Industry Committee on July 10th, 2020

[Sarah Davis]

As I highlighted a couple of times, we are not putting profits ahead of our people. We put in tens of millions of dollars for safety precautions in our stores. I think we publicly said in our Q1 call that we did see some buying up in Q1, but we would see large costs that would come into our Q2.

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

Mr. Medline, you have indicated that all resources have been put into your teammates. Your company has described them as family members. Describe the recent increase to shareholder dividends and how that accords with what you described to this committee in relation to putting all of the resources into your teammates, family members and your essential workers.

[Michael Medline]

We have a lot of stakeholders. We have to do everything we can for our teammates. We put every penny we could and every effort we could into the safety and health of our teammates. In fact, I was on a call with Chinese and Italian grocers early on in the pandemic, heard about plexiglass and put plexiglass in without knowing how much it was going to cost.

In terms of why we pay dividends, it's because ordinary Canadians count on those dividends to retire and to put their kids through school. There's a balance, but teammates, as you said—and you quoted me there—are so important.

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

Correct me if I'm wrong, but you paid just over $100 million in pandemic pay, additional pay. What's the number represented by the increase in shareholder payout?

[Michael Medline]

Are you talking about...?

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

I mean the increase in dividends.

[Michael Medline]

The increase in dividends was four cents per quarter. I'd have to do the math. I'll send it to your office.

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

When we talk about putting profits before people or putting people before profits, we've cut pandemic pay and we've paid out profits to shareholders. Do you still think you're putting people before profits?

[Michael Medline]

Yes, the increase in dividends was far below the pandemic hero pay. By the way, I don't think that was appreciation. It was scary for people to go to work. Whoever it was—one of the MPs—cited going into the store. I think it was Mr. Masse. We saw the people in the stores and we didn't know what was going to happen, so we did it for a number of reasons.

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

Ms. Davis, Target recently announced a $15 American per hour minimum wage for their employees. Dollarama here in Canada has extended its own pandemic pay until the end of August. Lowe's has extended pandemic pay.

Loblaw chairman, you, making millions of dollars, believe in a progressive living wage. How do you explain this? We heard about hypocrisy from Mr. Dias. How do you explain this personal belief of yours and Mr. Weston's, when other companies are able to do this and you've decided not to?

[Sarah Davis]

I think there are two questions here, and it does look as though we're out of time. I don't know if you want me to answer or not.

[The Chair, Liberal, Sherry Romanado]

We'll let you answer.

[Sarah Davis]

Okay, so there are two things we're talking about here. One is the pandemic pay premium, which was put in place on a temporary basis, and it was communicated that way to all of our colleagues. The second is about minimum wage and the living wage. As I highlighted in my opening remarks, I do believe that is a conversation that is for more than just one company or one industry to do on its own. I really think that is something we need to work on with the government. I think that is the decision I've mentioned and that we need to work on together.

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

Thanks for your time. Force us to do what we already believe in. I appreciate it. Take care.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Lemire.

Mr. Lemire, you have the floor for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

We've learned today—at least I have—that because of certain dependency issues, you rely on others when making difficult decisions. I want to highlight your honesty in bringing this up. I'm not saying that this constitutes collusion. However, it will be worthwhile to hear what the Competition Bureau has to say about this.

I want to understand what steps you took. Did you discuss this temporary positive benefit—and I think that the word “temporary” is significant for this premium—before you put it in place?

My question is for Mr. Medline.

[Michael Medline]

I'm sorry, but I just want to be very clear. What was the question?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Did you hold any discussions before implementing this premium, this $2-an-hour raise?

[Michael Medline]

No. I said before I was on calls with Chinese grocers, Italian grocers and those in the U.S., Australia and other European countries. We found out about some good safety and health initiatives. We also heard about grocers around the world implementing what we now call hero pay, but they didn't call it hero pay in those days. No, I talked to grocers in other countries but no one in Canada, and we made our own decision. Thank you for asking.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

As with your counterparts, would the involvement of a government or governments help you implement a permanent measure to improve the wages of your workers? Should this be done through an order in council or a government obligation to ensure that everyone makes the decision to increase the living wage of workers by $2 an hour, for example, on a permanent basis?

[Michael Medline]

Thank you.

Look, I didn't get a chance when Mr. Erskine-Smith asked before. We need a better income support system in this country. I know it's difficult to do and it's difficult for the federal government, the provincial governments and industry to get together and work on this. If you want to work on it, we'll be at the table.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I have one last question for you, Mr. Medline. Do you consider that the CERB has been a barrier to hiring or a positive solution for workers?

[Michael Medline]

I think that all of us, governments and industry, are dealing in unprecedented territory. I think that putting in the CERB and protecting Canadians, especially the most vulnerable, was a wonderful thing to do. I think that people are going to find that, when they take out the CERB, they're going to face the same issues we did when we took out the hero pay. It's hard to take things away, even things that have been communicated as temporary. I think that made it a little more difficult. It's going to be hard.

It's important to put them in place to take care of people—

[The Chair, Liberal, Sherry Romanado]

Mr. Medline, unfortunately that's all the time for that round.

We'll now go to Mr. Masse. You have the floor.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Have any of your companies applied or expect to apply for or receive any financial aid from any of the COVID-19 federal government programs?

I'll start with you first, Mr. La Flèche.