44th Parl. 1st Sess.
June 3, 2024 11:00AM
- Jun/3/24 2:50:18 p.m.
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Mr. Speaker, we all recognize in this country that families are having a hard time when it comes to groceries. That is why we have acted, with the Minister of Finance, to present to this nation the largest revamp of our competition law in the country.
Guess who voted against it? The Conservatives did. They are the ones who are standing and saying they want to help families. If they want to do something to help us, they should stand with us in asking Costco and Walmart to sign the grocery code of conduct.
That is the best way to bring fairness into this country. We will keep pushing, and I hope the Conservatives are going to join us in that endeavour.
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- Jun/3/24 7:13:16 p.m.
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Madam Speaker, I thank you for your diligence. I also wish to inform you that I will be sharing my time with none other than the Voltaire of Saint-Hyacinthe—Bagot, if ever there were one, and possibly the only person in the House who is so bright that we have to wear shades.
As we know, the NDP has been cozying up to the Liberals for the past two years. That is why it is no surprise that, today, the NDP wants to talk about groceries and grocery prices. We must admit that, for once, the NDP's diagnosis is correct. Yes, there is significant food inflation. Yes, the grocery retail market is becoming increasingly concentrated. In many communities, there are very few businesses supplying food to vulnerable and dependent customers.
While they are obviously not monopolies, they have what is known in economics as significant “market power”. Let me say straight out that there is a fundamental competition problem in the grocery retail market. If I am not mistaken, Canada had 11 or 12 major grocery store chains in the early 1980s, in a country stretching from coast to coast to coast. Anyway, Quebec is still part of it. The future may be a different story. Back then, there were 11 or 12 players. Today, we have five major chains, all suspected of possible anti-competitive behaviour.
Obviously, they deny it. However, the recent case involving Glentel raises questions. It is jointly owned by Bell and Rogers, which struck a deal with Loblaw to secure a monopoly on cell phone plans sold in Loblaws stores. Not only is their behaviour anti-competitive, but even when these companies create new business models, they manage to innovate in ways that raise prices for vulnerable customers who depend on their products and services, and their margins are high.
The grocers say that they have it hard here in Canada and that consolidation and mergers and acquisitions are necessary because the margins are low. The profit margins in question are about 5%. Maybe in sectors where the risk is high, these margins are low. Today at the Standing Committee on Industry and Technology, we welcomed—
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- Jun/3/24 7:28:41 p.m.
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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.
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- Jun/3/24 7:35:49 p.m.
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Mr. Speaker, I want to know something. Across Canada, we are seeing these grocery chains that often have a monopoly in some towns. The prices are higher. The reality is that people in Canada pay much more than people in other countries, such as the United Kingdom, for the same groceries.
Would my colleague not agree that the best way to combat this price gouging is to have a government that requires grocery chains to stop stealing money from people who are buying groceries just to put food on the table? The other option would be to tax excess profits.
Which of those two solutions does my colleague think is best?
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- Jun/3/24 8:26:54 p.m.
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Mr. Speaker, here we are tonight in a concurrence debate. There was a report from the finance committee on grocery stores and a recommendation to the House to create some kind of extra profit tax. It came out of the finance committee, but the Conservatives have a better solution that we have offered through an amendment to the report. We think that there is a more effective, more efficient, quicker and easier way for Parliament and for the government to improve the ability of Canadians to afford food than getting into the tax change they are proposing. In our motion, we “recommend a more efficient alternative to address food insecurity among Canadians this summer by calling on the government to eliminate the carbon tax, the federal fuel tax and GST on gasoline and diesel between now and Labour Day.” That is what we are debating tonight.
I share concerns that have been raised about the concentration of grocery retailing in Canada. I am very concerned, under the current government, about the extent to which competition has been reduced in a variety of sectors, including banking and telecoms. The Canadian consumer would be better served, I am certain, with better and more competition for retail of groceries, but the government could fix or at least address the growing number of Canadians who are food-insecure, though let us not mess around with labels here and say “food insecurity”. Let us just get real. People are hungry. People are skipping meals. People are compromising on the quality of ingredients they buy. We have seen it. There are countless studies that have come out showing that it is affecting millions of Canadians. There are people hungry in Canada in 2024.
