry-wide price-fixing scheme on packaged bread that ran from 2001 to 2015. The two companies agreed to a $500 million settlement, $247.5 million from George Weston and $252.5 million from Loblaw. Court filings estimated Canadians paid roughly a dollar-fifty more per loaf of bread during that period.
That case does not prove that all grocery prices today reflect greed, but it confirms that price gouging has happened in the food industry here in Canada.
Food is not the only place this has happened. Gas price fixing happened in Quebec. Between 2008 and 2012, the Competition Bureau charged dozens of gas station operators and energy companies working in four Quebec towns. They had agreed to raise oil price levels together instead of competing for customers. In the end, 33 people and eight companies pleaded guilty or were found guilty. They paid more than $4 million in fines combined, and six people went to jail. Irving Oil alone paid a $287,583 fine for its part in the scheme. Cases like this show that price gouging is not only a grocery store problem.
The Bottom Line
Greedflation is a real word for a real debate, but the evidence is mixed. Bank of Canada research and Dalhousie University findings suggest corporate markups are not the main driver of recent inflation. Canada’s bread price-fixing case, however, proves price gouging is real.
While there is a debate about the reality of greedflattion, there’s no debate about the fact that Canadians are feeling the pressure of rising costs. We’ve got resources that can help, including articles on what to do when facing financial hardship and how to make a little more wiggle room in your budget by doing a no-spend challenge. If you’re one of the many Canadians currently struggling financially and need more support, our Credit Counsellors are here to help. Call for a free, confidential, and no-obligation consultation to learn about what options there are for you to get on a path to a debt-free life.
