Agriculture Committee on Nov. 20th, 2025

[The Chair, Liberal, Michael Coteau]

I call the meeting to order.

Welcome to meeting number 15 of the House of Commons Standing Committee on Agriculture and Agri-Food.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room, and I believe we may have some folks online.

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I'd like to make a few comments for the benefit of our witnesses and members.

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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 on the implementation of the grocery code of conduct.

I'd like to welcome our guests who are joining us here today.

From Costco Wholesale Canada Limited, we have Pietro Nenci, senior vice-president of Canada merchandising. From Empire Company Limited, we have Rob Allsop. From Wal-Mart Canada Corp., we have Rhonda Maines-Corrado, who is the senior vice-president.

Thank you for joining us here today. We appreciate you for taking time from your busy schedule.

Everyone will have five minutes, and then we'll go to our first round of questions. We'll start in here, with our witness who's in the room.

Mr. Nenci, you have five minutes.

[Pietro Nenci, Senior-Vice President, Canada Merchandising, Costco Wholesale Canada Ltd.]

Good afternoon, Mr. Chair and members of the committee. Thank you for inviting Costco to appear before the committee today to discuss the Canadian grocery code of conduct.

My name is Pietro Nenci. I'm the senior vice-president of merchandising for Costco in Canada. I have been involved in conversations relating to the grocery code of conduct, through the Retail Council of Canada, since early discussions. Costco has been actively involved with the industry-wide stakeholder working group on the dispute resolution process and other governance documents since the spring of 2024.

As you know, Costco is a membership club. Our mission is to offer our members the best quality goods and services at the best possible prices through our unique retail business model. We offer limited skus, focus on sales and strive to keep our costs low.

We cannot repeat this message too often. We live by our code of ethics of obeying the law, taking care of our members and employees, respecting our suppliers and rewarding our shareholders.

We echo the message that for Costco to thrive, our suppliers have to thrive. We rely on each other. Canadian suppliers represent 65% of Costco's private label Kirkland Signature sales in Canada. Buying local when we can and where it makes sense is our priority.

We support the principles of the code: transparency, certainty and fair dealing. These principles align with our code of ethics. We continue to work diligently through the working group to finalize the governance rules that will apply to the operation of the grocery code. In particular, there has been a lot of work done by all stakeholders on the dispute resolution process, which is a very important element of the code for Costco. We are optimistic that the stakeholders, working together and through compromise, will shortly find agreement on a few outstanding points.

You asked, will the code of conduct have the effect of decreasing food prices for the consumer? We do not believe it will. It was not designed with that purpose in mind. However, if there is broad industry participation, including retailers, suppliers and wholesalers, large and small, we believe it can succeed in its goal to contribute to a thriving and competitive grocery industry.

We support the principles of the grocery code of conduct and plan to sign on once there is a mutual agreement on the details of its governance.

Thank you.

[The Chair, Liberal, Michael Coteau]

Thank you very much. We appreciate that.

Next, we'll go to Empire Company Limited, online.

Mr. Allsop, please go ahead.

[Rob Allsop, Vice-President National Sourcing and Supplier Engagement, Empire Company Limited]

Thank you and good afternoon, Mr. Chair and members of the committee. Thank you for allowing me the opportunity to be here today.

I'm Rob Allsop, vice-president of national sourcing and supplier engagement at Sobeys Inc.

As a bit of background, I began working at Sobeys 35 years ago as a student, literally pushing carts down the aisle. I've worked in various roles across the organization, with increasing responsibility. I've been very proud to be a part of Sobeys' Canadian family for all these years.

In my current role, I work with our supplier partners every day. I've been closely involved with preparation for the code implementation. Along this path, we've employed a cross-functional team that represents stakeholders across the organization to ensure that all facets of engagement with supplier partners reflect our commitment to fairness and transparency.

Since the beginning of this journey, Sobeys has been a leading voice for the concept, the adoption, and the upcoming implementation of the code. From 2020, when Michael Medline, our then CEO, spoke about the challenging supplier-grocer relationship and called for a code, to the creation of the draft Grocery Supply Code of Practice for Canada, which was launched in 2021, to the present-day grocery code of conduct, we played a leadership role every step of the way. To be clear, we're very proud to have been the first major retailer to sign on this past July.

As we move forward, we're also fortunate, if you heard the latest news, to have our new CEO, Pierre St.-Laurent, now formally announced. He is a veteran of the grocery industry of 30-plus years and is very supportive and committed to the code.

