Agriculture Committee on Oct. 20th, 2025

[Patrice Léger Bourgoin, General Manager, Association des producteurs maraîchers du Québec]

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

We're seeing a number of market failures right now. Producers always have to deal with structural asymmetry. The five major retailers are taking up nearly 80% of the food market in Quebec. They have an inordinate balance of power, which makes it possible to exert constant and harmful pressure on produce growers. Keep in mind that those are family businesses that sell only perishable products, often with very short shelf lives. As a result, produce growers are condemned to being price-takers and accepting the terms offered without being able to discuss or even negotiate.

Even today, despite the years it took to implement the code of conduct, the problems commonly reported by producers persist.

Retailers' insistence on undervaluing production costs is putting continued downward pressure on prices. Increases in administrative fees of all kinds are automatically deducted from produce growers' bills. A lack of certainty and transparency around procurement policies prevents producers from making informed financial decisions. There are also questionable behaviours, such as fees charged to give a produce farmer permission to unload their truck in a large chain's warehouse, late cancellation of orders, or fines imposed for alleged offences that haven't been substantiated.

The dynamic imposed by retailers isn't sustainable. It enables big chains to transfer the costs, risks and uncertainty to produce growers. It jeopardizes the long-term financial viability of vegetable farms. That is evidenced by the fact that the net profit of fruit and vegetable companies has declined since 2015. That means that expenses have risen much faster than revenues during that period.

In this context, the grocery sector code of conduct is key. We need it. It's essential for starting a movement that won't correct the structural asymmetry I was talking about earlier, but simply mitigate it. However, the major chains will have to act in good faith by agreeing to voluntarily and willingly submit to the provisions of the code, as well as to the dispute resolution process.

[Catherine Lefebvre, President, Association des producteurs maraîchers du Québec]

As president of the Association des producteurs maraîchers du Québec, I would like to reiterate our support for the grocery sector code of conduct, which, for us, is essential.

Mr. Léger Bourgoin told you about the major trends that are harmful to producers. Let me tell you about real-life situations, experienced this summer, that make this code a necessity.

A producer called me in tears because a major chain was threatening him with reprisals, since the drought conditions in Quebec meant that he was unable to deliver the volumes that met the technical specifications. The same major chain had substantially increased its administrative costs, which had nearly doubled for some producers. I requested a meeting with the chain, which refused to meet with me under the vague pretext of an issue related to the Competition Act.

Just a few days ago, another major chain asked producers to guarantee farm gate prices and sales volumes for the next two years. That request just doesn't make sense. Produce growers don't have an assembly line where vegetables are assembled in a closed circuit. They work with living things, in fields that are fully exposed to unpredictable weather. Current geopolitical issues are also having a direct impact on input prices. Imposing that kind of approach forces farms to take unreasonable financial risks.

In its request, the same major chain also asked the produce growers concerned to share highly confidential information, such as their sales figures and the identities of the large chain's three main competitors with whom the produce growers do business. By the way, all the directives stated that any form of communication about those directives with other people, including with employees in the chain, was prohibited, or else the supplier would receive a negative evaluation.

In conclusion, family-run vegetable businesses can no longer operate in this toxic business climate. We aren't expecting the major chains to show a genuine interest in changing their ways. We know that the code won't have shark teeth, but it also shouldn't be a goldfish.

For us, four things are non-negotiable. First, producer associations have to be given the opportunity to protect their members by filing a formal complaint on behalf of their members regarding a systemic issue. Second, the complaint process has to be transparent: The decision and the remediation plan adopted have to be made public. Major chains also cannot be able to escape the filing of a complaint and the dispute resolution process in any way. Third, a report has to be made public no later than September 1, 2027, with an update on the first 18 months of the code's implementation and the progress made toward improving relations between major chains and suppliers.

[The Chair, Liberal, Michael Coteau]

Thank you.

Next, we go to Mr. Graydon for five minutes.

