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Member of Parliament

Dave Epp

  • Member of Parliament
  • Member of Parliament
  • Conservative
  • Chatham-Kent—Leamington
  • Ontario
  • Voting Attendance: 65%
  • Expenses Last Quarter: $153,134.70

  • Government Page
Context: House Hansard - 144 - Dec/8/22
Mr. Dave Epp (Chatham-Kent—Leamington, CPC)
  • Dec/8/22 12:11:09 p.m.
  • Watch
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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