Agriculture Committee on Dec. 4th, 2023

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

Yes, thank you, Chair. I'll be splitting my time with Ms. Taylor Roy.

I want to thank all the witnesses.

I will direct my questions to Mr. Sands, the vice-president of the Canadian Federation of Independent Grocers.

You mentioned that there were 6,900 stores across Canada with a symbiotic relationship with a community. It makes me think of Pym's grocery store in my community, which is a landmark in Wellesley, so I appreciate your advocacy for independent grocers to all three levels of government.

We've talked and will continue to talk about the grocery code of conduct and how it will have to be signed on to by both the federal government and provincial governments.

My question is in a few parts.

How important is this grocery code of conduct in helping level the playing field for independent grocers and to ensure fairness to compete against the size and power of the major grocery chains?

How is important is it for co-operation with all the provinces and territories?

Third, how important is it for the two of the five large grocery chains that are opposing the grocery code of conduct—Loblaw and Walmart—to get on board?

[Gary Sands]

One thing I say to my members who, to be honest, have asked if this code will really make a difference in keeping us on that playing field.... I don't like to use the term “level playing field”, to be honest with you, because in the industry, that horse has galloped out of the barn. We're very consolidated. Our advocacy is just trying to keep us there on the playing field.

For our members who have questioned whether this code will actually make a difference, I actually point to the opposition of Loblaw and Walmart as being precisely why it will make a difference. If it wasn't going to make a difference for them, then why are those two chains so opposed to seeing that code come into place?

This will make a significant change in our access to fair and reliable supply for all Canadians. I think that should be a paramount concern of every government across Canada. I just hope that this committee and other governments will use whatever levers they can to get those two chains to sign on, because there will be a growing call for regulatory intervention if there's not.

I think we're on life support right now. I just hope we can resuscitate the patient.

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

Keep fighting. I thank you.

We've heard that the U.K. has a grocery code of conduct in place. We heard words about price stability, predictability, variety, packaging and innovation. All of these things have been improved.

I thank you for that. I'm going to hand my time over to Ms. Taylor Roy.

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

Thank you, Mr. Chair, and our witnesses as well.

There are a number of small independent grocers in my riding, and they add greatly to the community. They often provide different kinds of foods. They're really essential. They are grocers like Madani's, Greco's, Mellat, Frank's Organics and T&T. There are a whole bunch of different grocers here. I'm very concerned about their survival.

I'm hearing this opposition to the grocery code of conduct now, when I thought we were making progress on it. I know it's a voluntary arrangement and there's been a working group. What are your suggestions to actually get a grocery code of conduct implemented, then, if there is this kind of opposition right now?

Mr. Graydon, maybe you could start.

[Michael Graydon]

I just think it's going to require government intervention, which is unfortunate. We were working down a pathway of a unique model of collaboration within the industry that demonstrated our abilities to come together and find a workable solution to bring economic certainty to our industry. Unfortunately, the competitive challenges for Walmart and Loblaws are such they don't want to yield any power whatsoever, either with the supplier community or even potentially levelling the playing field with their own competitors.

It is similar to the U.K. When the code was originally discussed in the U.K., the large retailers were against it. If you ask them today in the U.K., they will tell you it was the best thing that ever happened. It's natural to find resistance to yielding power, but it is unfortunate that we're going to have to go down the same path as the U.K. and find a regulatory solution.

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

Thank you. I appreciate that.

I just have one other question. Bill C-56 will increase competition or is asking the Competition Bureau to look at that. Do you think that those changes or having an increase in the power of the Competition Bureau will also help independent grocers?

[Michael Graydon]

I'm not sure that it's going to help the independent grocers, and I'm not even sure as it's currently structured that it's going to make that much difference in this consolidated grocery market. I think something very specific to the code is required in the legislation to yield authority to something like the Competition Bureau to give it oversight over a code of conduct. That's a similar sort of environment that exists in the U.K., where a branch of government has overall responsibility for it.

[The Vice-Chair, Conservative, John Barlow]

Thanks, Mr. Graydon, and thanks, Ms. Taylor Roy.

Thank you to the witnesses.

I have one question as a result of what Mr. Louis was raising, and Mr. Epp.

Certainly there's concern over whether the grocery code of conduct is going to survive; as somebody said, it's on life support. What would have more impact if our long-term goal is to address the price inflation or the increasing cost of food—a three-month price freeze on the retailers or more government regulations and policy? I'm thinking of labelling and the plastics here. What would have more of an impact?

[Michael Graydon]

At the end of the day, regulation and policy are always going to yield an effect. Short-term price freezes are just that: They're short term. A freeze puts economic uncertainty into the manufacturing community, and at some point in time they're either going to go out of business or they're going to find a way to try to recoup those costs. The more that we can yield to some of the regulatory issues....

We're not concerned about front-of-pack labelling; it's how it's being executed. The principle of informing consumers so that they can make informed decisions on what they purchase is fine, but use current technology.

At the same time, I think regulation and a code of conduct are required, and how this particular code can be implemented effectively across Canada needs to be brought into the discussion.

[The Vice-Chair, Conservative, John Barlow]

Ms. Farrell, would you comment?

[Kristina Farrell]

I would agree. I would just add that the price freezes just mean that our manufacturers have to absorb those costs. They aren't able to request price increases.

Really, as I said and as Michael Graydon said, making the code mandatory would have the biggest impact in the medium to short term.

[The Vice-Chair, Conservative, John Barlow]

Mr. Sands, do you have a comment?

[Gary Sands]

The only thing I want to add is that I want to impress upon everyone that because this doesn't fall under one single government's jurisdiction, what we're looking at when we talk about regulation is the possibility of having a fragmented regulatory checkerboard system in Canada if all provinces don't sign on. That's a bit of a concern for us.

I'm not disputing what Mr. Graydon is saying, which is that we may have to do down the regulatory path, but it should be something that we try to avoid, if possible, by having a single uniform code. Again, having a patchwork of codes in different provinces is something that we're all concerned about.

[The Vice-Chair, Conservative, John Barlow]

Thanks, Mr. Sands.

Thanks to our witnesses. We will now suspend for a few minutes as we prepare to go in camera.

[Proceedings continue in camera]