Thank you, sir.
I produced that table because I do hope the debate over prices and profits in food retail—it is very important, and I thank the committee for undertaking it—can be the start of a larger conversation. I've described the factors in food retailing where companies are taking advantage of the supply chains, the uncertainty, the preserved spending power of Canadians—I don't say overheated demand, but their spending power was preserved thanks to the emergency supports during COVID, which have now all been phased out—and their market power to increase profits to the highest share ever of Canadian GDP. That similar mechanism is visible in other “strategic” sectors, as I call them, which have a place in the overall supply chain that allows them to charge what the market will bear even in a moment of social and environmental and economic crisis.
At the top of the list, there's no doubt about it, is the oil and gas sector. The excess profits earned there since the pandemic account for about one-quarter of the total mass of profits across the 15 sectors I identified in that work. The increased prices that embody those huge profit margins then trickle through the rest of the supply chain. Food processors have to pay that, so they have higher costs, nominally, but then they add their own higher profit margin on top of that. The same goes for the food retail sector. By the time the consumer gets it, there's been excess profits added at several steps of the whole supply chain. That magnifies the final impact on consumer price inflation.
I'm grateful to the committee for undertaking this look at food inflation, but when the supermarket vice-presidents come to you and tell you that their margins aren't up that much and their costs were increased, I would point out, first of all, that their margins are up and their profits are up despite the higher costs. Then I would point out that their own higher costs are a reflection of similar excess profit-taking at other stages along the supply chain. No greater example of that exists than the increase in profits and prices in oil and gas products.