AGRI Committee Meeting

     I call this meeting to order.

    Welcome to meeting number 11 of the House of Commons Standing Committee on Agriculture and Agri-Food.

    Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

    Before we continue, I'd like to ask all members here to consult the guidelines written on the cards on the table. Make sure that, when you are speaking, you keep a distance from the microphone, and be aware that the interpreters are listening in. For their health and safety, it's good to review the cards.

    I would like to make a few comments for the benefit of the witnesses and members. Please wait until I recognize you by name before speaking, or until you are asked questions directly by a member of Parliament. For those participating by teleconference, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen, you can select the appropriate channel for interpretation: floor, English or French. For those in the room, you can use the earpiece and select the desired channel. Remember that all comments should be made through the chair.

    Before we begin with the witnesses, I'd like to get consent to adopt the budget for our study on the importation of broiler meat mislabelled as spent fowl. A draft version has already been circulated.

    Is it the will of the committee to adopt this budget? It's roughly $1,000.

    Some hon. members: Agreed.

    The Chair: That's perfect.

    Mr. Barlow.

    Thank you, Chair.

    I want to get this out of the way, as well. I believe this has been circulated to everybody. I want to table a motion that addresses associate members of the committee with all parties. The motion is to allow associate members access to the digital binder.

    The motion reads:

    I believe there is consensus there.

    (Motion agreed to)

    The Chair: Okay.

    Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, the committee is resuming its study of the update on the implementation of the grocery code of conduct.

    I would now like to welcome our witnesses today.

    From Lactalis Canada Inc., we have Mark Taylor, who is joining us online. From Loblaw Companies Limited, we have Nick Henn, chief legal officer, also joining us online. From Metro Inc., we have Simon Rivet, vice-president. Thank you so much for joining us here in person.

    We'll start with Lactalis Canada for five minutes.

     Good afternoon, Mr. Chair and members of the committee.

    As the president of Lactalis Canada, a leading dairy processor in Canada’s food supply chain, I appreciate the invitation to share my perspective on the Canadian grocery code of conduct.

     In 2018, I was asked for my insights on the U.K. code of conduct. These insights were based on my experience implementing and working in a code environment for a leading manufacturer in the U.K. Today, seven years later, I am here to continue that conversation.

    I’ll begin by saying this. A grocery code of conduct, correctly used, is good for business—everyone’s business, suppliers and retailers—but, ultimately, it's good for Canadian consumers. Of course, the Canadian code, while drafted and final, is still not formally operational. We have made some positive inroads to arrive at this point, but I think that many of my industry peers would agree that we are certainly not at the finish line.

    First, we must acknowledge that Canada’s grocery code of conduct is the product of compromise. It was drafted through extensive negotiation among various stakeholders with varying priorities. This process resulted in language, text, that, without enforcement tools, creates challenges in achieving the code’s objectives.

    In the U.K., the code initially focused on the largest retailers and suppliers, around 85% of the market. This allowed for rapid adoption and best practice development that trickled down to all businesses. Canada’s approach involves many more parties, adding complexity to alignment and to implementation. Another significant difference is that, while Canada has incorporated elements of the U.K. code, the Canadian code is not enshrined in law; it is voluntary. The adjudicator has no enforcement tools. In the U.K., the possibility of fines was a powerful motivator for engagement, even though it was very rarely used.

    As a result of the code not being mandatory, adoption will be highly variable. In this framework, the code’s uptake will depend on each respective supplier’s or retailer’s understanding of it and organizational leadership supports. Some will see the code as an obstacle to be circumvented and something that offers little resistance to normal business practices. Others will fully embrace the code's true intent, enabling business certainty and meaningful collaboration and creating win-win outcomes through continuous improvement across supply chains. At this stage, it is difficult to predict the proportionality of the various outcomes, but what is certain—and this was our experience in the U.K.—is that if we all focus on using the code to deliver positive outcomes for all, we will see support grow quickly.

    It is important to note that commercial relationships built on fees, fines and euphemistically termed “asks” are not healthy. They undermine certainty and trust and drive short-term profit margin tactics that distract us from what really matters, which is delivering the best value for Canadians. These costs inevitably flow back into supplier and retailer pricing, ultimately hitting the consumer’s wallet.

    As a manufacturer, our purpose is to make and supply high-quality, nutritious products for Canadians. I am fully motivated to do as much of this as possible. Anyone who thinks that a threat of compliance or fill rate penalties will somehow encourage me to prioritize one customer over another is misguided. These penalties are a drain on resources that would otherwise be invested in manufacturing capacity, capability, efficiency and innovation.

    In conclusion, I am confident that the code’s principles and objectives remain critical to a strong grocery supply chain. We know from international experience that a code of conduct can deliver real value. In the U.K., where the code has been in place for over a decade, the U.K. groceries code adjudicator’s annual survey findings demonstrate that over 90% of suppliers report improved compliance and fair dealings. Retailers also universally acknowledge stronger relationships and greater efficiency as positive impacts resulting from the existence of a code. These outcomes demonstrate that when principles of fairness and transparency are embraced, the benefits extend across the entire value chain for all parties, including consumers.

    Looking at our current reality in Canada, the time is now to unlock the Canadian grocery code’s full potential. I remain optimistic that we will achieve this goal together.

    Thank you, and I look forward to the committee’s questions.

    Thank you very much.

    Next, we'll go to Nick Henn.

     Good afternoon. Thank you for inviting me to address the committee today.

    I'm pleased to share some thoughts on the grocery industry code of conduct. Before I start, I want to provide some context for how we at Loblaw think about the grocery code.

    At the outset, let me be clear that Loblaw supports the grocery code and intends to sign up as a member. We have been an active participant in the efforts and process leading up to implementation. We have also been hard at work with our own preparations to make sure that we're ready to fully implement the code when it comes into place in January.

    At its essence, Loblaw is a customer business. We exist to provide essential products and services to customers in communities across Canada. Every day, customers get to choose which food store or pharmacy they buy products from. Consequently, we have to ensure that we have the right products on shelves at the right quality and price that customers expect.

    The backbone of this effort is the work of our more than 220,000 colleagues, but equally important are the suppliers who provide the broad range of high-quality products that fill our shelves. These suppliers include many of the largest global brands and well-known Canadian suppliers, as well as thousands of small and medium manufacturers and producers from across the country. Our supplier base reflects the diversity of the needs of our customers.

    To support our commitments to our customers and to ensure that shelves are full with the right products when and where customers choose to shop, it is imperative that we have strong relationships with our suppliers. Ultimately, we cannot build a long-term, sustainable business unless our suppliers are also able to thrive. This principle has been central to our success over many decades.

    I want to provide a couple of examples of how our approach to managing our supplier relationships shows up in practice.

    As I mentioned earlier, we are deeply committed to supporting Canadian suppliers. Our customers have an increasing interest in purchasing products from their home provinces and regions, and we work hard to satisfy those demands through new products, new suppliers and new innovation. In 2025 alone, we have onboarded more than 140 new Canadian suppliers. We believe that is one of the best ways we can use the scale of our business to ensure that Canadian food businesses and growers succeed. One of these companies is Les Tartes de Simonne from Saguenay-Lac-Saint-Jean. Four of their famous pies are now in every one of our Maxi stores in Quebec. Our customers continue to respond positively to our new suppliers as we bring their products to stores.

    Another great example of our commitment to our supplier partners is our small-supplier program. Loblaw does business with over 1,000 small Canadian suppliers, and the program is built to ensure that suppliers get the kind of support they need. Companies like Crafty Ramen get onboarded and supported with guaranteed listings, fast payments and access to sales-point data. All of this is to make sure that their products have the best chance to reach Canadians. Ultimately, the goal is to see them grow to become a bigger supplier to us and others.

    We recognize that, despite our efforts to be a good retail partner to our suppliers, we're sometimes a complex organization to deal with. We continue to actively listen to our suppliers to understand their concerns. We work to make changes, where necessary and where we can, to our policies, processes and systems to reduce friction for all of us. We believe that the grocery code can play a role in reducing that friction, and we're optimistic that it will achieve its goal of improving supplier-retailer interactions across the industry.

    Loblaw was actively engaged in the development of the grocery code through 2023 and into the summer of 2024, alongside other industry members. We have continued to be involved as the industry and the code office have worked to finalize the outstanding governance documents, most notably the dispute resolution management process. Based on recent active discussions, we are very hopeful that the governance documents will be finalized shortly.

