Finance Committee on Sept. 28th, 2022

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

Thank you to our witnesses. I want to thank our first-round panellists.

We are going to move into our second panel as we do not have much time.

Members, we're going to suspend at this time as the clerk brings on our witnesses for the second panel.

[The Chair, Liberal, Peter Fonseca]

I'd like to make a few comments quickly for the benefit of the new witnesses.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. With regard to interpretation for those on Zoom, you have the choice, at the bottom of your screen, of floor, English or French. For those in the room, you can use the earpiece and select the desired channel. I will remind you that all comments should be addressed through the chair.

Now I'd like to welcome our witnesses for the second panel.

As an individual, we have Armine Yalnizyan, director of research at the Community Social Planning Council of Toronto. From the Agri-Food Analytics Lab, we have Sylvain Charlebois—he's the director and a professor there—and from the Co-operative Housing Federation of Canada, we have Timothy Ross, executive director.

We'll start with Ms. Yalnizyan for five minutes, please, for her opening remarks.

[Armine Yalnizyan, Economist and Atkinson Fellow on the Future of Workers, As an Individual]

Thank you so much, Mr. Chair.

I would just like to correct the record; I have not been with the social planning council for many years. I'm an economist and the Atkinson fellow on the future of workers. I am actually located in beautiful Nepean.

[The Chair, Liberal, Peter Fonseca]

Thank you.

My apologies.

[Armine Yalnizyan]

No problem.

I want to thank the committee for inviting me to your discussion on measures that can address inflation, particularly with regard to food affordability.

Members of the committee, it is a terrible time to be poor or living on a fixed income. That is the case for millions of Canadians who rely on social assistance, old age pensions or low-wage jobs that haven't seen a pay raise over the last year. That's particularly difficult if you are also living in a remote location or in an indigenous community, where three in 10 households struggle with the high cost of food.

Statistics Canada has told us that 16% of Canadian households—that's more than one in six—and six million Canadians were food-insecure last year. It's a lower number than the previous year because of emergency-related benefits from the federal government for the pandemic. This year, those sources of income have dried up, but food prices have started escalating and are now at rates of increase we haven't seen for 40 years. At last count, children and young adults—that's people under the age of 35—had the highest rate of extreme food insecurity. That means they were missing one or more meals on a regular basis because they couldn't afford to eat. More hungry people live on their own than with other people and more are renters than owners. All of these people have fewer resources to draw on to survive.

Meanwhile, demand for food banks has tripled on a monthly basis compared to last year in the GTA, the greater Toronto area. They are serving over 180,000 people every month. Keeping the shelves stocked for these food banks has increased sixfold over the last year, costing $13 million on an annual basis, right as gifts of money and food have dried up because of the price squeeze.

I don't know what keeps you up at night, but I lie awake at night thinking about how much worse it's going to get this fall. The Bank of Canada's rate hikes increase pressures to raise rents, and world developments—just mentioned—drive up the price of fuels and basic commodities needed. On the fuel front, heating, transportation and production are all affected. The escalation of food prices shows no signs of plateauing, particularly when it comes to food bank staples like pasta and bread, let alone fresh produce or meat.

It is clear to me that more people are going to have to opt for hunger to hang on to their housing because—let's be clear—there isn't any place cheaper to go to. More people are going to get sicker more quickly and turn to a health care system that itself is on life support these days.

What can you do? Given that the government coffers across Canada—provincially and federally—and around the world have swollen, in part due to inflation, some jurisdictions, like the United Kingdom abroad and Saskatchewan at home, have offered broad tax cuts. That approach, to paraphrase the International Monetary Fund and borrow words from the leader of the official opposition, Pierre Poilievre, pours fuel on the inflationary fire and actually generates more inequality.

Should we do nothing—because doing anything could be inflationary—that would simply be cruel and inhumane, particularly at a time when coffers are growing. This isn't about inflation. This is about survival for millions of Canadians. We can do much more than we are doing now.

Here are five short-term actions I would like you to consider.

The federal government could introduce a temporary food supplement tied to existing credits like the GST credit, the Canada child benefit or the Canada workers benefit. That infrastructure for advancing the money is in place.

All of these programs could be made more timely in their responsiveness by introducing quarterly indexing instead of annual indexing.

Please do not revert the EI system to the prepandemic model, which would affect the lowest-paid workers the hardest.

The one-time supplement to the housing benefit, which has just been recently offered, could be increased or renewed.

