Agriculture Committee on Dec. 7th, 2023

[Gonzalo Gebara]

I think competition is always great. It's great for consumers. It makes the industry better. We learn a lot from competition around the world. As you know, Walmart operates in many countries, and we've learned a lot from competing in different markets and different—

[Heath MacDonald, Liberal, Malpeque, PE]

Very quickly, Mr. Gebara, the inflation rate in the U.S., in which Walmart obviously has a base, was much higher than it was in Canada over the past number of months, and it fluctuated to some extent. What are you seeing in the U.S. compared to Canada that we could learn from?

[Gonzalo Gebara]

As you know, I'm only responsible for our Canadian business, so I am not very well educated to speak about what's going on in our U.S. business.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you, Mr. Gebara.

[The Chair, Liberal, Kody Blois]

Thank you.

We now go to Mr. Perron for six minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

Thank you for being here this morning, Mr. Gebara.

I've been listening to you carefully this whole time. I remember when you appeared before the committee in March, and you gave the impression that you were very open to signing on to the code of conduct. Maybe I'm naive, but I thought you had said you would. However, you told Ms. Rood that you didn't think the code was acceptable. Mr. MacDonald asked what we should make of your position, and you said that we should keep inviting you to take part in the committee's proceedings to help bring down prices.

Mr. Gebara, you were invited to participate in the discussions on the code of conduct, but you aren't participating. How do you, as one of the biggest players in the market, explain to consumers the fact that you aren't involved in the discussions and that, once the code is more or less finalized, you are almost undermining the whole thing by refusing to sign on?

I want to believe you're acting in good faith, but after listening to the discussion this morning, I have to tell you I see a credibility issue, frankly.

How do you explain that to those who make the food, the small and medium-sized processors, and the people who are struggling to buy groceries?

What has to happen next in order for you to participate in the healthy regulation of the grocery market? That is the goal.

[Gonzalo Gebara]

Thank you very much. I'll try to go step by step on all the points you covered.

First, I said in March that we wanted to actively participate in the discussions so as to understand them better. What I said moments ago is that we have actively participated in discussions of the code, and we believe that those discussions are still ongoing. We have raised our opinions on a couple of points on the code, which we believe are not going to help with having a better environment for producers, distributors and retailers—either to have better-run businesses or to have lower prices.

That's the main reason we would like to continue to have conversations, because at the end of the day, we want the same as everybody wants, which is to provide Canadians with low prices. That is what we have been doing for the last 30 years in Canada.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you for your answer.

You say you are actively involved, but according to the reports we are hearing, you don't want to commit any further to the process.

How do you think a code of conduct can work in Canada and Quebec if retailers don't all sign on? Do you really think it would be realistic to put that in place and expect that it would lead to better prices for consumers?

You say the code isn't acceptable, but similar codes have been introduced elsewhere, Mr. Gebara. Australia has one, as does the United Kingdom. In both cases, food prices came down.

How do you explain the fact that Walmart wants to offer lower prices but doesn't want to sign on to a code that the majority of retailers have agreed upon?

I don't understand, Mr. Gebara.

[Gonzalo Gebara]

I believe that Walmart has been very efficient and very—I would say—strong in delivering lower prices for Canadians without a code of conduct in place, so I don't see the direct relation between having a code of conduct and lower prices. History tells us that, for the last 30 years, Walmart in Canada has been able to lower prices in current conditions.

That's what we do. That's what we will continue to do with or without a code. That's why we think that we need to separate whether the code is the direct conduit for lower prices or not. Do we want the code to regulate the relationship between suppliers—

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Sorry to cut you off, Mr. Gebara, but I have a limited amount of time. The code has proven effective elsewhere. That's what I just told you.

I'm going to switch topics. Let's talk credibility and how much we can believe what you're telling us.

