Agriculture Committee on Oct. 30th, 2025

[The Chair, Liberal, Michael Coteau]

Thank you so much.

I want to take this opportunity to thank all the witnesses today for taking time to join us online and in person.

We will suspend for about five minutes so we can change panels.

[The Chair, Liberal, Michael Coteau]

I call the meeting back to order.

I'd like to make a few comments for the benefit of our witnesses. Please wait until I recognize you by name before speaking. For those participating by teleconference, click on the microphone icon to activate your mic and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen, you can select the appropriate channel for interpretation: floor, English or French. For those in the room, you can use your earpiece and select the desired channel. I remind you that all comments should go through the chair.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, the committee is resuming its study on the update to the implementation of the grocery code of conduct.

I'd now like to welcome our witnesses. We have, from the Canadian Federation of Independent Grocers, Gary Sands; from the Ontario Fruit and Vegetable Growers' Association, Gordon Stock; and from the Retail Council of Canada, Diane Brisebois. I'd like to welcome each of you to our committee. Thank you for taking time from your busy day to join us.

We start with Ms. Brisebois for five minutes, please.

[Diane Brisebois, Past President and Chief Executive Officer, Retail Council of Canada]

Thank you, Mr. Chair and committee members.

My name is Diane Brisebois, and I am the past president of the Retail Council of Canada, RCC, serving as president for the past 30 years, until this September.

RCC is an industry association that represents retailers of all sizes and types across Canada. Its membership, including grocery retailers, accounts for more than 75% of all retail sales in the country, excluding auto and gas. RCC, and I as its representative, have been serving on the board of the grocery code of conduct since its inception, representing large-format grocery retailers. RCC and the associations representing the different segments of the grocery supply chain, which serve on the board, have been working diligently over the past four years or more to design a code based on a reciprocal framework for fair dealing, and one that establishes clear standards for commercial relationships within the grocery sector in Canada.

The RCC grocery retail members have been engaged in the development of the code, as well as the establishment of the code office. They have been actively participating in its industry working groups with other stakeholders, and are participating and assisting in finalizing the dispute resolution management process—referred to as the DRMP, as you heard from the witnesses an hour ago.

As indicated when the president of the grocery code office, Ms. Karen Proud, appeared before this committee, the development of the DRMP has been challenging, as the industry stakeholders are developing it from scratch to ensure that it is fair and accessible to all. Balancing these realities, while ensuring that the DRMP is credible, practical and accessible to all, is a priority for our RCC members. As Ms. Proud noted, we are close, and we believe we have most of the tools needed to move forward.

Going forward, the priority for our members and all players in the supply chain is to finalize the dispute resolution mechanism process, or DRMP. That is an important step before the code is implemented on January 1, 2026 and for the office of the grocery sector code of conduct to launch its official member recruitment campaign.

Developing the DRMP was a difficult but essential process, as you know. Our members and various other stakeholders have to create a dispute resolution mechanism from scratch that is fair and accessible, ensuring that the process is fully consistent with the provisions of the code developed by the industry. I can assure you that we will get there.

RCC grocery retail members would like to thank the provincial, territorial and federal ministers for their support and for encouraging the industry to work together to develop the code, which will serve to strengthen the sector and contribute to a thriving and competitive grocery industry. Our members would also like to thank this committee for its interest and ongoing attention to the grocery code of conduct. Having a full-time president and adjudicator in place will assist the committee in monitoring the industry's progress, and we have no doubt that Ms. Proud will be available, when needed, to provide updates and report back to the committee honestly and transparently.

Mr. Chair, members of the committee, the president and adjudicator of the office of the grocery sector code of conduct is committed to overseeing the operation of the code on the ground and reporting fairly and transparently on what is working well and what needs to be adjusted. Improvement is ongoing, and it is important for all of our members.

Thank you so very much for inviting us today. I look forward to your questions.

[The Chair, Liberal, Michael Coteau]

Thank you very much. We appreciate the presentation.

Next, I'll go to Mr. Stock.

