Agriculture Committee on Feb. 13th, 2024

[Pierre Riel]

When they share all the details of the code of conduct, we can make a decision. Right now, we don't know enough details to say yes or no. It's too early to say today that we'll adhere to it when not all the details have been worked out yet.

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

You spoke of your philosophy and respect for members. I assume that, if a code of conduct were introduced, either on a voluntary basis with everyone's signature or through legislation, Costco would have no problem participating because it would benefit the industry. Let me know whether I'm misinterpreting anything you said.

You said earlier that you were monitoring your competitors' prices. That way, you know what's happening in other places. I think that it would benefit everyone if a code of conduct were established. I'm sure that you agree with that, but correct me if I'm wrong.

[Pierre Riel]

I think that we agree. However, we need to know more, because there's work to do.

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

Lastly, I would like to talk about transparency. When all the grocery chain representatives spoke to us for the first time, the Competition Bureau was conducting a study. The catalyst for this study was the significant increase in grocery chain profits.

When we asked grocery chain representatives about this, they said that their profits hadn't been boosted by food products, but by other goods, such as pharmacy products. However, when we asked them for details and breakdowns to check whether they were telling the truth, they said that they couldn't provide this information because they were in competition.

At that initial meeting, I asked each representative, including you, to commit to providing these figures to the Competition Bureau. Everyone agreed to do so. A few weeks later, I received the Competition Bureau's report. In the first pages of the report, the bureau lamented the fact that it hadn't received the figures from everyone.

My question is straightforward. Did Costco provide its figures to the Competition Bureau?

[Pierre Riel]

We provided the figures that we were able to supply when asked for them. If the Competition Bureau wants to call us back and ask for something else, it can do so.

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

I understand that you provided some figures, but perhaps not all the figures requested.

[Pierre Riel]

I wouldn't say that. If you receive something that doesn't fulfill your request, you should call us back to clarify the request and see what we can do.

You must understand that our company is public. We'll do our best to collaborate, as we do all the time. We have nothing to hide. However, there are five major retailers. This means competition, and we want to make sure that the same rules apply to everyone.

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

You said that you provided the requested information.

[Pierre Riel]

We believe that we did. However, if the Competition Bureau doesn't agree, it can call us back.

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

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you.

Mr. MacGregor, you have the floor for six minutes.

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

Thank you very much, Mr. Chair.

Mr. Riel, thank you for appearing before our committee again.

On the subject of the costs of transporting goods for your company, I think around this day, diesel prices in my neck of the woods are hovering around $1.70 a litre, compared with about a year and a half ago, when it went up to $2.30 a litre. I guess your company has noticed similar fluctuations?

[Pierre Riel]

Yes, absolutely.

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

Absolutely.

Then if you compare that with the prepandemic price of fuel, I'm sure you've seen a great change as well.

[Pierre Riel]

Absolutely.

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

It's interesting to note, to the Conservatives' point, those price increases have happened at a rate much greater than the carbon tax and also at the same time when oil and gas companies are reporting record profits. That's just something to put on the record.

Anyway, I wanted to move on to my questions here. I want to congratulate you because, first of all, I know your company is membership-driven, so people make an active choice to get a membership to shop there, and I think we've seen the results. I think you were recently voted Canada's most respected grocery retailer, while we saw Loblaws fall to thirteenth and Sobeys drop to ninth. Why do you think Canadians are losing faith in companies like Loblaws and your competitors?

[Pierre Riel]

I can talk about Costco; I'm not here to talk about the others.

I will say that Costco is working very hard. On a daily basis, our team looks at what we can do to gain and maintain the trust of our members. When somebody decides, as you said, to pay to come to shop somewhere, you have to offer something. If you don't give them the pricing and the quality, why should they pay to come to shop? That's our basic philosophy and our basic concept. We're going to continue as best we can to do that on a daily basis.

I will say the “utopia" of Costco is to be able to sell merchandise at cost and to make some money with the membership and other things. That would be the best. If we can do that one day, that's the utopia, and it will be good for us. It's not easy to do, but that's what we're aiming for.

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

Mr. Riel, in your opening comments—correct me if I'm wrong—you said that a starting wage at Costco is $18.50 an hour, and that the average wage is $30.20 an hour. With some of your competitors, we've noted that some of their employees have to go on strike, because they can't even afford to buy the food where they work. Some are having to bolster their food purchases with trips to the food bank. It was reported in the news that your competitor, Sobeys, has recently offered a five-cent raise to their minimum wage employees.

What goes through your mind when you see that kind of trouble in your competitors' labour market pool—the fact that their employees are struggling, they're having to fight for even a nickel a raise? How does that compare with the employees who work at Costco?

[Pierre Riel]

Again, I can talk about the employees at Costco. We're very fortunate to have the employees we have. I would not be sitting here today without my employees. Costco would not have millions of members in Canada without them. During the pandemic, in all of that time, the employees were there at the front end, at the cash, stocking the floor, day in and day out, to make sure that consumers got the food.

I'll tell you one thing: Thank you to our employees. Without them there's no need for Pierre. It's essential for us. Everything we can to give back to our employees, we'll do—the best we can.

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

You talked about the benefit plan that's available to them—full health care benefits and a defined contribution pension plan. I'm just curious if you've had any reports from employees who are struggling with day-to-day living? Are any even at the starting wage struggling with the cost of living and able to get by on that wage where they live?

[Pierre Riel]

We have roughly about 250 employees per store, and our warehouse managers are very close to people. If we hear something we'll do our best to help. Our employees are our family. For us, they're like a member. You need members to get employees; you need employees to get members. Those two things are essential.

Nothing is eternal in life. We have success, because of them and because of our members, so we need to maintain that relationship. If we hear something about an employee suffering, we'll do our best to help that employee. If there are some out there, then I invite them to call us. We'll do the best we can, again, to help them.

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

I also want to ask a question on the grocery code of conduct. That of course is a big topic for this committee. We've heard the noises that both Walmart and Loblaws have made with respect to the code. Now, the conversation is transitioning from a voluntary code to a mandatory code.

What is your feeling on what the federal government should do next if we have this reticence from two of your competitors? How do we step in as legislators, as policy-makers, to make it a fair code for everyone? In your opinion, does everyone have to be a part of this code in order to make it a fair place to compete in Canada?

[Pierre Riel]

I do believe that if there's a code, everybody should be participating. That also includes multinationals, because we're talking a lot about the retailers, but we also need to talk about the suppliers. They're part of that. This was brought to the attention of everybody based on some supplier having some difficulty with some retailers. Having said that, you need two to dance. I think you need everybody to participate.

All of us should look at it as beneficial for the consumer. I think it would be way better if everybody participated, and if we have a law to make that happen. That's my opinion.

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

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. MacGregor.

Thank you, Mr. Riel.

Colleagues, just to give you a sense of how we'll finish the rest of our day, I'm going to do the second round—so we'll do turns of five and five minutes, and two and a half, two and a half minutes. That should take us until about 12:10. If there are any final burning questions, I'll allow for a quick intervention for a minute from anyone on the Liberal or Conservative side. Otherwise we'll then move on to Mr. Louis's bill.

We'll go to you, Mr. Epp, for five minutes.