    I suspect that the committee is curious as to why these processes to finalize the code and the supporting documents take so long. In short, it is because the details matter when you're talking about impacting a sector as complex as the food supply chain. Each participant in the working group and, I'm sure, the interim board of the code wants to make sure that the words reflect the intentions and purpose of the grocery code. Taking the time to get those right up front makes sense and ensures that parties are aligned going into full implementation of the grocery code.

    Let me reiterate that once the remaining grocery code documents are finalized, Loblaw plans to join as a member of the code and contribute to its implementation and governance going forward.

    I'd be pleased to answer any questions the committee has.

    Thank you very much.

    Next we'll go to Mr. Rivet.

     Good afternoon, Mr. Chair, members of the committee.

    My name is Simon Rivet and I'm vice-president, general counsel and corporate secretary at Metro. I'm here at the invitation of the committee to contribute to your study on the implementation of the grocery code of conduct.

    With strong roots in Quebec and a growing presence in Ontario since 1999, Metro has always been committed to offering quality products and value to its customers. We know that our success depends on the people and partners who actively participate in the Canadian food system. Our relationships with our suppliers are based on trust, good faith, respect and fairness, which has always allowed us to develop successful solutions through mutually satisfactory agreements.

    Canadians count on grocers to provide quality food at affordable prices, and we take that responsibility seriously. Affordability remains a challenge for many households. As we have said before, food price increases have largely reflected higher input costs from suppliers, whether due to commodities, energy, transportation, labour or, more recently, tariffs. These are factors that we do not control.

    Despite this, we remain committed to driving tangible results across our operations as we work to keep costs in check while improving how we deliver food at affordable prices to Canadians every day. We've invested nearly $1 billion in recent years to modernize our distribution network, improving efficiency and service for both suppliers and customers. We continue to expand affordable options through value programs and discount formats, ensuring Canadians have choice in all the communities we serve.

    We're also proud of our work to strengthen local sourcing and reduce food waste. Metro works with many local and regional suppliers in Quebec and Ontario. Through long-standing partnerships with Feed Ontario and Food Banks of Quebec, we ensure that surplus food is redirected to those in need.

    Beyond our own initiatives, we have always emphasized a partnership-driven culture with our vendors, built on good faith, trust and fairness. That same approach underpins our engagement in the development of the grocery code of conduct to reinforce best practices and transparency. Suppliers and retailers alike must voluntarily decide to sign the code, and that can only happen if there is a solid framework in place, a point that was echoed by Karen Proud during her testimony in front of this committee.

    Metro's position is clear: We are committed to adopting the industry-led grocery code of conduct once finalized, and we believe the participation of all grocers and suppliers is essential to its success.

    Since 2021, through the Retail Council of Canada, Metro has been actively contributing to and participating in various working groups to help define the code's principles of fairness, predictability, and good faith. These principles benefit the entire supply chain, including consumers, who rely on a stable and competitive system.

    I can confirm that all major retailers, including Metro, are sitting at the table while we discuss the outstanding issues. We are optimistic that suppliers and retailers will agree on the few points that remain for the code to be implemented.

     In parallel with the code's development, we have proactively reviewed our supplier policies and processes to align with the code. By supporting the principles of the code within our organization, Metro is enhancing transparency, predictability and fair dealing throughout the supply chain.

    Canadians rely on food retailers to act responsibly and strike a balance between offering value to consumers and treating suppliers fairly. This balance is central to Metro's approach. We continue to work constructively with the office of the grocery sector code of conduct and our counterparts to ensure its success, while continuing our efforts to build consumer trust. We're very proud of the active role Metro has played in developing this code and will continue to work toward its implementation.

    Thank you.

    Thank you very much.

    We'll go to Mr. Barlow from the Conservatives for the first round of six minutes.

     Thanks, Mr. Chair.

    Mr. Rivet, you mentioned at the very beginning of your testimony the higher input costs. You talked about transportation, fuel and all of those costs that are having an impact on the price of groceries. We see from the most recent reports that food inflation is up another 4% in Canada. Food inflation is 50% higher in Canada than it is in the United States. It's rising at that rate.

    Is there anything in the grocery code of conduct that will lower food prices at the retailer store shelf?

    The grocery code of conduct is not to lower prices. The purpose is to establish a framework for transparency and fairness in the relationship between supplier and retailer. That will help, we hope, smaller retailers and smaller suppliers. The main purpose is not really to control costs.

    Mr. Henn, would you agree with that assessment from your colleague in terms of the grocery code of conduct and its impact on prices at the grocery store shelf?

    Yes, I would. Specifically, the grocery code does not regulate in any way the negotiation of costs between suppliers and retailers. We don't expect it to have a positive or a negative impact on prices.

    Thank you for that.

    I just find that interesting. About a year ago, the then minister of industry was saying that the salve for rising grocery prices in Canada was the grocery code of conduct and that it would solve all the problems. Clearly, that is not the case, and saying that the grocery code of conduct will have an impact on grocery prices is misleading.

    Mr. Rivet, what assurance is there, whether for Ms. Proud or Canadians, that with the grocery code being voluntary, if there is ever a decision rendered that Metro does not agree with, Metro would not just withdraw from membership of the grocery code of conduct?

    I'm not trying to put you on the spot, but is there anything in the grocery code of conduct that would preclude you, as a member, from withdrawing from the code, should Metro not agree with the direction it's going in?

    Well, the code is a voluntary code, obviously. We have said all along that we believe in the principles underpinning the code—transparency and fairness. We believe these principles are already in place at Metro, so we have a very good relationship with our suppliers. Frankly, I think we have to give it a go.

     Once the dispute resolution process is settled and we know that there is a broad-based adoption of the code, then definitely Metro will join the code. We're there to participate, as we've done in the past. We've been there since 2021, negotiating with all the parties and all the stakeholders, so we really believe in that code.

    Mr. Henn, I would ask you the same question.

    Are there some assurances to Canadians that, should there be a decision that is rendered against Loblaws, Loblaws would not simply remove itself from membership of the grocery code of conduct? Is there long-term commitment from Loblaws to be a member of this new initiative?

    Absolutely. The way to think about it is that the code is an industry code. We have been part of shaping that code, and we have very much bought into it. Alongside Metro and other retailers, we've been part of finalizing the governance documents. Even within our organization, we've spent many hours preparing for the code. Since the summer, really, we've been operating as though the code were in place. We'll continue to do that through the balance of this year and into January.

    Thanks, Mr. Henn. I appreciate that.

    Having Mr. Taylor here, with his experience with the U.K. grocery code of conduct, is an excellent opportunity. The reason for my questioning both of our retailers is that if they have a long-term commitment to the grocery code, mandatory might have been more effective than voluntary. Certainly, the United Kingdom has gone through that process where it started out as voluntary and eventually had to go mandatory.

     Can you maybe explain or elaborate on what initiated that move from voluntary to mandatory? Why did that become necessary in the U.K.?

    As you quite rightly pointed out, the code in the U.K. started off as voluntary around 2009. It failed to achieve any positive traction. In the end, the government decided that it would legislate. It wrote a couple of pages into the statute books—very light text. It also made the important move to give the adjudicator teeth, with the ability to levy fines. It's very rarely used, but those two things together, I think, were what catalyzed that positive change.

     You mentioned that there are no real enforcement tools in the voluntary code in Canada. Is that going to be an issue?

    I guess we'll find out after January. One hopes not.

    I do, too.

    Thanks.

    We're going to the Liberals for six minutes.

    Go ahead, MP Dandurand.

    Thank you, Mr. Chair.

    I thank the witnesses for joining us. I especially thank Mr. Henn and Mr. Rivet for supporting the Canada grocery code.

    I'm happy to hear the work is going well and, if I understand correctly, you hope the code of conduct will be implemented in January, as expected.

    Mr. Henn, we've previously heard Loblaws express concerns about a possible increase in prices resulting from the implementation of the code of conduct. That was said during the creation of the code, which is now almost complete. Only a few sections need to be finalized. Ultimately, we heard that the code will probably not lead to price increases.

    Have your concerns in that regard been addressed?

    In 2023, when we came to this committee, we voiced some concerns with the draft of the code that was then in place. As a result of those discussions, the working group got together and took on board some of the comments we had made, and we were very pleased with the changes that were made to the code at that time. As I said, in the middle of last year we were happy to signal our support for that revised code.

    Thank you very much.

    This demonstrates that the office of the grocery sector code of conduct was able to take your concerns into consideration and address them. We're almost at the finish line.

