- Member of Parliament
- Member of Parliament
- Conservative
- Chatham-Kent—Leamington
- Ontario
- Voting Attendance: 65%
- Expenses Last Quarter: $153,134.70
- Government Page
- Dec/8/22 12:11:09 p.m.
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Madam Speaker, as always, it is a privilege and honour to rise and bring the voice of Chatham-Kent—Leamington to this place.
I will be splitting my time with my hon. friend and colleague from Thornhill.
Food inflation remains a top priority for Canadians from coast to coast, with almost six million people reportedly living in food-insecure homes in Canada last year. This is per Canada's Food Price Report. This number is expected to be even higher in 2022.
Food inflation is impacted by a number of factors, including general inflation, supply chain issues, geopolitical situations and, of course, internal policies. General inflation in Canada has reached the highest level in decades, as the more the government spends, the more things cost.
We have seen local supply chain issues caused by the global pandemic, and there are global impacts on food, especially fertilizer supply, as a result of Russia's illegal invasion of Ukraine. Yes, these events are not controlled here, but here at home, the Liberal carbon tax continues to drive up the price of all goods, along with all of the other non-pandemic-related spending that the government has chosen to do.
Canada's general inflation rate is 6.9%, the highest it has been in 40 years, and food inflation has exceeded general inflation for 13 consecutive months, with food prices surpassing even the high-end predictions for 2021 to an astonishing rate of 10.3% this past September. This has led to food banks experiencing their highest level of demand in decades.
Russia's invasion of Ukraine has had global impacts on food prices through trade restrictions and further supply chain interruptions. This ongoing conflict has especially affected the fertilizer market here in Canada, and more than it should have since Canada should be far more self-sufficient in nitrogen and potassium than it is. We have the national gas here to provide our nitrogen fertilizers, but not the pipelines across Canada to get the gas to eastern Canada. Railcars do some of the cross-Canada shipping of our petroleum products, which ties up and makes more expensive the option of railing potassium to eastern Canadian markets. Saskatchewan is a very large producer of potash, or potassium, but instead of using our own, we have became dependent on imports.
As Russia is also the world's largest exporter of fertilizer and as trade restrictions remain in place, the shortage of fertilizer puts pressure on global prices. However, instead of helping farmers, the government has demonized our farmers' use of fertilizer. The introduction of a fertilizer emissions reduction target of 30% could not have come at a worse time, and this unscientific scheme is not based on any measured baseline data. Progress could not even be directly measured, because there is no base to measure from, nor a way of directly measuring emissions. Canadian farmers are already outproducing the world on sustainability and continue to improve their environmental record, as they are already up to 70% more efficient in fertilizer use than many other countries.
Russia is also the largest gas exporter in the world, meaning that sanctions imposed on Russia by Canada and a number of other countries have placed pressure on other suppliers of gas, once again driving prices up. Higher fuel costs affect food prices in every step of our food value chain, as suppliers are forced to pass along their increased costs at every step up the chain and then, of course, ultimately to consumers.
The government's carbon tax, the subject of today's opposition motion, is yet another factor driving up food costs across Canada, as its exemptions are currently limited to only on-farm fuels and it is still applied in many other areas of the food supply chain. Not only does the carbon tax directly raise costs for Canadians, but it has far-reaching indirect effects as well, especially if the government insists on tripling it. It is important to note that a large part of inflation, and certainly the carbon tax, is the result of internal policies over which the government has control.
In my remaining time, I want to spend some time on an important issue that has been a priority for me since I first became a member of Parliament. It is the role that grocery retailers play in our inflationary challenges.
On the one end, our food supply chain continues to be crippled by the government's cash grab carbon tax, and we are certainly hearing about that in the House today. However, let us look at the other end of this equation and at the role of the large grocery retailers that complete the double whammy of the carbon tax.
The government has the opportunity to address the crisis of food inflation and lower food costs, namely through the implementation of a grocer code of conduct. Farmers are often called the first step in the food value chain. However, the “field to fork” expression is a bit of a misnomer. Farmers have many suppliers, so they are not the first step in the value chain. These suppliers, in turn, incur the carbon tax on many of their products and of course on the transportation of their products to the farm, and these costs are once again passed along to the farmer. Food manufacturers and processors are next, and then on to food distribution, which is either retail or the food service industry. The carbon tax is incurred at each step of this chain, eventually ending on the consumer's lap.
