Madam Speaker, what a curious land Canada is, where a handful of grocery moguls control all the food supply. In 2022, the three most affluent grocers in the land—Loblaws, Sobeys and Metro—reported over $100 billion in sales and drew in profits exceeding $3.6 billion.
Unfortunately, small operators and local shops find it very hard to get a foothold in this vast land. Financial and logistical constraints make it nearly impossible to open new businesses. In the meanwhile, the grocery store giants, firmly rooted in Canadian customs and traditions, thrive as they operate thousands of stores.
We watch with a mixture of amazement and dismay as the growing concentration of this sector makes it even more complicated for new players to enter the arena and grow, rendering competition almost non-existent. Food prices are going through the roof. Of course, fingers point at the rising cost of raw materials, the upheaval caused by the war in Ukraine and supply chain disruptions. That is true.
However, the profit margins of these grocery titans keep growing, and the phenomenon is nothing new. It is becoming critical for Canada to find ways to stem the tide of skyrocketing grocery prices. More competition seems essential to make this positive outcome a reality.
In June 2023, a Competition Bureau report on the retail grocery sector was made public, revealing the underbelly of the sector. Canada is at a turning point and needs to develop an innovative strategy to encourage the creation of new businesses in the grocery sector in order to diversify the supply for consumers. Some ambitious companies are looking to revolutionize the sector by offering online groceries. It is crucial that the different levels of government work together to encourage these bold initiatives, which are ready to shake up the established order.
Ottawa should support the grocery sector by encouraging the growth of independent retailers and welcoming international grocers to the Canadian market. While there are already several renowned independent grocers in Canada capable of standing up to the industry giants, their modest scale prevents them from competing on a national level. It is critically important that Ottawa embrace informed policies that encourage the growth of independent grocers and facilitate the entry of foreign grocers and discount stores. The addition of new competitors and the growth of existing independent retailers will bring in a healthy breath of fresh air, thereby strengthening consumer purchasing power. This healthy rivalry will encourage our retailers to lower their prices, improve the quality of their products and do more to innovate.
Ottawa should also consider introducing clear, harmonized requirements for the display of unit price. It is often time consuming to compare prices, even just for a few items at different grocery stores. People need tools to help them compare prices at the grocery store and make informed choices. This information is essential in helping people make wiser, smarter choices and in promoting competition in our industry.
To meet these noble objectives, our governments will have to work together to develop and implement accessible, harmonized standards for the display of unit price. When I say “work together”, I mean that we, of course, do not want Ottawa to interfere again. This work needs to be done with other levels of government. Measures must also be taken to limit or even ban property controls in the grocery sector. Such controls restrict the use of real estate by grocery competitors and make opening new grocery stores difficult, if not impossible. They also reduce competition in our communities.
Why is competition so important? Basically, competition is a critical economic lever.
When the economy becomes more competitive, both businesses and consumers—Canadians and Quebeckers in this case—benefit substantially. Competition encourages companies to innovate, to perfect the products and services they offer and to increase operational efficiency. As a result, consumers benefit from greater choice, higher quality goods and services and inevitably lower prices. Competition is crucial in all industries and sectors of our economy.
The reason it is so important here is that the Canadian grocery sector, as has been said before, is concentrated. This can make it much harder for small and medium-sized businesses to really compete with the Canadian grocery giants. It is difficult for new companies to successfully penetrate this market. Without a change in this competitive landscape, Canadians and Quebeckers will not be able to fully enjoy competitive prices and a wide range of products.
In its report, the Competition Bureau recommended more competition in Canada's grocery sector. That is the way forward. We need to adopt measures that are going to encourage and support more competition in this sector. Accordingly, we must also avoid simplistic solutions. Through its amendment, the Conservative Party of Canada is trying once again to replay its opposition day. It feels like Groundhog Day. The opposition day motion was defeated just a few hours ago. It does not hold water for all the reasons that were outlined last week during the debate on that ridiculous proposal.
On that, I would be pleased to engage with all of my colleagues.