[Michael Graydon, Chief Executive Officer, Food, Health & Consumer Products of Canada]

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

I speak to you as the CEO of Food, Health and Consumer Products of Canada and also in my role as chair of the board for the Office of the Grocery Sector Code of Conduct.

Over the past nine years with FHCP, I've been a consistent advocate for the creation of a grocery code. I've dedicated time and energy to advancing this work, from serving on the original steering committee and helping lead the development of the actual code to supporting its governance as part of the board of directors. This has been a long and complex process. It's been four years since the federal government publicly backed the need for a code and, throughout that time, we've appreciated the support of multiple ministers of agriculture and their provincial counterparts. I also want to thank this committee for its steady backing, which has been key to helping move this initiative forward.

Let me be clear about what we've accomplished and what remains. We have successfully established the office and appointed an exceptional leader, Karen Proud, as our first code office president and adjudicator. Karen has implemented a meticulous and thorough process, laying a stable foundation for the office in a very remarkable and short period of time.

The code of conduct provisions, the core of this entire initiative, are done. They took three years of negotiation, compromise and collaboration. They represent the heart of the code and set the framework for how suppliers and retailers will engage going forward. Everything else from a governance perspective—the operating rules, the bylaws and the forthcoming dispute resolution process—exists to support and enable the code provisions. That's why it's important to view what's left in perspective.

We are in the final five kilometres of a 40-kilometre run. The heavy lifting has been accomplished. The final piece is the dispute resolution management process, or DRMP, and discussions on that are ongoing. Importantly, the code itself informs the DRMP, not the other way around. The DRMP cannot be used to rewrite or undermine what has already been agreed upon in the code.

I remain confident that we will reach a workable conclusion. Our adjudicator, Karen Proud, is actively engaged and, if she determines that the proposed DRMP mechanism equips her to fulfill her responsibilities and if parties can find agreement, I think we have a clear path forward.

The voluntary nature of the code isn't easy. Every stakeholder has to make their own decision to opt in, and they will do so only if they believe the framework is sound. Perspectives differ sharply; some large retailers remain skeptical about the need for a code, while the supplier community has been unified in its support. This gap in outlook, compounded by a lack of trust, has made it tempting for some parties to attempt to script solutions for every possible scenario. While the code was designed to be principle-based, there's been pressure to make the DRMP more prescriptive than originally intended. That's where the friction lies now, not in the code itself, but in the dispute process.

Despite these challenges, momentum continues to be on our side, with almost 100 companies already registered. That list continues to grow every day. That sends a strong signal of confidence from across the stakeholder base. We've worked together to complete the most difficult part, the code of conduct provisions themselves. I'm encouraged by the progress we've made and confident that, with a more balanced and pragmatic approach to finalizing the DRMP, we can take this final step. If we stay focused and collaborative, I believe we will be ready to implement the code by January 2026 and begin delivering the positive change the industry needs.

Thank you for your time. I look forward to your questions.

[The Chair, Liberal, Michael Coteau]

Thank you very much.

Now we'll go to the Fruit and Vegetable Growers of Canada online.

Sir, you have five minutes.

[Massimo Bergamini, Executive Director, Fruit and Vegetable Growers of Canada]

Mr. Chair and members of the committee, thank you for agreeing to study this issue, which is extremely important for our sector.

My name is Massimo Bergamini, and I am the executive director of the Fruit and Vegetable Growers of Canada. Through our 80-plus members, FVGC represents growers across the country, which are producing more than 120 different crops on over 14,000 farms.

My comments will focus on a fundamental flaw in the design of the grocery code of conduct and offer what we believe is a simple and practical solution.

Let me begin by stating the obvious: Growers want a fair, competitive and transparent marketplace. In theory, the grocery code of conduct and the office that administers it represent an important step toward that goal. In practice, however, it may be another matter.

The problem is simple. The code's dispute resolution architecture relies on individual suppliers bringing individual complaints about retailer conduct. On its face, this may look reasonable. In practice, however, it may be unworkable.

