MPs escalate food inflation fight with grocers by summoning CEOs to testify

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The heads of Canada’s three largest grocery chains have been formally summoned to appear before a parliamentary inquiry into allegations of profiteering in the food business.

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Galen Weston, president of Loblaw Cos. Ltd., received a summons via email, the House of Commons agriculture committee confirmed on Feb. 17.

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Eric La Flèche, head of the Quebec grocery giant Metro Inc., got one too, as did Michael Medline, the chief executive of Empire Co. Ltd., the Stellarton, N.S.-based owner of Sobeys, Safeway, IGA, FreshCo and Foodland, among others.

The three executives have so far snubbed the Commons agriculture committee’s invitations to appear at the inquiry. So the committee voted Feb. 13 to summon them.

That, in the language of parliamentary procedures and practices, represents a serious escalation that looks destined to extend the grocers’ PR nightmare over accusations they took advantage of the worst inflation in four decades to pad their profits. Unlike a simple invitation, disobeying a summons could in theory lead to a run-in with the Sergeant-at-Arms of the House of Commons, who has the power to haul individuals in front of the House to be admonished.

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The Retail Council of Canada, a lobby group for the grocers, criticized the move as needless bluster, noting that all three companies have already sent “very senior representatives.” Loblaw sent its senior vice-president of retail finance to a hearing in December. Empire sent its chief operating officer to the same hearing. And Metro sent its chief financial officer to another hearing earlier this month.

There is nothing new to be gained

Michelle Wasylyshen, spokesperson, Retail Council

“There is nothing new to be gained,” Retail Council spokesperson Michelle Wasylyshen said in an email.

‘Profits before people’

The summons could push the inquiry one step closer to understanding what, if anything, might have headed off the worst spike in food prices since the early 1980s. It also could amount to nothing more than a sideshow, a bit of theatre to exercise pent-up consumer resentment against the big grocers, who have grown profits consistently through the inflation crisis.

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Whatever it is, if the grocers show, it will make for the most significant standoff yet between MPs and the people who control our grocery stores.

Things did not go well for the country’s top grocery bosses the last time they showed up at a committee hearing, in July 2020, as part of the industry committee’s inquiry into the Hero Pay scandal. At that meeting, MPs sparred with the executives, challenging them to state their multi-million-dollar salaries and asking them to justify why all three companies cut wages for front-line workers on the same day in June 2020.

“How can you in good conscience put profits before people in a pandemic?” Liberal MP Nathaniel Erskine-Smith asked in a spirited back-and-forth with the grocers that made national news.

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Alistair MacGregor, the NDP MP on the agriculture committee who pushed for an inquiry into grocery profits late last year, said he had hoped the CEOs would show his hearings the same “courtesy” they showed the hearings on Hero Pay. When lieutenants appeared instead, MacGregor asked them why their boss hadn’t bothered to show up.

On Feb. 13, MacGregor motioned the committee to summon Weston, Medline and La Flèche. “Given the fact that confidence and trust are not very high, I think we need to get a few more answers than what we’ve been getting,” he said in an interview.

Back in 1891

Standing committees have the power to “send for persons, papers and records,” according to the House of Commons Procedure and Practice manual. Most of those witnesses show up willingly when invited, the manual notes, but when they decline, committees can summon them. The summons, signed by the committee chair, is then “served on each of the individuals by a bailiff,” according to the manual.

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On Feb. 15, the committee confirmed that the grocers would receive the notice via bailiff, as an earlier version of this story reported. But on Feb. 17, the committee said it had opted to deliver the notices by email instead.

If the witness still doesn’t show after receiving a summons, committees have no power to punish them, but they can refer it to the House of Commons, which “has the disciplinary powers needed to deal with this type of offence,” according to the manual. “Once seized with the matter,” it reads, “the House takes the measures that it considers appropriate.”

In 1891, for example, the committee on public accounts wanted to hear from the government’s superintendent of printing. After he disobeyed, the House of Commons ordered him to show up at the Bar of the House — the brass rod that extends across one end of the chamber, acting as a kind of gate that only MPs and authorized personnel are allowed to pass. The superintendent of printing again didn’t show.

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“The House ordered that he be taken into the custody of the Sergeant-at-Arms. However, the Sergeant-at-Arms was unable to find him. No other action was taken,” says a footnote in the manual.

In a more recent example, the president of the Public Health Agency was called in front of the bar in 2021 and admonished for refusing to hand over classified documents about the firing of scientists at a Winnipeg disease lab — the first such rebuke the House had given in more than a century, the National Post reported.

Accountability exercise

Even though MacGregor’s motion to summon the grocers passed unanimously, Kody Blois, the Liberal chair of the agriculture committee, wondered aloud whether the three leaders would say anything that hadn’t already been said by their top lieutenants.

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“I don’t know if we’re going to get any further information,” Blois said at the hearing, though he also noted that he thought it was important to hear from the chief executives “in terms of accountability.”

Despite their vigorous denials, Loblaw, E
mpire and Metro haven’t been able to shake accusations that they are taking advantage of the worst food inflation since the 1980s to pad their profits. In Loblaw’s case, it went so far as freezing prices on its in-store No Name brand to help tamp down anxieties around costs — a move that was quickly dismissed by Loblaw’s suppliers and rivals as a meaningless marketing ploy.

The grocers have blamed multinational food manufacturers for foisting cost increases on them, as a way of recouping the rising cost of fuel, commodities and packaging. And this week, the Retail Council said the parliamentary inquiry should be turning its attention to those global brands, rather than questioning the grocers again.

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Loblaw and Metro did not answer questions on whether Weston and La Flèche will agree to appear before the committee. Empire, however, said Medline will go when asked.

“Should the Committee require a second attendance, of course Michael will attend,” spokesperson Jacquelin Weatherbee said in an email.

But she also said the company believes its chief operating officer Pierre St-Laurent already gave “forthright and insightful testimony, clearly showing that Empire is not in any way taking advantage of these awful, inflationary times.”

Medline’s lament

In an interview last year, Medline lamented that the 2020 inquiry into Hero Pay didn’t give the same scrutiny to the American retail chains that operate in Canada.

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“We have an unfortunate habit of picking on ourselves,” he said.

The current inquiry into inflation and corporate profits so far hasn’t sought testimony from Walmart Inc. and Costco Wholesale Corp., even though they are two of the five major chains that control roughly 80 per cent of Canadian grocery sales, according to a 2021 government report.

Walmart and Costco haven’t factored into discussions around profits and inflation in the past year partly because their public financial statements don’t break out their Canadian results as fulsomely as the other three chains in the big five grocers.

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“Loblaw Metro and Empire, between the three of them, have just seemed to get most of the attenti
on lately,” MacGregor said, when asked why Walmart and Costco weren’t asked to testify. “They just seem to be the ones that have occupied the attention now. That’s not to say that the other two couldn’t at some point be asked to come and speak to us.”

Correction: Empire Co. Ltd. sent chief operating officer Pierre St-Laurent to testify at an agriculture committee hearing on Dec. 5, 2022. A previous version of this story incorrectly identified him as the chief financial officer. An earlier version also incorrectly reported that the committee was sending a bailiff to deliver the summons. The committee changed its plans after the original article was published and delivered the notice by email on Feb. 17 instead. The story has been updated to reflect the new information.  

• Email: jedmiston@postmedia.com | Twitter: jakeedmiston