[Gordon Stock, Senior Policy and Government Relations Advisor, Ontario Fruit and Vegetable Growers' Association]

Chair and honourable members, thank you for the opportunity to speak today.

I'm Gordon Stock. I'm with the Ontario Fruit and Vegetable Growers' Association, representing 3,500 farms that grow fruits and vegetables in the province of Ontario—approximately 40% of Canada's production.

I am here today to share why it is imperative that Canada have a strong and reliable grocery code of conduct, one of many tools needed to support a robust food system. In recent weeks, I have heard about what the code was intended to do and what it was never intended to do. There is what is needed, but there is also what is possible.

First, congratulations to those who built the code. The commitment is commendable, but the work must continue. Encouraging transparency in agreements, creating avenues for dispute resolution and discouraging punitive actions are all positive and, hopefully, meaningful aspects.

It is important to recognize that the code will influence various grocery items differently. Risks are greater for produce than for dry or processed goods. For example, once the broccoli, cucumber or strawberry has been harvested, the clock starts. It must make it to a consumer quickly or it is waste. The grower—who has been investing in the development of that crop through purchases of fertilizer, seed and specialized equipment, as well as through wages and meeting food safety and labour requirements—has limited market options for their crop, especially with the consolidated retail landscape in Canada. Assuming the grower can get an agreement with a retail chain, the terms will not necessarily be a negotiation. It's generally a “take it or leave it” scenario. The price, payment terms, marketing and rejection fee structures will not be negotiable. If the grower chooses not to proceed, the retailer will fill their needs from other sources, including imports, even if it is the local peak growing season. Because the product is perishable and the grower has expenses to pay, they sell to the retailer, even if it means minimal revenue to cover historically high production costs and service debt.

I acknowledge that the code, as designed, is intended to support fair and equitable dealing, not define what fair practices are or guarantee revenue for the farm. However, the nature of fruit and vegetable production requires more consideration. The risks growers face are significant and increasing. It is not just about the perishable nature of the products but also about the ability of farms to negotiate fair deals without having the power of a multinational. We are concerned about the long-term consequences of a system that does not inherently prioritize the production of fruits and vegetables in Canada. Growers will reach a breaking point, reducing investment in their farms and contracting the acres dedicated to growing high-value fruits and vegetables. Some will shift production to simpler-to-grow and simpler-to-market crops with lower economic value, while others may exit entirely.

This is a risk to Canada's economy and food security, but it also creates reliance on produce imports from foreign countries, where consumers have less control over factors like labour and environmental standards. It would be shameful if we didn't address these challenges before we lose this critical homegrown capacity. Not all of these issues are caused by the supplier-retailer relationship, although it is highly impactful. Government policies are also at play. The future of Canadian fruit and vegetable production relies on a market environment that individual farmers and growers can bank on, encouraging investment, innovation and the next generation of farmers. For the public good, it is imperative that we get the code right in order to create balance and certainty and to strengthen Canada's capacity to feed itself with high-quality produce.

The current code is not everything that may be needed. Despite any shortcomings, however, it is a starting point on which we can and should build. There must be ongoing commitment among all parties for continuous improvement, and space for industry associations to raise sector-wide concerns. We all have a part to play in prioritizing fruit and vegetable production in Canada—growers, retailers, government and consumers.

The planned 18-month review is a start, but it must go further. Parties must come to the table with the goal to prioritize Canada's ability to produce as many of its own fresh and processed fruits and vegetables as possible, as well as a commitment to fair business practices and transparency along the chain.

Thank you for the time to present today and share our perspectives.

[The Chair, Liberal, Michael Coteau]

Thank you so much.

Next, we'll go to Mr. Sands.

Mr. Sands, it's nice to see you again. You have five minutes.

[Gary Sands, Senior Vice-President, Canadian Federation of Independent Grocers]

It's nice to see you again, Mr. Chair.

I would like to thank the committee for the invitation to appear before you today to provide the perspective of the Canadian Federation of Independent Grocers on the current status of our grocery code.

CFIG was the first association in Canada to call for a grocery code of conduct. We did so recognizing there was a need to address some market practices that had become more common in the industry.

