Toronto City Council has approved a pilot project that would see the City operate its own grocery stores in an effort to reduce food costs for shoppers.
Councillor Anthony Peruzza, for Humber River—Black Creek, pushed for a pilot project to open four nonprofit grocery stores across the city, aiming to make everyday groceries more affordable in low-income neighbourhoods.
The stores would operate like private grocery stores, but, unlike traditional supermarkets, shoppers at these City-run stores would be able to purchase essentials at much lower prices without markups, while the City would help push food costs further down by waiving property taxes, development charges, and other fees.
Peruzza’s motion, seconded by Councillor Mike Colle, recommended that each of the four grocery stores be located within Toronto’s four community council districts, and that priority be given to neighbourhoods with limited access to full-service grocery stores and where individuals have lower average household incomes.
“The rising cost of living continues to place significant pressure on many residents across Toronto. Food costs, in particular, represent one of the largest household expenses. As a result, food bank usage has increased dramatically throughout the city,” the motion reads.
“In several neighbourhoods, residents face limited access to full-service grocery stores offering affordable, high-quality food. These areas are often referred to as ‘food deserts,’ where the lack of accessible grocery options forces residents to rely on smaller convenience or boutique stores with significantly higher prices.”
The pilot project was approved by a vote of 21-3 during a city council meeting this week, with councillors Brad Bradford, Jon Burnside, and Stephen Holyday the only councillors opposing the proposal.
In a letter, charity organization Daily Bread Food Bank welcomed the proposal, but emphasized the importance of exploring new approaches to improving food access, noting that the average four-person Canadian household is expected to spend just over $17,500 on groceries in 2026.
“Retail grocery margins in Canada are estimated at approximately 3-5 per cent on food items. Even if a City-run grocery model eliminated these margins entirely, this would translate to approximately $40-$73 per household per month in maximum theoretical savings (or $11 to $18 per person per month), and likely less once operating costs are considered,” the letter reads.
“While any savings are meaningful, this level of reduction alone is unlikely to significantly improve affordability for households experiencing food insecurity without additional subsidy.”
The organization continues by recommending a feasibility and viability assessment, which should examine whether or not the City can procure and operate grocery retail at costs equal to or less than the private sector, and determine whether food access versus income is the primary barrier in specific neighbourhoods.
Municipal-run grocery stores and markets already exist in other parts of the world, including in Mexico and Turkey, in an effort to counter inflation and combat sky-high food prices. New York City Mayor Zohran Mamdani also proposed creating City-owned and operated grocery stores aimed at addressing unaffordable food prices during his election campaign.
While the majority of councillors were in favour of the project, many emphasized that the idea requires greater consultation and review before it is fully implemented.