There are two seemingly contradictory statements being bandied about these days. The first is that retailers are seeing record profits. The counter-argument from the industry is that retailer margins have not changed in percentage terms throughout the pandemic. Both these statements can be true, as retail volumes have increased during the pandemic since consumers shopped more retail versus the food service that supplies the restaurants and institutional trade.
The carbon tax, which applies to the delivery of farm inputs and outputs and to the transportation all along the food chain, has increased costs, so retailers, maintaining their margins in percentage terms, which is what they are claiming, are applying this margin to a higher cost from suppliers and to higher volumes generated by the change in the market from consumers shopping retail versus food service. Of course, their profits then set records.
However, there is an opportunity before us that could accomplish many goals if we get it right. When properly implemented, it would result in increased profits for food manufacturers because of fair trading practices and reduced administrative costs in attempting to comply with the many “rules” applied by retailers. It would also lead to reduced costs for the retailers themselves in administering all these programs allegedly used as profit centres. Most importantly, it would reduce food costs for consumers.
Right now, shelf listing fees, fines for short or late deliveries and a host of other administrative exercises are adding costs that eventually end with the consumer paying a higher price. There is certainly an international precedent for such a solution, as the U.K., Ireland and Australia have all gone down this road with varying degrees of success.
Initially, retailers were afraid imposing a code would lead to a reduction in the number of retailers with gross sales meeting the threshold for the application of the code. However, the U.K., since fixing its original attempts, has seen more retailers succeed. At the outset of the program, only 10 retailers reached the threshold of dollar value throughput, but now 14 are large enough, meaning that the code has not driven consolidation.
In addition, and this is very important as well, it would allow the 10,000 independent grocers, which are crucial to so many parts of rural Canada, to be treated on par with the big five that control 85% of the grocery retail trade.
In conclusion, an appropriately structured code results in lower consumer prices and fairer trading practices within the value chain. Punishing farmers with an unscientific fertilizer emission target and applying a carbon tax to almost every step of the food value chain only serve to drive up food prices and drive more Canadians to the food bank.
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Madam Speaker, it is a pleasure this morning to continue to put some thoughts on the record regarding the fall economic statement implementation act.
Seven years ago, the current government inherited a balanced budget and a robust economy, but instead of maintaining balance or even paying down some debt, let us consider that for a moment, perhaps to prepare for the unknown, such as a pandemic or an unexpected war, it immediately began to add more spending, took the government finances back into a deficit and again started to add to the debt.
Then came the COVID–19 pandemic, which required additional spending. We supported those early programs. However, of the half a trillion dollars, yes, $500 billion, of added debt by the current government, $200 billion was not pandemic-related.
Program spending by the current government is now 30% above prepandemic levels. We now have structural deficits presently embedded in our finances, and of course the more that the government spends, the more things cost.
When the current government came to power seven years ago, it promised transparency. Do members remember “sunny ways”? This is what its own Parliamentary Budget Officer had to say on the transparency of the fall economic statement:
In this year’s FES, the Government identified $14.2 billion in new measures without providing specific details on this spending....
This lack of transparency presents challenges for parliamentarians and the public in scrutinizing the Government’s spending plans, particularly given the magnitude of measures, $14.2 billion—the largest amount announced without specific details since the 2016 [FES].
On top of all the other spending already outlined, the $20 billion, the current government is now asking the House for a $14.2 billion blank cheque. Are these sunny ways? Hardly. We will not be supporting this.
In my remaining time, I want to spend some time on one issue that is not addressed in the fall economic statement.
Last week, I had a series of eight meetings with my own constituents. The primary issue I heard from them was the rising cost of living, particularly the costs of food, fuel and housing. Those are the main things I heard, and in particular, food. Last month, as we are all now aware, there were 1.5 million visits to food banks, that in the country of Canada, a country that is considered a breadbasket.
The FES missed an opportunity to address an issue that has the potential to lower food costs, namely the status of the implementation of a grocery code of conduct.
First, we have heard much in statements in the media today about two seemingly contradictory statements, record grocery retailer profits and the counter-argument from industry that retailer margins have not changed in percentage terms through the pandemic. Both statements can be true, as retail volumes have increased during the pandemic as consumers have shopped more retail versus the food service that supplies the restaurant trade and institutional trade.
