Agriculture Committee on April 19th, 2023

[Pierre Lynch]

Thank you for your question.

Temporary measures are welcome, but we also need meaningful long-term measures. What the most vulnerable seniors need is an increase to their GIS, which is meant to help people with the lowest fixed incomes in the country.

Bear in mind that, right now, for people 65 and older who rely solely on federal benefits, the most they get in a year is $21,339. That includes January's GIS increase for people 75 and older. Seniors can't afford a whole lot on an annual income of $21,339. They can't cover their basic needs, and sometimes they even have to choose between their medications, their groceries or their rent. That is a financially precarious situation. In Quebec, seniors make up 20% of the population, so 1,865,000 people, and 40% are living in precarious situations. I imagine the figure is about the same in the rest of Canada.

[Rechie Valdez, Liberal, Mississauga—Streetsville, ON]

Thank you so much.

Concerning some of the things you mentioned in your opening remarks, we know that seniors are on fixed incomes or on their pensions. Are there any recommendations you want to put forward that you didn't cover in your opening?

[Pierre Lynch]

I want to reiterate what I said earlier. The government must do everything it can to raise the income levels of the poorest seniors. Tax measures and the GIS are the keys to putting better supports in place, and that needs to happen quickly. As the cost of living increases and incomes decrease, things are only getting worse. Benefits are not fully indexed to take into account rising costs. Society as a whole is gradually becoming poorer. With other segments of the population gradually heading towards financial insecurity, they will find themselves in the same boat as the most vulnerable members of society today.

It's important to take action quickly, to ensure that seniors, those who built our society, have the income they deserve.

[Rechie Valdez, Liberal, Mississauga—Streetsville, ON]

Thank you, Mr. Lynch.

It's over to you, Leah.

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

Thank you.

Thank you to all the witnesses for being here.

I'd like to direct my questions to Mr. Whitehurst from the Consumers Council of Canada, as you represent consumers. In this study up until now, we've had a lot of discussion on the issue of trust between consumers and the major grocery chains.

Do you feel this is a major issue facing consumers right now? If so, do you believe that the grocery code of conduct would address this, or do you think that's going to deal primarily with the relationship between the farmers and producers and the grocery chains?

[Ken Whitehurst]

Shockingly, we're seeing—and we're not the only ones—when we and others measure it, that trust in business and government is plummeting. Marketplace practices are a big part of that.

For sure, we don't think that any major consumer group has been included in any of the discussions about supply chain codes. Where there are practices in place, like in Canada's agricultural products marketing boards, the consumer voice is extremely weak.

We're not an organization that will discredit one process or another on philosophy alone. It needs to be judged by its performance. We're hearing from everyone, including supply chain people, that there are big problems of trust.

Part of it is the concentration of ownership problem. Part of it is international forces. This is one reason that we didn't focus on the bigger question of inflation. There are lots of sources of inflation right now. Instead, we would say that if you give people more financial assistance to help them in the marketplace, but the marketplace itself is stripping them of consumer surplus assertively because it's not a competitive marketplace and because consumers don't have a voice, then you're wasting your money.

I think it's time for a rebalance if you want consumers' trust back.

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

Thank you, Mr. Whitehurst.

I have just one quick follow-up. Which of the recommendations that you've made in your presentation do you think will go furthest towards re-establishing that trust between the consumer and the grocers?

[Ken Whitehurst]

We think that at a very fundamental level, not just in this sector but in every sector, there is really a problem that there's no whole-of-government approach to looking at the consumers' interest in any of these questions. The reason for having competition policy is to protect consumers. The reason for having health policy is to protect consumers.

[The Chair, Liberal, Kody Blois]

Mr. Whitehurst, we're at time.

[Ken Whitehurst]

I could go down the list. We would say the Canadian consumer advocate—

[The Chair, Liberal, Kody Blois]

Mr. Whitehurst, excuse me. As the chair, when I intervene I need you to stop, honestly, as a witness. We're significantly over time. I listened and certainly wanted to make sure you had the opportunity, but you were going quite deep in opining on that subject.

I'm going to give you 30 seconds to finish up and then we need to be able to move on. Thank you.

It's back over to you.

[Ken Whitehurst]

I have no need to finish up. I apologize. It was simply that until you spoke, I didn't realize that my time was up.

