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Agri-food expert calls Parliament grocery inflation hearings ‘political harassment’

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Grocery store chain CEOs are being called back to Parliament to explain how they are they will stabilize food prices, but one agri-food expert said the process is pointless.

“This is starting to look more like political harassment, really,” said agri-food expert Sylvain Charlebois.

“This will be the second time CEOs will be asked to testify before the committee and a third visit in Ottawa.”

Canada’s biggest grocery store CEOs are going to be called back to Parliament, and this time MPs want them to explain how they are stabilizing food prices.

Price growth for groceries continues to outpace overall inflation, with the September data from Statistics Canada placing inflation on groceries at 5.8 per cent year-over-year, opposed to 3.8 per cent for headline inflation.

The motion calls on the committee to invite Loblaw chair Galen Weston; Metro CEO Eric La Fleche; Empire Company, the parent of the Sobey’s chain, CEO Michael Medline; Wal-Mart Canada CEO Gonzalo Gebara and Costco Canada COO Pierre Riel to appear at committee.

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The grocery companies are also asked to supply “a comprehensive report” on their strategies and initiative to stabilize grocery prices by Nov. 2.

Charlebois said that Canadians are being hit harder by housing costs than by the price of groceries.

“Housing costs are preventing people from spending more at the grocery store. In fact, they are spending less at the grocery store. People aren’t saying that openly but business in the food industry is much tougher than last year.”

He said it is unfortunate that CEOs are being asked to return to Ottawa.

“These people have a business to run and Canadians to feed. They have other things to do than to testify at Ottawa.”

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Associate economics professor Jason Childs at the University of Regina agreed, saying the meetings won’t change the underlying problems at the grocery market.

“You are seeing the easing of grocery price inflation but it’s not really to do with the structure of the industry, it’s more to do with the basic input conditions,” Childs said.

He said in terms of percentages, the profits that have moved have been minuscule.

“Real estate costs and interest rate costs have been rising and those play a huge factor for these firms. So, the five-per cent interest rate isn’t just taking a bite out of households with their mortgage payments, it is taking a bite out of grocers, too.”

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Childs said his biggest concern is that international companies encouraged to be at the intervention will push out existing firms.

“This set of actions actually makes those kinds of firms walk away and say they don’t want to play in the market. Ultimately, this set of actions could be counterproductive.”

— with files from Global News’ David Baxter