    Mr. Rivet and Mr. Henn, could you give us an idea of the issues that need to be addressed before December so that everything is ready by January?

    There are only a few issues left to address regarding the dispute resolution mechanism. Several meetings were held this year between retailers and suppliers. We got a lot of work done. There are only a few issues left to resolve in terms of governance.

    Obviously, I don't want to negotiate in public, but I can tell you that there are only a few issues left to resolve. As I stated in my opening remarks, I'm very optimistic that we'll all be able to reach an agreement.

    Mr. Henn, what do you think?

    The committee should understand that when the code was finalized in the summer of last year, we left the governance documents to be finalized later. The process we're going through right now with the industry was expected. It's taken longer than many would have hoped, but that is the nature of a complex industry with everybody having a perspective.

    I think we are very close to the finish line, and we should commend the working group for the work that's been done. Both of the other witnesses today are in that working group, and they've done an excellent job trying to get us towards the finish line. I'm very confident that we will be there before the end of the year.

    Thank you.

    Mr. Taylor, from experience, you're familiar with the UK code of conduct. Some producers expressed concerns about governance or, specifically, the process for filing a complaint. They were concerned that individual complaints could lead to retaliation.

    Do you share these concerns? Do you think producers have the capacity and sufficient resources to make a complaint if necessary?

    In terms of producers in Canada, we're supplied by farmers who are represented by Dairy Farmers of Canada, a big dairy company, and farmers who are represented by their local milk boards. We have a good relationship. I guess they would be able to, but I don't see a need for that.

    In terms of experience from the U.K. in this regard, the initial code focused only on the largest retailers and the largest manufacturers. That was very deliberate, because it addressed around 85% of the market. There was a positive trickle-down effect on smaller participants in the supply chain, including farmers, who saw greater stability in their relationships with their customers.

    One hopes to see that same kind of mechanism in Canada, but, as I said in my testimony, we have many more direct participants involved here.

    I want to get a brief comment. In your opening remarks, you said that it's going to be good for Canadians. Can you talk a bit more about how this is going to be good for Canadians?

    Yes, thank you for that.

    While the code doesn't directly impact pricing—it's not designed for that, and it was never designed for that in the U.K. either—the benefits derive from the certainty that contracts will be honoured in full. With that certainty comes the ability to increase investments, so the code will encourage investment in the sector.

    The other thing it focuses on—

    Thank you very much. I have to stop you there. Six minutes have expired.

    Mr. Perron, you have six minutes.

    Thank you, Mr. Chair.

    I want to thank the witnesses for joining us. We're grateful to them for sharing their time with us, because we know how busy they are.

    Mr. Taylor, I'm going to continue along the same line as Ms. Dandurand.

    You just said that lowering prices was never a goal. However, based on what you saw in the UK, were there any repercussions? Do you have any statistics? Did you note any impact?

    There are statistics available from the U.K. showing that during the initial years the code was in operation, there was a positive impact on prices. All prices fell. Whether there is a direct correlation between the two remains to be seen.

    What I would say, again, is that there is no direct influence on retail pricing as a result of the code. The benefits are accrued through certainty and increased collaboration among the parties. That increased collaboration can include improved efficiency in our supply chains. That, then, provides the opportunity for a positive impact on consumers. That positive impact could come through innovation, availability of products on shelves and, of course, our ability to pass on some of those benefits in price, should retailers choose to do that.

    Nevertheless, it's good to know that there can be indirect impacts. That's what I wanted to hear.

    You're the only supplier who is testifying on the grocery sector code of conduct study. Do you think that, in the industry in general, people feel comfortable testifying about this subject? Are some people afraid?

    You would have to ask the adjudicator how many people have signed up to the code. I think around 100 manufacturers have already signed on to the code, so that tells us there is support.

    We're still in a part of the journey where we're raising the profile of the code and the benefits that can come from it. I think we'll see increased membership as we go forward.

    I have a final question for you. During an exchange, you mentioned that we'd find out in January whether the lack of mandatory fines or a problematic application would prove problematic.

    Do you think that allowing the organization managing the grocery sector code of conduct to publish a list of people who violate the code will have a sufficient impact?

    In my experience—we've been negotiating this for nearly seven years now—retailers and manufacturers share a lot of common ground and a lot of the same objectives. You've heard that from the other panellists today. We collectively want to do the right thing for Canadians. If we focus on continuing to do the right thing for Canadians, we'll overcome—

    Thank you very much, Mr. Taylor. I apologize for interrupting you, but my time is limited.

    I would be remiss if I didn't ask you any questions, Mr. Rivet, especially since you're appearing in person.

    The grocery sector code of conduct is an attempt to regulate the relationship between small suppliers and markets in particular.

    There's also the issue of administrative fees. Over the summer, people in the horticultural sector, among others, told me that Metro had increased its administrative fees from 3.5% to 6.5%. That's a significant increase; in fact, it's almost double. I get the feeling that fees are being increased before the code comes into effect.

    Could you enlighten me in this regard?

    I don't know exactly what fees you're referring to. If I knew, it might help me answer your question.

    However, I can assure you that we always deal with our suppliers transparently when it comes to fees. If there are fee increases, they're always justified. We give them plenty of advance notice so that they can prepare for them. These fee increases are often justified by our own cost increases. I'm not aware of a 3–6% fee increase. I don't know where that came from.

    Some fees also vary depending on whether they're calculated by the case or by weight. This can have an impact. If someone delivers more goods to us, their fees will be higher because they're based on the number of units.

    I imagine that this kind of question could be one of the elements discussed in the context of implementing a code.

    Would you object to this being discussed in the code, since it's always justified?

    Since we respect the principles of the code, we have no objection to discussing this with our suppliers.

    Thank you very much.

    When the produce growers came to see us, there was a lot of discussion about whether they could be assisted or represented by their association. The argument was that we could avoid too many complaints by going through the association, particularly with regard to problems that were more systemic or generic.

    What's your opinion?

     Give a short answer.

    I'd say that the code is based on individual relationships between retailers and suppliers. Essentially, if there are systemic problems, there are still channels of communication with the adjudicator. The latter has set up communication channels, particularly on their website. However, when it comes to resolving complaints, these are individual complaints.

    Thank you very much.

    It's over to Mr. Epp of the Conservatives now for five minutes.

    Thank you, Mr. Chair.

    I'd like to give my very sincere thanks to the witnesses for being here, particularly in your role as retailers. This is important for the industry, and your presence helps.

    I'd like to pick up on a line of questioning from Madame Dandurand. To confirm, the former chair of Loblaws did come to this committee and testify that there was a risk that food prices would rise with the adoption of a code. If I heard your testimony, Mr. Henn, you're saying that changes from the code have now ameliorated that, from your perspective. We've heard the former minister say that the code is the magic bullet that will lower food prices.

    To confirm, from your perspective, the changes to prices from the code would be minor in either direction or neutral. Is that correct?

    As I said earlier, the code will not apply to price discussions and negotiations between suppliers and retailers. The implementation of the code won't change those normal-course negotiations that go on every day between retailers and suppliers.

    That's my understanding as well. Thank you.

    Karen Proud, the adjudicator, did testify in front of this committee that, in essence, if push came to shove, her tools would really be to name and shame.

    I have a question. I'll start with Mr. Henn and then I'll go to Mr. Rivet.

    Do you support the adjudicator having the power to name and shame upon a confirmed conviction of a violation by one of your competitors?

    Mr. Henn, you can go first.

    This concept of naming and shaming is something that's built into the dispute resolution mechanism being discussed by industry right now, and we've always been supportive of that. That's a good remedy, whether it's a retailer or a supplier who's in breach of the code. That's a good way to provide an incentive for people not to get to that stage and to self-correct through some of the other dispute resolution mechanisms. Ultimately, it's a good final result, if parties can't agree on a better solution than that.

    Monsieur Rivet.

    We also support naming and shaming. We're in agreement with it. No one wants to read their name in the paper, so obviously we think it's a good way and an effective way to motivate retailers and suppliers to respect the code.

    Thank you for that. I really do appreciate that, and I also appreciate your commitment to stay with the code and to really address it and make it work.

    From your perspective—and this came up in earlier questioning—would it be easier for you if the government were to mandate your competitors to also sign on upon the completion of the negotiations, or will this voluntary approach work?

