Agriculture Committee on Dec. 7th, 2023

[The Chair, Liberal, Kody Blois]

That's time. Thank you very much, Mr. Epp and Mr. Gebara.

Now we'll turn to Ms. Taylor Roy for five minutes.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you, Mr. Gebara, for being here and for participating in this effort with our government. We know that it's taking everyone's efforts to try to tackle food price inflation.

I wanted to talk about one thing you referenced and that the minister had also referenced, which was amending the Competition Act to strengthen the Competition Bureau's power. You said that was one of your recommendations to the government as well.

We currently have a bill, Bill C-56, the affordable housing and groceries act. It was introduced in September. We've been trying to get that passed in the House of Commons. The Conservatives have been delaying and opposing and doing things to try to slow that down.

I'm wondering if you can comment on how you think this bill or increasing competition and strengthening the Competition Bureau will help bring food prices down for Canadians.

[Gonzalo Gebara]

I have to apologize on this one. I'm not familiar with that provision. I will make sure that I get very well versed and educated on it, so that I can come back to you with some comments on it.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Great. Thank you.

In general, you said that one thing that you think would help would be more robust competition and a stronger Competition Bureau. In what ways do you think that would help bring down grocery prices?

[Gonzalo Gebara]

When I said that competition was good, I was not referencing that related to the bureau. I was referencing the fact that having more players in a particular market gives consumers more options. By giving consumers more options, you give them more power to decide.

That's what we want. We like consumers in Canada to have choices. Each of the different players will develop their own value propositions so that they can have their choices delivered properly to their target customers. I think strong competition makes everyone better.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you. Yes, I agree with that. One of the issues we're facing in Canada, as my colleague has said, is the oligopoly power in the grocery sector. The grocery code of conduct would in fact address some of that.

You also mentioned supply chain issues. One thing the grocery code of conduct would do is contribute to improving the strength and resilience of Canada's supply chain. Given that the grocery code of conduct would help, especially, independent grocers and some of the suppliers in terms of the power that companies like Walmart have in this industry, why is it you're not supporting the grocery code of conduct?

[Gonzalo Gebara]

First, I would have to disagree with the concept of oligopoly. I think there is very strong competition in Canada. Every time I travel to the different regions, I see amazing operators and amazing value offerings from very good operators. As I said, it's great competition for us. We like to compete with those operators. I think Canada is a very competitive market in that regard.

As it relates to the code, as I said earlier, I hope that we can have the right provisions to provide the environment of a level playing field and to make sure that all of the provisions contribute to tighter relationships.

As I said, we already conduct tight relationships with our suppliers. That's why we think we need to make some adaptations to those provisions to make sure they provide the right environment for us to conduct business.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

If you already have those kinds of relationships.... It may be that you believe you do, but it seems that most Canadians and many suppliers do not agree with this. Right now, when things are this difficult—many of my constituents are struggling in this holiday season in particular—it seems that you're not doing everything you could to address this problem.

I'm wondering if you agree. Are there more things that you could do to try to help bring down grocery prices for those Canadians who are really struggling at this time?

Profits and executive compensation are all pretty robust, but people's household budgets right now aren't able to meet this. I'm wondering what else you could be doing to try to help Canadians at this time.

[Gonzalo Gebara]

I hope you trust me when I tell you that we're doing everything we can do to run the tightest operation possible to be able to continue to offer the lowest prices in the market, particularly for Canadians to put food on the table during this holiday season and to celebrate with their loved ones.

As I mentioned in March, we are far away from the narrative of excess profits. That's not what happened for Walmart. That's not what we do.

We are focused on delivering value for Canadians, particularly in the holiday season so that they can put a good meal on the table and have the celebration they all deserve.

[The Chair, Liberal, Kody Blois]

Thank you, Ms. Taylor Roy.

It is now over to Mr. Perron for two and a half minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

Mr. Gebara, you said you hoped we believed you when you said that you were working to offer consumers low prices. We all want to believe you, but that isn't what I've been hearing throughout this meeting. You said that you gave the Competition Bureau the figures it requested. I'm still not clear as to whether you provided all the information it requested. You say that Walmart is involved in the discussions on the grocery code of conduct. However, according to the information I have, neither the steering committee nor the working group has a Walmart representative, so you aren't involved in the process.

