Agriculture committee  I think we need to find a way to get reciprocity, sir.

Agriculture committee  Right. Then they can't say they only carry meat from federally inspected plants when there's really no difference. You could say they all meet the standards.

Agriculture committee  It's a very difficult situation, sir.

Agriculture committee  I'm sorry, sir, I wouldn't touch a percentage at all; I would leave it at 95%. What I'd do is make exceptions and I'd say they can do, except for local produce, local this, local that. In other words, it would be exceptions in the marketplace. I'm not going to protect the corporations here, but I think it's important to note that we have among the lowest prices in the world, the most comfortable shopping environments, and that's because of a very efficient system.

Agriculture committee  I'd be happy to come in here and lay it all out for you. I can't do it here, but bottom line is that retail is high volume, very low margins, so our people work on a net margin of 1% to 1.5%. When you're talking about the meat industry, gross margin in meat is anywhere from 19% to 26%, depending on the store you're in.

Agriculture committee  I will caution you on that. I am an economist, and I study this stuff. I think you'll see the price of a lot of packaged goods coming down in the next little while. Don't forget, when buyers buy commodities, they're buying them six to eight months out, so there are still high input prices on those.

Agriculture committee  Do they have to buy? Yes, they have to buy from the central.... Again, there's huge money changing hands here. The majors will make a deal with a major meat-packing house and here's the deal. They need their whole system to support the commitment they've made. Basically, that's how it works.

Agriculture committee  It is. I think the companies would respond that it's about efficiency. I know it doesn't sound efficient, but I think they will respond that it's efficient, running everything through a central distribution system. If your product is here and there, they have to get it to this store from this farm or whatever.

Agriculture committee  Absolutely.

Agriculture committee  Not necessarily, but I was talking about fidelity agreements related only to franchise grocers.

Agriculture committee  Franchises are run by Loblaw Companies, the Sobey company, Metro.... There are three or four of them in Canada, and those are the ones that have fidelity agreements. But if you're independent—

Agriculture committee  No, they're different. They offer different flexibility in different markets.

Agriculture committee  In terms of trade spend. That's because of the concentration of power in the hands of just a few. The tighter and more concentrated it is.... It's a dichotomy, Mr. Chair, because on the one hand the major distributors keep asking for more, and on the other hand the manufacturers often pay more after....

Agriculture committee  First of all, the Ontario terminal is an Ontario government project. It was built in the late 1950s. It was built by the Ontario government. It is managed by a board of directors appointed by that government. You can either rent space in hard walls and display your product there, or you can be part of a huge farmers market in the main parking lot.

Agriculture committee  I can't answer that.