Minister of Innovation, Science and Industry François-Philippe Champagne rises during Question Period on Parliament Hill in Ottawa on Oct. 5, 2023.Spencer Colby/The Canadian Press
Industry Minister Francois-Philippe Champagne says he wishes Canadian grocers would be more forthcoming with the public about their plans to stabilize prices.
Earlier this month, Champagne announced that major Canadian grocers – Loblaw L-T, Metro MRU-T, Empire EMP-A-T, Walmart WMT-N and Costco COST-Q – submitted initial plans to the federal government for how they will stabilize prices in the face of high inflation.
The Liberal government summoned the heads of the companies to meet in Ottawa last month, demanding they present such a plan by Thanksgiving or face potential tax measures.
At the announcement on Oct. 5, Mr. Champagne said those plans included discounts, price freezes and price-matching campaigns. He didn’t divulge many details at the time, saying he wanted the grocers to compete with one another.
But in an interview with The Canadian Press on Monday, Mr. Champagne said he wishes the grocers were willing to be more open.
“I wish they would be more forthcoming,” Mr. Champagne said.
“They’ve been outlining to us the kind of things [they] intend to do, but I think they have perhaps historically been different in how they approach the market. They say, ‘We’re going to tell the market when we do it,’ but they are a bit concerned of telling in advance what they’re going to do.”
The issue of affordability – especially when it comes to housing and the cost of food – has been dominating political discourse for months, with both the Conservatives and NDP demanding the Liberal government do more to help Canadians struggling to pay the bills.
Grocery prices have risen in Canada at a faster rate than overall inflation, although they have also risen dramatically around the world. Many countries have seen food prices rise faster than in Canada.
Support for the Conservatives, who have focused heavily on that issue for months, has also been rising in the polls, at the expense of the Liberals.
The decision to prepsure grocers to tackle rising prices was one of several affordability measures Prime Minister Justin Trudeau announced after a Liberal caucus retreat in September.
“During the summer, I think all of us went out and listened to Canadians about everywhere. And it became very clear when we met at our retreat with caucus that what we heard from Canadians was really around housing and around affordability,” Mr. Champagne said.
But the opposition has not welcomed the approach to the problem.
The Conservatives have been hammering the Liberals over the cost of groceries, blaming the Prime Minister for these price increases due to his government’s “deficit spending.”
NDP Leader Jagmeet Singh has said the Liberal government’s “plan to ask CEOs nicely to reduce prices is ridiculous.”
Still, it remains unclear what else Mr. Champagne could do, given groceries, unlike telecommunications, are not a federally regulated industry.
The lack of details from the grocers themselves does not add clarity.
The Canadian Press reached out to the grocers last week to request more details on their pledges to the federal government.
Loblaw and Costco did not respond and Metro declined to comment. A spokeswoman for Walmart said the company promised to continue offering “everyday low prices,” which refers to its strategy of offering low prices on a regular basis, rather than on promotion only.
Meanwhile, a spokeswoman for Sobeys, which is owned by Empire, responded on Friday to say the company isn’t disclosing its plan for competitive reasons.
“Our plans are competitively sensitive and we do not plan to discuss them before they are launched in our stores,” said Karen White-Boswell, Empire’s director of external communications.
Michael von Massow, a food economy professor at the University of Guelph, says the whole process between the federal government and grocers has been a “mess.”
He said in an interview on Tuesday that the federal government has been unclear about its goals, and that there’s not much it can actually do on the issue.
“The government’s kind of stuck between a rock and a hard place,” Prof. von Massow said.
“I think the government is getting blamed for things that are outside of their control, and is looking to get credit for things that are also outside of their control.”
European countries have also tried to address the issue of rising grocery prices, with grocers coming out with price reductions and freezes for certain products.
In the U.K., grocery giant Asda announced in June its plans to freeze prices on 500 products until the end of August. The French government reached a three-month agreement with supermarket chains earlier this year for them to cut prices on hundreds of staples and other foods.
Although Mr. Champagne has regularly pointed to these countries as examples to follow, he said Canadian grocers aren’t used to government intervention, and calling them into a meeting in Ottawa was already a big step for the federal government to take.
“We’re shaking the tree,” Mr. Champagne said. “This is not a regulated industry [like] telecom where they’re used to working with government to achieve outcomes.”
Prof. Von Massow said it’s unclear how much success European countries have had with their initiatives. At the same time, he agreed with Mr. Champagne’s point that the relationships in Canada are different.
“France has been much more involved in managing grocery prices before, so they have more history. So it’s difficult to come from zero to 100 miles an hour and say we’re going to do what France has done,” he said.
The Liberals have said that getting grocers to stabilize prices is a way of taking immediate action to address people’s financial anxieties, but Mr. Champagne acknowledged during the interview that the solution to high grocery prices, in the long run, depends on competitive forces.
“[The] bottom line is that three companies in Canada, three large grocers, control more than 60 per cent of the market. And the best way to address that and stabilize prices over the mid- to long-term is to create more competition,” Mr. Champagne said.
The Liberals have also introduced legislation that would make several changes to the country’s competition law, including empowering the Competition Bureau to go after anticompetitive collaborations, such as real estate agreements that prohibit a competitor from opening shop nearby.
The federal government has long pledged a broader overhaul of the Competition Act, something many experts are hoping for as well.
Mr. Champagne said reform is going to happen, though he wouldn’t say when.