[The Chair, Liberal, Kody Blois]

No worries. Thank you very much, Mr. Whitehurst.

Thank you, Ms. Taylor Roy.

Colleagues, because of time constraints, that ends our first panel, unfortunately.

Let me thank, on behalf of all the committee, Mr. Lynch from the Association québécoise de défense des droits des personnes retraitées et préretraitées.

Mr. Whitehurst from the Consumer Council of Canada, thank you for being here today. Ms. Allen from Food Producers of Canada, thank you for contributing to our study.

Colleagues, don't go far. We're just going to be a few minutes. We're going to be getting back with our second panel. Thank you so much.

[The Chair, Liberal, Kody Blois]

All right, colleagues, we're going to get started. Thank you so much for your patience during the turnaround. We have the second panel.

Ms. Rood, we can talk about appointments and all of that stuff between you and Mr. Drouin another time. Right now, we have to get to business.

First of all, thank you, colleagues. This is our last but not least panel, because of the folks we have here today. I am looking forward to this panel. We've had a great study, but I'm looking forward to hearing from these folks.

Joining us are Jean‑François Archambault, founder and chief executive officer of Tablée des chefs, and Sébastien Léveillé, chief executive officer of Nutri Group.

From the Public Interest Advocacy Centre, we have John Lawford, executive director and general counsel. He is joining us online. We have Amy Hill in the room. She is a graduate of the Dalhousie law school, the best law school in the country.

It's very good to see you, Ms. Hill.

We're going to have up to five minutes. Colleagues, based on the bells, by the time we get done, it's going to be about 5:20. The bells are expected at 5:40. I propose that we do one six-minute round for each party. We'll have to extend it a few minutes beyond the bells, but then we'll let everyone go. This is a confidence vote. It is important, so I think we should make sure we're there, of course.

Steven MacKinnon would be proud of me.

I also want to recognize Mr. Shields, who is replacing Mr. Barlow today.

Welcome to the committee, Mr. Shields.

We're going to start with Monsieur Archambault.

You have five minutes.

[Jean-François Archambault, Founder and Chief Executive Officer, La Tablée des chefs]

Thank you.

Thank you for the opportunity to share my views on the problem of food price inflation.

I'm a father of five children. Their ages run the gamut. I have a 15‑year-old, a 12‑year-old, a 9‑year-old and three‑year-old twins. Like all Canadians, I have noticed the increase in food prices.

There's no doubt that the grocery bill has gone up dramatically. When you know how to cook and you cook a lot, when you know how to prepare food and minimize food waste, and especially, when you know how to store that food, you can make it work more or less.

When I see the cost of food, a number of considerations come to mind. I was in Toronto yesterday to participate in a food waste event at a supermarket. I was there alongside businesses that work with Tablée des chefs. The point of the event was to take advantage of perfectly good but unsold grocery store produce otherwise destined for the compost. That's what we were trying to highlight.

What we are experiencing today is temporary, with the dramatic rise of prices in certain food categories. Take lettuce, for example. Yesterday I saw broccoli being sold for five dollars a head. They were small and wouldn't have fed my family of seven. I don't know many people who would've bought that broccoli. It's reasonable to assume that expensive produce will end up as food waste. It will sit on the shelf, no one will buy it and it won't get eaten, resulting in more food waste. That's the first point I want to make.

My second point has to do with the significant increase in people experiencing food insecurity. I saw it first-hand on my recent trips to Calgary, Toronto, Montreal and Quebec City. I have worked in the food industry for 20 years, and I can tell you that the difference in the past six months is glaring and troubling. The current circumstances are putting a lot of people in vulnerable situations. I hear it every day from my colleagues who run organizations working on the front lines. We are in touch with over 200 agencies. During the pandemic, we partnered with more than 200 organizations across Canada, through our Solidarity Kitchens initiative. The situation is worrisome.

Another thing I'd like to bring to your attention is the importance of developing cooking knowledge and skills from an early age. I know how to cook. I have a culinary degree from the Institut de tourisme et de l'hôtellerie du Québec. Those skills are very helpful to me today, when I cook for my family, when I invite friends over for dinner and when I make meals to help people in need. I use food that would otherwise be wasted to cook meals in bulk for people in need. I also try to convince my fellow chefs to join me in that effort, to feed people struggling with food insecurity.

