Agriculture Committee on Feb. 27th, 2024

[The Chair, Liberal, Kody Blois]

Mr. Perkins, I'm going to stop this.

Mr. Perkins, I have the floor as the chair. You will stop talking, because I'm the chair of this committee. I appreciate that you are having a back-and-forth, but we have translators that we want to be respectful to.

Again, ask the question. If the minister takes too long or meanders, I will cut him off and go back to you, but I do not need three people or two people talking at the same time.

You have three minutes and 25 seconds. Go ahead.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I'm sorry, Mr. Chair. I was just trying to answer the minister's question that he posed to me, and that is 53%.

Do you know what the gross profit margins of Kraft or PepsiCo are? I believe you're not putting the emphasis on where the price is going up. As a person who has worked in retail, I have to deal with the price of the product that's sold to me, that's manufactured, because I don't make them.

Have you met with those groups, and what pressure are you putting on them to reduce their monopolistic gross profit margins of more than 50%?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I'm very happy to answer that.

By the way, I have met with representatives from Unilever, Lassonde, Nestlé, Lactalis, Smucker's, Kraft...and the list goes on. Definitely, I have met with them. I told them one thing: that we expect them to play a role in stabilizing prices.

I even talked to international colleagues, Mr. Perkins, not just those in Canada. I'm talking to our G7 partners to ask what can we do together to make sure that we have more stability in the prices.

I'm not just looking at the grocers. I understand that. I have spent my life in business, just as you have, sir. I understand that everyone has a role to play. One thing that we have to be clear about is that the grocery retail profit margins have nearly doubled in the last five years.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Well—

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

If you don't believe the Competition Bureau or Statistics Canada, sir, we have a fundamental problem. It's not me saying that. Look at the chart.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I believe their disclosed, publicly available information in their annual report—

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

As you know—

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Please don't interrupt me.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

—there's grocery, and there's pharmacy—

[The Chair, Liberal, Kody Blois]

Minister Champagne, no. I have to be fair now. Let him speak.

Thank you.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

You've had zero impact on that part of the business. You've had zero impact on the retail side of the business. For retailers, transportation is one of the biggest costs—transportation and energy in the stores.

Can you tell me how putting two carbon taxes on the fuel—which causes the transport costs to go up, which I, as a retailer, have to to pass on to consumers—actually lowers grocery prices?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

You know, Mr. Perkins, I like you very much, but look at this chart. I don't have to say much more. If you think that our actions have no impact, look at the numbers. Do you want me to quote them for you?

In August 2023—

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

No, I would like you to answer the question.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

—it was 6.9%. In September, it was 5.8%. In October 2023, it was 5.4%. In November 2023, it was 4.7%, and in January 2024, it was 3.4%. Those are the food inflation rates, sir.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Listen—

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

If you're asking me if our actions are having an impact, look at the chart, sir. I'm happy to give you a copy. The trend is going in the right direction.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I asked you how increasing the carbon tax on one of the most expensive parts of retail—transport—lowers grocery prices. How does it do it?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Sir, I would be happy to respond to you.

I would refer not just to me but to the Bank of Canada. The Bank of Canada said that carbon pricing might have a small impact on food-price inflation, less than 0.2%. That's not me, Mr. Perkins. You may not like my answers, but you at least have to like the answers sometimes provided by the Bank of Canada, Statistics Canada or the Competition Bureau. Those are facts, sir. I'm just referring to established facts that have been done by other agencies.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

It will come as a shock to Canadians, who see grocery inflation up every month, up higher than the inflation prices. Are you telling Canadians that grocery prices are going down?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Sir, it's not me. It's Statistics Canada. Look at the chart, sir. If you don't believe Statistics Canada, then, sir, I guess you might be one of those in Canada.... However, I would say that most Canadians believe Statistics Canada.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Minister, do you understand how inflation works?

[The Chair, Liberal, Kody Blois]

Mr. Perkins, your time is up. I don't know how Mr. Lightbound runs his committee. It must be a little bit harder. However, in this committee, Mr. Perkins, we try to walk that balance.

We're at time, but thank you.

We'll now turn to Mr. Carr for five minutes.

[Ben Carr, Liberal, Winnipeg South Centre, MB]

Thanks very much.

I'll try to invoke some of my friendly Manitoba disposition here, Mr. Chair.

Minister, thank you very much for being here.

I want to go back in my preamble—which may be a bit longer than that of some of my colleagues—to some statistics we have available to us. I've heard my Conservative colleagues from across the way in this committee and in the House talk a lot about food inflation. I want to draw the committee's attention, if I may, to a couple of statistics.

