RCC’s Response to Standing Committee on Agriculture and Agri-Food report

On Tuesday, June 13, 2023, the Standing Committee on Agriculture and Agri-Food released “Grocery Affordability: Examining Rising Food Costs in Canada,” a report which takes a look at the impact of food inflation. In summary, the committee made 13 recommendations.

Overall, RCC is encouraged by the report, which is thoughtful and comprehensive, in marked contrast to some of the surrounding rhetoric at the outset of the hearings. The report makes it clear that multiple factors have led to this inflationary environment, most of them of a global nature, driving up input costs in the supply chain long before these foods get to Canada’s grocers. The combined roles of cost spikes for feed, fuel, and fertilizer, compounded by supply chain disruptions, labour shortages and climate events have been the real drivers of food price inflation.

The report also notes expert opinion agreeing with what we have said throughout: that there is no “greedflation” in Canada’s grocery sector. The Committee declined to offer any evidence that grocers are profiting from food inflation. The very opposite is true, with grocers working daily to provide food to Canadians at the lowest prices possible. That is evidenced by the Committee’s finding that food inflation is lower in Canada than in our economic peers in the G7 and comparable to that in the US. A more recent Ubuy study has recently confirmed that Canada has the second lowest food inflation in the world.

So, while we welcome the collaborative tone of the report, we would caution against increased government intervention in the operational aspects of the food business. It is a multilayered, complex and business that works well for Canadian consumers, jobs, and investment and there is no evidence to suggest that government intervention would lower food prices for Canadians.

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Grocery retailers are working jointly with manufacturers and other stakeholders in the development of a reciprocal Code that reflects the realities of the Canadian regulatory and commercial environments. The Steering Committee continue to report on their progress to the FPT Ministers to ensure that a Canadian Code benefits all participants in the supply chain and one which supports the principles of Transparency and Certainty, Fair Dealing Across the Value Chain, Timely Dispute Resolution and Simplicity. It should be noted that countries without reciprocal obligations (Australia) or with a legislated code (UK) have experienced significantly higher food inflation.