Madam Speaker, today at the Standing Committee on Industry and Technology, we welcomed Pierre Larouche, a world authority on competition law. He has been a professor at the Université de Montréal for seven years, but he had a long career in Europe and has trained other leading figures in competition law in Europe. He told us that, in Europe, the average profit margin in the grocery sector is about 3%.
Our neighbours to the south might want to set up shop here in Canada because the average profit margin in the U.S. is 2%. It is not surprising that they can survive with such low margins, because it is a volume market there. We have very few players, yet they feed an entire G7 country. Profit margins are high. That is a symptom of the lack of competition. There were a lot of companies 25, 30 or 40 years ago, whereas there are very few today, and they have higher profit margins than our neighbour to the south. This is reflected in prices and possibly results in higher prices for consumers.
The NDP got it right: Food and rent are the biggest household expenses. It is important, here at the federal level, that we study this issue within the context of federal jurisdiction. Competition falls under federal jurisdiction.
Now, it is worth noting that some progress has been made. Bills have been introduced. The Canadian competition regime was partially reformed this year and changes were made to the rules around competition. The commissioner of competition has been given the power to investigate for the first time, as well as the power to subpoena. In the future, the commissioner's office will be able to initiate its own investigations, particularly in the food market, and it will also be able to force companies to hand over documents. Canada's competition regime was extremely outdated. It still is in many respects, but we are moving from the Stone Age to the Iron Age, to some degree, in terms of competition statutes in Canada. In the past, the commissioner might tell a company that he wanted to see its numbers, but all the company had to do was not answer the phone, and that was the end of it.
The commissioner's investigative power was expanded. He was given the power to subpoena. The definitions of anti-competitive practices, including for commercial leasing, was changed. From now on, grocery stores will no longer be able to strike a deal with a shopping mall owner, where the grocer agrees to operate its store in the mall, provided the mall owner does not rent any space to another business that provides food or grocery services. These are anti-competitive practices. Canadian law had not been modernized, but these businesses, having failed to innovate on everything else in many ways, innovated when it comes to their anti-competitive practices. Which is why this change was made. The Bloc Québécois had long been asking for that change and we commend the efforts of the Minister of Innovation, Science and Industry.
Bloomberg recently said that Canada was a good place to invest. The government brags about it almost every question period. Despite that and despite the fact that profit margins at grocery stores are higher in Canada than they are in the United States, we were surprised to learn that the U.S. companies, foreign entrants, did not want to set up shop here and create competition. This raises a lot of questions, which, I think, should be studied in committee.
Are there regulatory barriers that prevent these companies from investing here? Are there barriers to investment that prevent these companies from investing here? What are the institutional data that explain the fact that Canada, despite its high profit margins, is unattractive to U.S. companies south of the border, whose profit margins are two to three percentage points lower? I think that we need to answer those questions.
I know that we are debating a committee report on a special tax, but we could debate at length the effect that a special tax would have on grocery stores' excess profits and whether it will be passed on to consumers. We could debate that at length, but one thing is certain: It will not resolve the competition issue. If we impose a special tax on these companies' excess profits tomorrow morning, it will not bring in new companies, it will not open new grocery stores and it will not increase competition. We will also still be obligated to implement the same temporary measure next year, in five years, 10 years or even 15 years. The diagnosis is clear. The state of competition has been in decline for the past 30 years, and it will continue to decline. We cannot just come up with a band-aid solution. We need to get to the root of the problem.
I think the Minister of Innovation, Science and Industry needs to be asking himself these questions. He has been running all over the United States, meeting with grocers and asking them to come open stores here. That is not how investment is supposed to work. Investment is supposed to be attractive. We have yet to announce how we will be voting on this committee report. There are several hours of debate left. We will be listening. The Bloc Québécois still has a lot of thinking to do.
However, it should be noted that the Conservatives have tabled an amendment calling for this report to be referred back to committee, so that the committee can study alternative solutions to the food inflation problem, including axing the carbon tax. My grandfather had an expression that I liked a lot. He used to say that if the only tool you have is a hammer, you think everything is a nail. That is the problem with the Conservatives. The carbon tax is the only thing they have to talk about. It could be the solution to menopause, it could be the solution if your car breaks down. Axing the carbon tax is the solution to everything.
I encourage the Conservatives to think about their amendment. We cannot send a report back to committee and ask it to take more time, do more analyses and push for solutions because food is a major and vital expense for Quebeckers and Canadians. We cannot say that we need that done in a non-partisan, constructive way and then turn around and include the most partisan nonsense on earth in the motion, while telling the committee that instead of reflecting in earnest, it should take this trivial partisan line and make that the focus of its reflection.
This is actually a great initiative by the NDP. It still needs some fine tuning, but eventually, we will have to turn our attention to the state of competition. Guess what? Axing the carbon tax for three or four months will not reopen a single grocery store in Quebec.
