Shrinkflation: Why are smaller products costing more in Quebec?

A grocery store aisle in Montreal on Oct. 9, 2024. (THE CANADIAN PRESS/Graham Hughes)

Shrinkflation at the grocery store – where a product’s size decreases but consumers are charged the same price (or more) – is nothing new, but what some shoppers may not know is that these subtle changes can put the food they buy in a new tax bracket.

In Quebec, most products sold in grocery and convenience stores are considered zero-rated basic grocery items, meaning they are taxable at a rate of zero per cent under the GST and the QST systems.

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These include meat, cereal, fruits, vegetables, eggs, bread, fish and dairy products.

However, according to Revenu Quebec, shrinkflation’s affinity to reducing portions can suddenly make a product taxable.

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Noovo Info gives the example of a tub of ice cream.

A container weighing 500 millilitres or more is considered a staple food product and is therefore not subject to tax.

If that same product is reduced slightly to 473 millilitres, it is considered an individual serving and is now taxable.

The same principle applies to baked goods: a package of six or more muffins is tax-free, while a package of four muffins is taxable.

There are some foods and beverages that are always taxable, including food heated for consumption, alcohol, hot beverages such as coffee and tea, carbonated beverages, carbonated mineral water, candy and snacks like cheese sticks, pretzels, potato chips and popcorn.

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So, what’s the best way to protect your grocery budget moving forward?

Revenu Quebec recommends comparing product sizes, choosing family-size packages or assortments of six or more portions, and checking your receipts to identify products that have suddenly become taxable.