Conducting business fairly, collaboratively and consistently has always been a part of our culture since this company was founded over 100 years ago. The code isn't just a framework; it's a commitment to a stronger, more transparent industry, one where suppliers, retailers and consumers can all thrive together.

We continually work to foster a collaborative relationship with all our supplier partners at Sobeys. It's always been a heightened priority also to invest in our local Canadian suppliers, helping to facilitate their expansion into the larger grocery market.

The pathway to the code implementation has provided an excellent opportunity for us to closely review our policies and ways of working to ensure we're upholding the standards we have for ourselves and also the code.

I have a few notables to share. We assessed and updated our policies where we found improvement opportunities. We created a master framework agreement that serves as the foundation for our partnerships with suppliers. We've developed new resources for suppliers, such as a clean glossary of terms that explains in plain language a lot of the technical terms we use internally every day. We've developed a new supplier resource centre, which houses all our policies in one centralized portal. This web-based platform is a one-stop shop for everything a supplier needs to know about working with us. It will also simplify onboarding for new suppliers. This portal will continue to enhance engagement while also reinforcing the core principles of transparency, predictability and openness.

We've also rolled out a full training and communication refresh plan to ensure that all internal teammates are well equipped as we move forward into January. In addition, we maintain a graduated model for how we work with our local, small, mid-sized, national and global partners. That model allows for local and small suppliers to build their business with us in a simplified way, from Meadow Creek Sausage and Meat in Alberta to the Great Lakes Food Company in Ontario, Une Touche d’Ail in Quebec, and Paradise Bakery in Newfoundland.

We've helped foster growth among our supplier partners, from hyperlocal to national status. We're proud to say that we have over 2,500 local suppliers right here in Canada, and that number continues to grow.

In summary, we'll ensure that the code's best practices continue to be upheld within our organization. We look forward to the ongoing collaboration with the new adjudicator, Karen Proud, and her team. We know the code will provide stability. It's going to create efficiencies, and it will promote investment in the Canadian food industry. That will lead to a stronger supply chain here at home in the months and years to come.

Finally, I'll say again, we're proud to have championed the code from the beginning. We're confident that our current ways of working with suppliers personify the spirit of the code. That said, we're also confident that we will address any issues through engagement, collaboration and a fair and consistent mindset, together with our partners, as we always do.

Thank you for the opportunity to be here today, Mr. Chair and members of the committee.

[The Chair, Liberal, Michael Coteau]

Thank you very much.

We will now go to Walmart for five minutes.

[Rhonda Maines-Corrado, Senior Vice-President, General Counsel and Secretary, Wal-Mart Canada Corp.]

Good afternoon, Mr. Chair and honourable members of the committee.

Thank you for the opportunity to contribute on behalf of Walmart Canada to your important study on the implementation of the grocery code of conduct.

My name is Rhonda Maines-Corrado, and I am the SVP general counsel at Walmart Canada. At Walmart, our mission is straightforward: to help Canadians save money and live better. While this is always important, it becomes even more significant during challenging economic times. Lowering prices for our customers is in our DNA.

This is the mission around which our teams have been coming together for over 30 years. We have over 400 stores serving Canadian families and communities across the country.

This year, Walmart Canada announced a new $6.5-billion investment over the next five years to expand our stores and supply chain, following a $3.5-billion investment announced in 2020. We also support our local communities, and we have raised and donated over $850 million to Canadian charities since 1994, including $83 million in 2024 alone. From coast to coast, our team of about 100,000 associates serves millions of customers every week, delivering on the everyday low prices our customers deserve.

Everyday low prices—or EDLP, as we call them at Walmart—are at the core of everything we do. EDLP are not just a pricing strategy, and they're not a reaction to the times. For Canadian consumers, they mean reliable, consistent access to affordable groceries without needing to wait for a promotion or a sale.

Part of how we deliver these everyday low prices is through collaboration with our suppliers. Walmart Canada has great working relationships with our suppliers, whom we hold in the highest regard. Since 1994, we've purchased billions of dollars' worth of goods from many Canadian suppliers. We work closely with them to help nurture and support their businesses, with the goal of growing together.

Just this summer, we hosted our first Walmart Canada Growth Summit, inviting 120 local suppliers to pitch their products directly to our merchants for a chance to be listed with us. All of these suppliers were invited to list on our online marketplace, and about half of these suppliers are now working closely with us to put their products on our shelves, with the first arriving early next year.

Fairness, transparency and predictability, the same principles that the code seeks to establish, have defined our supplier relationships for the past 30 years.

