Agriculture Committee on Feb. 27th, 2024

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

—and we met with the FPT, and the last time it happened was in 2013.

If you look at my record and the record of the Conservative government, I think Canadians at home will see who has been fighting for them.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Barlow.

Thank you, Minister Champagne.

We'll now turn to Ms. Taylor Roy for up to six minutes.

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

Thank you, Mr. Chair.

Minister, thank you for being here today to discuss our progress in the fight against food inflation. I also want to thank you for everything you have done to date to stabilize grocery prices. We know that food inflation has dropped since you met with Canada's major grocery chains.

What do you think that grocers still need to do to maintain the confidence of Canadian consumers who are still concerned about their grocery bills?

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

Ms. Taylor-Roy, I am very pleased to hear you ask a question in French and to answer in that language.

You're right. The curve shows that inflation is slowing down in the grocery sector. That is a fact and the data comes from Statistics Canada. The measures that we have taken are currently affecting the market, but we need to do more. That is why, when I met with grocers for the first time in September 2023, I asked them to work with us to implement measures. We were guided by what is being done in Canada and abroad. We looked at what is being done in France, England and other countries. We told Canadian grocers that we need them to work with the Government of Canada to help us stabilize food prices in the country.

The major grocery chains that appeared before the committee came back with some ideas. However, I did not think that they were enough and I was not satisfied, so I told them that we were going to change the law to give the Competition Bureau more power so that it could get to the bottom of this issue. That is what we did.

When we meet with Canada's major grocery chains, they tell us that the supply chain is complicated and that there are many factors that affect grocery prices. I told them to put their cards on the table and to tell Canadians if it is complicated and then we can decide what to do about it.

We launched the biggest reform of the Competition Act in the past 40 years. What is more, we made record investments in the Office of Consumer Affairs, which is part of my department. We also held a federal-provincial meeting on consumer challenges. Some people told me that this was the first such meeting since Confederation. I would like to believe them, but there have definitely been other meetings since then. I was told that the last such meeting supposedly took place around 2000, and we are in the process of verifying that.

We put pressure on the industry because we think that everyone has a role to play in this. In light of that, we did not just meet with the major grocery chains. We also met with industry representatives, those who have a role to play, including major domestic and foreign stakeholders in Canada's processing industry. We met with them in Ottawa and asked them to be part of the solution.

More recently, I was in discussions with major grocery chains in the United States to see how their market dynamics work. I learned something that this committee should know. A representative from a large American grocery chain that generates about $100 billion in revenue told me that it tried to enter the Canadian market a few years ago, but that it was unable to find any rental space. The chain was looking for 150 rental spaces in Canada, but it was unable to find them. I answered that we had just changed the law to prohibit the use of restrictive clauses in leases between lessors and lessees that prevent competitors from setting up shop near a large grocery chain. The representative confirmed that that was the reason why the chain was unable to enter the Canadian market. We are talking about a company that generates $100 billion in revenue. The representative said that, now that we had changed the law, the chain would again think about coming to Canada because it thinks that Canada is a lucrative market.

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

Thank you very much.

I will now switch to English.

We hear a lot about some of the programs we have in place to combat climate change. The articles I've read and the people I've spoken to have said that climate change is actually a major factor in food price inflation. I'm wondering if you've heard the same.

This is one of the big challenges we are facing, and we are doing the responsible things by taking care of Canadians who need help the most with grocery prices through grocery rebates, through the Canada workers benefits, and through other programs that are trying to make sure that people can afford groceries, but at the same time we're protecting the future of our country, our workers, our children and our farmers. Quite frankly, it's to ensure we fight climate change.

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

You put it in the best possible way. Obviously, Canadians want us to fight climate change. They realize this is an existential issue for them and for their children and grandchildren, and there's no doubt about that.

At the same time, Canadians understand it's a very complex supply chain. What is driving prices up? You have animal disease. You have droughts in certain growing regions. You have higher input costs. There's the war in Ukraine. We've seen labour shortages. As for profit margins over the last five years, just look at the profit margins of some of the largest grocers in the country. There are a number of factors.

The reason I think the role of the committee and the grocery market study was so important was to put light on that. I keep saying that if it's complex and complicated, just tell Canadians. I trust Canadians. They will understand that. As government and Parliament, we will take action to make sure we do everything we can to help stabilize prices in Canada. We're talking with our international partners.

Just look at what the United States did yesterday. The Americans are also fighting for consumers. They're looking at competition. The biggest gift we can give the market will be around competition and the code of conduct. This is what we heard loud and clear from market participants, especially the independent grocers, who said, “We need to reform competition. We need a grocery code of conduct. Let us compete, and then we'll be able to better serve.” Competition means more choice and more innovation, and that translates to better prices.

It's true in Australia and New Zealand. It's true in markets around the world. That's what we're looking at.

[The Chair, Liberal, Kody Blois]

Thank you, Minister. Thank you, Ms. Taylor Roy.

Mr. Perron, you have six minutes.

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

Thank you, Mr. Chair.

Minister, thank you for being here and thank you to those who accompanied you. We appreciate you taking the time.

I was pleasantly surprised to hear you say that you were not satisfied with the meeting that you had with the five CEOs. As you said, since nothing came out of that meeting, something else needs to be done. Did I understand correctly that not much came out of that meeting?

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

I don't think I would say that.

That meeting was a wake-up call for grocers. It was the first time that Canada's five major grocery chains had to answer for their actions before a minister in Ottawa. The meeting lasted two hours. You can ask Mr. Charlebois, who was with me at the meeting, but the tone changed. I told the grocers that I was not speaking on behalf of the Prime Minister but on behalf of all 40 million Canadians. Canadians are the ones asking them to take action. Some grocers did so, but, personally, I am not satisfied with what has been done. That is why I told them that the government was going to take other measures that would impact them. They have seen the consequences of the amendments to the law. Grocers know that we are willing to do more.