     It's a voluntary code. As I said, we hope, and I'm optimistic, that everyone will join the code. We think that the voluntary nature of the code is a strength and that it will push people to comply with the provisions of the code. As far as we're concerned, we've been supporting a voluntary code ever since the beginning.

    This code, contrary to certain legislative codes, is reciprocal. It applies to both suppliers and retailers. That's very important. You have to keep that in mind.

    You went exactly where my next question is. I was going to address it to Mr. Taylor, but I'll also give you a chance.

    Mr. Taylor, having participated both in the U.K. development and now here in Canada, what are the lessons learned from the U.K. experience? I was going to follow that up by saying that what's different in the Canadian code is that it also applies to suppliers. Would you have a comment on that?

    In terms of the experience in the U.K., it's been in operation for 10 years now. There is a report issued by the adjudicator every year. You can see the positive trend against all of the key measures. That's been consistent over that period of time. The suppliers' confidence has increased. The number of issues arising has decreased. Both suppliers and retailers talk very positively about the impact this has had on their businesses.

    With that in mind, I think I'd be very optimistic that we'll see those similar benefits arise here. I have absolutely no issue with it being a reciprocal code. I think that's very positive. It should be. We should all be held to the same standards. I'd be very surprised if manufacturers had an issue with that.

     I'd like to have another chance to ask a question, but time's up.

    Thank you.

    Next, we go to the Liberals and MP Chatel for five minutes.

    Thank you, Mr. Chair.

    Welcome to the witnesses joining us today.

    Obviously, we're facing a breakdown in our trade relations with the United States, which poses many economic challenges. One thing we've all understood in this country is that Canadians want more than ever to support their local producers and buy their products.

    We were talking about this earlier, Mr. Rivet. Back home, at Metro in Gracefield, Daniel, the produce manager, showcases our young farmers by displaying their products.

    Earlier, we talked about the importance of collaboration between producers and grocers. How will the code of conduct help improve these relationships?

    I think the code will help build better relationships. It will probably make negotiations easier. However, I also think that each party has a role to play.

    At Metro, we've adopted a buy local policy. The Metro in Gracefield probably benefits from this. As much as possible, we try to support foods that come from Canada or are produced in Canada.

    Obviously, pineapples still don't grow in Canada. Basically, we try to give priority to Canadian products, when they're available. We support suppliers in this process so that they can join us and we can sell their products.

    Thank you very much.

    Mr. Taylor, you talked earlier about some comparisons between the UK and Canadian codes of conduct. I'd like to talk about the provisions on dispute resolution.

    Some representatives of producer associations told us that they'd prefer to represent their members directly. According to the Canadian grocery code, associations can assist and represent their members. However, they'd like to do so directly, meaning they'd be the ones filing complaints about systemic issues rather than individual ones.

    Could you explain how the UK and Canadian codes compare in this regard?

     There is no comparison, because in the U.K. individual suppliers are not party to the code. It focuses on the largest retailers and the largest suppliers.

    In the Canadian context, I think this is logical. The trade associations potentially have a very important role to play in this and in representing their members, as you say, looking to systemic issues and bringing those forward to the adjudicator. In the U.K., the process of adjudication is a very light touch. There is no DRMP, dispute resolution mechanism. In the U.K., 99% of the issues are resolved through informal dialogue, often facilitated by the adjudicator, who would give an opinion and provide straight guidance way before having to be more heavy-handed.

    We heard Ms. Proud and Mr. Rivet say it was possible. When there are systemic complaints, they're presented to the person who will manage the code of conduct. That person can report on and actually deal with these complaints. We aren't required to go through a specific complaint resolution system. We can go directly to the adjudicator, as you said.

     Yes, indeed. In fact, that's the desirable approach. We don't want issues ending up in a dispute resolution management process. We want them to be resolved by sensible people, using common sense, working amongst themselves to improve their trading relationships.

    I have 30 seconds left.

    If I understand this very important process correctly, if an association receives several complaints from its producers but doesn't necessarily wish to resort to the dispute resolution mechanism, it can engage in discussions with Ms. Proud, the current adjudicator, to find a solution. Otherwise, Ms. Proud may report these practices in a report.

    We're going to have to stop there.

    We're going to go to Mr. Perron, for two and a half minutes.

    Thank you, Mr. Chair.

    Mr. Rivet, I want to continue our previous conversation.

    I heard Mr. Taylor say that it was logical for associations to want to represent their members. When you were answering me at the end of our speaking time, you seemed more ambivalent about this.

    Wouldn't you like to be able to deal with a complaint that might be reported, for example, by 25 small producers, by discussing it just once with the association?

    I'm having trouble understanding what the problem is.

    Normally, when a supplier files a complaint, we deal with the supplier. We have a privileged relationship with the supplier, one based on confidentiality. So it's hard to see how an association could speak on behalf of 25 suppliers, to use your example. We don't think it's appropriate for suppliers to share information with each other.

    As we said earlier, there are systemic issues, there is a channel. Indeed, Ms. Proud, from the office of the grocery sector code of conduct, can hear this type of complaint and include it in her annual report.

    Perhaps some small producers are afraid to report code violations because they don't want to be subject to reprisals. I'm not saying you do that, far from it, but aren't you afraid of that? Several of us here have heard this many times.

    There's a principle in the code that retaliation is prohibited. At Metro, we've always operated this way. We're therefore trying to facilitate the complaint resolution mechanism and improve our portals so that producers and suppliers can communicate with us.

    Many thanks.

    I'm sorry but my time is quite limited.

    Mr. Henn, I'll conclude by addressing you very briefly. I've been told that, as part of your business relationships, you're asking producers who have greenhouses and who grow carrots, potatoes and onions, among other things, to guarantee prices and quantities two years in advance, which can be difficult in a context of climate change. I've been told that producers have even been asked to disclose their turnover.

    Are you aware of these practices?

    I'd like to hear your comments on this.

    I don't have the specifics of what you're referring to, so it's hard to talk generally.

    As I said previously, the success of our suppliers is fundamental to our success as well, so we look to working actively with our suppliers to make sure that we can set them up for success.

    Without some specifics, it's very hard to comment. I'd happily take that off-line and address that. If there are some specifics you could raise, I could come back to you on that.

    Fine, we'll provide them to you. Thank you.

    We'll go to the Conservatives now. We'll do three minutes and three minutes, if that's okay.

    Mr. Gourde, you have three minutes.

    Thank you, Mr. Chair.

    I'd like to start with Mr. Rivard.

    I'm disappointed because we realize that the Canadian grocery code will not lower costs and make groceries more affordable. On the other hand, will the code succeed in resolving certain disputes between grocers and their head offices, which often impose restrictions? They enter into agreements with suppliers and large farms, but they limit buying locally from small farms. A small farm has to start somewhere before it becomes a large farm.

    In my riding, I've seen grocers unable to purchase local products. To get around corporate regulations, they set up a public market outside their building, without any problems. I was told local products couldn't be purchased inside, but that they were allowed to use their entire parking lot to sell these products.

    Do you think it's fair that grocers are forced to use their parking lot to sell local products?

    Look, I'm not aware of those situations. As I said earlier, we promote local products. Clearly, we have a policy in effect and we comply with it. Can that kind of thing happen at certain supermarkets? You know, we have independent merchants, affiliates, franchisees, so it is not impossible.

    If you would like to bring something specific to my attention after the meeting, we can look into it.

    Mr. Henn, are your regulations for grocers as flexible as Metro's? Or do you focus more on better supporting your suppliers?

     I'm sorry. Was that a question for me?

    Yes, Mr. Henn.

    We're the largest buyer of produce in Canada, whether that's in Quebec or in other jurisdictions. We favour, as much as we can, Canadian suppliers, but as Mr. Rivet correctly pointed out, you can't buy avocados and pineapples that are grown in Canada. There are circumstances, because of products or quality, when we have to go outside—

    I'm sorry to interrupt, but perhaps you didn't understand the question.

    When you resell products from headquarters to your grocers, do you allow them to have a place in their store to sell products from smaller producers so that your business partners can buy local products?

    Yes, we do. Wherever we can, we meet the local demand from customers for local products, whether that be produce or beer or other products in the store. We want to be as local as we can.

     Thank you, sir.

    Now we'll go to the Liberals and MP Harrison for three minutes.

    Thank you so much.

    The riding I represent, Peterborough, is home to many small farms and local producers. You mentioned that the code might make it easier for local and small suppliers to negotiate. I was wondering if you could elaborate on that, Mr. Rivet.

