44th Parl. 1st Sess.
June 3, 2024 11:00AM
- Jun/3/24 2:49:39 p.m.
- Watch
Mr. Speaker, while a record number of families are turning to food banks, grocery CEOs have never been richer. The Liberals are not cracking down on the corporate greed driving up food prices. As for the Conservatives, they would not dare touch the profits of their CEO donors.
Canadians deserve better. The NDP is giving the Liberals a chance to put an end to corporate greed by making rich CEOs pay what they owe so that we can invest that money back into Canadians.
Will the Liberals vote in favour of our motion to make rich grocery CEOs pay what they owe?
102 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 7:16:25 p.m.
- Watch
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.
1182 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 7:28:41 p.m.
- Watch
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.
859 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 7:35:49 p.m.
- Watch
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?
111 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 7:37:06 p.m.
- Watch
Mr. Speaker, I am the first to speak out against indecent profits at a time when many people are finding it harder and harder to make ends meet. However, we need to be careful about using the word “stealing”. We are not talking about stealing. There are some people who willingly spend their savings. Let us be more careful about the words that we choose. That being said, this situation is indeed unacceptable and inappropriate in many regards.
I would say that the answer is in my colleague's question. He said that there are large grocery stores that have a monopoly. That is exactly the problem. That is why I want to go back to what I said. We need to support more small and medium-sized independent grocery stores. We also need to support more foreign grocery stores. That is how we create competition. That is also how we get lower overall prices for everyone.
159 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 8:05:32 p.m.
- Watch
Mr. Speaker, that is exactly the point. We do have a massive concentration of grocery chains in this country, and the response from the Liberal government has been to just ask them politely to stop gouging Canadian consumers. That is absolutely unacceptable and one of the reasons why I am so critical of the Liberal government in this regard. The minister of industry asked them politely, and it did not change anything at all.
What it takes is action. Other countries have taken action by having an excess profits tax and by having an enhancement for competition, just as the member for Burnaby South, the leader of the NDP, has brought forward for the Competition Act, so that the Competition Bureau can actually take action against the rise in prices that are simultaneous and, obviously, in a very real sense, price-fixing. We saw this when it came to the great bread price-fixing saga. This happened under the Conservatives, and they did not take any action at all. The Liberals finally did. I will give them some credit for that, but the reality is that the cost of what was gouged, or stolen, was an average of $400 from every Canadian family. My colleague from the Bloc said we cannot say “steal”, but the price-fixing majors, the grocery giants, stole an average of $400 from every Canadian family. That was price-fixing. They raised the price of bread and they stole $400 from every Canadian family over the course of a number of years. That is theft.
What it takes is a government that is willing to stand up to the grocery chains, willing to legislate against them and willing to implement those tools, including an excess profits tax and enhanced consumer protection legislation, and then basically telling the CEOs that unless they stop gouging people, the government will take action, as it has all these tools in place. We know that did not happen under the Conservatives. It has happened very rarely under the Liberals.
What it will take is an NDP government that actually stands up for working people. We are prepared to do just that.
362 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 8:41:55 p.m.
- Watch
Mr. Speaker, I will be sharing my time with the member for Milton.
Today, we are discussing a motion that was passed in committee and sent over to the House. It is a report specifically on excess profit tax on large grocery companies. It states:
Given that the Canadian grocery sector made more than $6 billion in profit in 2023 and that millions of Canadians have reported food insecurity in the last year, the Standing Committee on Finance call on the government to immediately take action by implementing an excess profit tax on large grocery companies that would put money back in the people's pocket with a GST rebate and establish a National School Food Program, and that this motion be reported to the House.
My understanding, based on going back and looking at the committee minutes, is that this was supported by all the Liberal, Bloc and NDP members on the committee. I think it is a really good motion.
I certainly agree with the motion, especially with the part on the national school food program. This is a program that has organically come from communities and from Canadians. I know I heard NDP members say earlier that this was their initiative. I actually do not think that it was. I think that this was an initiative that was born out of need, but also born out of what was already taking place in so many communities.
In the city of Kingston, we have the Food Sharing Project, which has been around since the eighties. Basically, it is a volunteer organization led by Andy Mills in Kingston. Every day, its members pack up food and send it out to schools.
One of the most interesting things that I found, and one of the reasons I thought this was an incredible program, was this. When I toured the program, I brought my children with me, Frankie and Vivian, who are seven and five. Frankie suddenly realized where the food was coming from that he would see in school.
I really thought the program was unique. What made this program so incredibly successful, and why the government needed to fund this program, was because it helps to break down stigmas and stereotypes. According to my children, it is not just the “poor kids” who have access to this food. As a matter of fact, according to my daughter, who is in senior kindergarten, there are often discussions about which piece of food or which granola bar they are going to get from the special snack station.
My point is that this is something that all kids look at and think is normal. It is not associated to or creating stereotypes that some kids need this food and others do not. I think that is incredibly powerful. At such an early age, children should be taught not to judge others based on their needs. That is why I supported this.
That is why when people from my community came to see me to really push the federal government to put this program into this particular budget, it was something that I worked with them on. I barely did anything, but my constituents went to all the schools, collected petitions and garnered support. They gave those petitions to me so I could present them to the House.
I imagine that similar things happened in communities throughout Canada. I really look at the national school food program as a grassroots program that has taken hold based on need, based on a desire to break down stereotypes, and based on treating all kids equally at such a young age. That is what we have.