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

Minister, they appeared before the committee last spring, before you asked them to meet in Ottawa, so they had been to the Hill before.

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

That's true, but they had never met with an industry minister before.

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

I agree.

I am pleased to see that we agree on the fact that the results were insufficient. We had access to documents that we, unfortunately, cannot discuss, but we agree on one thing: There was not much in there. I am glad that you recognized that.

You said that the meeting was a wake-up call for these grocers. Don't you want to meet with Walmart and Loblaws again to find out why they don't want to sign on to the grocery code of conduct? We wrote a letter. The committee did its part. Perhaps it would be more effective if the request came from you. I think that's a good idea. What do you think?

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

I'm glad you're here, Mr. Perron. You represent one of the ridings next to mine. I'm pleased to talk to a colleague and a friend. Agriculture is especially important to our two ridings.

I've spoken to the grocers since the meeting. You know me. I'm not one to let things go. Many initiatives have been taken. In fact, I would like to acknowledge the Quebec minister, Mr. Lamontagne, who did a lot of the work. Minister Bibeau, who served before Minister MacAulay, worked on it too. This work was done over two years, which shows how important the grocery code of conduct is. I assure you that we will continue to exert pressure on Loblaws and Walmart. Personally, I think that this code is vital for Canada.

One way or another, there will be a code of conduct. If grocers sign on to it voluntarily, then that would be a good thing and that is what we would like to see. If some decide not to, then we will be obligated to take action to ensure—

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

Sorry to cut you off, but I don't have much time. Yes, we know each other, but not very well. My job is to ask you questions. That is what we are here for.

We are talking about competition. I listened carefully to the answers that you gave to questions from previous speakers. You said that this doesn't make any sense and that more competition is needed. We agree on that, and the Bloc Québécois supported Bill C-56. However, representatives from the Competition Bureau recently appeared before the committee and they told us that Bill C-56 is not enough. They explained that the bill is missing certain measures when it comes to proving that a merger will not harm competition, implementing better standards of repair and so on. Do we agree that more work needs to be done and that we need to avoid being negligent?

I really liked your document with the list of grocery store mergers and acquisitions. I don't want to be impolite, but this shows me that we have been negligent in this sector. How did all of these mergers and acquisitions get approved? When I spoke to the people from the Competition Bureau, they told me that the government should have stopped more of these from happening.

When it comes to another sector that falls under your department, the Competition Bureau representatives told me that the bureau advised against the Shaw-Rogers merger but that the Competition Tribunal went ahead and approved it anyway. The government is putting on a good show with the grocery sector by saying that it wants to take grocers to task and help people, but why then it is allowing similar negligence to happen in another sector at the same time? What is happening? Do changes need to be made to the Competition Tribunal?

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

Thank you for your very relevant question.

The reform of the Competition Act is a three-pronged process, which began with the 2022 budget. Second, there was an update in Bill C-56 and, third, other measures are set out in Bill C-59. It has been said that this is the biggest reform in the past 40 years, since the Competition Act was passed. This law needed to be modernized. For example, under the old version of the act, witnesses could not be subpoenaed. When the committee and people saw that there was a study without—

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

Minister, I would like to you to tell me about the tribunal because my time is almost up.

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

The tribunal depends on the legislative powers given to the Competition Bureau.

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

That is what we do.

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

That is its role. By looking at all of you, I know that, when it comes to competition, the legacy that we are going to leave to future generations will be to give teeth to the Competition Bureau. When we invested $90 million to—

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

Give us some proposals, Minister, and we will be there to work with you.

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

We have made a proposal: Bill C-59. I see your colleagues smiling, and I will take that as a sign that they will support this bill.

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

I have about 40 seconds left. We will have to come back to this later.

We all agree that the grocery code of conduct is necessary. You saw the letter from the committee in that regard. In your introduction, you mentioned my name and spoke about jurisdictions. What steps are you taking? Will you commit before the committee to do this the right way? Obviously, we want everyone's jurisdictions to be respected in this. You understand our role.

What commitment can you make to us today in that regard?

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

We want a grocery code of conduct. We commit to continue to move in that direction. Of course, we want to do things right. We are in contact with our colleagues in Quebec. That is why the federal-provincial-territorial meeting was so important. The last time such a meeting was held was somewhere around 2010 or 2015. It had been a long time since there was one. We relaunched this process.

We have a lot to learn from Quebec. I'm sorry for taking a bit more time, but I know that what I have to say will interest you. Did you know that only in Quebec does the law require a price per unit? That is not the case across the country. I learned that as a consumer, and I was very surprised. Quebec is therefore a leader, just as it is with its Consumer Protection Act. With our partners, we want to transmit that culture to different jurisdictions in the country.

[The Chair, Liberal, Kody Blois]

Thank you very much, Minister.

Thank you, Mr. Perron.

I will now turn the time over to Mr. MacGregor for six minutes, please.

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

Thank you, Chair.

Welcome to the committee, Minister.

If you look back over the last number of years, especially since the pandemic in 2020 and over this period of instability, you see that many corporate sectors involved in the food supply chain, whether it's oil and gas or fertilizer or the grocery companies, have seen record profits. Many of the high prices that Canadians are paying for food these days have gone a long way to padding corporate bank accounts.

Canadians would look at the graph you just held up, Minister, and I think they would still see a failure. You may show a trend line in decreasing inflation, but the fact is that Canadians are still paying higher prices for food, and many families are at a breaking point. I guess the question many have in their mind is this: With all of the powers that you command as a minister, why is your plan still failing after all this time?