    The code establishes a framework of transparency, fairness and principles. It is not targeted only at large suppliers and retailers. It also targets small and medium-sized retailers and suppliers. It's like a guide. If they follow the guide, then everything will be fine.

    We believe that it will definitely help the relationship. At Metro, we already have a very good relationship, but we think that it will improve the discussions and negotiations for everyone.

    Mr. Taylor, have amendments been made to the U.K. code since its implementation? If so, what is the process for doing so?

    The text in the statute books remains the same as it was when it was first written, but there have been adjustments to the processes around adjudication, which have come from learnings. It's important that our code continues to adapt to the changing environment that we all operate in, in order to remain relevant.

    Thank you so much.

    When people sign on to the code, because now it's mandatory, do they agree to any of the amendments made, or is that brought back to negotiation?

     It's a great question.

    The code written in the U.K. was done with a very light touch. The drafting was very broad, which leaves it open to interpretation. It is not a legal tome. If it were a legal tome, people would spend all their time trying to figure out how to get around it. It's there to be interpreted. The adjudicator has the freedom to interpret it and to work with suppliers and manufacturers to adjust definitions that meet need according to particular circumstances at the time.

    Thank you.

    Do I still have time?

    You have 40 seconds.

    I'm good, then. Thank you.

    I have a question.

    Go ahead. You have 35 seconds.

    Thank you. I'll ask it quickly.

    Mr. Taylor, what are the current impacts on investment in your type of business in terms of uncertainty around the fees grocers charge? Are there any impacts?

    We're all in the business of managing scarce resources. I'm part of a large international company, and I'm competing with about 100 other countries for investment. If uncertainty around outcomes in my trading relationships is a feature of business in Canada, and if the U.S. or Brazil has more certainty, the chance of them getting that investment, rather than me, increases.

    Thank you so much.

    I want to take this opportunity to thank all the witnesses today for taking time to join us online and in person.

    We will suspend for about five minutes so we can change panels.

     I call the meeting back to order.

    I'd like to make a few comments for the benefit of our witnesses. Please wait until I recognize you by name before speaking. For those participating by teleconference, click on the microphone icon to activate your mic and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen, you can select the appropriate channel for interpretation: floor, English or French. For those in the room, you can use your earpiece and select the desired channel. I remind you that all comments should go through the chair.

    Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, the committee is resuming its study on the update to the implementation of the grocery code of conduct.

    I'd now like to welcome our witnesses. We have, from the Canadian Federation of Independent Grocers, Gary Sands; from the Ontario Fruit and Vegetable Growers' Association, Gordon Stock; and from the Retail Council of Canada, Diane Brisebois. I'd like to welcome each of you to our committee. Thank you for taking time from your busy day to join us.

    We start with Ms. Brisebois for five minutes, please.

    Thank you, Mr. Chair and committee members.

    My name is Diane Brisebois, and I am the past president of the Retail Council of Canada, RCC, serving as president for the past 30 years, until this September.

    RCC is an industry association that represents retailers of all sizes and types across Canada. Its membership, including grocery retailers, accounts for more than 75% of all retail sales in the country, excluding auto and gas. RCC, and I as its representative, have been serving on the board of the grocery code of conduct since its inception, representing large-format grocery retailers. RCC and the associations representing the different segments of the grocery supply chain, which serve on the board, have been working diligently over the past four years or more to design a code based on a reciprocal framework for fair dealing, and one that establishes clear standards for commercial relationships within the grocery sector in Canada.

     The RCC grocery retail members have been engaged in the development of the code, as well as the establishment of the code office. They have been actively participating in its industry working groups with other stakeholders, and are participating and assisting in finalizing the dispute resolution management process—referred to as the DRMP, as you heard from the witnesses an hour ago.

    As indicated when the president of the grocery code office, Ms. Karen Proud, appeared before this committee, the development of the DRMP has been challenging, as the industry stakeholders are developing it from scratch to ensure that it is fair and accessible to all. Balancing these realities, while ensuring that the DRMP is credible, practical and accessible to all, is a priority for our RCC members. As Ms. Proud noted, we are close, and we believe we have most of the tools needed to move forward.

    Going forward, the priority for our members and all players in the supply chain is to finalize the dispute resolution mechanism process, or DRMP. That is an important step before the code is implemented on January 1, 2026 and for the office of the grocery sector code of conduct to launch its official member recruitment campaign.

    Developing the DRMP was a difficult but essential process, as you know. Our members and various other stakeholders have to create a dispute resolution mechanism from scratch that is fair and accessible, ensuring that the process is fully consistent with the provisions of the code developed by the industry. I can assure you that we will get there.

    RCC grocery retail members would like to thank the provincial, territorial and federal ministers for their support and for encouraging the industry to work together to develop the code, which will serve to strengthen the sector and contribute to a thriving and competitive grocery industry. Our members would also like to thank this committee for its interest and ongoing attention to the grocery code of conduct. Having a full-time president and adjudicator in place will assist the committee in monitoring the industry's progress, and we have no doubt that Ms. Proud will be available, when needed, to provide updates and report back to the committee honestly and transparently.

    Mr. Chair, members of the committee, the president and adjudicator of the office of the grocery sector code of conduct is committed to overseeing the operation of the code on the ground and reporting fairly and transparently on what is working well and what needs to be adjusted. Improvement is ongoing, and it is important for all of our members.

     Thank you so very much for inviting us today. I look forward to your questions.

    Thank you very much. We appreciate the presentation.

    Next, I'll go to Mr. Stock.

     Chair and honourable members, thank you for the opportunity to speak today.

    I'm Gordon Stock. I'm with the Ontario Fruit and Vegetable Growers' Association, representing 3,500 farms that grow fruits and vegetables in the province of Ontario—approximately 40% of Canada's production.

    I am here today to share why it is imperative that Canada have a strong and reliable grocery code of conduct, one of many tools needed to support a robust food system. In recent weeks, I have heard about what the code was intended to do and what it was never intended to do. There is what is needed, but there is also what is possible.

    First, congratulations to those who built the code. The commitment is commendable, but the work must continue. Encouraging transparency in agreements, creating avenues for dispute resolution and discouraging punitive actions are all positive and, hopefully, meaningful aspects.

    It is important to recognize that the code will influence various grocery items differently. Risks are greater for produce than for dry or processed goods. For example, once the broccoli, cucumber or strawberry has been harvested, the clock starts. It must make it to a consumer quickly or it is waste. The grower—who has been investing in the development of that crop through purchases of fertilizer, seed and specialized equipment, as well as through wages and meeting food safety and labour requirements—has limited market options for their crop, especially with the consolidated retail landscape in Canada. Assuming the grower can get an agreement with a retail chain, the terms will not necessarily be a negotiation. It's generally a “take it or leave it” scenario. The price, payment terms, marketing and rejection fee structures will not be negotiable. If the grower chooses not to proceed, the retailer will fill their needs from other sources, including imports, even if it is the local peak growing season. Because the product is perishable and the grower has expenses to pay, they sell to the retailer, even if it means minimal revenue to cover historically high production costs and service debt.

     I acknowledge that the code, as designed, is intended to support fair and equitable dealing, not define what fair practices are or guarantee revenue for the farm. However, the nature of fruit and vegetable production requires more consideration. The risks growers face are significant and increasing. It is not just about the perishable nature of the products but also about the ability of farms to negotiate fair deals without having the power of a multinational. We are concerned about the long-term consequences of a system that does not inherently prioritize the production of fruits and vegetables in Canada. Growers will reach a breaking point, reducing investment in their farms and contracting the acres dedicated to growing high-value fruits and vegetables. Some will shift production to simpler-to-grow and simpler-to-market crops with lower economic value, while others may exit entirely.

    This is a risk to Canada's economy and food security, but it also creates reliance on produce imports from foreign countries, where consumers have less control over factors like labour and environmental standards. It would be shameful if we didn't address these challenges before we lose this critical homegrown capacity. Not all of these issues are caused by the supplier-retailer relationship, although it is highly impactful. Government policies are also at play. The future of Canadian fruit and vegetable production relies on a market environment that individual farmers and growers can bank on, encouraging investment, innovation and the next generation of farmers. For the public good, it is imperative that we get the code right in order to create balance and certainty and to strengthen Canada's capacity to feed itself with high-quality produce.

    The current code is not everything that may be needed. Despite any shortcomings, however, it is a starting point on which we can and should build. There must be ongoing commitment among all parties for continuous improvement, and space for industry associations to raise sector-wide concerns. We all have a part to play in prioritizing fruit and vegetable production in Canada—growers, retailers, government and consumers.