I also want to stress that we advocated for a grocery code of conduct, not a retailer code of conduct. Independent grocers know full well that the principles we have agreed to in the code need to apply to all stakeholders. We are proud of the fact that reciprocity is one of the pillars on which our made-in-Canada code rests.

Some in the industry seem to forget that when the FPT ministers of agriculture and food established the steering committee to develop a code, two issues were identified. I would invite those people to reread that FPT communiqué.

One issue of concern was, yes, around some of the practices of retail chains, but it was also the need to recognize the importance of fair supply to independents, particularly in many rural and remote areas of the country, where often it is just the independent grocer that is providing food to those communities. As such, food security for many parts of Canada is linked to ensuring the continued viability of Canada's 6,900 independent grocers. We believe the provisions of the code that have been developed will put independent grocers and all industry stakeholders in a better position to compete in the months and years ahead.

CFIG also recognizes that this is a voluntary code; it's not regulated. As such, it cannot and should not wade into the area of negotiations on pricing, for example. We also have to ensure that it is not overly prescriptive. For a principles-based code, we cannot come up with language that covers every scenario or situation that could possibly, maybe, arise.

After four years, a lot of time, resources and commitment have gotten us to where we are today. We now have a balanced code. We have a code adjudicator. Stakeholders are signing up as members. We are now just waiting to finalize the dispute resolution process. Some may want to hold the code hostage, unless they obtain their concept of code perfection, but what is perfect to some may certainly not be to others.

It is time to let the market test the code within the context of having a very able and astute code adjudicator in place, who will be the first to call out any systemic issues that need to be addressed. I can assure you that, as the association that was the first to call for a code, we also would call out any systemic issues that we see in the market.

Let all of us, industry and governments, now see how what has been built actually works. If something is not working, industry will have to change it. If we cannot manage that process, then industry will know that governments will have to manage it for us.

Thank you again for your time today.

[The Chair, Liberal, Michael Coteau]

Thank you very much, Mr. Sands.

First, we'll go to the Conservatives for six minutes.

Mr. Gourde, go ahead.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you, Mr. Chair.

My first question is for Ms. Brisebois.

First of all, hats off to you for your long career.

[Diane Brisebois]

Thank you.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Do you think the code of conduct will make the grocery basket more affordable for consumers?

[Diane Brisebois]

I will repeat what was said an hour ago with the three previous witnesses.

The code does not refer to prices. It does not give participants the opportunity to negotiate prices. That is not its purpose.

On the other hand, if it improves working relationships, we think there will be benefits for consumers in terms of investments, new products and so forth.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

As to the dispute resolution mechanism, are there any disputes that you have seen throughout your career that were detrimental to parties or that were problematic for the sector?

[Diane Brisebois]

It's hard to give examples simply because they are confidential negotiations. That is reflected in the code.

At the same time, I can say that the big problem in many cases—and the reason we are very proud to have Ms. Proud as our president—is the lack of transparency and communication, and the lack of a code or framework for the various stakeholders to meet in a safe place to discuss existing problems. I hope that gives you a better understanding of the process.

There are always misunderstandings and problems because there are many stakeholders, but the code gives stakeholders the opportunity to meet to try to resolve their labour relations problems.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

You mentioned a lack of transparency. Is it possible that the biggest buyers do not always offer the same prices and conditions to their suppliers? That can be frustrating for producers when two neighbours do not necessarily get the same price for large volumes of carrots, for example. One might survive, while the other one might disappear over time.

Is that what you mean by transparency, fairness among all stakeholders?

[Diane Brisebois]

Transparency does not mean publicly announcing a product price that is negotiated with a stakeholder. It is actually very important to suppliers and retailers that those negotiations remain confidential.

Transparency refers primarily to ensuring that producers and small companies really understand the rules of the game. That means that the rules of the game are clear, the contracts are clear, and there is a process for discussing misunderstandings.

That is why transparency is so important.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Ms. Brisebois, I know that some big chains have in the past rented out shelves to their best producers, charging them $2,500 per month, for instance, for four feet of shelf space to sell their products.

Is that still happening?