The government could do something immediately that would improve the personal finances of Canadians and help consumers to afford more and better food, and that is to get rid of all the taxes. That would to bring down their transportation costs, which would free up more money for food, and it also would directly impact the price of food.
We have been calling for relief from the carbon tax in many ways from the government. In fact, the House of Commons has passed a bill that would have taken the carbon tax entirely off farmers so they would not have to pay the carbon tax to heat barns and buildings and to dry grain, and for all of these kinds of things. The other place amended the bill, gutted it and took out one of the most critical parts of it: the buildings and the barns. That is something that could be done too, but if the government would just listen and accept the advice in a motion that we voted on today and get rid of the carbon tax, the federal fuel tax, the GST on gasoline and diesel, we could bring down costs for consumers.
That would be so important for so many reasons. It would help both the producers and the consumers. A consumer has basic costs: shelter, food, clothing and transportation. The carbon tax directly impacts all of these things, but especially food and transportation. It does not matter whether someone owns a car or not; the carbon tax and the other federal taxes on fuel affect the ability of municipalities to run transit systems, so even if someone takes the bus, they would benefit from the proposal that the Conservatives have to send back to the finance committee.
If someone does have to drive their car to get to the grocery store or to take their children to activities or school, then reducing their budget for transportation is going to help make up what is available for food, shelter or other needs. A Canadian who is at least able to get by, and can actually, on a month-to-month basis, afford the home they live in and afford to keep a car on the road and food in the fridge, might want to just take a little vacation this summer. The proposal would help Canadians who are struggling and who just want to put the kids in the car, as the health minister talked about in question period the other day, and drive out to the mountains, the lake or the beach, depending on where they live and what kinds of things they have nearby for recreation.
This is Canadiana; it is what Canadians do. They get out and go to see the beautiful country that we live in. We live in such a beautiful land with so much to offer for summer recreation, or winter recreation for that matter, or any recreation at any time of year. Why not celebrate the outdoors and celebrate the people of this country? Why not be able to go visit a relative? I plan to go on a road trip this summer. I am not planning a major vacation or anything, but I hope to have a chance to visit relatives who live in other parts of the country and to maybe get out to the mountains west of Calgary. It is what Canadians do.
The least the government could do is not make the basics more expensive for Canadians. A Canadian who can save a little bit of money on their fuel to go on a trip this summer is just going to have more money in their bank account for other things. However, the approach of the government has been to tax and regulate the economy to the point where we are at the very bottom of the G7 for per capita GDP growth, because our per capita GDP growth is not growth at all; it is contraction. Per capita, we are going backwards. Per capita, Canadians are getting poorer. Canadians are going backwards while life gets more expensive. It is a spiral that we need to get out of.
The only way we are going to get out of it is with a change of government. It is the only way forward, so that we can fix the budget and be able to get serious about the basic core responsibilities of government, like national defence, public safety, and ensuring that health transfers will be there in the years ahead. We are spending more now on interest than on health transfers. We spend far more on interest than we do on national defence.
We are going to need a strong economy. We are going to need new investment. We are going to need regulatory relief and tax relief to make these things happen. The only way we are going to get out of the spiral and see Canadians' per capita income go up instead of down in the years ahead is with a new signal for strong economic leadership. We have to get rid of the gatekeepers who are destroying the ability for anyone to get projects approved in this country.
There has been capital flight. There has been the cancellation of projects, which has been ongoing for the last nine years. There is a carbon tax that continually goes up, is piled on Canadians and interferes with their ability to do basic things like afford groceries; get in their car, put some gas in the tank and go on a small trip; or even just get themselves to work and back on a day-to-day basis.
We need to get away from the continual regime of further and greater red tape, regulation and taxes, and get back to a country that can work and where people's work is rewarded, where people can afford to live and where people can afford their homes, groceries and transportation.
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- Jun/3/24 8:57:25 p.m.
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Mr. Speaker, it is nice to join the debate this evening on an issue that is affecting so many Canadians, I would say every Canadian, because everybody needs to eat. Our groceries just cost too much these days. Everybody is frustrated, and I understand why.
Food is an essential item. It is not as though people can just decide to take a couple of weeks off. Groceries are probably the third or fourth-most expensive thing that a household has to purchase every month, after paying rent or a mortgage and after paying for a vehicle. Food is expensive, and there are a lot of reasons for the fact that food is expensive. This evening, I was hoping I could unpack a few of those root causes a little and could get to some questions. With some colleagues, the art of thoughtful conversation and a little debate sometimes feels like it has lost its touch around here.
