Thank you, Mr. Chair, and thank you, members, for the invitation to appear once again at this committee.
With your permission, RCC will split our time. I will speak to food inflation and its causes and current trajectory. Diane Brisebois, our CEO, will speak briefly to the code of conduct, which we know to be of interest.
In a different context, Al Gore referred to an “inconvenient truth”, meaning facts that some people would rather not acknowledge, because, once acknowledged, they'd have to do something they'd rather not do. In this case, what some political opportunists would rather not do is acknowledge how very little grocers have to do with food price inflation and admit that the overwhelming portion of the run-up in food prices occurs earlier in the supply chain, at the producer and processor level.
This is not to lay the blame on producers or most of the processors. As earlier noted, growers have faced huge pressures on input costs like feed, fuel and fertilizer, being global phenomena, along with rising interest charges, labour and other costs. These costs are passed on to manufacturers, who then bear additional costs of their own. However, the fact remains that almost 80% of the price of food on grocery shelves arises at the vendor level, long before reaching grocers.
That inconvenient truth also includes the fact that Canada's food inflation rate is the second-lowest in the G7; the fact that the most recent food inflation rate in Canada is less than half what it was when RCC last appeared before this committee; the fact that the delta between food inflation and headline CPI inflation has narrowed by more than half, and in fact by almost two-thirds; and lastly, the fact that gross margins and net profits in the grocery sector are consistently within the 2% to 5% range, profit percentages that are dwarfed by the profits of the big global CPG manufacturers, who have been passing on repeated cost increases.
Notwithstanding those facts—that inconvenient truth—we face recurring attempts to portray grocers as cartoon villains and, in service of that false narrative, deliberate avoidance of any effort to hold the earlier players in the chain accountable. Our political leadership owes it to Canadians to give them the full picture about food inflation, to openly acknowledge its global and supply chain causes, and, frankly, to stop scapegoating a grocery industry that continues to work diligently to help stabilize food prices for Canadians.
I will now turn it over to my colleague Ms. Brisebois.