Please tell me how you can say that you are participating in the discussions on the code of conduct, when you aren't on the committee or in the working group. If you are, can you tell us who is representing you, what instructions they have been given and whether you will be taking a more active role going forward?

[Gonzalo Gebara]

Yes, we will continue to participate actively, the way we have been participating. We have our own representatives in the different forums.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

You are saying that you currently have representatives on the steering committee and in the working group examining the code of conduct. Do I have that right?

[Gonzalo Gebara]

We have a team that's in constant contact with the different committees and the different forums in which the code is being discussed. We do that through the RCC—the Retail Council of Canada.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

You aren't involved directly, then, Mr. Gebara. Walmart is represented indirectly by the Retail Council of Canada, which has people in those bodies.

Don't you think it would be better for Walmart to have its own representative, to really show it is trying to build the system in good faith? Then, we would be able to believe you when you say that you would like to participate if there were better conditions. Don't you think you should be at the table to help steer the discussion and call for the changes you want to see, as opposed to undermining the system we are trying to build to give consumers access to lower food prices and better market conditions?

[Gonzalo Gebara]

I think we are participating in the best way we can participate, and doing it through the RCC is the way we think is best.

[The Chair, Liberal, Kody Blois]

Thank you.

We now go to Mr. MacGregor.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you very much, Mr. Chair.

Mr. Gebara, I need to revisit this issue because I think that, given the fact that you appeared before our committee in March, you should have had some anticipation that similar questions would come your way.

In March I very clearly asked about salaries, the wages you pay your frontline employees. Just given the fact that we do operate in the context.... Ms. Taylor Roy used the term “robust”, and “robust” is certainly an interesting way of describing executive compensation and pay.

With respect, sir, I am a little bit perturbed that you, as the CEO of Walmart Canada, given the fact that we are talking about food price inflation and that we know the stats that so many working people can't afford to even provide the basic necessities for their families....

I've seen your website, and we have seen the documents you have provided to this committee. You've certainly made a great show that you care about your employees, but the fact that you, as a CEO, are unaware of whether your employees are having to access the food bank to pull themselves through.... I think that would be a bit disconcerting to the Walmart Canada employees who are watching this right now.

Again, if we're to take you and other CEOs seriously on this very important subject to Canadians, how can we do so when you don't even appear to understand how many of your employees are having to access a food bank or whether they're being compensated appropriately?

If they are being kept in a state of being the working poor, does it not concern you, sir, that you don't have an accurate number on that?

[Gonzalo Gebara]

First of all, I think that we have a very good understanding of what's going on with our associates. We measure that. As I mentioned before, we have an open-door policy. Everyone can bring their concerns to anyone in the company, and we have a very clear understanding of our associates' engagement, our associates' morale and our associates' concerns.

When I answered that I didn't know, it's because it wasn't brought to my attention the fact that we could have associates in the situation you just described.

[The Chair, Liberal, Kody Blois]

Thank you to you both.

We'll go to Ms. Rood for five minutes, and then we're going to go to Mr. Louis. I'm going to exercise my right to a couple of questions at the end.

Go ahead, Ms. Rood.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

Mr. Gebara, we talked about fees and fines the last time you were before this committee in March. We've heard you push back today on unjustified supplier increases, but you never talk about unjustified penalties to small suppliers, farmers and producers. Ultimately, when these fines are brought onto suppliers, it translates into increased prices for consumers. That is perhaps why some suppliers are pushing back and asking for price increases.

I am wondering if you would table with this committee the total fines and fees charged to your suppliers in 2023.

[Gonzalo Gebara]

I don't have that information, and I apologize.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

It's okay if you don't have it today, sir. We'd be happy if you could table it with this committee at a later date. Would you be willing to do that?

[Gonzalo Gebara]

Yes.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much.

With regard to the code, you said that there are provisions that you're concerned about. I'm wondering if you could tell us what provisions you are particularly concerned about, because we have already had other retailers here who weren't concerned with some of the provisions in the code.

What are those provisions in the code that you're concerned about? Why won't you sign on to this grocery code, and why are you holding out?