Canada's grocery supply chain is vast and complex. Many of the practices deemed problematic by the growers we represent are systemic and affect dozens or hundreds of growers at once, yet the current process asks each grower to, one at a time, invest scarce time and money to bring a complaint and to do so, as my colleagues from APMQ mentioned, under the shadow of potential commercial retaliation.

Two fundamental factors not addressed in the design phase make the current model problematic.

The first is capacity. Let's start with growers. Most growers do not have legal teams to do their research or to represent them. Most growers operate on tight margins and spend more time in the field than they do in the office. In these circumstances, pursuing an individual claim risks being costly and time-consuming. Given the toothless nature of a voluntary code and the fact that it remains unproven, the results risk being hypothetical at best.

Now let's look at the office. The office itself is small, with few staff and limited resources. If many growers filed one-off claims, it could quickly be overwhelmed.

The second factor—and this remains an uncomfortable fact of life given the economic power imbalance that exists—is that growers fear retaliation. We believe that this alone will silence complaints and reduce and limit participation.

This leads us to the following conclusion: Unless the issue at hand is one of commercial survival for a grower, the rational response for most will simply be to go along to get along. If these design flaws remain unaddressed, the result will be either a clogged system or an underused one, falling well short of Canadians' expectations and those of this committee and Parliament at the time of the inception of the code two years ago.

The practical fix is straightforward. Allow credible producer associations to file representative systemic complaints on behalf of affected members. Think of it like a kind of class action suit. Associations can aggregate and anonymize data, present patterns instead of anecdotes and bear some of the legal investigative costs that an individual grower cannot.

This reduces the risk to growers and improves evidence quality, and—this is important given the current business model—it lets the office triage and investigate a manageable number of high-value systemic cases, rather than potentially hundreds of small, repetitive ones.

Representative complaints are not a radical idea. They are a pragmatic design choice that would align the code's operational model with the realities of scale and market power. They also create efficiencies, fewer files, richer evidence and remedies that can apply across a class of suppliers rather than to a single grower or a single farm.

Our ask of this committee is simple. Support changes to the code's operating rules and bylaws to explicitly allow registered producer associations to bring representative complaints under clear governance and verification rules to be developed.

If we want the code to be more than a public relations instrument and if we want it to actually protect growers and improve supply chain predictability, transparency and fair dealing, we must match its procedures and operating requirements to the on-the-ground realities.

[The Chair, Liberal, Michael Coteau]

Okay, sir, I'm going to have to stop you there. You're over five minutes. Thank you very much.

We'll go to the Conservatives for five minutes.

Mr. Epp, you have five minutes.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Mr. Chair.

Thank you to all three parties for appearing here today.

I'm going to begin with the Association des producteurs maraîchers du Québec. I'm working on my French.

As I listened to your testimony, I heard, in my mind, two different issues relative to the code. There is, I think, the one the code was designed to address, where there's a contract in place and breaches of that contract—fines that were not addressed in the contract and things like that—and the negotiation of the contract itself, whether that provided a fair return or not.

My understanding is that the code was not designed to provide a fair return to producers, as much as, coming from producers, I'd like to see that. That is not the goal of the code; it's to address the other violations of that agreement after an agreement is in place.

Would you agree with that?

[Patrice Léger Bourgoin]

Yes, absolutely.

The purpose of the office of the grocery sector code of conduct isn't to interfere in a contractual relationship between a major chain and a produce grower. When money is tied to the value of the goods sold, we have absolutely nothing to do with it, as Ms. Proud said so clearly.

However, in a case like the one raised by Ms. Lefebvre, where a major chain asks producers to submit prices two years in advance and disclose confidential information, the issue has to be considered as a problem that members of the code of conduct office have to address. That specific kind of situation is a systemic issue, since all Canadian potato, carrot and onion growers are affected. To prevent the office from being inundated with thousands of complaints, as Mr. Bergamini said, associations should have the freedom to represent businesses.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

I want to get a few more questions in.

I'm going to switch to Mr. Graydon.

Notwithstanding what the code is designed for, the reports that I'm getting from both small producers and from $100-million-plus companies and large producers—again, in the hundreds of millions of dollars—is that the behaviour of the retailers, quite frankly, has gotten worse in the last six months with respect to fines and with respect to those things. That's the allegation I've heard.