[Diane Brisebois]

I can't answer because I don't have that information.

I really encourage you to talk to the various stakeholders about that. Mr. Rivet and Mr. Henn were very open and would be pleased to answer that question.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you, Ms. Brisebois.

My next question is for Mr. Stock, from the Ontario Fruit and Vegetable Growers' Association.

In your remarks, you said you are hopeful that the code will give producers more stability. That was music to my ears because that is what I am really hoping for.

Why do you place so much confidence in the code? Is it for dispute resolution? Does it give you a power balance?

[Gordon Stock]

To clarify, I think I should say that we hope it provides those kinds of benefits.

In 2020, when there were a number of retailers bringing in new fees and so on, we also started calling for a code. I think just the fact that we have a code that we can work from is an important step and milestone, but I want to be cautious in saying that I am certain that there will be the benefits that my members were looking for in what it has come up with. I don't want to discourage what's been created, and I don't want to dispute it, but I'm not prepared at this point to say, “Yes, it's guaranteed that there will be benefits from it.” I hope there are. I think there are good signals here.

I think there's a basis on which we can work together, and there's been some talk around trust and building relationships. I think that is core to how this moves forward. Some of the anxiety that you might be hearing from some suppliers around this is from some of the history and some of the practices of the past, which it will take time to rectify and move forward from, but I do believe there is an opportunity here.

[The Chair, Liberal, Michael Coteau]

Thank you very much.

Next, we'll go to the Liberals for six minutes.

Mr. Connors, you have the floor.

[Paul Connors, Liberal, Avalon, NL]

Thank you.

Welcome to the witnesses.

Mr. Sands, I was recently speaking to one of your members. Atlantic Grocery Distributors is one of the larger independent grocers in Newfoundland and probably in Atlantic Canada, and they are looking forward to the implementation of the code of conduct.

One thing you mentioned is that the code should bring fairer supply to independents. Can you elaborate on that and give us a bit more detail on what you mean by that?

[Gary Sands]

Thank you for the question.

Also, I want to tell you that we very much appreciate the fact that you took time to meet with Atlantic Grocery Distributors. I got very positive feedback from your meeting with them, and I would be remiss if I didn't extend our appreciation for your taking the time to talk to them, so thank you for that.

On the issue of fair supply, that is an extremely important issue to independent grocers. We have seen that when a product is in high demand or in low supply, independents sometimes don't get a fair allocation of that. There have been examples. I've been with the independents for 25 years, and there have been examples where a supplier will tell an independent grocer that they don't have any more of a product—I won't pick an example—and then the independent will notice that the same product is going on sale at a retail chain competitor. I'm not pointing fingers at anyone. I'm just saying that those kinds of things can't continue, and the code addresses that. The code will require suppliers to take into account their orders from all of their customers, so it's just not something that we anticipate will continue.

I think parts of the discussions we had about this issue while we were developing the code sensitized everyone to the issue. I've heard a positive reaction from suppliers and from the retail chains. No one wants to see that kind of thing happen. We're all Canadians, and we want to ensure there is food security in all of the country. That's why we're feeling very positive that we've been listened to and that those elements have been incorporated into the code.

[Paul Connors, Liberal, Avalon, NL]

Thank you very much.

When I was talking to Atlantic Grocery Distributors, one of the things we discussed was how they supply to rural areas of Newfoundland, where there are no larger chains.

Can you talk a bit about this? If your members supply to rural parts of Canada, how could a code of conduct help rural parts of Canada?

[Gary Sands]

Again, there are so many parts of Canada—rural and remote communities—where we're the only grocery store in that community, so the ability of that independent grocer to survive is very much linked to food security for those communities. Atlantic Grocery Distributors is a good example. They supply a myriad of rural and remote communities in Newfoundland and Labrador.

Again, we feel confident that the principles that the industry itself has accepted and has adopted in the code are going to go a long way to addressing our concerns. I think that if you listen to what Karen Proud, our adjudicator, said when she was before the committee, that is one of the areas that she has been talking about and has been raising with industry, and this is something she will be paying attention to. We think that's a very good signal for the entire industry.