Canada’s Voluntary Grocery Code Lands With a Whimper
2026: A Year of Magical Thinking on Grocery Prices
Canada’s Grocery Code of Conduct will come into effect on New Year’s Day. If you didn’t know, you’re not alone. Its impending arrival did not produce any grand announcements, political pre-positioning or media curtain raisers beyond a few mid-December explainers lost in the noise of the Christmas holidays.
Considering the Code was conceived in the glare of political klieg lights, its arrival will be less a premiere than a matinee few care about.
To understand the contrast between conception and delivery, you have to cast your mind back to 2021, when, with food prices surging and consumer anger boiling over, grocery chain CEOs were hauled before parliamentary committees for a public grilling.
It was in that environment that the idea of a voluntary Grocery Code of Conduct was advanced as a possible answer to high food prices, greedy retailers and whatever else might be on Canadian’s minds when they went to the grocery store.
The problem is not that a Code was proposed as a possible solution – other countries had also tried it. It was that it’s proponents decided to eschew lessons learned elsewhere and opt for the same failed model other had walked away from.
Today it’s easy to see that the Code, coming as it did in the midst of consumer and political anger with spiraling grocery prices, was primarily designed to quiet consumer angst by punting a political and reputational problem down the road.
In fairness to its proponents, the Code as a standalone measure was never meant to drive down the price of food. But it was supposed to address the kind of market inequalities that contribute to price inflation and had consumers clamouring for government action. On that front, it fails the grade.
This failure is not accidental. in fact, it was wholly predictable.
The Code is the product of more than two years of negotiations supported by the federal and provincial governments and involving retailers, suppliers and other food-chain stakeholders. In the end, the outcome produced a familiar outcome: in a voluntary process where participation by large grocery chains was essential, their economic clout carried the day.
Properly designed, the Code could make a real difference in addressing the imbalance of economic power between dominant grocery chains and the growers who supply them. But that would require a dispute-resolution system capable of addressing systemic behaviour. Instead, the Code relies almost entirely on individual suppliers bringing individual complaints and does nothing to balance the commercial playing field.
In fact, as it is currently designed, the power imbalance that contributed to much of the geregious retailer behaviour that came to light in public hearings five years ago is baked in.
And let’s not kid ourselves, that’s not a glitch of the current Code, it’s a feature – likely the price of bringing and keeping large retail interests around the table.
Public policy is generally built on the assumption that people and institutions behave rationally. Unfortunately, in the case of the Code, it appears to have been replaced by magical thinking.
Consider the Code’s value proposition from the perspective of a fruit and vegetable grower. Even accessing the dispute-resolution process requires becoming a member of the Office — learning a new set of rules, paying dues, and navigating an unfamiliar system before a single issue can be raised. Filing a complaint requires time, legal resources, all to challenge a buyer that may represent a vital market outlet.
Simply put, for growers, the potential upside is uncertain, the remedies are limited, and the commercial risks such as delisting, are real. For a grower operating on tight margins and in a hypercompetitive environment, the cost-benefit calculation is straightforward: the costs are immediate and tangible, while the benefits are hypothetical at best.
Seen through that lens, the expectation that individual growers will use this system in sufficient numbers to drive meaningful systemic change is not just optimistic — it is fundamentally misaligned with how people actually run their businesses and manage risk. For most growers, the rational response will be to opt out of the Code.
That matters because the most serious problems in the grocery supply chain are not isolated misunderstandings. They are patterns of behaviour repeated across regions and commodities, affecting dozens or hundreds of suppliers at once. Yet the Code offers no meaningful way to address those patterns or fix the underlying problems with the system.
Other countries have already tested this voluntary model and opted for more stringent mandatory rules.
The United Kingdom and Australia both began with voluntary grocery codes built on individual complaints and soft enforcement. In both cases, early optimism gave way to the same conclusion: without credible enforcement powers and the ability to address systemic conduct, those codes delivered limited change. They were strengthened only after experience proved that goodwill alone does not alter behaviour in highly concentrated markets.
During hearings before the House Agriculture Committee last October, defenders of the current model urged everyone to “give it a chance,” suggesting things would work out differently here. That belief rests on the idea that Canadian companies will behave in ways their U.K. or Australian counterparts did not.
With apologies to Joan Didion, when it comes to grocery retailers, 2026 should not be a year of magical thinking. With grocery costs again top of mind for Canadians, the Government of Canada has a choice. It can fix the Grocery Code’s structural flaws now, or wait years for multiple reports to confirm what international evidence has already made clear: Voluntary codes that bake-in market dominance do not work.