I know you talked about food prices beginning to stabilize around Thanksgiving. Now, I remember Thanksgiving well, because my birthday is in and around there. That would be October. Now, I'm looking at this graph, which is probably similar to the one you have. This is from Statistics Canada and was provided by the Library of Parliament, and then provided to us by the analysts of this committee. It tells us that in the month of October, grocery prices had stabilized substantially since March, May and July, down to about 6%. Now they're down, from the most recent data we have—January 2024—to 4%, which is essentially on par with the consumer price index.

I also hear my colleagues talk a lot about the carbon price and the concern they have about its contributions to food inflation in Canada.

I think, as you mentioned before, Minister, that we have seen a variety of different factors contributing to the cost of living across the world, whether it was pandemic disruption, supply chain management issues or war between Russia and Ukraine, etc.

I'm going to refer back to a chart that I have referred to on a number of occasions in this committee and in the chamber during debate. This comes from 2023 OECD data showing that Canada is essentially on par with the United States in terms of where its position is in the G7, which is tied for second-lowest in the G7 for food price inflation. How is it, I ask, that in a jurisdiction where there is not a price on pollution, the price of food and the inflation related to the cost of food can be on par with those in a jurisdiction where there is one? I have yet to hear my colleagues answer that question adequately. Perhaps it's because they don't want to believe the data.

I'll turn to you, Minister, for comment on that. However, most importantly, I would hope that you comment on.... You'll probably reiterate things you've said before, but I'd love to hear them again. Why do you believe—and is it in relation to actions the Government of Canada has taken—that food prices are lower, that Canada is on par with the United States and that we are starting to see a turnaround and a higher rate of reduction in food prices than we're seeing among allies across the G7 and around the world?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I very much like the question. I think you're right, and I'll also go back to the question before.

Yes, the trend is going in the right direction. Those are the data from Stats Canada. Do we need to do more? Definitely. Are we going to keep fighting? Definitely. Is it easy? No. Is it worth it? Definitely.

It's not only for the Minister of Industry; it's for this committee and all Canadians. Everyone is watching what we're doing.

When I hear the Conservatives criticizing, I almost have in mind, “What did you do during your time?” These are the actions that I have taken in five months: I called the grocery CEOs; I made the most comprehensive reform of competition in Canada's history; we made a record investment in the Office of Consumer Affairs; and we had probably one of the first FPT meetings on consumer affairs. That's why I am saying that when I look at our record, I feel pretty good. Do we need to continue the fight? Definitely.

Are there a number of macro things? I think Mr. Perkins was trying to allude.... I don't know if he was trying to defend some of the profit margins, which would be concerning to most Canadians, but what I am saying is that we understand that it's a complex supply chain. What I am saying is that there is also data that we've seen of a profit margin increase.

There are a lot of macro issues that are going on: the war in Ukraine, coming out of COVID, supply chain issues, droughts in some places where we're growing and animal diseases. We understand that, but my point is that when I talked to the CEOS of the groceries, they said that it's complex. I said, “Let's put the cards on the table.”

To the question from before, are we putting pressure on international food processors? Definitely. Are we pushing them? Definitely. Are we talking to our allies to put the pressure on? Definitely. Is that easy? No. Are we going to continue the fight? Yes.

I think that's what Canadians expect, and they expect us to look at all the tools in the tool box, but I would say that the most important one is the reform of competition. If our Conservative colleagues want to help Canadians, they should vote for the bill that would implement the last fall economic statement, because you have additional measures to make sure that we give more power to the Competition Bureau to investigate the issues they see.

I don't think the best way is to defend the profit margin of large international grocers. I don't know where our Conservative colleague was going with that. I don't think he would find a lot of Canadians very sympathetic to that.

We're fighting for average Canadians who are finding that it's very tough every week when they have to go to the grocery store. They say, “Keep up the fight, sir. We're going to be with you.” I think this is our duty as elected officials, not just as a minister. We know that when we talk to Canadians, it's about affordability, it's about groceries, it's about housing and it's about opportunities.

I wish that what could come out of this committee, Mr. Chair, is that Canadians watching at home—and I'm sure there are many watching—will say, “These people get it. They're working together.”

My plea to colleagues on the Conservative side is to join the fight and be with us to fight for consumers. Don't start trying to defend the profit margin of large international processors. I'm not sure that's a winning argument.

[The Chair, Liberal, Kody Blois]

Thank you, Minister.

Thank you, Mr. Carr. That's our time.

We now have Monsieur Perron.

You have two and a half minutes.