Industry Committee on July 10th, 2020

[Eric La Flèche]

Sure. When we announced the premium, when it was first announced on March 21, we had found out the night before that a retailer out west had introduced it, and a pharmacy chain in Ontario had introduced it. We had back-channel information from unions that Saturday morning some of our competitors were thinking of introducing it. Later that morning I got a courtesy email, which we talked about earlier, advising me and the other CEOs that Loblaw was introducing the two dollars per hour temporary premium. We were working on that. We accelerated that announcement to that Saturday afternoon.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

To the best of your knowledge, did every competitor, even the ones outside of those here at this committee meeting, all use just two dollars as an arbitrary, random number?

[Eric La Flèche]

I can't speak for every other retailer and what they did. It resembled two dollars an hour in some form or fashion. I can't speak for the others.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay.

Mr. La Flèche, I'm just wondering if you could clarify a few things for me. Earlier you told Mr. Masse it was an email you had sent about what you guys were doing, as far as reducing the pay. Then you told Mrs. Gray that it was a phone call. I'm just going to give you another chance here. Which was it? Was it an email or was it a phone call?

[Eric La Flèche]

I did not send an email to any colleagues or competitors about our decision to end. I did get an email from the president of Loblaw, telling me that they were ending on the 13th. I called again to find out their intentions, and I didn't get any answer.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Whom exactly did you speak to, then?

[Eric La Flèche]

I spoke to Sarah Davis twice and I spoke to Michael Medline once.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

What about others, such as, say, Walmart or any other multinational companies or other grocers? Did you call any of them and talk to any of them about it?

[Eric La Flèche]

I did not call Walmart. I did call another grocer elsewhere in Canada.

As I said, we looked at all sources of information: U.S. retailers, Canadian retailers, food retailers and non-food retailers. Some were paying a premium; some were not. We gathered as much information from as many sources as we could. One key resource was unions. They were really encouraging us to follow suit when someone increased pay. We got that information, and we acted on the information we had to the best of our ability.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Did you email or call your lawyer? What kind of communication was that?

[Eric La Flèche]

No. I called my colleague, the general counsel, asking for his advice on whether I could make a call, which I did. I was told it was perfectly fine according to competition laws. Making that call was not outside of legal boundaries.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Ms. Davis, when you referenced contacting your lawyer, I think you said that you copied your lawyer on the email that you sent to everybody else. Is that true or did you consult beforehand?

[Sarah Davis]

I had consulted with a lawyer and had the approval that it was fine. It was already public. It had already been announced, so I did copy him on the email as well.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay. Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Erskine-Smith.

You have the floor for five minutes.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

I want to pick up where Mr. Patzer left off.

Mr. La Flèche, on what date did you first reach out to a competitor to ask if they were going to end the pandemic pay and when they were going to do so?

[Eric La Flèche]

The week of May 20 was the first contact.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Who was that with?

[Eric La Flèche]

I called Sarah Davis, Michael Medline and one other CEO.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Who was the other CEO?

[Eric La Flèche]

Darrell Jones at Save-On-Foods. He's out west, in a market where we don't compete, by the way.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

You said that you had a second conversation with Sarah Davis. What was the date that took place?

[Eric La Flèche]

It was June 9.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

June 8, to my understanding, is when Ms. Davis made the decision to end pandemic pay. Is that correct, Ms. Davis?

[Sarah Davis]

Yes, it is.