When you were here before, an investigation into food pricing in grocery stores was under way. I asked the CEOs of the five major grocery chains who appeared whether they would commit to disclosing their numbers. When we asked for more details on those numbers, you all answered that you couldn't share that information because you were in competition with one another. As I said, the Competition Bureau was conducting a study at the same time, and the five CEOs told me that they were prepared to provide their numbers to the Competition Bureau. Nevertheless, when the Competition Bureau released its report a few weeks later, at the very beginning of the report, it criticized the fact that not all the companies had provided their figures.

Here is my question for you. Did you provide your figures to the Competition Bureau when it asked you for them?

[Gonzalo Gebara]

We provided information to the Competition Bureau on the conditions that they were requesting, yes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

If I understand correctly, you provided all the information that was requested. Is that correct?

[Gonzalo Gebara]

It is my understanding that we provided what was requested.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Perron.

We now go to Mr. MacGregor for six minutes.

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

Thank you very much, Mr. Chair.

Thank you for joining us today, Mr. Gebara.

In September, the Minister of Industry made a great deal about the meeting he had with all of the CEOs to discuss food prices and a pretty strong commitment from the Liberal government.

I guess the straight-up question to you, sir, is this: Did that meeting lead to lower prices in your grocery stores?

[Gonzalo Gebara]

As I said in March and have been saying for the last hour here, at Walmart we work to lower prices. That's the way we go to market.

When we came to Ottawa and had those conversations and those interactions, we committed to continue to work on lowering prices and running the different programs we have, many of which I mentioned, so doubling down on—

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

I'm sorry, Mr. Gebara, to interrupt. With respect, I want to know if that meeting resulted in lower prices in your grocery stores, the actions following from that meeting in September to where we are now today in December?

[Gonzalo Gebara]

Yes, I was going to say that we were able to launch several programs that resulted in lower prices. As I said, we were able to offer Thanksgiving meals at lower prices than last year.

Those are all parts of the way we go to market so we can continue to deliver a value proposition for our customers that's based and anchored in low prices.

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

Mr. Gebara, we live in a country today where approximately seven million Canadians, a record number, are having to access food banks due to high grocery prices. I imagine with a company as large as yours that executive compensation is quite generous for a person in your position, but I think it's fair for us as a committee to ask about the subject of high grocery prices.

I know that in my community of Cowichan—Malahat—Langford a lot of the people who are having to access help are, in fact, people who have full-time jobs. Even after working 40 hours a week, they are still unable to go out and afford to feed their families.

I want to know, with respect to the employees that Walmart Canada has, especially for your entry-level folks.... We have data now showing that an average family of four is expected to spend more than $16,000 on food next year. That's a $700 increase. Can you say with certainty, sir...? Are any of your employees having to access food banks while they are working at Walmart Canada?

[Gonzalo Gebara]

At Walmart Canada, our more than 100,000 associates are the most important resource we have. We are a company that is very proud to say that we have very strong values, and we care about our associates. This year we were able to launch several programs, so that we could help our associates live better, because, as you very well know, our purpose is to help people save money and live better, and that includes our associates.

We were able to launch health programs and—

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

I'm sorry. With respect, Mr. Gebara, that wasn't the question. I wanted to know, because you're the point person for Walmart in Canada, and given the difference that we have between executive pay and employee pay in Canada, which is very well documented, can you say for certain that no Walmart Canada full-time employee is accessing a food bank in Canada?

[Gonzalo Gebara]

As I said, we have more than 100,000 associates across Canada, and I couldn't say whether any of them would have. However, I am confident that we have the right conditions for our associates to invest their time and energy with us to grow and develop themselves and grow a career with Walmart. Again, that's what we have done for 30 years in Canada.

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

With respect, sir, what is your opinion? If you did have an employee, who was working at your store 40 hours a week, and if they're working in the grocery department and they still can't afford to feed their family on a full-time wage with Walmart Canada, what does that say to you? What's your opinion of that?

[Gonzalo Gebara]

That would be something that we would like to address immediately. As I said, I don't have knowledge of that situation.