The other part of this motion speaks specifically to an excess profit tax. I have been asked many times by my NDP colleagues how I feel about an excess profit tax. On the surface level, I have nothing against it. In particular, when we are dealing with an industry that has very few players, effectively we have a joint monopoly or an oligopoly, and they are basically setting prices. The grocery industry has been found guilty in the past of fixing prices. We remember the bread-fixing scheme that went on a number of years ago. Whether it is out of malice and is intended, or whether it just grows out of the lack of competition, it still happens.
Therefore, when we talk about an excess profit tax, and I know we talk about it from the oil industry perspective too, I am really intrigued by having the discussion, because I think it is one that is important to have, but I have a question and a concern. I tried to ask the House leader for the NDP a question, but he did not answer, about what happens when and if the oligopoly partners end up just transferring that tax over to consumers. If we have so few players in the industry, let us say there are three major players, Loblaws being one of them, and we add this tax on, what is to stop them from just marginally increasing everything again to cover the tax? Then we have not accomplished what we set out to do; we have not met the objective.
Maybe there is an easy answer to this. Maybe the NDP would say that if we do a particular thing then it will prevent that from happening. That is what I was trying to understand earlier when I was asking the question. Maybe my concern can be put to rest very easily by addressing that point. Therefore, I want to have conversations about this excess profit tax on these large industries like the grocery and oil industries, but I want to do it in a responsible way. I want to do it in a way that ensures that whatever comes out of it actually produces the intended result, which is to return some of these excess profits created out of the monopolistic environment back to the consumers who are being taken advantage of in the practice of the monopoly or oligopoly. That is my main concern with respect to this. I would love to have a conversation about how the NDP would ensure that does not happen.
On the surface, I certainly appreciate this. I understand that the Liberals, the NDP and the Bloc members all voted in favour of this. I think on a surface level it makes a lot of sense. There are some details that I would like to understand a little more clearly before I vote on this, but I will say that the national school food program is an incredible program that I know already works because I see a volunteer version of it at our local level and I know of the success it can create. I think it would help with food insecurity and with breaking down stereotypes. It will also give young children who are growing up the best shot at life and their educational experience if they are not going to school hungry.
I find it very concerning that Conservatives, who will likely vote against this because of their connection to large companies, tend to raise the alarm bells on food bank usage, but then literally in the next action will not do anything to actually help people who are faced with food insecurity. With respect to the national school food program, before any money was even put behind it, when it was just a concept, they voted against it. They have indicated that they will vote against this budget, which includes money for that. It would be easy for them to separate out the items of the budget they do support and vote in favour of those, but they do not because it just seems that they are insistent on not doing anything that possibly could give this government a win.
I will leave it at that. I look forward to listening to the rest of the debate on this and coming to a conclusion as to how I will vote when we are asked to vote on this, I presume tomorrow.
1357 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 8:55:59 p.m.
- Watch
Mr. Speaker, in all of the debate about excess profits for large grocery stores, I am really puzzled by this one fundamental question. That is, in the supply chain, there are costs added everywhere, with input costs added at every stage. Everybody along the supply chain is making money somewhere along the line. Why pick on the very last person in the supply chain? Why not look at all the others as well?
73 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 8:56:36 p.m.
- Watch
Mr. Speaker, in my opinion, I do not think that the vast majority of the profits are being made lower down on the supply chain. I think that what we are seeing, which is indicative of a market that has only a few players in it, is that it is the few players that are going to jack up their prices, because they can. If, farther down the supply chain there is a supplier of something, or there are 10 suppliers of something, because there are so many of them, they are going to be incentivized to ensure that they are being competitive. It is not the same scenario when there are only a few grocery retailers, which is what we have.
122 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 9:07:07 p.m.
- Watch
Mr. Speaker, the debate tonight is on excess profits. Would my colleague from Milton be able to define what exactly would be an excess profit? For example, what would be an appropriate margin of profit for a grocery company that he has referred to this evening?
46 words
- Hear!
- Rabble!
- add
- star_border
- share
- Jun/3/24 9:07:44 p.m.
- Watch
Mr. Speaker, I will be totally frank: I am no expert on what thresholds of corporate profit should be deemed reasonable. I would leave that up to experts to determine. I would like some public input on that. I think everybody would agree that companies ought to be able to earn a profit.
I grew up in non-profit housing, so nobody made any money when my mom paid the rent. I would like to see that same system applied more broadly across our economy, because with essentials, whether it is shelter, medicine or food, there should be a way to pay a farmer directly for their work and not be facilitating the enormous profits of billionaire grocery execs. However, that is tough to find. There are stores called co-ops out there, a chain of stores, which I am not sure who owns, but I do not think they are actually co-operatives and non-profits. I would love to see more non-profit-style shopping in the grocery space.
While I am on this topic, I also know that a lot of seniors, particularly single seniors, shop for previously prepared items. They might get spaghetti and meatballs or a soup, which is not in a can and might be in a jar or a takeaway container, and HST is applied to that food. That is something that is not in our control, but I would consider looking at taking off the HST on prepared food at grocery stores. This would not be at a convenience store or for a sandwich at Subway or something like that. I am not suggesting there should not be HST on that food, but finding ways to meet Canadians where they are and lower their food costs would be a priority for me. Any good idea that somebody comes forward with is worthy of consideration and debate.
314 words
- Hear!
- Rabble!
- add
- star_border
- share
- menumenu
- notificationsnotifications
- home
- mailmail
- searchsearch