What can we do as a government? People ask us all the time. We knock on their doors or we answer the phone at the office, and people say, “Lettuce is $3.50 again. What the heck?” I do not blame people for being frustrated. I am frustrated too. One of the chief complaints I hear is that people are frustrated because they hear that grocery executives are being paid millions of dollars and that the people who work in those stores are still earning minimum wage. It does not seem fair, and it is not, quite frankly.
However, it is clear to me that regardless of who works for lobbying firms, and I will not argue about who works where; everybody deserves honest work. The reality is that these big companies can afford lobbyists and that they can afford lobbyists because they make a lot of money. Whether we are talking about private utility companies, oil and gas companies, grocery chains or big banks, for that matter, those companies can afford to spend a lot of that money on government relations and on PR.
Those who cannot are Food Banks Canada, teachers, nurses, parents and people who are struggling to pay their bills. There is no public lobbyist who says that their neighbours are really struggling. In fact, that is us. We need to have our ears to the ground. We need to be there for our neighbours. We need to listen to their issues, and then do a little bit of research.
I often talk, probably not enough in this place, about the Library of Parliament, which is such a wonderful resource that we all have access to. They do great work. They do excellent research. It is completely non-partisan, and it is extraordinary. The people who work over there, the researchers, the clerks and the librarians, are amazing.
I am going to commit to work with the Library of Parliament for the remainder of this session to try to dive into precisely why some grocery prices are so high. I have done a little research, which was very preliminary. I will say it is not research because when we Google something, that is not research. Research is actually meant to have some rigour, and a Google search does not. It is just a little reading.
I have done some light reading on why grocery prices are expensive. Climate change is the number one reason. Disruptions, extreme weather, floods and droughts, all of those things are costing food production and farmers a lot of money. That needs to be addressed, and we know that we cannot just switch climate change on or off like a light switch, despite the Conservatives talking about carbon pricing. They ask if we pay a carbon price, will it stop a hurricane or will it stop a wildfire? It is absurd.
It is an absolutely absurd question or statement, but it does not stop the Conservatives from making that sort of comparison; if we pay the price on pollution, then it will just stop the crazy weather. That is not the way it works. The crazy weather that we are experiencing is a result of an excessive amount of greenhouse gases in our environment and in our atmosphere. Just like a greenhouse that has a lot of CO2 inside because there are a lot of plants in there, it heats up. Our planet has been heating up, not in a uniform way, but one that contributes to a lot of extreme weather, and it disrupts agriculture.
Another significant cause of disruption of the agriculture sector is conflict. We know that around the world, there is a lot of fighting. Some of those countries that are fighting produce a heck of a lot of food. When they are at war, they are not able to ship their raw goods, and that increases the cost of food.
Then there are some more localized issues here at home. I remember, probably a decade ago, getting a weird little $25 gift card in the mail, which was unmarked. It was because the price of bread was fixed by some of the largest grocery chains. They were colluding with each other. It was due to unfair practices and really bad corporate behaviour. They settled out of court, and asked if they sent $25 to everybody who asked for it, would that be enough? Somebody, in their infinite wisdom, said that it ought to do.
I do not think any laws were changed. An ombudsman was not put in place to make sure that grocery prices did not just fly off the shelf, literally. That continues to happen. There has to be a way, with a little more scrutiny.
My community members, over the month of May, decided not to shop at Loblaws stores, and there was a big boycott. I do not know if it was across Ontario or Canada, but I saw a lot of people online talking about how they were not shopping at Loblaws. One does not need to do research, but just a cursory Google search on all the stores that the Loblaw company owns, to see that it is a lot of places. It is actually hard in many communities to avoid shopping at Loblaws.
Something I have noticed is that Loblaws owns Shoppers Drug Mart and, not that recently, Shoppers Drug Mart started to sell more and more produce and fresh food in addition to shelved items, like cereal and canned soups. My example is about canned soup, because when I go to that aisle in Shoppers Drug Mart, I can find a can of tomato soup priced at $2.49, $2.69, $2.79, but if I go to No Frills, which is owned by the exact same company, I will see exactly the same soup in a can for 99¢ or $1.29. The issue I have with that is not so much that we can say that Shoppers is maybe a little more of a convenience store, but that people who live close to a Shoppers oftentimes do not have a car. The stores are in strip malls, and the one on Main Street in Milton is right next to a bunch of apartment buildings where people do not all have vehicles, which means they cannot drive to No Frills. It means that there is an environmental barrier to shopping at lower prices.