    The planned 18-month review is a start, but it must go further. Parties must come to the table with the goal to prioritize Canada's ability to produce as many of its own fresh and processed fruits and vegetables as possible, as well as a commitment to fair business practices and transparency along the chain.

    Thank you for the time to present today and share our perspectives.

     Thank you so much.

    Next, we'll go to Mr. Sands.

    Mr. Sands, it's nice to see you again. You have five minutes.

     It's nice to see you again, Mr. Chair.

    I would like to thank the committee for the invitation to appear before you today to provide the perspective of the Canadian Federation of Independent Grocers on the current status of our grocery code.

    CFIG was the first association in Canada to call for a grocery code of conduct. We did so recognizing there was a need to address some market practices that had become more common in the industry.

    I also want to stress that we advocated for a grocery code of conduct, not a retailer code of conduct. Independent grocers know full well that the principles we have agreed to in the code need to apply to all stakeholders. We are proud of the fact that reciprocity is one of the pillars on which our made-in-Canada code rests.

    Some in the industry seem to forget that when the FPT ministers of agriculture and food established the steering committee to develop a code, two issues were identified. I would invite those people to reread that FPT communiqué.

    One issue of concern was, yes, around some of the practices of retail chains, but it was also the need to recognize the importance of fair supply to independents, particularly in many rural and remote areas of the country, where often it is just the independent grocer that is providing food to those communities. As such, food security for many parts of Canada is linked to ensuring the continued viability of Canada's 6,900 independent grocers. We believe the provisions of the code that have been developed will put independent grocers and all industry stakeholders in a better position to compete in the months and years ahead.

    CFIG also recognizes that this is a voluntary code; it's not regulated. As such, it cannot and should not wade into the area of negotiations on pricing, for example. We also have to ensure that it is not overly prescriptive. For a principles-based code, we cannot come up with language that covers every scenario or situation that could possibly, maybe, arise.

    After four years, a lot of time, resources and commitment have gotten us to where we are today. We now have a balanced code. We have a code adjudicator. Stakeholders are signing up as members. We are now just waiting to finalize the dispute resolution process. Some may want to hold the code hostage, unless they obtain their concept of code perfection, but what is perfect to some may certainly not be to others.

    It is time to let the market test the code within the context of having a very able and astute code adjudicator in place, who will be the first to call out any systemic issues that need to be addressed. I can assure you that, as the association that was the first to call for a code, we also would call out any systemic issues that we see in the market.

    Let all of us, industry and governments, now see how what has been built actually works. If something is not working, industry will have to change it. If we cannot manage that process, then industry will know that governments will have to manage it for us.

    Thank you again for your time today.

    Thank you very much, Mr. Sands.

    First, we'll go to the Conservatives for six minutes.

    Mr. Gourde, go ahead.

    Thank you, Mr. Chair.

    My first question is for Ms. Brisebois.

    First of all, hats off to you for your long career.

    Thank you.

    Do you think the code of conduct will make the grocery basket more affordable for consumers?

    I will repeat what was said an hour ago with the three previous witnesses.

    The code does not refer to prices. It does not give participants the opportunity to negotiate prices. That is not its purpose.

    On the other hand, if it improves working relationships, we think there will be benefits for consumers in terms of investments, new products and so forth.

    As to the dispute resolution mechanism, are there any disputes that you have seen throughout your career that were detrimental to parties or that were problematic for the sector?

    It's hard to give examples simply because they are confidential negotiations. That is reflected in the code.

    At the same time, I can say that the big problem in many cases—and the reason we are very proud to have Ms. Proud as our president—is the lack of transparency and communication, and the lack of a code or framework for the various stakeholders to meet in a safe place to discuss existing problems. I hope that gives you a better understanding of the process.

    There are always misunderstandings and problems because there are many stakeholders, but the code gives stakeholders the opportunity to meet to try to resolve their labour relations problems.

    You mentioned a lack of transparency. Is it possible that the biggest buyers do not always offer the same prices and conditions to their suppliers? That can be frustrating for producers when two neighbours do not necessarily get the same price for large volumes of carrots, for example. One might survive, while the other one might disappear over time.

    Is that what you mean by transparency, fairness among all stakeholders?

    Transparency does not mean publicly announcing a product price that is negotiated with a stakeholder. It is actually very important to suppliers and retailers that those negotiations remain confidential.

    Transparency refers primarily to ensuring that producers and small companies really understand the rules of the game. That means that the rules of the game are clear, the contracts are clear, and there is a process for discussing misunderstandings.

    That is why transparency is so important.

    Ms. Brisebois, I know that some big chains have in the past rented out shelves to their best producers, charging them $2,500 per month, for instance, for four feet of shelf space to sell their products.

    Is that still happening?

    I can't answer because I don't have that information.

    I really encourage you to talk to the various stakeholders about that. Mr. Rivet and Mr. Henn were very open and would be pleased to answer that question.

    Thank you, Ms. Brisebois.

    My next question is for Mr. Stock, from the Ontario Fruit and Vegetable Growers' Association.

    In your remarks, you said you are hopeful that the code will give producers more stability. That was music to my ears because that is what I am really hoping for.

    Why do you place so much confidence in the code? Is it for dispute resolution? Does it give you a power balance?

    To clarify, I think I should say that we hope it provides those kinds of benefits.

    In 2020, when there were a number of retailers bringing in new fees and so on, we also started calling for a code. I think just the fact that we have a code that we can work from is an important step and milestone, but I want to be cautious in saying that I am certain that there will be the benefits that my members were looking for in what it has come up with. I don't want to discourage what's been created, and I don't want to dispute it, but I'm not prepared at this point to say, “Yes, it's guaranteed that there will be benefits from it.” I hope there are. I think there are good signals here.

     I think there's a basis on which we can work together, and there's been some talk around trust and building relationships. I think that is core to how this moves forward. Some of the anxiety that you might be hearing from some suppliers around this is from some of the history and some of the practices of the past, which it will take time to rectify and move forward from, but I do believe there is an opportunity here.

    Thank you very much.

    Next, we'll go to the Liberals for six minutes.

    Mr. Connors, you have the floor.

    Thank you.

    Welcome to the witnesses.

    Mr. Sands, I was recently speaking to one of your members. Atlantic Grocery Distributors is one of the larger independent grocers in Newfoundland and probably in Atlantic Canada, and they are looking forward to the implementation of the code of conduct.

    One thing you mentioned is that the code should bring fairer supply to independents. Can you elaborate on that and give us a bit more detail on what you mean by that?

     Thank you for the question.

    Also, I want to tell you that we very much appreciate the fact that you took time to meet with Atlantic Grocery Distributors. I got very positive feedback from your meeting with them, and I would be remiss if I didn't extend our appreciation for your taking the time to talk to them, so thank you for that.

    On the issue of fair supply, that is an extremely important issue to independent grocers. We have seen that when a product is in high demand or in low supply, independents sometimes don't get a fair allocation of that. There have been examples. I've been with the independents for 25 years, and there have been examples where a supplier will tell an independent grocer that they don't have any more of a product—I won't pick an example—and then the independent will notice that the same product is going on sale at a retail chain competitor. I'm not pointing fingers at anyone. I'm just saying that those kinds of things can't continue, and the code addresses that. The code will require suppliers to take into account their orders from all of their customers, so it's just not something that we anticipate will continue.

    I think parts of the discussions we had about this issue while we were developing the code sensitized everyone to the issue. I've heard a positive reaction from suppliers and from the retail chains. No one wants to see that kind of thing happen. We're all Canadians, and we want to ensure there is food security in all of the country. That's why we're feeling very positive that we've been listened to and that those elements have been incorporated into the code.

    Thank you very much.

    When I was talking to Atlantic Grocery Distributors, one of the things we discussed was how they supply to rural areas of Newfoundland, where there are no larger chains.

    Can you talk a bit about this? If your members supply to rural parts of Canada, how could a code of conduct help rural parts of Canada?

    Again, there are so many parts of Canada—rural and remote communities—where we're the only grocery store in that community, so the ability of that independent grocer to survive is very much linked to food security for those communities. Atlantic Grocery Distributors is a good example. They supply a myriad of rural and remote communities in Newfoundland and Labrador.