Second, the carbon tax, along with other issues, that is applied to the delivery of farm inputs and outputs, and to transportation all up and down the food chain, has increased costs for suppliers. Retailers maintaining their margins in percentage terms are applying this margin to a higher cost of goods from suppliers and to higher volumes generated by the change in market from consumers.
However, there is an opportunity for us to accomplish many goals if we get it right. What do I mean by getting it right? We can increase profits for food manufacturers and processors because of fair trading practices, and we can reduce the administration costs in attempting to comply with the many “rules” applied by retailers in an updated code of conduct. We can reduce administration costs for retailers in all these programs that are allegedly used as profit centres, but most importantly we can reduce consumer food costs.
Right now, shelf listing fees, fines for short or late deliveries and a host of other administrative exercises are adding costs that eventually the consumer pays. The U.K., Ireland and Australia have all gone down this road of a grocery code of conduct. Retailers were afraid that imposing a code would lead to a reduction in the number of retailers with gross sales meeting the threshold for application of the code. The U.K., since fixing its original voluntary attempts, has seen more retailers. It started with 10 and now has 14 retailers meeting the threshold dollar value, so the code has not driven consolidation there.
In conclusion, an appropriately structured code results in lower consumer prices and fairer trading practices within the value chain. In addition, it allows 10,000 independent grocers, who are so crucial for rural parts of our country, to be treated on par with the big five that control 85% of the grocery retailer trade.
The fall economic statement missed an opportunity to advance this issue for Canadians. Instead, the statement adds more government spending, which would only lead to higher inflation over time and the hurting of our most vulnerable citizens. With that I will conclude, and I look forward to questions.
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Madam Speaker, it is always a pleasure to rise to bring the voices from Chatham-Kent—Leamington to the chamber.
When I started farming professionally some three and a half decades ago, I am not sure if I would have personally supported a measure like the one we are debating today. I would have thought it unnecessary.
I live on a home farm, and I am a third-generation farmer. When my father began farming, everyone was either from the farm, had an uncle on the farm or had a personal farm connection. Today, it is much different.
We often hear of the 80-20 scenario, where 80% of a product or service is delivered by just 20% of a population, those who are providing that service. With food production, farming in particular, if we go back and look at census data, 2% of our Canadian population are farmers. Under the census, that means they produce more than 7,000 dollars' worth of farmed goods per year. In reality, half of 1% of our farmers produce 85% of the production grown on our farms.
If we look in the chamber, there are 338 members. With table officers and others, there are around 400 people on a full day. The means two people would be the represented population.
I do celebrate this day and the opportunity to speak because it provides us an opportunity to educate people and talk about local food. More importantly, we can talk about the whole food chain.
I want to credit Senator Black for his leadership in the Senate and my colleague from Perth—Wellington for shepherding it through this chamber. I also want to credit Anita Stewart from Wellington County who pioneered the first Food Day.
The member for Perth—Wellington said in his speech about a month ago, “Since that first Food Day in 2003, it has indeed grown into a wonderful celebration of the food our farmers grow and the food that all Canadians enjoy every single day, whether at their kitchen tables or at restaurant tables across the country.” I add my voice to that celebration and that encouragement of local production.
I live in a part of the world where we have access to fresh fruits and vegetables produced locally almost 10 months, or even more than 10 months, a year, depending on the vegetable, because of our innovative greenhouse sector.
Our roadside markets are plentiful, with direct lines from the producer to the consumer, which is great. However, for much of Canada, roadside markets are not accessible all year round, especially in the winter. We all know winter is coming.
Canada is a trading nation. We produce so many good foods, but our coffee production and our orange juice production is not top-notch. We do not have access to it and, as Canadians, we cannot eat all the wheat, canola or pork we produce. We are a trading nation. We rely on food chain systems, both here in Canada, for our own domestic production, be it at our kitchen tables or at restaurants, and with our international trade.
I wanted to say that to lead into three points today. The first is that this day offers us an opportunity to enhance food literacy to our general population. We rely on this agri-food value chain to feed us year-round, and because, as I shared earlier, such a small percentage of our population has a true connection to the farm, food literacy has dropped in Canada.
