Professor Charlebois was clear when he appeared before the committee. He had this to say: “the balance of power is not the same in Canada. Given the oligopoly we see in this area, it is very difficult for suppliers to negotiate with the major distributors”.
Picture a small family business that brings perishable products to the market in a matter of days. Imagine that small family business having to negotiate with a very limited number of customers that do billions of dollars worth of business. Now ladies and gentlemen of the committee, do you really think that a small vegetable grower has much negotiating power in that scenario? Vegetable growers never win in the carrot and stick game.
You heard from a number of retailers that they required extensive justification before agreeing to pay their suppliers a higher price—and believe you me, that's what they do. The real question, though, is who do the big grocery store chains have to justify their regular price increases to. It's a question worth asking.
What's more, globalization has led to the consolidation of input supplier operations, reducing the availability of diverse supply sources and, by extension, causing prices to soar.
The country's vegetable production supply chain is dealing with another phenomenon as well. The industry's major national customers sell local products and imported products alongside one another, in direct competition. Regulations are much more stringent in Canada than they are in Mexico, for instance. For that reason, the production costs in Mexico and other such countries are not sustainable here.
There's no easy answer when it comes managing food inflation more effectively, but as a society, we know we should be making national food security a bigger priority. Now, I'll turn to our recommendations.
First, a code of conduct governing relations between suppliers and retailers in the grocery sector won't implicitly address pricing mechanisms. It is therefore crucial to examine the issue and assess the harmful effects of market concentration.
Second, we can no longer talk about climate change as though it's in the future, because it's happening now. Vegetable growers are living it every single day. This past summer, entire crops were ruined in Quebec because of invasions of aphids from the U.S., hurting supply chain resilience. A national climate change strategy must be implemented now.
Third, vegetable growers need a level playing field to compete with growers of imported produce. Equivalence and reciprocity of standards must be implemented in order to secure the domestic supply chain.
Thank you for this opportunity.