You could offer more support to the non-profit sector to underwrite the costs of food banks and permit community-based groups to help people navigate the system of supports. All of you around this table have financial advisers. People on low income rely on such organizations to literally save lives.

You can address affordability in the medium and long term through other measures that support incomes, services, supply chains and infrastructure. You could also create a consumer bureau that monitors pricing trends in key industries as vigorously as the Competition Bureau monitors the impact of mergers and acquisitions on market performance.

Those ideas can be discussed later, but for now I want to reinforce that you have plenty of room to act today, fiscally and morally, with immediate action.

I welcome your questions, and I thank you again for the opportunity to be part of your discussions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Yalnizyan.

Now we're going to hear from the Agri-Food Analytics Lab and Monsieur Charlebois, please.

[Dr. Sylvain Charlebois, Director, Agri-Food Analytics Lab and Professor, Dalhousie University]

Thank you, Mr. Chair and committee members. I would like to thank the committee for inviting me again.

Canada's food inflation has exceeded our inflation rate for 13 straight months now. While some Canadians are coping, many are struggling. Within the G7, Canada currently has the third-lowest food inflation rate, at 10.8%, in food retail. Only Japan and France have lower food inflation rates right now, but that doesn't help families here in Canada. Almost 8% of Canadians are now skipping meals due to higher food prices. Nearly 24% of Canadians are simply buying less food, according to a recent report we just released. Of that group, almost 70% are women, which likely means that many Canadians are making daily dietary compromises due to food inflation.

As a result, accusations of gouging in the food industry have reached an all-time high. According to a recent survey, almost 80% of Canadians believe food corporations are taking advantage of the inflationary cycle to increase prices. It's not just in retail. Both Quebec and British Columbia have class action lawsuits against the beef industry, and now many groups are asking the federal government to investigate.

We have investigated this matter ourselves in groceries, with the help and support of three colleagues of mine: Samantha Taylor, Stacey Taylor and Janet Music. The fact remains that any evidence of “greedflation” in food retail in Canada is weak at best.

That said, some prices in some categories have behaved unreasonably in recent years, in animal proteins in particular. Accepting that “greedflation” exists and accusing companies of being abusive, though, is the easy part. Where it gets challenging is to set thresholds. How much is too much? Is it 4%? Is it 5% or 10%? Where should the line be? A potential code of conduct for grocers and vendors could make things easier for government to access and provide some oversight if the proper governance is implemented.

Assessing Canada's food affordability situation will also be key moving forward. Regarding food affordability, one index does exist around the world. It's called the global food security index. It's made up of a set of indices from more than 120 countries. Since 2012, the index has been based on four main pillars: food access, safety, sustainable development and food affordability. Again, Canada ranked well this year, seventh globally.

Where Canada's performance is of some concern is in food affordability. This measure is dedicated to consumers' ability to purchase food, their vulnerability to price shocks and the presence of programs and policies to support consumers when shocks occur. Canada fell one spot again this year to number 25 in the world. Australia, Singapore and Holland topped the list in food affordability. Given the resources and food access we have in Canada, we should do better.

Higher food prices at grocery stores over the past year have been difficult for many of us to accept. Canada needs a food autonomy policy to make our food economy less vulnerable to macro events, with a stronger food-processing sector and better logistics domestically as well.

The key to greater food self-sufficiency in Canada is a strong and robust processing sector. Processing remains the most important strategic cornerstone of any food chain. It is much easier to support Canadian farmers and to engage in innovation in order to satisfy the needs of Canadians.

Buy local policies are also important and should be made a priority in Canada. For instance, in our province, Quebec, what Aliments du Québec has done should serve as a model for the rest of Canada. Over time, efforts to promote local products have resulted in greater demand for Quebec-made products, allowing for economies of scale. Some Quebec farmers may wish to sell their products outside the province, in markets where consumers most certainly want a little piece of Quebec on their plates.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Charlebois.

Now we will hear from the Co-operative Housing Federation of Canada and Mr. Tim Ross, please.

[Timothy Ross, Executive Director, Co-operative Housing Federation of Canada]

Thank you very much.

Thank you to the chair and the committee for the invitation to appear here today.

I'm going to make a few points about housing co-operatives in the context of a high-inflation environment. I'm going to speak about their affordability, security of tenure and strong sense of community.

Many Canadians know about renting and owning, but there's another alternative. Today, a quarter of a million Canadians are members of housing co-operatives, owning their homes together from coast to coast to coast.

Co-op housing is more affordable than market rental housing because the vast majority of co-ops operate on a not-for-profit basis, resulting in smaller year-over-year rent increases. Because they are mission-driven, their affordable rents will be affordable forever and generally able to become more affordable over time.

