NDP pushes for profits probe of soaring grocery prices
A New Democratic Party member of Parliament wants to summon grocery executives to the House of Commons to explain why Canada’s biggest supermarket chains are growing profits while food inflation is rising at its fastest pace in decades.
Alistair Macgregor, who represents a riding that covers the southern portion of Vancouver Island, advised the House agriculture committee on Wednesday evening
that he intends to table a motion that the committee investigate “profit-driven inflation” in the grocery business, setting the stage for a vote as early as next week.
Macgregor is the only NDP lawmaker on the committee and it was unclear whether he’ll be able to muster enough support from other parties to pass his motion. The 12-member committee consists of seven Liberals, three Conservatives, Macgregor and Yves Perron of the Bloc Québécois.
Regardless of the outcome, Macgregor’s motion is further evidence of a growing public relations problem for Canada’s big grocers, as economists, consumer advocates and the NDP have all publicly questioned whether profiteering or price gouging is driving profit growth in the sector.
The top three grocers — Loblaw Cos. Ltd., Sobeys’s parent Empire Co. Ltd., and Quebec-based Metro Inc. — say higher profits and wider profit margins are coming from other factors and have nothing to do with the broader inflation story. For example, all say they are benefiting from increased demand for high-margin health and beauty products, now that COVID restrictions have been lifted and people are going back to offices and parties.
But accounting experts say it’s difficult to figure out whether those explanations are true using just the data included in public financial statements, leading to calls for an inquiry into grocery profits.
“If we really want to get to the bottom of it, there needs to be some objective, third-party analysis,” said Robin Shaban, a former officer at the Competition Bureau and co-founder of a think-tank called the Canadian Anti-monopoly Project.
Macgregor’s formal notice of motion called on the committee to “examine record profits of large grocery chains and their CEOS in relation to employee wages and the cost of groceries in Canada.”
Macgregor also wants the investigation to look at the grocery oligopoly’s ability to use its dominance to “cut into the earnings of Canadian farmers.”
“I think that all political parties have been feeling the heat on this,” Macgregor said in an interview on Thursday. “Many of my constituents are banging down my door talking about the high cost of groceries.”
But John Barlow, the Conservative agriculture critic and one the committee’s vice-chairs, said he believes such an investigation into competition and wage issues would be better suited for the House of Commons committee on industry, which has previously studied power imbalance issues in the grocery sector.
“We’re going to try to make some amendments,” Barlow said.
Barlow said he’d be “more open” to an investigation if Macgregor refocused the motion to look at rising input costs at the farm level, including fertilizer prices and the impact of the Trudeau government’s carbon tax.
Federal Agriculture Minister Marie-claude Bibeau wouldn’t say whether she supports a closer look at the grocery industry.
“The committee can make their own choice in terms of the studies they want to pursue,” she said at a news conference on Wednesday.
Grocery leaders have dismissed the scrutiny on profits as unfounded and misguided. Karl Littler, senior vice-president at the lobby group Retail Council of Canada, told the House of Commons finance committee on Wednesday that the criticism shows that few people understand how inflation works. He said “some commentators are rushing to judgment or seeking to play the blame game for their own purposes.”