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Jean-Denis Garon

Member of Parliament
Member of Parliament
Bloc Québécois

Mirabel
Quebec
Voting Attendance: 62%
Expenses Last Quarter: $216,581.38

Government Page

Jun/4/24 11:37:19 a.m.
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Madam Speaker, I will be sharing my time with the member for Saint-Hyacinthe—Bagot. Today, we are talking about the price of groceries and the food we eat. First, as they start their season, I would like to take a few seconds in the House to thank all those in Quebec's agricultural and processing sectors who feed us. Many of my colleagues from all parties, especially those of the Bloc Québécois, are from Quebec agricultural ridings that feed our cities. In particular, I am thinking of the member from Montcalm and the member for Saint-Hyacinthe—Bagot. I feel it is very important to acknowledge the work of people in the agricultural sector. They work hard under tough market conditions. Global warming and climate conditions do not help. Bad weather adds to all the economic hardship these people face. However, in the past year, the federal government has offered virtually no meaningful programs to help them. I therefore want to recognize their work. Today, we are debating this NDP motion. I have mixed feelings about it because we know the NDP has something of talent for making accurate diagnoses but proposing solutions that, to put it politely, are inappropriate and ill-conceived. Maybe it is because of incompetence. I cannot say. Anyway, the NDP makes diagnoses. For example, they said people need dental care. Their solution was to ask the government with the least competence and no jurisdiction in this area to implement a program that violates the Constitution by sending cheques to people, making them wait and not clearly outlining the parameters to them, not to mention that its management was turned over to the private sector. A diagnosis with a bad solution is the hallmark of the NDP. It is the same thing with the pharmacare system. The New Democrats are good at stating the obvious: In their opinion, people need prescription drugs. I thank the NDP, because no one here had any idea. Here again, the NDP comes up with a solution, namely to call on the federal government to get involved and impose conditions on the provinces. Given that Quebec already has its own plan and is innovating, they are destabilizing that plan and slowing down the progress of Quebec's system, which is still a model in the federation. They are actually slowing down innovation, because a province that is innovating can inspire the other provinces. That is the hallmark of the NDP. It makes an obvious diagnosis of an obvious problem. In this particular case, let us keep in mind that for 30 years the NDP was not interested in this problem, although it has easily existed for 30 or 40 years in our competition regime. However, after a period of 7%, 8% or 9% annual inflation, the NDP is suddenly interested and is proposing a strange solution. The NDP's solution is to control prices, in other words, cap them. I am all for discussing the price of food, because it is true that prices have increased. How do we cap the price of groceries? We open a new tower here in Ottawa and fill it with public servants who will search through flyers all day long: Butter will be such and such a price, celery is too expensive in Val-d'Or, maybe beets should be cheaper in Rimouski, and a loaf of bread in Plateau Mont-Royal costs 25¢ too much. This was already done in the United States during the Great Depression of the 1930s. They were exceptional measures. It was also done during the Second World War, when they had the Office of Price Administration. That place was filled with public servants who threw papers from one floor to another, as in “the place that sends you mad”, in an Asterix film. At the time, in all the non-communist regimes where this was done, these were exceptional measures implemented in response to an exceptional situation. The problem with what the NDP is proposing is that it is seeking an exceptional measure to address a problem that has become permanent. That is the wrong way to approach the problem. The same is true of bringing in a windfall profit tax. It might be a good tax. It may be that this tax will not distort markets. Tax specialists tell us that some taxes are better than others in that they are less harmful to the economy, which will come as a surprise to the Conservatives. In the Bloc Québécois, we once proposed a temporary windfall tax on certain profits. It was a surtax on the banks, because they had made excess profits during the pandemic, and those temporary measures could be considered appropriate. In this case, however, the situation is structural. In 1986, I was four years old. Revealing my age is not something I like doing, but someone put it on Wikipedia so what can I do. In 1986, there were 13 major grocery chains competing with each other. Over the years, some of them swallowed up others. Bigger chains emerged, to the point where today Canada has only three major chains—yes, three. I would remind everyone that geographically speaking, Canada is a very big country, and we have only three chains—five, if we count Costco and Walmart. Target tried but came up short. We started out with 13 large chains and now we are down to five. That is the problem. The problem lies in our competition system. What will we do? Will we let five players divvy up 80% of the market, fill an office tower with public servants and institute price controls? Therein lies the problem. I will show how easy it is to diagnose the lack of competition here, as well as the obstacles to investment. The profit margin of Canada's major grocery chains is about 5%. People might say that is not a very big margin, but we are dealing here with a volume market where five players share 80% of the market. Five per cent is a fairly large margin, because in Europe the average margin is 3%. In the United States the average margin is 2%. Furthermore, since there is more competition in the U.S., there is more innovation. One of the leading competition law specialists testified in committee that, unlike here in Canada, there is a differentiated offer in the U.S., in that grocery stores are different from one another and there are different models. Here in Canada, however, when people walk into one grocery store or another, they can see they are all the same. They could change their name tomorrow and we would not even notice a difference. I said profit margins are 5% in Canada and 2% in the United States. In a functional market, what should happen in this situation? Eventually, an American chain would decide it is no crazier than anybody else, and it would come open grocery stores in Canada and make 5%. What is happening instead? We have a Minister of Innovation, Science and Industry, whom I admire for his boundless energy, flying to the U.S. so he can chase down grocers and beg them to open stores here. Clearly, there is an investment issue. There is something wrong when Bloomberg says that Canada has become a top investment destination for some industries, yet American grocery retailers just kilometres away do not want to come here. Why? Maybe it is because there is still anti-competitive behaviour going on, there are regulatory barriers, and the other players are too big. The NDP does not mention this, however. It did not do this analysis, and that is why we will continue to live in a market dominated by a handful of major players. Yes, improvements have been made. The commissioner of competition has been given the power to subpoena witnesses and compel them to produce documents. He has been given the power to launch investigations. His powers have been enhanced, but this is like moving from the Stone Age to the Iron Age. Just a few months ago, Canada's competition regime was the same as it was in the 1980s, and it is changing at a snail's pace. However, all competing markets give their commissioners more powers. They give them more freedom. There is always a presumption in favour of consumers, and the commissioner does not have to constantly go to court, only to lose the case in the end. We need a major overhaul and regulatory reform. This would require a Parliament that cares about competition and innovation. It would also require stable and predictable supply chains, as well as local production. Free trade is great, but it requires reciprocity of standards, because we are importing products treated with pesticides that are banned in Canada. When the pandemic hit, obviously, supply chains broke down. This would be part of the solution. Today's motion gives us an opportunity to talk about and debate food prices. Food is the second highest household expense item. Unfortunately, however, I have my doubts that filling office towers with public servants to control prices is an appropriate way to address a situation that deserves a considerable amount of our attention.

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Context: House Hansard - 144 - Dec/8/22

Mr. Jean-Denis Garon

Dec/8/22 11:30:02 a.m.
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Mr. Speaker, many of our competitors that produce agricultural commodities are subject to similar tax measures in competing countries. What I tried to tell my colleague earlier in my speech, not my question, is that we recognize the impact on farmers, so we want targeted measures. What my colleague forgot to mention is that the carbon tax applies to markets in general. We care about farmers, and we are sensitive to the problems they are dealing with, which is why my colleague is indirectly asking me whether we should abolish the tax for all industries, including western Canada's oil industry, which is the most polluting of all. We need targeted measures. That is the problem with the Conservatives, and that is the problem with their motion. They are better at changing the subject than they are at identifying problems.

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Member of Parliament

Jean-Denis Garon