That is an unfair practice that I strongly believe an excess profits tax on grocery stores would penalize, but not necessarily fix. I will say that I am in favour of an excess profits tax on groceries, because I think the behaviour is bad. We are seeing inflated grocery prices between stores where there ought not to be. However, I also think that there needs to be some scrutiny, and an ombudsperson in the grocery sector could achieve that. I would like to address the issue of excess profits, not just tax the people who are applying them on customers.
The other thing that I think could achieve that is a grocery code of conduct. We have seen it spoken about a lot since last September. I will not say that it was a coincidence, but the same month that Loblaws was being boycotted by so many members of my community, Loblaws said it was willing to sign the grocery code of conduct, as long as some of its competition did, and I think they said Metro and Walmart.
The other issue is that there are only five or six big grocery companies in Canada, just like there are only four or five big oil and gas companies, and there are also only four or five banks in Canada, which means that the market is kind of closed. There is a little bit of an oligopoly, not quite a monopoly but something similar to that, and it is also clear that a lot of these companies kind of keep an eye on each other's prices, whether it is a service fee or a can of tomato soup. They like making money and, hey, we live in a capitalist environment, where everybody wants to make money, whether one is a lobbyist for a grocery store or the CEO of a big multinational company. Their job is to make money.
However, in this House, our job is to promote fairness, and I believe that budget 2024 does find fairness in the market, and it does demand better from big grocery and big oil and gas. It does ask those companies to find a way to have fairer practices so that they do not get caught up in a situation like they did 10 years ago when they had to mail hundreds of thousands of Canadian households a funny little blank $25 gift card to make up for the fact that they cheated them.
I will say it again: Food is an essential item. It is not as though Canadians can just choose not to go to the grocery store. Certainly, they can choose to go to a less expensive one, or they can choose to shop local or at the farmers' market, but that does not fix the problem. Fixing the problem is going to take a combination of solutions.
I am in support of an excess profit tax on grocery stores, and also oil and gas, I would add, but that does not necessarily address the issue that they are allowed to get away with it. I would like to see fairness built into the system and an ombudsperson who oversees a lot of these prices so that we can see more fairness, and I know that competition will also achieve that.
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- Jun/3/24 9:10:39 p.m.
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Mr. Speaker, I could not agree more with my hon. colleague from Skeena—Bulkley Valley. I tend to agree with him whether we are on committee or just going for a walk down Wellington. We are both very pressed with the issue of trying to find solutions to affordability in Canada. I have noticed the same thing. For months now, a head of lettuce has been $3.49 where I shop, and I do not think it is as a result of a drought. It is because the price went up, people became used to it and the prices just kind of sat there; stores said that people were now used to paying $3.50 for lettuce. That is too expensive, and there needs to be a little more accountability.
If a price shock occurs because of any number of factors, then we understand that people need to be made whole. We can choose something else in many cases. I feel the same way about shopping seasonally. There was a big thing on Facebook a couple of weeks ago about watermelon, and everybody was freaking out about the price of watermelon, but watermelon was wildly out of season at the time. It is also appropriate that we consider the time of year when we are shopping for certain items. I enjoy the convenience of having watermelon all year, but it is also true that we can shop seasonally to save a bit of money.
The other thing I wanted to discuss is something I am not sure will come up. Most people in the House are my age, a little older or close to it. I am 42 years old. In my first job, I was working for about eight dollars an hour. These days, that is absolutely not okay, and nobody works for eight dollars an hour in Canada; however, one of the reasons things have become more expensive is that we are starting to pay people closer to a minimum livable income.
I am not saying we are there just yet. People who are working in grocery stores now are not being paid enough, but perhaps they are being paid $16 or $17 an hour; that is almost nine dollars more than we were paid 15 years or 20 years back. This is another concern that we need to feed into the system. I believe in a living wage being paid to the people who are ringing our groceries through and stocking the shelves. If that could normalize a little and balance out against the billion-dollar CEO profits and bonuses we are seeing, that would also be fair.
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