    Again, we feel confident that the principles that the industry itself has accepted and has adopted in the code are going to go a long way to addressing our concerns. I think that if you listen to what Karen Proud, our adjudicator, said when she was before the committee, that is one of the areas that she has been talking about and has been raising with industry, and this is something she will be paying attention to. We think that's a very good signal for the entire industry.

    I have one more question for you. There has been talk about the dispute resolution mechanism, and that's probably the final thing that needs to be decided before we move forward. As the independent grocers are part of this, do you think we could move forward without having that fully finalized?

    No, I think we have to have the dispute resolution process finalized.

    I'm going to choose my words carefully because I am a member, as Diane is, of the grocery code interim board. I'll tell you, on behalf of our members, that we're comfortable with the direction we're moving in. We're comfortable with where we think we're going to land on that, but absolutely, the dispute resolution process is the final piece that we all recognize needs to be put in place. I think there are a number of industry participants, in both retail and supply, who are holding back from becoming signatories to the code until that's finalized.

    There is one quick thing I could just throw out, which is important to remember. The code, especially when you're talking about issues like pricing, doesn't level the playing field—the industry is what the industry is—but the dispute resolution process does level the playing field. Everyone is treated equally under that process, and I think that's an important element that often gets overlooked.

    I have a quick question for Mr. Stock. I have only about 30 seconds, I think.

    You talked about the limit of market options and how that affects your members. Can you expand a bit on that?

    I think the main one is the consolidated retail market in Canada, but there is also the trouble that we have with limited export opportunities. There is a substantial market south of the border, but we all know that market is also not entirely reliable at the moment. If we run into challenges there, then we're going to have broader market problems in Canada.

     Thank you very much.

    We'll go to the Bloc Québécois.

     Mr. Perron, you have six minutes.

    Thank you, Mr. Chair.

    I would like to thank the witnesses for being here. I appreciate it.

    Hello, Ms. Brisebois. My first remarks are for you.

    Hello.

    After years of work and many negotiations, as you said earlier, you worked hard to draft a code. There seems to be some difficulty in coming to a final agreement on the dispute resolution mechanism. Is there anything else?

    What has to happen for the five big retailers to comply with the Canada grocery code of conduct? So far, I think just one of them has expressed an interest.

    As Mr. Sands and Ms. Proud said, the final details were settled last week. There is just one step left, the completion of the dispute resolution mechanism process.

    It will not be perfect, of course. Once we have finalized that process, we hope that the big retail chains and suppliers alike will want to become members and subscribe to the grocery code of conduct.

    It should be noted that the code includes a provision allowing for a new board of directors to be elected next year to make minor changes to ensure that the code is working well for all stakeholders.

    As noted, it is a work in progress. Right now, we still have to finalize the dispute resolution process.

    Thank you.

    One of the sticking points we discussed with the grocers earlier relates to producers' associations, including vegetable growers' associations. Those producers said they have small operations and do not have the resources the big supermarket chains have and are not represented by teams of lawyers.

    In the case of systemic issues in particular, that is, issues that arise frequently, those small companies would like to be represented by their association.

    I would like to hear your opinion on that. Don't you think that might make things easier? The number of disputes might drop off if there were a dozen producers, for instance, dealing with the same problem. Their association could represent them. That would also help maintain the anonymity of those small producers.

    What are your thoughts?

    Associations can play a very important role, especially those that represent small companies, as you rightly pointed out.

    Ms. Proud talked about that last week. The association is there to listen, especially for issues that affect the sector. In the case of a dispute, clearly, the two companies have to work together. It is a confidential contract.

    That doesn't mean that a systemic problem cannot be resolved up front. That is actually why we want to make sure that the associations are in contact with Ms. Proud to meet with her and identify the problem and resolve it before it affects small companies.

    That would be ideal.

    If the issue is not resolved, can you imagine that a small producer might at least need help from his association to represent him?

    Definitely. We have always agreed about the association's potential involvement.

    As you said earlier, small companies do not have lawyers or the resources that the big chains do. We encourage the associations to provide those services to various members who have persistent problems. It is not impossible. That said, it's up to the company and not the association to comply with the code. So that is part of the negotiation process.

    Thank you, Ms. Brisebois.

    I have a question for Mr. Stock and I can see that my time is running out.

    I understand.

    Mr. Stock, in light of my exchange with Ms. Brisebois, do you as a vegetable producer need your associations to represent you?

     I should clarify. I actually work as a staff member for the association, and I am not a fruit and vegetable grower. Although I do farm myself, it's something much simpler than fruits and vegetables.

    You do represent vegetable growers here though, so the question is for you.

    Do you think that is important?

    Yes. What I'll say is that there will be members who I believe will be challenged to bring forward their perspectives through the process and there is a role for associations. I think the role, from my perspective, is not quite clear at this point, and there needs to be some work done for our associations to better understand how we can engage and support our members in the process. It's very important, yes.

    Thank you, Mr. Stock.

    Thank you very much.

    Next, we'll go to the Conservatives.

    Mr. Epp, you have five minutes.

    Thank you, Mr. Chair.

    Thank you sincerely to all the witnesses for appearing.

    Congratulations for 30 years in a very dynamic industry, Madame Brisebois. I'll start with you.

    In the first round, the representatives from Loblaws and Metro affirmed that the name and shame powers that the adjudicator has are something that they support. Are you in a position to speak on behalf of your members—I understand that the RCC is not a member of the code, but your members are—about whether there is broad buy-in for that power of the adjudicator to address confirmed violations?

    Yes, very much so.

    Thank you.

    That leads into the next question, then.

    I know that the dispute resolution mechanism has yet to be finalized, and I understand about not commenting or negotiating on camera, which is what we are right now, but can you, from the retailers' perspective, outline the principles that the retailers are looking for in a dispute resolution mechanism?

    I would say that they are very similar to those that independent grocers would look for, as well as suppliers. It is clarity. If you're going to enter into a dispute resolution process, it's very important to understand each step and to understand, one, where you end up if the issue is resolved and, two, what happens if the issue is not resolved.

    At this point, most of those discussions have taken place. There seems to be consensus, and I would have to say that it's more wordsmithing at this point than anything else, which is why you've heard Mr. Sands and me and others express our positive outlook in regard to January 1.

    Thank you.

    I'm going to ask all three of you to answer the following question.

    At its core, my understanding of the code is that it is to get at the basics of raw power, which I don't mean in a negative sense, and power often comes from size. We often think first of a large retailer and small producers or smaller manufacturers. In Mr. Sands' case, it can be smaller retailers with large producers and the imbalance of power and the behaviours that come out of it. The code is not meant to interfere in the contract terms and conditions and prices, but my understanding is that it is designed to address intimidation of one party by another. Mr. Stock, in his testimony, came close to identifying different behaviours that could almost be determined as intimidation.

    Can you each articulate what the code does to address intimidation tactics as opposed to interfering in the price negotiation?

    We'll start with Mr. Stock.

    I have to be honest. This is an area that's a little bit unclear to me yet in terms of how it will address that, partially because, if there is intimidation, it's going to actually be difficult to bring it to the surface for adjudication. From the standpoint of being intimidated and being concerned about their business, the ability to bring that forward, I think, will be a challenge. I'm not saying it's impossible, but it's an area where I would want to see the code move ahead and be tested out to see how it operates, before I comment further.

     What do you think, Mr. Sands?

     I've been listening to the committee's questioning, not just this week but last week, and a lot of times when I hear the questions, I just want to say to the whole committee that, so many times, the things that are being said about the retailers, you could say about how the independent grocers feel when they're dealing with large suppliers.

    When an organization like ours says that we are comfortable with the principles and what we're heading for in the dispute resolution, just remember who my members are. They are overwhelmingly small and medium-sized businesses. I think that's something we have to keep in mind.

    Again, we're very comfortable with where we're heading. I think I have to leave it at that, because I can't get into the wording of the dispute resolution.

    I'm going to give the final word to Madame Brisebois.

    I would echo Mr. Sands' comments and say that our members are also very concerned about any issue around intimidation. In fact, it was one of the reasons they became even more engaged in working on dispute resolution with the other stakeholders, to show their empathy, to a degree, and also to understand that we need to build a system where smaller players would not feel that kind of intimidation, and if they do, there would be steps in place in order to protect them and ensure that the code is respected.

    Thank you.

    Thank you very much.

    Now we'll go to MP Dandurand for five minutes.

    Thank you very much.

    I want to thank you all for joining us for this study to get an update on the code of conduct. It is very important.

