Agriculture Committee on Oct. 30th, 2025

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Thank you, Mr. Chair.

I thank the witnesses for joining us. I especially thank Mr. Henn and Mr. Rivet for supporting the Canada grocery code.

I'm happy to hear the work is going well and, if I understand correctly, you hope the code of conduct will be implemented in January, as expected.

Mr. Henn, we've previously heard Loblaws express concerns about a possible increase in prices resulting from the implementation of the code of conduct. That was said during the creation of the code, which is now almost complete. Only a few sections need to be finalized. Ultimately, we heard that the code will probably not lead to price increases.

Have your concerns in that regard been addressed?

[Nick Henn]

In 2023, when we came to this committee, we voiced some concerns with the draft of the code that was then in place. As a result of those discussions, the working group got together and took on board some of the comments we had made, and we were very pleased with the changes that were made to the code at that time. As I said, in the middle of last year we were happy to signal our support for that revised code.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Thank you very much.

This demonstrates that the office of the grocery sector code of conduct was able to take your concerns into consideration and address them. We're almost at the finish line.

Mr. Rivet and Mr. Henn, could you give us an idea of the issues that need to be addressed before December so that everything is ready by January?

[Simon Rivet]

There are only a few issues left to address regarding the dispute resolution mechanism. Several meetings were held this year between retailers and suppliers. We got a lot of work done. There are only a few issues left to resolve in terms of governance.

Obviously, I don't want to negotiate in public, but I can tell you that there are only a few issues left to resolve. As I stated in my opening remarks, I'm very optimistic that we'll all be able to reach an agreement.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Mr. Henn, what do you think?

[Nick Henn]

The committee should understand that when the code was finalized in the summer of last year, we left the governance documents to be finalized later. The process we're going through right now with the industry was expected. It's taken longer than many would have hoped, but that is the nature of a complex industry with everybody having a perspective.

I think we are very close to the finish line, and we should commend the working group for the work that's been done. Both of the other witnesses today are in that working group, and they've done an excellent job trying to get us towards the finish line. I'm very confident that we will be there before the end of the year.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Thank you.

Mr. Taylor, from experience, you're familiar with the UK code of conduct. Some producers expressed concerns about governance or, specifically, the process for filing a complaint. They were concerned that individual complaints could lead to retaliation.

Do you share these concerns? Do you think producers have the capacity and sufficient resources to make a complaint if necessary?

[Mark Taylor]

In terms of producers in Canada, we're supplied by farmers who are represented by Dairy Farmers of Canada, a big dairy company, and farmers who are represented by their local milk boards. We have a good relationship. I guess they would be able to, but I don't see a need for that.

In terms of experience from the U.K. in this regard, the initial code focused only on the largest retailers and the largest manufacturers. That was very deliberate, because it addressed around 85% of the market. There was a positive trickle-down effect on smaller participants in the supply chain, including farmers, who saw greater stability in their relationships with their customers.

One hopes to see that same kind of mechanism in Canada, but, as I said in my testimony, we have many more direct participants involved here.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

I want to get a brief comment. In your opening remarks, you said that it's going to be good for Canadians. Can you talk a bit more about how this is going to be good for Canadians?

[Mark Taylor]

Yes, thank you for that.

While the code doesn't directly impact pricing—it's not designed for that, and it was never designed for that in the U.K. either—the benefits derive from the certainty that contracts will be honoured in full. With that certainty comes the ability to increase investments, so the code will encourage investment in the sector.

The other thing it focuses on—

[The Chair, Liberal, Michael Coteau]

Thank you very much. I have to stop you there. Six minutes have expired.

Mr. Perron, you have six minutes.

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

Thank you, Mr. Chair.

I want to thank the witnesses for joining us. We're grateful to them for sharing their time with us, because we know how busy they are.

Mr. Taylor, I'm going to continue along the same line as Ms. Dandurand.

You just said that lowering prices was never a goal. However, based on what you saw in the UK, were there any repercussions? Do you have any statistics? Did you note any impact?

[Mark Taylor]

There are statistics available from the U.K. showing that during the initial years the code was in operation, there was a positive impact on prices. All prices fell. Whether there is a direct correlation between the two remains to be seen.

What I would say, again, is that there is no direct influence on retail pricing as a result of the code. The benefits are accrued through certainty and increased collaboration among the parties. That increased collaboration can include improved efficiency in our supply chains. That, then, provides the opportunity for a positive impact on consumers. That positive impact could come through innovation, availability of products on shelves and, of course, our ability to pass on some of those benefits in price, should retailers choose to do that.

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

Nevertheless, it's good to know that there can be indirect impacts. That's what I wanted to hear.

You're the only supplier who is testifying on the grocery sector code of conduct study. Do you think that, in the industry in general, people feel comfortable testifying about this subject? Are some people afraid?

[Mark Taylor]

You would have to ask the adjudicator how many people have signed up to the code. I think around 100 manufacturers have already signed on to the code, so that tells us there is support.

We're still in a part of the journey where we're raising the profile of the code and the benefits that can come from it. I think we'll see increased membership as we go forward.

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

I have a final question for you. During an exchange, you mentioned that we'd find out in January whether the lack of mandatory fines or a problematic application would prove problematic.

Do you think that allowing the organization managing the grocery sector code of conduct to publish a list of people who violate the code will have a sufficient impact?

[Mark Taylor]

In my experience—we've been negotiating this for nearly seven years now—retailers and manufacturers share a lot of common ground and a lot of the same objectives. You've heard that from the other panellists today. We collectively want to do the right thing for Canadians. If we focus on continuing to do the right thing for Canadians, we'll overcome—

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

Thank you very much, Mr. Taylor. I apologize for interrupting you, but my time is limited.

I would be remiss if I didn't ask you any questions, Mr. Rivet, especially since you're appearing in person.

The grocery sector code of conduct is an attempt to regulate the relationship between small suppliers and markets in particular.

There's also the issue of administrative fees. Over the summer, people in the horticultural sector, among others, told me that Metro had increased its administrative fees from 3.5% to 6.5%. That's a significant increase; in fact, it's almost double. I get the feeling that fees are being increased before the code comes into effect.

Could you enlighten me in this regard?

[Simon Rivet]

I don't know exactly what fees you're referring to. If I knew, it might help me answer your question.

However, I can assure you that we always deal with our suppliers transparently when it comes to fees. If there are fee increases, they're always justified. We give them plenty of advance notice so that they can prepare for them. These fee increases are often justified by our own cost increases. I'm not aware of a 3–6% fee increase. I don't know where that came from.

Some fees also vary depending on whether they're calculated by the case or by weight. This can have an impact. If someone delivers more goods to us, their fees will be higher because they're based on the number of units.

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

I imagine that this kind of question could be one of the elements discussed in the context of implementing a code.

Would you object to this being discussed in the code, since it's always justified?

[Simon Rivet]

Since we respect the principles of the code, we have no objection to discussing this with our suppliers.

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

Thank you very much.

When the produce growers came to see us, there was a lot of discussion about whether they could be assisted or represented by their association. The argument was that we could avoid too many complaints by going through the association, particularly with regard to problems that were more systemic or generic.

What's your opinion?

[The Chair, Liberal, Michael Coteau]

Give a short answer.

[Simon Rivet]

I'd say that the code is based on individual relationships between retailers and suppliers. Essentially, if there are systemic problems, there are still channels of communication with the adjudicator. The latter has set up communication channels, particularly on their website. However, when it comes to resolving complaints, these are individual complaints.

[The Chair, Liberal, Michael Coteau]

Thank you very much.

It's over to Mr. Epp of the Conservatives now for five minutes.