Agriculture Committee on March 27th, 2023

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

I looked it up. They say, across Canada, it's approximately $15 to $16 per hour.

Does that sound about right to you?

[Gonzalo Gebara]

As I said, I'll have to get back to you, without having to compromise on anything that I'm not aware of.

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

Sure.

You are aware that the food price inflation has been climbing at a rate much higher than the general rate of inflation. Is that right? Do you acknowledge that?

[Gonzalo Gebara]

Yes.

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

I guess what I'm trying to get at, Mr. Gebara, is this: Do you feel that your company pays your employees a high enough wage that they can actually afford healthy, nutritious food each and every week?

If it comes back to us that it's true, that the average wage is somewhere between $15 and $16 an hour for the employees of your company, a major food retailer in Canada—and say we can extrapolate that out to an income of $30,000 a year—do you feel, sir, that your employees are able to afford to put enough on the table for their own families?

These are your employees, in a very profitable company that's selling food as the main part of its business.

[Gonzalo Gebara]

Yes. The first thing I'll say is that we are in the people business. Our people are what make a difference in our company. We believe that we provide a very good environment for our associates to work in. We are a values-based company. Respect for the individual is one of our main values.

We have very competitive pay in Canada. I personally believe that we offer a very good environment for people to bring their true selves, to enjoy a very diverse setting in which we appreciate everyone for who they are and we enjoy the contributions that each of us makes. We provide very good development opportunities. We have thousands of cases of associates who have started with in what looked like a short-term job and ended up in a long-term career.

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

Thank you.

I'm sorry to cut you off. Time goes by quickly.

I was looking at your “Investor Relations” website, and it stated that for Walmart International, Mexico, China and Canada lead the way for revenue generation.

In the Canadian operations for which you are responsible, overall, what has been the net profit margin for Walmart Canada?

[Gonzalo Gebara]

As you know, we are a private company in Canada, and that is competitively sensitive information, but as I said, we have provided all of that relevant financial information to the bureau for it to consider in the analysis it's doing.

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

How does the information that you provide to Canadian regulators compare with what your parent company gives to United States' regulators?

[Gonzalo Gebara]

As I said earlier, our business in Canada is very different from our business around the world in the intricacies and particularities of the information.

We shared all of the relevant information with the bureau, as I said, for them to continue their study.

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

Mr. Gebara, I understand that you are saying it's private information for your company and it relates to your ability to compete. However, in the absence of such information, a lot of people are left doing guesswork on it.

Do you not see how being a bit more forthcoming and a bit more transparent could maybe help alleviate some of the crisis in confidence and trust that so many Canadians are having with large-scale retailers such as you?

[Gonzalo Gebara]

We believe that we earn the trust of our customers every day in every store as we deploy our customer value proposition in all of our 400-plus stores across all of Canada. That's the most important thing for us in terms of building trust.

Together with that, we are, of course, voluntarily sharing information with the appropriate bureau to help continue the study so that we can continue to build trust and transparency.

[The Vice-Chair, Conservative, John Barlow]

Thanks, Mr. MacGregor.

Thanks, Mr. Gebara.

We now go into our second round of questions. I will go back to the Conservatives—and Mr. Epp—for five minutes, please.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Mr. Chair.

Thank you, sincerely, Mr. Gebara, for joining us today as we tackle some of the challenges in the food value system.

Before coming to this honoured place, I had the opportunity to develop many relationships in the food value chain. With the opportunities in this committee, I've had many suppliers reach out to me voluntarily—without my approaching them—with some statements. Some have said that the fees and the fines they receive feel more like a planned revenue stream for Walmart, rather than a mechanism to adjust the behaviour of suppliers.

How would you respond to that statement?

[Gonzalo Gebara]

As I said earlier, we engage with customers in a very transparent and arm's-length way. We have a set of definitions for the way we engage with our suppliers, which we believe is the right way to conduct business. We do it in a very planned way. We do it always—as I said in my opening remarks—without making last-minute calls. We know that our suppliers need enough time so that they can plan accordingly. Then, we can—

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

I'm sorry to cut you off, but our time is so limited.

You've mentioned transparency a number of times, yet I have heard that some fees are a surprise to your suppliers. To your company's credit, with negotiations, some of those have been rolled back with discussions. Would you acknowledge that adds administrative costs both to suppliers and to your company?

[Gonzalo Gebara]

Excuse me, Mr. Epp, would you please repeat the question? I just got—

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Yes. On the back and forth in negotiating fees with your suppliers, would you acknowledge that that adds administrative costs, both for the suppliers and yourselves?

[Gonzalo Gebara]

No. I think that many of those conditions are meant to reduce some costs that are natural costs of inefficiencies in the supply chain. We think that in many ways we can streamline those costs by having different conditions and solving those problems in different ways.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

Walmart operates in many countries around the world. Can you tell the committee a bit about the differences in the American landscape versus the Canadian landscape, from your Walmart perspective? Now, I'm not talking about your relationship with the suppliers so much, but your own internal costs: your shipping costs, your handling costs, and your packaging costs.

We have a carbon tax that's about to go up again. Are you seeing that in your differential cost structures in Canada versus the U.S.?

[Gonzalo Gebara]

Again, as I said earlier, the nature of our businesses is quite different because of the reach, because of the particular intricacies of each of the different markets, and of course because of the different market conditions in each of the markets. I don't think that they are comparable in any way.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

You mentioned that you just received the grocery code of conduct. Is it correct then that you did not participate in the negotiations that led up to this draft?

[Gonzalo Gebara]

We just recently received it, so we are getting engaged right now. As I said earlier, we would support any evolution of that draft so that we can create good conditions for the whole industry.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Are you involved with present discussions?

[Gonzalo Gebara]

We just received the draft, and we're going to get engaged shortly.