I'm not stating that is representative of the industry. That's my question for you: Is that representative, that they are pre-positioning themselves going forward? What are you hearing on behalf of your members?

[Michael Graydon]

The conditions we're experiencing right now aren't the greatest. I think there are other issues that are driving it. If you'll remember back to the affordability issues, retailers wore it on their chest in regard to being implicated as the biggest drivers of that. I think the retailers are working very hard to protect themselves from that happening again.

Again, I don't think anything that gets laid out today is grandfathered once the code is implemented. The code takes over at that particular point in time, and if those issues continue to exist, then the code is designed to hopefully bring an adjustment in those behaviours.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

I have a question for Mr. Bergamini at FVGC.

The testimony we heard from Ms. Proud in the first hour was that there is a role for the associations, the groups, to bring those systemic complaints. I think our friends from Quebec brought that up too, that there is that role.

What is your confidence that, as it has been in other countries, some of those systemic complaints, some of those broad behaviours, will be addressed through that office and will be addressed through, as was testified, name and shame, or that whole process? Obviously naming and shaming is the last resort, but in terms of the discussions within the industry....

[Massimo Bergamini]

Our understanding is that the role as it is envisaged now is really to be an advocate for the interests of the members in a very discrete fashion.

What we're looking for is a formal role for the representative association to actually, in the aggregate, identify systemic issues and bring them forward in the formal adjudication process. We believe that is an absolutely essential step that needs to be taken, that needs to be formalized.

We're not satisfied with the current design.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

I hear you and I'm cognizant of the path the U.K. and Australia had to take.

I'll go back to a question from the first hour. What has to happen for the code to remain voluntary in Canada?

I'll ask Mr. Graydon to begin with that.

[Michael Graydon]

I think it's compliance. One of the deterrents to not being compliant is a regulated code. You fundamentally lose control over the ability to change and adjust it. You lose your governance. I think it behooves the industry to be compliant. That is the biggest thing we have going for us.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

I'll ask our friends from Quebec the same question.

[Patrice Léger Bourgoin]

Mr. Epp, I think we have to try out the code. Eighteen months is the time we gave ourselves to show that each party is acting in good faith and wants to improve the quality of the business relations between them. Let's give the benefit of the doubt for 18 months, to see if the industry can govern itself. If it can't, it will be up to parliamentarians to decide to implement a mandatory code of conduct, as Australia decided to do, or to do something similar to the European Union, which prohibited 15 or so business practices through clauses incorporated into the regulations of all countries in the European Union.

If European Union members are able to build consensus, Canadian provinces and territories also have to be able to build consensus, should stakeholders be unable to improve the quality of their relationships on a voluntary basis.

[The Chair, Liberal, Michael Coteau]

I'm going to stop you there. I'm sorry. I apologize.

We'll go to the Liberals for six minutes.

MP Chatel.

[Sophie Chatel, Liberal, Pontiac—Kitigan Zibi, QC]

Thank you very much, Mr. Chair.

Thank you to our witnesses for being here today.

I think there's consensus among the parties, parliamentarians and Canadians. Everyone wants a code of conduct, starting in January. Let's be optimistic. It won't be perfect, but we'll give ourselves 18 months of testing, and then we'll adjust based on the experience we've acquired. I love hearing the witnesses say the same thing.

I've done a lot of work on arbitration clauses in my career. A dispute resolution process typically requires a dispute and two parties. That's how it works, including in Australia and the United Kingdom.

We also heard from Ms. Proud, who has the important leverage of being able to publicly disclose the names of offenders. The report that she's going to table after the 18-month trial will be important. She will be reinvited by the committee, and we've already agreed to invite her on a regular basis. She has the power of persuasion. She said earlier that she was going to listen to systemic complaints. She'll work on them with the associations, and that's her role. In fact, it's a bit of an ombud role, listening to systemic or anonymous complaints. I've heard things from some producers, and my heart goes out to them. They have the right to file anonymous complaints, through you, that Ms. Proud should hear as part of her role. When there are many complaints of that nature, it indeed becomes systemic. That has to be in her report as well.

