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Jun/3/24 7:12:45 p.m.
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Madam Speaker, would it be possible to ask members to be quiet?

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Quiet
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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Jun/3/24 7:12:50 p.m.
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I would ask hon. members who are chatting in the House to please take their conversations to the lobby. We are beginning debate. The hon. member for New Westminster—Burnaby is rising on a point of order.

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Mr. Peter Julian

Jun/3/24 7:13:04 p.m.
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Madam Speaker, we are celebrating pharmacare. It is—

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Jun/3/24 7:13:11 p.m.
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We are beginning debate in the chamber, as the hon. member well knows. The hon. member for Mirabel.

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Mr. Jean-Denis Garon

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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Mr. Simon-Pierre Savard-Tremblay

Jun/3/24 7:16:07 p.m.
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Madam Speaker, point of order. It seems that several members did not listen to your reminder earlier. Even though my colleague is not far from me, I am having trouble hearing him.

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Jun/3/24 7:16:16 p.m.
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I would ask those who are talking to please take their conversations outside the chamber.

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Mr. Jean-Denis Garon

Jun/3/24 7:16:25 p.m.
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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.

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Mr. Peter Julian (New Westminster—Burnaby, NDP)

Jun/3/24 7:23:47 p.m.
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Madam Speaker, my colleague, for whom I have a great deal respect, just said that the NDP's diagnosis is correct for once. I would like to point out that the NDP's dental care plan is a resounding success in Quebec. Proportionately, there are now more dentists registered in Quebec than in any other region in Canada to provide this dental care. There are also more seniors registered than in any other region in Canada. Quebeckers are the ones who sought out this care and have already received these services. The NDP's diagnosis was correct. We just voted for a historic pharmacare program called for by a broad coalition in Quebec representing nearly two million Quebeckers who are calling on parliamentarians to vote in favour of pharmacare. Does my colleague agree that the NDP and its diagnoses have been correct on a number of occasions over the past few weeks?

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Mr. Jean-Denis Garon

Jun/3/24 7:25:03 p.m.
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Madam Speaker, the diagnosis is correct. I said as much. It is their solutions that are unappealing and bad. Dentists in Quebec are against their program. They want to provide care. The federal government has no expertise. The system already exists in Quebec. We are saying that if they want there to be dental care, then the money needs to be sent to Quebec. Their diagnosis is good, but their solutions make no sense. My colleague mentioned the vote we just had. There is a coalition of 125 members at the National Assembly who are calling for the money to be sent, who are saying that everyone in Quebec is insured, who are saying that we can improve the program and that we want to do so quickly and better. That is the problem with the NDP: their diagnoses may be correct, but as soon as respecting Quebec's jurisdictions crosses paths with their solutions, they trample all over Quebec and call that a success. If the government of the Netherlands decided to write cheques to Quebec, the people would ask for it. That is not the question. The question is how to offer the services effectively while respecting the Constitution. Obviously, the NDP did not read the Constitution or it pretends not to have read it.

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Mr. Taylor Bachrach (Skeena—Bulkley Valley, NDP)

Jun/3/24 7:26:15 p.m.
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Madam Speaker, the issue of the report is one that I believe we will be debating again soon. The challenge of exorbitant food prices is truly an international challenge. I was reading that in France the finance minister managed to secure—

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Jun/3/24 7:26:38 p.m.
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The hon. member's phone is vibrating and causing interference.

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Mr. Taylor Bachrach

Jun/3/24 7:26:44 p.m.
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Re: Bill C-352

Madam Speaker, it was my hand on the desk. I was reading that in France the finance minister managed to secure an agreement from 75 of the top food companies to lower their prices significantly, but here in Canada, the Prime Minister has not even managed to get the big grocery retailers to sign on to a voluntary code of conduct that would not actually lower food prices. Given the fact that the voluntary approach has failed so miserably, does the member not support more proactive measures to ensure that food prices come down? I hear his point around competition. Our leader has tabled Bill C-352, which is now making its way through committee. That process is going to take some time, and Canadians need relief, when it comes to food prices, now. Would the member not support more proactive measures by the government?

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Mr. Jean-Denis Garon

Jun/3/24 7:27:40 p.m.
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Madam Speaker, I am pleased to be debating with the NDP today because they are once again proving my point. The member says that in France, the finance minister gathered 75 people in a room to negotiate. There is so little competition here that there were five people in the room. They could have fit in a cubicle here in the back of the lobby. We clearly do not have the same market structure at all. The profit margins are higher here. The land area is bigger and it is less densely populated. We have a fundamental issue with competition. What I was saying to the member earlier is that I think that it is a good idea to think about this, but until we find a way to ensure more competition, more innovation and more supply for consumers, we will go from one temporary measure to the next. There are other anti-competitive behaviours. The grocery stores here are all the same. The service offering is identical almost everywhere, and the supply of products is identical everywhere. I think we need to think outside the box and spend a lot of time on this. The member can count on me to be part of that.

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Mr. Simon-Pierre Savard-Tremblay (Saint-Hyacinthe—Bagot, BQ)

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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Mr. Peter Julian (New Westminster—Burnaby, NDP)

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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Mr. Simon-Pierre Savard-Tremblay

Jun/3/24 7:37:06 p.m.
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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.

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Mr. Jean-Denis Garon (Mirabel, BQ)

Jun/3/24 7:38:15 p.m.
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Mr. Speaker, in his speech, my colleague mentioned that consumers will not be able to enjoy lower prices unless new competitors enter the market. I would like to know why he thinks new entrants are reluctant to invest in Canada. Why is our industry minister always travelling, chasing grocers south of the border? Is that not proof, in and of itself, that there are significant barriers, primarily regulatory ones, that discourage people from investing in Canada?

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Mr. Simon-Pierre Savard-Tremblay

Jun/3/24 7:38:52 p.m.
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Mr. Speaker, once again, I think the answer was in the question. Of course, as we know, the Minister of Innovation, Science and Industry is promoting it left, right and centre, but it is not working. The same few players in the sector continue to behave like a cartel. I remember hearing the Minister of Innovation, Science and Industry say at Thanksgiving that it was thanks to his plan that there were discounts, as if the flyers in the ad-bags did not exist before the plan was announced by the Minister of Innovation, Science and Industry and as if inflation would magically disappear and go away because of it. This initiative cannot and should not be promoted simply through some sort of global marketing operation, but rather through policy changes, of course. The government can kiss up to international companies as much as it wants, but if the market is not attractive, no one will ever want to come here.

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Mr. Peter Julian

Jun/3/24 7:40:07 p.m.
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Mr. Speaker, my colleague just said that we cannot use the word “stealing” but we can use the word “cartel”. A cartel does things that are illegal. It steals money. Would it not be accurate to simply say that we are paying too much and that it amounts to stealing from us?

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