    Ms. Brisebois, Sobeys has already signed on to the code of conduct, and representatives from Loblaw Companies Ltd. and Metro said earlier that they intend to do so as well. We do not have a position from Walmart or Costco, but we now know the position of most of the big retailers.

    In your opinion, what is the likelihood of reaching an agreement to finalize the code of conduct before it comes into effect?

    It is very likely.

    That is great news.

    What are the last sticking points? People have mentioned technical details, but can you elaborate on the final obstacles to reaching an agreement? When do you think it will be finalized?

    I cannot give you those details because, like Mr. Sands, we are not party to those negotiations. It is the steering committee, made up of various stakeholders, that is involved. We have however been told that we are at 98%. So that is promising, we support them and are expecting good news soon.

    Thank you. Glad to hear that.

    This is very hypothetical, but what would happen if the team does not come to an agreement on the code? Would the government have to impose something mandatory?

    I think all of our members and stakeholders understand that some action will be taken if no agreement is reached, but I cannot tell you what kind of action. You have to remember that all the stakeholders agree that this is a sector-wide initiative. It is important to show that we can work together, and we think we have been able to do that. We hope that you will not have to ask us if there is another option in 2026.

    I also want to point out that there is a big difference between our code and the one in the United Kingdom. The difficulty in our case is that it is not really federal regulation. The provinces and territories hold the cards. I think that motivates all stakeholders to agree on a single code rather than having 12, 13, 14 or 15 different codes.

    That is very true, thank you.

    I think small retailers and suppliers agree that a code would make the rules of the game a bit fairer. If no code is implemented though—which once again is very hypothetical—how can the imbalance among the various stakeholders be corrected?

    I think we all agree that having a code will foster transparency and positive relationships.

    I cannot really talk about another solution. It has been done in other countries, and that is why we are working together. We want to make sure there is a code in Canada.

    Thank you.

    Mr. Sands, if you were to ask your colleague from the Retail Council of Canada a question, what would it be?

     If you had asked me that question a few years ago, I would've had a couple of questions, for sure.

    I represent Canada's independent grocers, not the retail chains, so we've had issues where we don't always agree with them. I've been part of this process, part of the steering committee and part of the grocery code board. The collaboration and consensus that I've seen from everyone.... What we saw when we started developing the code is that we stopped pointing fingers at each other and starting talking to each other.

    I don't really have a question; I'm just pleased that the industry has been able to do this.

    Thank you, Gary.

    Thank you very much.

    Thank you.

    We'll go to Mr. Perron for two and a half minutes.

    Thank you, Mr. Chair.

    I want to commend my colleague on her creative questions.

    Mr. Sands, it is very interesting to hear from you as an independent grocer.

    Earlier you mentioned problems with suppliers and said you were glad the grocery code of conduct will go both ways. We also think that is a good thing.

    I think you are referring to the big suppliers, not the little ones. Can you elaborate on that?

    The problems that occur between big suppliers and big retailers will sometimes have a trickle-down effect or, as it's called in other countries, waterbed effect. That's what has tended to happen to the smaller independents. Everything trickles down, so if demands are made on suppliers, that will have an impact on independent grocers, but at other times, I have to tell you—I'm being honest here—suppliers are not dressed in white robes with halos over their heads. There are lots of times when suppliers do things that are not entirely fair to independent grocers.

    As I said, though, I just feel the provisions and the principles that the suppliers themselves and the retail chains have supported in the code are very positive. As I said, I was part of the association when we first called for a code, and where we are now, we're filled with a lot of optimism.

    One of the things I should mention, too, when it comes to the earlier discussion about retaliation or intimidation, is that no retaliation is allowed in the code. One of the things we're doing for our independent grocers, which we think will help the small suppliers too, is developing templates of contracts that will help guide our members. Gordon, I think this will be of interest to your members, too. When you're developing contracts, what are some of the mutual principles that should be outlined in the contract? I think that will be very helpful.

    Thanks very much.

    The small vegetable producers said that some small producers do not complain for fear of retaliation. You mentioned that in your answer and said that is not allowed.

    As a small independent grocer, would you not be afraid of complaining about a big supplier, a multinational, for instance?

    Who was that directed to?

    The question was for Mr. Sands.

    We were continuing on the topic, or rather, wrapping it up.

    I'm sorry; I thought that was for Mr. Stock.

    We have no fear of that.

    I'll be very quick. Remember, the primary purpose of the dispute resolution process is that we want people to talk to each other first. That's a primary objective. At a certain point, the associations have a role to play, but not in bringing forward individual complaints. I have 6,900 independent grocers out there. We're not going to be bringing forward complaints, nor should we. If you start having associations play that role, I would just ask the question out loud: Why would anybody become a member of the code? We could just make the associations members of the code.

    Again, we intend to bring forward systemic issues, not individual issues, to Karen Proud, and we're confident it'll be a good process.

     Thank you very much, Mr. Sands.

    Thank you to all of our panellists. We appreciate your time and your input.

    For the committee, Mr. Perron wants to bring up a point, so I'll turn it over to him.

    Thank you, Mr. Chair.

    Yes, the parties have talked to each other. We are at the end of our study and we have a good idea of the witnesses we still want to hear from. I note however that no representative from Costco or Walmart has been invited. I think we invited the Sobeys representative. I don't know if we got an answer, or if it didn't fit into our schedule.

    Perhaps we could find a minute before the end of the study to invite the Costco and Walmart representatives. They are American companies, and it is important to know where they stand as well. We want to make sure that the big five food companies agree on and sign Canada's grocery code of conduct. At the same time, we could also invite Sobeys once again, if my colleagues are in agreement.

    Would we invite just the two of them?

    We could invite the Costco and Walmart representatives and someone from Sobeys as well.

    We could also invite Ms. Proud again to provide a brief conclusion. She is indicating that she would be willing.

    So we could make a meeting out of that.

    Is there anyone else?

    Do you have a specific date in mind, or do we want to push it back to the clerk to see when they're available and build it that way? Can we figure it out next week? What's the plan for next week?

    The clerks usually figure things out very well. I will leave it up to them to find a time that is convenient for everyone. We could still give them our instructions for the report on November 6.

    After the break week, at one of the meetings set aside for the report, we could use the first hour to complete the study. I think the analysts will let me know if I am giving them too much work.

    Some have nodded yes, so that's agreed. They could complete the report after that.

    Just to be clear, you want one hour for the three grocery chains. What's the other hour for?

    Actually, I am suggesting that we spend the first hour on the report and hear from the Costco, Walmart and Sobeys representatives in the second hour since we don't have much time left before the holiday season. I think we can invite them. We'll see who answers, but we do of course hope they can come.

    Go ahead, Madame Chatel.

    Yes, we could spend an hour on the report and on reducing paperwork. In the second hour, we could hear from the three wholesalers and from Ms. Proud. So we would have four witnesses for that meeting.

    That would be different. Are you fine with that suggestion? That's a different suggestion. Is that right?

    No, I was suggesting the same thing, Mr. Chair. If we draw up the list, we have…. I will let you finish your conversation with the clerk.

    I thought it was different.

    Okay. As long as you understand, we're good.

    Is that okay?

    Yes.

    Thank you, Mr. Chair.

    My last point is that I think we just had a great meeting about spent fowl—

    Voices: Oh, oh!

    Can we listen to Mr. Perron for a second? It's hard to hear him.

    Go ahead, sir.

    Yes, what I am saying is very important so please pay attention.

    I was saying that we had a great information session about spent fowl. I found it interesting. I would like us to do something with that session. We could write a brief report, or at least send a letter to the minister, if my colleagues are in agreement, of course.

    It's up to the will of the committee.

    What was our original plan for next week? How would we proceed, according to what we've heard now?

     Would you mind telling the committee what we're doing next week so that we're all on the same page?

    Certainly, Mr. Chair.

    The committee is meeting on Monday to resume the study on the government's regulatory reform initiative in the agriculture and agri-food sector. On Thursday—this would be the last one—the committee will be meeting to undertake the same study in the first and second hour, and the last 15 minutes of the second hour will be on the instructions to the analysts for the drafting of the report.

     Is everyone fine? Okay.

    Yes, sir, go ahead.

    We wouldn't be able to add that panel on the grocery code until after we're back from that break, as we already have witnesses invited next week, from what I've seen.

    Just on the spent fowl, part of the motion that we approved was to report the findings back to the House. That is part of the motion. I guess we would have to craft that and put that together.

    I think that all fits into where we're going.

    Is it the will of the committee to adjourn?

    The meeting is adjourned.