Agriculture Committee on April 19th, 2023

[Sébastien Léveillé]

That's right, there are still many independent producers who are not members of Nutri Group. In fact, at least 40% of our suppliers are not members of Nutri Group, but they are subject to the same rules as the shareholders.

[Richard Lehoux, Conservative, Beauce, QC]

Nutri Group's size surely gives it an advantage when negotiating with retailers.

Can you give me a percentage breakdown of the price of a dozen eggs, from what is paid to the producer, through processing and retailer, to what the consumer pays?

[Sébastien Léveillé]

We have to protect confidentiality and competitive advantage, but I can say that the producer price, which you know, is $2.49 in Quebec, for example. It's hard to answer your question, as the price varies so much. I don't know if your committee has noted this, but the price varies everywhere right now. Throughout the year, eggs are regularly promoted, and at times the cost is very low.

Eggs are an incentive to attract consumers to grocery stores. That's what we've been experiencing on an ongoing basis for many years. For this reason, it is difficult to establish the profit margin. There are so many promotions and variations that it's hard to say.

[Richard Lehoux, Conservative, Beauce, QC]

Basically, without producers, we wouldn't have eggs on the table. Are producers getting a decent price? For producers, is the pricing correct? Does it respect the—

[Sébastien Léveillé]

Supply management is a huge benefit because it enables Canadian consumers to pay a fair price and farm families to have a decent income.

[Richard Lehoux, Conservative, Beauce, QC]

As you mentioned at the outset, in countries that don't have this kind of a system, the price of a dozen eggs is very high, compared with what Canadian consumers pay.

[Sébastien Léveillé]

Absolutely.

For example, in the United States, the price of eggs is very high compared with Canada. We're in the midst of inflation and, more importantly, avian flu, which is a problem not only in North America, but around the world.

[Richard Lehoux, Conservative, Beauce, QC]

Avian flu necessarily has production implications. If producers have difficulty supplying the consumer, the consumer will surely experience a price increase.

In your opinion, are the mechanisms for controlling avian flu in Canada adequate?

[Sébastien Léveillé]

The facts speak for themselves.

Over the past year, in the United States, supply and demand have caused a very large price spike. So the market has dictated the price. In Canada, supply management is driven by the cost of production. Biosecurity has been very well controlled in Canada for eggs, even though producers have been affected by the avian flu. In Canada, there is an effective system in place to keep prices at a respectable level for consumers.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Léveillé.

Mr. Archambault, you talked a lot about food insecurity and food waste. La Tablée des chefs is already implemented in about 250 schools in Quebec, as well as in several other Canadian provinces.

How could the committee help you improve education related to food waste? Is there a link between waste and education?

[Jean-François Archambault]

Thank you for your question.

In my opinion, it is already a good thing that you are listening to us. I also think it's important to think about the consumer of tomorrow. We are working with the Quebec minister Mr. Lamontagne on Quebec's food policy and food autonomy.

We think a lot about what is happening now, but we also need to think about future generations, as soon as possible. The teenagers in high school right now are the ones who will be making decisions tomorrow. They are tomorrow's consumers. That's why we need to make room for them.

Testifying before the committee enables me to raise the importance of this issue and amplify the Canadian movement to further educate young people about cooking. We want young people to become informed and equipped consumers. When you are experiencing food insecurity and have to feed your family on a limited budget, you have to be well equipped. This includes developing culinary knowledge and skills.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you.

In this context, could you make a recommendation to expand the reach of the Tablée des chefs outside the province in relation to other chefs, but also to the culinary knowledge of young people?

[The Chair, Liberal, Kody Blois]

You have 20 seconds left, Mr. Archambault.

[Jean-François Archambault]

Minister Bibeau and Minister Gould are currently working on a universal school food plan that would include food literacy, and therefore culinary education. Progress should be accelerated and communicated by the government.

We are working very hard on this. The discussion is transparent, but I would like to see decisions made to enable organizations like ours, and like all those involved in school feeding across Canada, to benefit from a universal feeding program to ensure food security for children in schools and to develop culinary education for youth across Canada.

[The Chair, Liberal, Kody Blois]

I thank Mr. Archambault and Mr. Lehoux.

We will now give the floor to Mr. Louis, who will be sharing his time with Ms. Taylor Roy.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you very much, Chair.

Thank you to all the witnesses.

Like you said, I'll be splitting my time with Ms. Taylor Roy.

I'll focus my questions on Mr. Léveillé.

You mentioned off the top supply management and how much that protects price fluctuations and offers predictability. You talked about safety, affordability and local production.

Nutri Group, you also mentioned egg raters and processors at seven locations. One location is minutes from my house. I believe you're the parent company of Ontario Pride Eggs, which is in Kitchener, where I am. That facility has local producers selling, and they're cleaning, grading and packaging eggs.

On our food price inflation study here, you mentioned in your opening statement the costing mechanism, the three steps. The first is farm gate prices, controlled in part by supply management, which has less price fluctuation. There are operational costs for you, and then retail sets prices for its margin.

I'd like to focus on the operational costs. Concerning the logistics of having your plants closer to producers and to customers with those seven, can you explain how that helps keep your costs down?

[Sébastien Léveillé]

Thank you for your question.

You are correct. Having locations near Canadian farms helps us have proximity. We've been subject to the same rules as the rest of the economy regarding inflation, but having local producers across Canada goes a long way in helping us not be too far from our farms. By the way, being able to produce where the markets are across the country is one of the strengths of Canada's supply management.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you.

Also we talked about the relationship between our farmers and production. You have a wonderful relationship—and I can speak to this—with farmers locally, most of whom are shareholders in the company.

We've heard some horror stories about relationships. Can you tell us about the relationship you have when the farmers themselves and the producers who are also shareholders?

[Sébastien Léveillé]

Nutri Group's history is quite exceptional. At some point in their history, egg producers decided to create an economic structure to bring their product to consumers' plates. Nutri Group's role is to bring together the supply of these producers, who themselves decided to create this entity, to innovate, to enhance the value of eggs and to bring them to the consumer's plate in the best possible way. It's really the story of these seasoned Canadian agricultural entrepreneurs who built this business.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you very much.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you.

Thank you to all of our witnesses for participating.

I'd like to address my question to PIAC, and perhaps, since you're in the room, Ms. Hill, you could answer my question.

I noticed that your main recommendation to do with the increase in food prices is really to increase or continue the support for the most vulnerable. While I agree with this—and certainly our government does, with the GST rebate and many other support programs that we've put in place since 2015 targeted to those who need them most—I notice that there were not any specific recommendations to combat high grocery prices. I was just wondering whether you had any thoughts on what could be done to bring grocery prices down.

[Amy Hill]

Yes, definitely. Thank you. It's a great question.

As this committee has heard, there are a lot of different things that contribute to inflation throughout the supply chain and result in some of the prices we're seeing at retail. We decided to focus our recommendations on more of the demand side, because our interest group is consumers at the end of the day.

We would highlight that there's a really important role for competition law to play in those prices that we see at retail. We hope there will be some improvements to the Competition Act that will allow some more enforcement in the industry.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you.

Mr. Lawford, do you have anything to add to that?

[John Lawford]

Yes. We have had years of mergers in the grocery industry. We're reaping the benefit now, such that retailers can raise prices in a more comprehensive and quicker fashion than if there were more competitors.

That's basically our bottom line.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you.

Do you think having more local food producers, more sustainable agriculture locally, could help to address some of these problems as well?