I would say that is paramount. The chefs and cooks I have asked to join La Tablée des chefs work alongside me in bringing culinary knowledge and skills to students in more than 250 schools across Quebec. La Tablée des chefs works mainly in Quebec, but we are also involved with 40 or so schools outside Quebec, in five provinces, and we hold activities in English and in French.

It's hard to do more than that at this time. I'm looking at the universal healthy school food program, especially food literacy. I am eager to see real funding allocated to building food literacy, in other words, youth culinary education in schools.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Archambault.

We will now hear from Mr. Léveillé for five minutes.

[Sébastien Léveillé, Chief Executive Officer, Nutri Group]

Thank you, Mr. Chair.

Members of the committee, good afternoon.

First and foremost, I would like to extend my greetings to all members of Nutri Group across Canada.

For the purpose of clarity, the remainder of my presentation will be in French.

I am delighted to be here today, on behalf of the hundreds of farm owners who make up Nutri Group, to help the committee gain a clear understanding of the health of the egg production sector, overall, and the pricing mechanism, specifically.

Like you, I am well aware of the inflation being felt here and everywhere. Our sector has a unique perspective on the realities of supply-managed areas, which were better protected against significant price fluctuations than sectors in countries with fully free market systems. Right now, consumers in those countries are paying a lot more for a dozen eggs than consumers in Canada. Thanks to supply management, we have a predictable supply chain, good jobs and quality products backed by stringent food safety and animal care programs.

As was illustrated during the pandemic, Canada's supply management system ensured that Canadian families had access to safe, affordable and local products, safe from border-related challenges and supply chain issues abroad.

Eggs are very popular, consumed by millions of Canadians every day, making them a staple of Canadian families' diets. Nutri Group is one of the largest egg graders and processors in Canada. Our head office is in Saint‑Hyacinthe, Quebec. We employ more than 500 people across seven business units and partnerships. First and foremost, Nutri Group is a group of family farms throughout the Maritimes, Quebec, Ontario and the Prairies. Together, we produce more than 1.5 billion eggs a year. Through collective production, we are able to meet the needs of our Canadian customers—retailers, restaurants, hotel networks and institutions.

In Quebec and in the rest of Canada, the egg industry is structured in a way that supports the dynamic use of land. Most of our farms are located in regions, which means they leverage the space and infrastructure in those regions and support local economies.

With eggs being such a popular product and playing a key role in people's diets, they often go on sale. This means prices are subject to downward pressure more often than upward pressure. Egg pricing adheres to organized and regulated conditions. We have a limited role in retail pricing. The reality is that the retail price depends on three factors. The first is the price paid to the farmer, as determined by supply management. The second factor is operating costs, and rest assured that we go to great lengths to keep our costs down. The third factor has to do with the retailer or restaurant, the one responsible for setting the price at which the product is sold, which depends on the business's desired profit margin.

If I want to raise the price of eggs, I have to let the big-name stores know at least three months ahead of the planned increase. Then, I have to justify the increase and explain why it's necessary. As you can appreciate, some things are beyond our control: the increase in production costs, the labour shortage, which is affecting our sector like so many others, the significant increase in energy and transportation costs, and in the case of eggs specifically, avian flu, as we are experiencing now.

The logistical set-up required to serve a market like Canada's is extensive. I want to take this opportunity to thank the producers and all the actors throughout the long supply chain for their role in getting eggs from gate to plate. Nevertheless, thanks to ongoing efforts to become more efficient, our prices are slow to fluctuate, and all of it benefits Canadians. In 2022, our sector saw a price increase of 8.4% over 2021. Although that's a lot, it's less than the 9.2% in the rest of the food sector.

Most of you have probably eaten eggs in the past few days, if not today. Since 1985, Nutri Group has been a vehicle for the continuum that begins at the farm and ends with Canadian consumers. Accordingly, we have a duty to both consumers and producers.

Thank you, Mr. Chair.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Léveillé.

I now give the floor to Mr. Lawford and Ms. Hill for five minutes.

[John Lawford, Executive Director and General Counsel, Public Interest Advocacy Centre]

Thank you, Mr. Chair and honourable members.

I'm the executive director and general counsel of the Public Interest Advocacy Centre. I'm joined today by PIAC's articling student Amy Hill. For the technicians and members, we will be sharing the speaking.

