House committee recommends windfall tax for grocers if Competition Bureau finds evidence of profiteering

The Canadian authorities ought to introduce a windfall tax on giant grocery chains if the Competition Bureau finds proof that they’re producing extra income on meals objects.

That is one in all 13 suggestions that the parliamentary agriculture committee has put ahead to the federal authorities in a brand new report.

The report comes amid accusations from some critics, together with NDP MPs, that Canada’s 5 largest grocery chains — who management 80 per cent of the grocery market — are engaged in “price gouging,” or utilizing their market energy to boost costs quicker than the expansion of their manufacturing prices.

If the Competition Bureau finds in its upcoming advertising and marketing research, slated to be launched in June, that giant grocery chains are producing extra income on meals objects, the committee beneficial that the federal government think about introducing a windfall tax on these giant companies to “disincentivize excess hikes in their profit margins.”

In March, the CEOs of main grocery chains appeared earlier than a parliamentary committee that’s finding out inflated grocery costs and insisted that meals worth inflation will not be brought on by profit-mongering and that their revenue margins on meals objects have remained low.

The authorities must also acquire and make public knowledge on prices all through the Canadian agri-food provide chain—together with disaggregated knowledge on prices within the main agriculture, meals and beverage processing and meals retail sectors, the committee stated.

This may comply with the same mannequin made out there by the United States Department of Agriculture’s Economic Research Service as a part of its Food Dollar Series analysis program, the report notes.

The committee additional beneficial that the federal authorities present further funding to Indigenous-led initiatives in distant and northern areas to “improve infrastructure that supports the food security of their communities.”

It stated that quite a few stakeholders it consulted for the report, together with Chief Byron Louis of the Okanagan Indian Band, testified that meals insecurity was on the rise throughout the nation and is of explicit concern for low-income households and Indigenous peoples.

Addressing meals waste is one other suggestion that the committee put ahead. It stated the federal authorities ought to work with provinces and territories to research how the elimination of “best-before” dates on meals would influence Canadians and accomplice with non-profits together with giant grocers to develop applications that divert meals, which might in any other case be wasted, to Canadians experiencing meals insecurity, amongst different measures.

Some different suggestions for the federal authorities embody immediately reimbursing farmers and retailers who’ve paid a 35 per cent tariff on their imports of Russian fertilizer since March 2022 and discontinuing the tariff, together with supporting producers and others within the agri-food business to mitigate their prices and guarantee they’ve ample money stream throughout this era of excessive inflation.

Grocery costs had been up 9.1 per cent in April in comparison with a 12 months in the past, greater than double the total charge of inflation of 4.4 per cent.

The committee stated it held eight conferences and heard from 58 witnesses, together with stakeholders representing the first manufacturing, meals and beverage processing, and meals retail sectors, in addition to representatives from civil society teams, to give you these suggestions.

The findings and suggestions spotlight the “need to increase transparency in the grocery sector and to strengthen its collaboration with other supply chain actors to ensure fairness in the business relations between each link in the chain,” it stated.

“Food price inflation affects a fundamental aspect of Canadians’ lives: their ability to feed themselves adequately,” the committee acknowledged within the report.

“While pushed partly by international components, comparable to rising enter and gasoline prices, relationships within the meals provide chain have a significant affect on how costs are transmitted alongside the provision chain and finally to the patron.

The full report and set of suggestions is out there on-line.