Co-op housing offers security of ownership. There is no outside landlord who might sell, move in or have an incentive to renovict. Co-op member ownership means that you have a real say in how your community is run.

Co-ops are inclusive by design. Almost all operate on a mixed-income model, with a portion of members paying an economic rent that allows the co-op to balance its books and to support members with low incomes paying a subsidized rent through rental assistance provided by governments.

Beyond a mix of income levels, co-ops typically reflect the diversity of the communities in which they're located. They make decisions through democratic processes that engage all members—something that doesn't happen in private rental housing.

Co-ops are also strong communities. During the pandemic, we witnessed countless stories of neighbours helping neighbours with child care, groceries and other acts of mutual aid that money just can't buy.

However, for the vast majority of Canadians today, the solution to their housing crisis will not be found in a co-op. With reasonable rents and security of tenure, existing co-ops rarely have vacancies, and very few new co-ops have been built in recent years.

The co-op homes that exist today are largely a product of robust and dedicated federal programs that supported their development, primarily through the 1970s and through to the 1990s. That is when the first generation of co-op housing was built, and it continues to pay dividends today in providing security, affordability and dignity for households and communities across the country. If we want to share this security, dignity and affordability with more households, we need to make sure that housing co-ops are part of the supply mix in Canada and support the development of new housing co-operatives.

That's why we're quite pleased with the news announced in the recent federal budget to launch a new co-op housing development program that sets us on the path to building new and much-needed co-op homes.

I want to reinforce the fact that co-ops are more affordable than market rents and more stable in year-over-year cost increases. Moderate rents in co-op housing over the long term contrast with the trends we're seeing in Canada's rental markets: rapidly escalating rents that mean fewer housing options affordable to low- and moderate-income households.

We recently undertook a longitudinal study comparing rents in co-ops to rents in private market buildings in Victoria, Vancouver, Edmonton, Toronto and Ottawa from 2006 to 2021. The results were stark. We found that co-op housing charges are consistently lower than rents in comparable buildings in the private market by one-quarter to one-third, and that gap actually widens over time. This represents hundreds of dollars per month and thousands per year left in people's pockets to buy healthy food, put the kids in sports, advance education or save for retirement.

If you are looking for solutions to help Canadians in this high-inflation environment, this needs to start at home, and it needs to start with more co-op housing development.

With the minute I have left, I also want to recognize that tomorrow is the National Day for Truth and Reconciliation. It's in this context that we need to recognize that indigenous housing needs are disproportionate to the rest of the country. We must see an accelerated focus on the development of a “by indigenous, for indigenous” urban, rural and northern housing strategy that is fully supported and fully funded by the federal government.

Thank you for the opportunity to appear before the committee today. We look forward to working together to build a successful co-op housing development program, so that more Canadians can have a safe and affordable place to call home in co-op housing.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ross.

I want to apologize to our witnesses and to our members in advance. Due to House resources, we have only until 6:30. We have a hard stop, members and witnesses. We will have only one round. It will allow for about five and a half minutes for each of the parties to ask questions.

We are going to start with the Conservatives. I have MP Goodridge.

Welcome to our committee, MP Goodridge. You have five and a half minutes.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Thank you, Chair.

Thank you to the witnesses for being with us today.

I'm the member of Parliament for Fort McMurray—Cold Lake, which is a riding in northern Alberta. I was thinking about this as we were going through some of our testimony. Basically, everything I eat comes up on a truck on Highway 63 and, as gas prices increase, the price of everything I buy and everything that everyone in my community buys increases.

The Parliamentary Budget Officer stated in a letter to this committee that the carbon tax was inflationary, adding 0.6% to Canada's overall inflation rate. My question is for Mr. Charlebois. When it comes to food prices, do you have any statistics on how the carbon tax impacts food inflation?

[Dr. Sylvain Charlebois]

I get that question a lot. We don't have any evidence right now to suggest that the carbon tax is influencing retail food prices, but it is a strong hypothesis. There is a strong possibility. As a lab, we applied to SSHRC for a grant to get the proper funding to look into this matter. Unfortunately, our request was rejected, so we're going to go back at it again next year.

At $50 per metric ton, there was no real debate about affordability, but we're slowly marching toward a carbon tax of $170 per metric ton. That's triple where we are now. I'm certainly concerned about food affordability, because it affects all nodes of the supply chain. I think it's worth looking into this matter.