PIAC is a national not-for-profit and registered charity. We provide legal and research services on behalf of consumer interests—in particular, vulnerable consumer interests—concerning the provision of important public services and products. PIAC has been active in the field of consumer protection and policy for over 40 years.

Amy.

[Amy Hill, Articling Student, Public Interest Advocacy Centre]

PIAC supports the government's grocery rebate in budget 2023, which provides much-needed financial support to 11 million low- and modest-income Canadians and families. The grocery rebate is a one-time payment and a step in the right direction, but more ongoing relief is needed for consumers, and vulnerable consumers in particular.

Food Banks Canada reported a 35% increase in total food bank visits between 2019 and 2022. Canadian research has indicated, however, that only 20% to 30% of people experiencing food insecurity seek charitable food assistance. Research also suggests that some of those who access food assistance still report going hungry. Stigma was cited as one reason that people are not seeking help from food banks. Given this, it is likely that the negative impacts of food inflation on food security are even worse than Food Banks' statistics may suggest.

This is important for two reasons. First, food insecurity has important ties to both physical and mental health. Second, food insecurity disproportionately impacts certain populations, including those with disabilities, racialized people, newcomers and people with precarious immigration status, many of whom are already facing structural oppression in our society.

In February, Mr. McCann testified before this committee that “food inflation is regressive, hitting poor households harder.” He testified that “policy solutions should be directed at those Canadians who need the most help.” PIAC agrees.

The federal government should consider extending the grocery rebate and consider other targeted income supplements to vulnerable consumers who need help most during the inflationary period and beyond.

John.

[John Lawford]

This committee has heard extensive testimony about the grocery code of conduct. We understand from the testimony that this code is needed to govern the relationship between suppliers and grocers.

PIAC does not oppose a code. PIAC is supportive of a code, so far as it provides benefits to consumers, such as increased supply chain resiliency and, in the long run, more innovative products. What we are concerned with, however, are the new financial dynamics under a code that could impact consumer retail pricing.

Mike von Massow, an associate professor at the University of Guelph, described the pricing dynamics in the grocery code of conduct as a zero-sum game. That is, if suppliers make more money by facing either fewer fees or less price pressure, then either grocers will make less or consumers will pay more. Something has to give and it's not likely to be grocers' profits.

On March 8, Mr. Perron briefly questioned witnesses on the idea of a review of the code one year following implementation. PIAC is supportive of a post-implementation review and would add that any review should not only consider how the code has impacted industry relationships, but also consider whether the code has impacted retail prices for consumers. Innovative products are interesting, but food affordability must be prioritized.

Amy.

[Amy Hill]

Finally, PIAC provided a submission to the Competition Bureau in response to its market study on the grocery industry. We flagged a couple of issues for the bureau that we would also put before the committee today, which had either direct or indirect impacts to food pricing.

First, access to consumer data and the ability to process and use data from loyalty programs is a significant competitive advantage in the grocery industry. Purchasing data about a consumer allows the grocers to build profiles about consumers and then use the profiles for targeted advertising.

In the interest of time, I will just note that if Bill C-27 passes in its current form, consumers could lose important legislative protections when it comes to their data, leaving data more vulnerable even as grocers collect more from points programs.

Secondly, while this is a federal committee, the committee should also consider regional challenges, whether that be food affordability in the far north or restrictive covenants in some southern communities. Many Canadian communities have unique challenges when it comes to food. We hope to see recommendations acknowledging these distinct challenges.

John.

[John Lawford]

We're supportive of the committee's study to examine food inflation. We hope that this ultimately results in more support for vulnerable consumers.

Thanks very much. We look forward to your questions.

[The Chair, Liberal, Kody Blois]

Thank you very much.

It's not often that we have the back and forth, but I think it was a good, unique bit and it was right on time. As your chair, I'm quite happy about that.

Colleagues, as I mentioned, we're going to go for 24 minutes. That's six minutes for each party.

Mr. Lehoux, go ahead.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

I thank the witnesses for being with us this afternoon.

My first question will be for Mr. Léveillé.

Your production is still quota-controlled across Canada. In the overall market, are there still independent producers? What percentage of Nutri Group's production is done in Quebec? Is there a comparison in Canada?