Going back to arbitration, I think it would be important not to distort the dispute resolution clause. After all, this is a dispute that we're trying to resolve.

Ms. Lefebvre and Mr. Léger Bourgoin, are you satisfied with the opportunity offered to associations? A producer can be represented by you, and you can accompany them. It has been said that the process should be streamlined. Are you reassured to hear that, which would mean you can move forward in your negotiations and arrive at a nice code of conduct in January?

[Patrice Léger Bourgoin]

Yes, we're reassured about the informal part of the resolution process, that is to say the ability of an association to be able to contact Ms. Proud, to tell her that a particular situation has been brought to our attention, and to request her intervention.

In terms of a formal process, however, there are no producers who, as things currently stand in Quebec, will dare to file an official complaint on their behalf, because they are afraid. Unfortunately, the examples that Ms. Lefebvre mentioned to you earlier represent only a small sample of what has happened in the past six months. However, the code of conduct is supposed to have been in effect since June, and these behaviours should no longer exist in the normal course of events.

Earlier, we gave the example of the increase in fees, which have more than doubled. I held a conference call during which 30 of my members agreed that I could represent them in their dealings with the major chain concerned. During the second call, however, only eight were willing to continue the process. You can imagine the circumstances that led me to having 30 members willing to have me make representations at the beginning, but only eight at the end. Let's just say that the phone must have been ringing off the hook.

[Sophie Chatel, Liberal, Pontiac—Kitigan Zibi, QC]

For there to be arbitration, there has to be a dispute that is resolvable in a concrete way, not by putting policies in place.

What you're asking for, though, is to reopen the code of conduct. We're no longer talking about arbitration in the traditional sense here. Rather, we're talking about collective arbitration and broadening the definition of “party” in the code of conduct to include associations. Currently, yes, a “party” is a retailer or a supplier. You're asking to reopen the code of conduct to include a provision for the resolution of disputes that would be considered systemic by an organization or association. Complaints could be anonymous, and the formal role of arbitration would not be to arbitrate a dispute, but rather general practices that are certain to be repeated.

If no one files a complaint under the current code of conduct, but your association receives a number of complaints, perhaps we should consider what you are proposing, since we will have realized that the current code is not working. However, I urge you to be careful. In my opinion, wanting to change this definition does not reflect the intent behind the arbitration provision in this context.

[Patrice Léger Bourgoin]

Ms. Chatel, I wear another hat as well. Today, I'm representing Quebec's fruit and vegetable producers, but throughout the process of developing the code of conduct, I represented Canadian fruit and vegetable producers, particularly at the technical committee.

It's unfortunate that there are no minutes of our meetings, because it has always been clear that—

[The Chair, Liberal, Michael Coteau]

You're going to have to stop there. I'm sorry.

Mr. Perron, you have six minutes.

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

Thank you, Mr. Chair.

Mr. Léger Bourgoin, I'll let you finish your sentence.

[Patrice Léger Bourgoin]

At every technical committee meeting I was at, it was always clear that the associations would have a role to play.

The current general rules of the code of conduct are clear, and everyone agrees on that at the board of directors. As Ms. Proud told you, the dispute settlement mechanism is currently being discussed. Until that process is completed, we can agree on a principle whereby companies that have adhered to the code can file a complaint, after which their identity will be disclosed to Ms. Proud. A delegation of authority can take place and, only in the event of a systemic problem, the associations can speak on behalf of those companies.

That has a significant advantage. As Mr. Bergamini told you, there are about 80 horticultural associations in Quebec, which represent thousands of businesses that do business with the major grocery chains. Imagine a thousand companies simultaneously filing a complaint about the same subject through the dispute settlement mechanism: It will be impossible, with just a few people, to resolve the problem. This shows the crucial importance of the role of associations, which will be able to coordinate the filing of these complaints to increase the efficiency of the process.