This gives us an opportunity to describe how complex our food system is. Given that it is so complex, and given the times we are in, food is becoming more expensive. September's food inflation rate, year over year, increased 11.4%, and that is growing. Here in Canada compared to much of the world, we are still lucky as Canadians.
In 2020, 11% of our disposable income was spent on food. In 2021, in calculations by the Canadian Federation of Agriculture, it was 10.7%. They declare that day one day earlier, on February 8, 2022, when the average Canadian has spent their percentage of disposable income to purchase all the food they needed for the year. I suspect that will be much later in 2023. That is unfortunate for many low-income Canadians.
Why are food costs rising? I can share that the food inflation rate has certainly outstripped general inflation, and yes, the commodity markets are strong. A lot of crops that are negotiated in price relative to the strong commodity markets have also risen at the farm gate. The costs to our farmers have outstripped the prices they have received at the field.
Fertilizer tariffs and shipping costs have sky rocketed. There is an exemption for on-farm gas and diesel, but there is the carbon tax and everything else. There is carbon tax when it is shipped to the farm and on the barns being heated, and the grain is still being dried this year.
I would implore this House to pass Bill C-234. I had the opportunity to speak to it earlier.
Make no mistake. Farmers are conservationists. The fact they need an exemption so they can compete with the rest of the world and reduce the cost of producing food is not a reflection of their ability as conservationists. I could spend a whole 10 minutes just talking about the advances that our farm community has made on that.
I want to touch on another cost driver, labour, which is affecting every sector of our economy. I hear that from our farm community. I want to celebrate the fact that Canada has a temporary foreign worker program. It is critical to so much of our farming sector and is also of great benefit to the host nations from where many of these valuable workers have come. It is one of our best foreign aid mechanisms, and many parts of the world are jealous of this opportunity. Again, I could spend 10 minutes just on that.
Another cost driver is obviously the borrowing costs to finance assets and the growing cost of crops, which is another thing our farmers are facing.
Farmers are often called the first step in our food value chain. This leads me to the third and final point that I wish to make today.
We often hear our food system being described as field to fork, but that is a bit of a misnomer. Farmers are not the first step in our food chain. I note that the bill's title refers to establishing a national food day, not a national farming day. I think it is rightfully titled. As farmers, we have so many suppliers that supply us with our crop inputs and everything from steel to bearings to financing. We are not the first step. I want to acknowledge that. In this food value chain we have in Canada, and actually much of the world, food manufacturers and processors are next, and then it is on to food distribution, whether it be the retail or the food service mechanisms.
We hear two statements being bandied about, “record retailer profits” and “retailer margins are not changing much in percentage terms”, throughout the pandemic. Both those things have been in the news recently. Both of these statements can be true at the same time. Because the pandemic has shifted, somehow much of the food supply has come to our bodies more through home cooking and the grocery retail chains. The volumes being sold through retail have increased and food service has diminished. With increased volumes, even though the margins of our retailers have remained roughly steady within a certain range, between 2% and 4%, the profits have actually increased. Today we are in a state in Canada where we have an opportunity to address some of these mechanisms in our food value chain if we get it right.
What I am talking about is a grocery code of conduct. I had two excellent meetings last week with Restaurants Canada and Food and Beverage Canada. They mentioned labour availability as being their number one issue and talked about the temporary foreign worker program, but that is not where I want to go. Restaurants are telling me the very same things our farmers are experiencing. We have all gone out and noticed that the cost of restaurant meals has also climbed, but their margins are also shrinking because of the cost structures they are experiencing.
A grocery code of conduct actually gives us the opportunity to address some of the behaviours in the food chain, the fines, levies, listing fees, and the like, all those mechanisms that the value of our food production is being transferred from the food processors and manufacturers to the retailers. Manufacturers are spending on administrative costs and keeping an eye on that. Food retailers are spending on administrative costs in that mechanism.
The United Kingdom, Ireland and Australia have all gone down the road of a grocery code of conduct and have actually experienced greater profits throughout the transmission chain of food, the value chain. Most importantly, food costs for consumers have relatively dropped because costs have been stripped out of that system. That is the big point I want to make. Canada has an opportunity to get that right. I want to mention the 10,000 independent grocers across this country that are very critical to our rural fabric.
I know my time is quickly running out. I want to thank the sponsor of this bill.
I would just note that we have inflationary pressures driving up costs. We have an opportunity through a grocer code of conduct to address these inflationary costs.
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