With regard to the code, let me be clear. Walmart Canada intends to sign on to the code once all outstanding documents have been finalized. We have been actively engaged in the development of these documents, including participating constructively in the industry working group.

At Walmart Canada, our core values set the expectations of how our associates work, in a way that is fair, honest and transparent, to earn the trust of our customers, suppliers and communities.

In conclusion, Walmart Canada is committed to working with this committee, the grocery code office and our supplier partners to ensure that the code achieves its intended objectives. We will continue investing in Canada, supporting local producers and businesses, and delivering value to our customers through everyday low prices. We stand ready to collaborate with policy-makers and industry partners to prioritize affordability and accessibility for Canadians.

Thank you for the opportunity to appear before the committee today. I welcome your questions.

[The Chair, Liberal, Michael Coteau]

Thank you very much.

Before we begin our first round of six minutes, I want to note that filling in for Mr. Bragdon is Mr. Kuruc.

Thank you for being here and joining the committee.

We'll start with the Conservatives for six minutes.

Mr. Barlow.

[John Barlow, Conservative, Foothills, AB]

Thanks, Mr. Chair.

I appreciate all of our witnesses for being here and walking us through, hopefully, what are the final steps of the grocery code of conduct's coming into force.

I have to say, Mr. Nenci, that I'm really surprised at your testimony saying that the grocery code of conduct will not lower grocery prices.

About two years ago at this very time, the now finance minister made a very grand announcement to the press gallery that he was committed to lowering grocery prices by Thanksgiving at that time—Thanksgiving 2023—with five very poignant initiatives. One of those five was the grocery code of conduct, which he promised Canadians would lower food prices.

In fact, we're two years later, and food inflation in Canada is 40% higher than in the United States. We are the only G7 country where food inflation has increased for four straight months, and we have food inflation now 50% higher than the target. I am surprised that the finance minister would make such a claim—that the grocery code of conduct is going to lower food prices—when, clearly, based on your testimony and testimony from other stakeholders, that just isn't the case.

I want you to explain why the government would make a claim that this is going to lower food prices, when it was never intended to do that. There certainly seems to be some disconnect between what the code is and what the government is claiming it will do.

[Pietro Nenci]

The code was made for better practices through different vendor suppliers across Canada. It was never meant to negotiate pricing or talk about pricing. A lot goes beyond price: commodity, labour, freight, tariffs, exchange rates. For us, the code was not meant to be.... It was just to make a level playing field for everybody who works in that industry.

[John Barlow, Conservative, Foothills, AB]

I appreciate that comment. It leads me to my next question, which is for Ms. Maines-Corrado at Walmart.

Ms. Maines-Corrado, I know you weren't here two years ago, but we had the president and CEO of Walmart at that time say there are elements of the grocery code of conduct that could make the playing field unlevel and increase costs on retailers, which would then increase costs on consumers. Would you share Mr. Nenci's opinion that there are no elements of the grocery code of conduct that will lower prices for consumers?

[Rhonda Maines-Corrado]

I agree that the code as it's drafted in final form was not intended to, nor does this setup support impact on pricing. Yes, I agree. It will not impact pricing.

[John Barlow, Conservative, Foothills, AB]

Ms. Maines-Corrado, does Walmart still have concerns? Is one of the reasons you haven't signed on to the grocery code of conduct that there are still concerns that there could be elements of the code that would increase prices on food for consumers, or have those concerns been alleviated in the interim?

[Rhonda Maines-Corrado]

Our concerns were alleviated in the principles of the code, which we agreed to last year. With respect to the remaining documentation, it was the governance and dispute resolution model. We are not of the view, at this stage, that the code will impact pricing. It relates to fairness, transparency and principles about the interactions between suppliers and retailers, not to pricing.

[John Barlow, Conservative, Foothills, AB]

Thank you.

Mr. Allsop, I want to thank you and Empire for signing on to the code, but I also want to ask you the same question.

Would you agree with the assessment of your colleagues that there are no specific elements of the grocery code of conduct that will ensure, in one lever or another, that retailers will be lowering food prices for consumers?

[Rob Allsop]

I do agree with the statements made. Transparency and predictability support a more efficient supply chain. When there are fewer disputes, clearer terms and more stable relationships, that reduces frictional costs over time. It creates a more resilient system that can better manage volatility and keep food moving efficiently. To Canadians, that's the benefit. I agree, there is no direct impact on price.

[John Barlow, Conservative, Foothills, AB]

Thank you.

I'll ask you to build on that a bit, Mr. Nenci, for example.

