Industry committee  I don't think so. It is a practice that has been around for decades. I have two concerns about shrinkflation. One is that we have some data at the lab showing that, perhaps, Statistic Canada doesn't really take into account the impact of shrinkflation on food inflation, generally speaking.

Industry committee  Yes, I think the path is pretty simple in my mind. You have two elements: the code of conduct and processing. The code of conduct would obviously bring more depth to our food processing sector because they'll be able to have a voice to negotiate with grocers, so you will increase chances of processors surviving and thriving in Canada.

Industry committee  In response to your question, I have two comments. One is about net margins. Yes, net margins are very low in Canada compared with other sectors. But if you compare the net margins of Empire, Sobeys, Loblaws, and Metro, the net margins are actually, on average, double of what they are in the U.S. if you look at Albertsons and Kroger there.

Industry committee  For applesauce, the margins are much smaller. There's more processing involved. There's a lot more markup in processing, in particular. The apple grower will get much less—close to 3% or 4% for that apple.

Industry committee  Well, first of all, I can't believe you bought American apples [Inaudible—Editor].

Industry committee  I would say that, obviously, out of $8, if you want to use that sum—

Industry committee  —very little goes to the farmer. On average, a farmer will get anywhere between, I'd say, 3% to 10% of the product you buy at the grocery store. Of course, it depends on the level of processing. For an apple, there's very little processing, so my guess is that it's closer to 10%.

Industry committee  First, stop inviting grocery CEOs to Ottawa to ask them why they're making too much money. The Lidls and Aldis of the world read the headlines, like everyone else. Second, I think it's important to recognize that the companies currently in Canada are very well managed. They're very market savvy.

Industry committee  I'm afraid, Mr. Turnbull, that we won't have a debate, because I still agree with you. I actually do think that using market share as a sole metric is misleading. Loblaw is a good example of that. Loblaw has 29% of the market when it comes to food retail in Canada. The 29% is a bit misleading because Loblaw is a heavily vertically integrated company.

Industry committee  That's right. For example, just to compare what's going on in the U.S. versus Canada, in the U.S., they had one case involving canned tuna. The CEO of Bumble Bee Foods was jailed for 40 months because he was found guilty of fixing prices for three years. In Canada with bread, allegedly the scheme was running for 14 years, from 2001 to 2015.

Industry committee  Absolutely. I think you raise a good point, Mr. Turnbull. I didn't comment on the amounts presented in the bill, but I did question why we would put an actual sum there. In the agri-food sector in particular, not all firms are created equal and penalties would vary greatly. I would argue that for Grupo Bimbo, the owner of Canada Bread, $50 million is not very much.

Industry committee  I would agree, Mr. Turnbull. I think it would be a step back, for sure. I'm not a legal expert, and I just want to make sure that people know that. I look at food distribution as a social scientist and economist.

Industry committee  Is that for the capital gains tax specifically, Mr. Williams?

Industry committee  I haven't seen the evaluation today, unfortunately, but I would say that I'm surprised that this hasn't come up before. We did hear from other groups in the economy. However, to suggest that this change affects only a minimal number of Canadians, I think, is misleading. I think it actually affects a lot of businesses, including in the agri-food sector, and I would start with farmers.

Industry committee  It affects planning for businesses and farmers. They have to think about the next generation. We've had issues with farming and the next generation and how we get more people involved in farming, so that's certainly not something you want to do. You're discouraging investments.