I was listening to the panel before this one, and the issue was raised of looking at taxes through the affordability lens. I would suggest doing that with health as well. Canada's food guide is less affordable than the old one, and nobody at Health Canada looked into it. We did, and we figured out that the second most downloaded document from the Government of Canada suggests a diet that is more expensive than what we had before.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Wow. It's unfortunate that you weren't able to get that grant.

Frankly speaking, I'm no economist, but I don't understand how if you're increasing input costs for food and for grocery stores in terms of their utility bills, electricity bills and the like, it wouldn't translate to higher food costs.

I've talked to many farmers in my riding and throughout my province of Alberta who talk about the increased cost of fertilizer, how that's having an impact on their production and how these increased input costs are having a major impact. We know that the government is adding to inflation and driving up the cost of living—specifically, the out-of-control spending from the Prime Minister. We have some of the highest inflation rates, and food is massive.

Do you have any further thoughts when it comes to the idea of affordability and how government could get its spending under control to reduce inflation?

[Dr. Sylvain Charlebois]

You raise a good point. Going back briefly to the carbon tax issue with farmers, I testified before Parliament on the former bill, which didn't last due to an election. I think price-takers—farmers—have to be looked at very differently. They have no other choice but to absorb more cost. That's something that Parliament needs to be addressing as soon as possible.

In terms of more spending from the government, again, the affordability bill and the affordability plan that we saw a few weeks ago from Ottawa concerned me quite a bit, because the last thing we need right now is more public spending. It could absolutely add oil to the fire. I think we need to be wiser and more targeted in terms of spending.

Second, I think some fiscal measures would be welcomed by many Canadians.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Monsieur Charlebois, are you saying that the carbon tax doesn't work in the farming sector, in your opinion?

[Dr. Sylvain Charlebois]

I think it's an unfair tax for farmers, because they just can't pass on extra costs to their clients, essentially. They are essentially price-takers. They don't set prices; the market does. This is unlike processors and distributors, who have more control over their pricing, but farmers don't.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

That's alarming and I really appreciate your sharing this. I'm wondering if you have anything else you would like the committee to know before our time quickly elapses.

[Dr. Sylvain Charlebois]

It's important to recognize that Canadians are actually going through a unique phenomenon right now when it comes to inflation. A lot of people are comparing it to 1981. In 1981, the food inflation rate was actually over 10% for just a few months. Food inflation right now is lingering. It's been 13 months now that it has exceeded the general inflation rate, and it's not over. It will continue into the new year, unfortunately. So obviously, it's of great concern for many Canadians right now.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Goodridge. That's the time.

Now we're going to hear from the Liberals for questions. We go to MP Baker for five and a half minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks, Chair.

I'm going to ask Madame Chatel to begin the questioning, and then I'll take the remaining time.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Baker.

I have a quick question for Mr. Ross.

Mr. Ross, obviously you know that rural areas are facing a pretty acute housing shortage. Small communities struggle to apply for common programs available through the Canada Mortgage and Housing Corporation, or CMHC.

I know you're in the process of working with CMHC to develop a new program, one focused on co‑op housing. How might that program help small communities?

[Timothy Ross]

Thank you for your question.

The forthcoming program is still under discussion with CMHC, but we do have some thoughts about how to make rural housing development more workable in the context of the national housing strategy program.

That could look like a couple of things. One is enabling the co-op sector to take a portfolio approach to realizing new co-op homes across the country. Developing a stand-alone co-op in a rural area has its challenges, but by taking a portfolio approach of having a community of co-operatives across many communities in a shared governance structure, we are seeing the viability of rural development increase as a result of that, particularly with some success in Nova Scotia lately.

The other piece is that there's a significant equity gap in the financing and the contributions available in a lot of the national housing strategy program. There is financing available, but in order to make projects viable and have a reasonable affordability level, a deeper level of grant or contribution can help with project viability.

And then a third feature is—

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you.

I don't want to take all of my fellow member's time, so I'll simply thank you for those suggestions.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you, Ms. Chatel.

If I may, I'd like to direct the remaining time—I think I have about three minutes left—to Monsieur Charlebois.

Monsieur Charlebois, just going back to the prior exchange with my colleague, you were talking about the price on pollution and the fact that there are price-takers in the value chain. You were also talking about the fact that you wanted to study what the impact of the price on pollution, the carbon tax, would be on end-consumer prices or whether there is one. That suggests to me that you're not sure if there is an impact on end-consumer prices by the price on pollution. Is that correct? If you knew, you wouldn't need to study it.