Madam Speaker, I am proud to rise here today as the new NDP critic for agriculture and speak to a subject that Canadians really care about, a subject the NDP has been the leading force on in this place, and that is the rising price of groceries.
Groceries have gone up 22% over the last three years alone, and since food is one of the biggest parts of any family's budget, and an absolutely essential one at that, this has hit Canadians hard. The use of food banks has hit a 35-year high. Meanwhile, the grocery sector made record profits last year, raking in $6 billion. Loblaw has almost doubled its profit margin in the past five years.
On top of that, other parts of household budgets have also soared, which impacts families, in many cases, as much as, or more than, food prices, and this has aggravated the impact of the rising cost of food. Housing costs have soared. The price of gas at the pumps has skyrocketed as the big oil companies revel in high world oil prices and rake in billions of dollars in record profits, over $30 billion last year alone. All in all, it is easy to see why Canadians are struggling to make ends meet.
As I said, it has been the NDP that has really been fighting for relief from all these rising costs. We have been fighting to stabilize food prices, build affordable housing and provide relief from rising gas prices. We have been putting forward really solid ideas that would actually do that.
Last fall, my colleague, the former NDP critic for agriculture, the member for Cowichan—Malahat—Langford, tabled a motion at the agriculture committee to study the rising costs of food. The motion put forward by the member asked for a study on the recent commitments, at that time, of the government to stabilize and lower food prices. It called for the Minister of Agriculture and the Minister of Finance to appear, and summoned the CEOs of Loblaw, Metro, Empire, Walmart and Costco. That study resulted in the report we are debating today, which is called “A Call to Action: How Government and Industry Can Fight Back Against Food Price Volatility”.
As I said, the report came out last May, and I could spend some time going through it, but I want to highlight some of the important issues and what the NDP has been asking the government to do about them. This all crystallized on May 31 when the leader of the NDP put forward an opposition day motion that read:
That, given that the cost of food continues to increase while grocery giants such as Loblaws, Metro and Sobeys make record profits, the House call on the government to:
(a) force big grocery chains and suppliers to lower the prices of essential foods or else face a price cap or other measures;
(b) stop delaying long-needed reforms to the Nutrition North program; and
(c) stop Liberal and Conservative corporate handouts to big grocers.
Unfortunately, Liberals, Conservatives and the Bloc, surprisingly, all voted against the motion. However, I want to thank the Green members for supporting us. One Liberal voted for it as well, but I do not know if that was a mistake.
New Democrats were asking the government to force big grocery chains and suppliers to lower the price of essential foods or the government would put in place a price cap or use other measures. Big grocery chains have shown that they have control over their prices when they announce price freezes on store brands. All major grocery stores have their own brands, such as no name. A cap on prices on these items is within the control of grocery stores. If they do not voluntarily cap these prices, the government should force them to do so.
So far, Liberals promised to, “stabilize” food prices, but they have failed to do so. For more than 25 consecutive months, as of last May, food inflation outpaced general inflation, leaving Canadians with higher bills, and the Liberals did nothing. While food inflation is at a more reasonable level right now, in the past three years, as I said, food prices have increased by over 20%. We need government action to lower the prices of essential food items.
After asking grocery giants to come up with a plan to lower prices, the Prime Minister said, “If their plan doesn’t provide real relief for the middle class and people working hard to join it, then we will take further action and we are not ruling anything out including tax measures”.
We got all excited. Unfortunately, we were disappointed. Other countries, such as France, Greece and South Korea have taken steps to lower essential food prices. Price control measures are being used right now in Canada. Many provincial governments impose limits on rent increases. Prices for most forms of energy are also regulated in Canada; obviously, gasoline, diesel and so on are not. Big grocery chains, as I said, have shown they have control over their prices when they have announced price freezes. I just want to go into more detail on what these other countries have done.
In France, the government secured a deal with 75 major companies to lower the price of groceries for 5,000 products. If the grocery companies fail to reduce prices, the government can hold them publicly accountable. For example, the government called out major corporations, such as PepsiCo and Unilever.
In Greece, the government announced gross profit caps for key consumer goods and services in the food and health sectors. In practice, the policy stipulates that the gross profit per unit cannot exceed that of the profits made before December 31, 2021. To ensure enforcement of these measures, international companies can be fined.
In South Korea, in 2023, the president established department-level task forces to monitor and implement food price control measures in key industries. For example, the ministry of agriculture assessed the prices of seven key food items, including milk, coffee, noodles and bread. In 2024, President Yeol adjusted his approach to establish a national-level task force responsible for implementing food price control measures.
What, again, is the NDP calling for? We are asking the government to force these big grocery chains and suppliers to lower the price of essential food for the next six months. If they do not do that, we suggest that the government impose a price cap on those essential foods. The government could take that period to develop options of price regulation measures if big companies of the industry fail to do so. They could look at what other countries have done, as I just mentioned, and how price regulation measures could work in Canada. There are many options at the government's disposal. It could be a straight price cap, in which essential food items cannot be higher than a certain price and cannot be increased above a certain price every year. The basket of food covered could be determined by looking at what other countries have done, or we could start from the 60 items in the Statistics Canada nutritious food basket and go toward all food items that are GST-free. As some economists have suggested, the government could start by forcing big grocery chains to lower prices of their private brand products.