Once Canadians hear that the grocery code of conduct has been enacted later in January as a result of the communications from the Liberal government, as misleading as they are, that all of a sudden grocery prices are going to start to go down.... Are you concerned as a retailer that, when that doesn't happen in February, March and April, the retailers will be facing the blame as a result of the Liberal government's saying that once the grocery code of conduct was in, you were going to see grocery prices go down?

Who do you think is going to be blamed when that doesn't happen? Even though it is no doing of your own, it is misleading communications directly by the Liberal government.

[Pietro Nenci]

We'll continue to do what we do best every day, try to bring the best possible value and price to our members. What we know about the code—I'm repeating myself—is that it's more about fair play, a level playing field to be fair with everybody and make a more robust industry. At Costco, we strive every day to give the best value to our members. That wholesale club concept works well for us. We believe that trust is still there.

[John Barlow, Conservative, Foothills, AB]

I appreciate that. I think all of us agree that the grocery code of conduct is an important tool.

Clearly, there needs to be some communication and outreach by the Liberal government to inform Canadians that, truly, the grocery code of conduct is not going to lower food prices for consumers; they should come clean with consumers. That's not what this was intended for, and that's not the result they should be seeing, despite the claims by the finance minister.

Thank you.

[The Chair, Liberal, Michael Coteau]

Thank you very much.

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

MP Dandurand, you have the floor.

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

Thank you, Mr. Chair.

It was so interesting to hear those comments about how people should communicate in order to not misinform the population. On that topic, I'd like to have the perspective of some of you about what is driving up—and I know this is probably not your specialty—the price of food in Canada. We've heard many members of the Conservative Party saying that there are hidden taxes that are the major driver of food inflation. I'd like to hear each of your perspectives on that.

[Pietro Nenci]

I want to talk about that, because it's what I did every day for many decades. What drives the price of food? There are a lot of factors.

The first one is the commodity itself: what the product is and how it's grown. Mother Nature changes every year. That's probably the first aspect of the cost of a product.

The second is that there are variables. There's our Canadian dollar. Often we have to buy those commodities in another currency. That also has an effect on the cost of goods. There's the price of transportation and the price of labour—we saw high inflation in the price of labour. When you add all of these things up, it's a big part of the inflation that you've seen lately.

However, there's also deflation in some categories. I'll give you some examples, if these may be pertinent to the committee. Two years ago, we saw the price of olive oil skyrocket, and this year it's plummeting. It's the same thing with canola oil. With a bad crop, the price goes up. With a good crop, the price comes down. It has nothing to do with any committee. It's just that, sometimes, Mother Nature just does its work.

Look at the price of chocolate. When you go to shop for chocolate this fall, you're going to see that it's more expensive than last year. It has nothing to do with any policies: It's just a bad crop in the country producing the cocoa bean. The price of coffee is through the roof these days. The price will come down eventually, but that's a lot of...the aspect of pricing in our food world. I could talk also about small producers. For a good crop, there's pressure on pricing—it goes down—and for a bad crop, prices go up. There are a lot of variables. Mother Nature plays a certain role.

Also, in prepared or processed foods, sugar, flour and all of those ingredients come into play. More than policies, more than everything, I think the commodity market itself.... That's why, every day, we follow those prices very closely, up or down.

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

Thank you very much, Mr. Nenci. Your position probably mirrors that of your colleagues and other grocers. I have limited time, but I would like to thank you for your commitment to the code of conduct. We hear so much about how well you treat your employees. I get the impression that you also have a good relationship with your suppliers.

Mr. Allsop, I'd like to thank Empire for being the first retailer to sign the code of conduct. In fact, it is still the only retailer to have done so to date.

That brings me back to Walmart. Walmart is kind of the source of the code of conduct. A few years ago, IT system problems caused cost increases that would ultimately be passed on to producers. That's what sparked the desire to create a voluntary code of conduct.

Can you tell us where you stand on your commitment to the code of conduct? How close is Walmart to signing on to the code of conduct?

[Rhonda Maines-Corrado]

As I mentioned, Walmart intends to sign onto the code when the documents are finalized. Those documents are now working their way through the approval process, and the final drafts are ones that, I'm confident to say, on January 1 should be very feasible documents for completion.

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

Currently, what kind of costs are shared with producers? What are the fees that Walmart imposes on producers who sell products?

To be a little clearer, I'll go back to the example of IT systems. Are there any other fees that Walmart imposes on agricultural producers in its agreements?

[Rhonda Maines-Corrado]

I'm sorry, but I'm not sure I understand the question.