For the NDP, it is critical that any measures taken do not hurt producers or small independent grocers. I will just step back here and say that we certainly want to protect farmers, what they produce and what they make. I grew up on a small farm. I know how hard it is to make money in agriculture, and we do not want to affect them. They are suffering more than ever from all sorts of issues, but these big corporations are causing this food inflation.
The government has other tools at its disposal, such as an excess profit tax, as they have used for banks, at the NDP's bidding. In addition, the government could always implement fines if the companies are not doing what it has asked them to do. It should certainly go the route of excess profit tax on the big oil companies for the prices at the pumps. The Conservatives can talk all they want about how the carbon tax is hitting people. It is the profits of the big oil companies that are really hurting farmers.
The government should stop feeding grocery greed with corporate handouts. When the Conservatives were last in power, they cut the corporate tax rate from 22% down to 15%. It is estimated that this cost the federal government $60 billion in corporate handouts over a six-year period. The Liberals kept those corporate handouts in place. We estimate that the federal government has lost $90 billion through its inaction. Just as another aside, this is all based on the long-debunked theory of trickle-down economics, which says that if we tax corporations less, we will all benefit. That does not happen. It never has.
Due to the Conservatives' corporate tax cuts, it is estimated that Loblaws, Costco and Metro have received $2.35 billion in handouts from the federal government. The New Democrats are calling for corporations to pay their fair share, and we are not alone. President Biden's 2024 budget will increase the U.S. corporate tax rate from 21% to 28%.
I would like to turn now to nutrition north Canada. This is a hugely important program in the north, where food prices have been extraordinarily high for many years. Nutrition north is designed to lower the cost of essential goods for retailers. It includes a retail subsidy for grocery stores and food producers, grant funding for local harvesters to boost local food production, and funding support for community food programs.
However, new studies show that the price of goods has gone down by only 67¢ for every dollar in subsidy provided by nutrition north. That is particularly concerning, as the subsidy is being delivered to corporations like the North West Company, owner of Northmart, which is bringing in hundreds of millions of dollars in profits and paying its executives millions of dollars in bonuses and salaries. While many of these stores operate in indigenous communities, few are owned by indigenous people who live in those communities and most are found in cities like Winnipeg or Montreal. Meanwhile, families in the north cannot afford basic fresh food.
The New Democrats have called for an audit of nutrition north to ensure that corporate greed is not interfering in northerners' access to healthy, fresh and affordable food. No company should be bringing in millions in profits while also needing a subsidy to deliver goods to northern communities. We also believe nutrition north should be reformed to become a social program, not a corporate subsidy, so that families will have more choice in what they put on their plates.
The report we are debating today came from an NDP motion for a study that was tabled almost a year ago. That motion arose from a promise made by the Liberal government almost exactly a year ago. I will finish by reading out a letter sent by my colleague, the MP for Cowichan—Malahat—Langford, just last week to the Minister of Innovation, Science and Industry on the first anniversary of that promise:
One year ago, your Liberal government convened a meeting with the CEOs of Canada's five largest corporate grocers, pledging to stabilize grocery prices and provide relief to families. Despite this promise, the cost of food and other essentials continue to soar, forcing many families to make the impossible choice between buying food and paying rent.
Alarmingly, food bank usage has surged to its highest level since 1989, with over 1 million people in Ontario turning to food banks in the past year. In my home province of British Columbia, almost 200,000 families are relying on a food bank every month.
While families struggle, corporate grocers are reaping historic profits. Between March and June [one quarter] of this year, Loblaws reported an astounding $457 million in profit, all while forcing families to pay outrageous prices for essential items like baby formula.
Instead of stopping the corporate greed that is driving up costs, your government voted against concrete measures that would increase penalties for price fixing, help smaller grocery stores by protecting them against anti-competitive tactics from corporate grocers, give the competition bureau more powers to crack down on abuses like price-gouging consumers, and stop mergers that decrease competition and hurt Canadians—such as the Rogers and Shaw merger.
Canadians expect you to side with them, not the CEO of Loblaws. They expect you to take immediate action against corporate greed, not accept piles of cash to fund the Liberal Party.
But that's what you and your government have been doing, just like the Conservatives did beforehand. Canadians are fed up with how beholden the Liberals and Conservatives are to CEOs. It's a corporate coalition and Canadians have had enough.
The NDP will bring hope and relief to Canadians. We're urging you to stop listening to greedy grocery chains and instead support the NDP's plan to end grocery greed and lower food costs for Canadian families. This includes capping prices on essential grocery items, introducing an excess profit tax on large grocery chains, stopping shady shrinkflation practices, and ending federal handouts to corporate grocery chains.
Canadians are tired of useless meetings with CEOs, they're tired of watching you break promises; it's the people's time, and they demand bold action now.