The short-term funding comes after all five major grocery retailers in Canada announce that they will sign on to the code
WHITEHORSE — Agriculture ministers have agreed to spend $1.2 million to fund Canada’s new grocery code of conduct.
During their annual meeting in Whitehorse last week, ministers heard that all major retailers had agreed to the code. Walmart and Costco were the final holdouts.
The money is short-term assistance to support the code’s adjudication office.
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The code will be implemented by June 2025.
“This is a positive step toward bringing more fairness, transparency and predictability to Canada’s grocery supply chain and for consumers,” said the ministers in a statement after a report to their meeting from the code’s interim board.
The board said national grocers are committed to the voluntary code, as are many regional and local grocers and key suppliers.
“While there is still much work to be done, including the development of the processes required to ensure an efficient and effective implementation, the establishment of an operating office, the hiring of an adjudicator, industry education, and much more, we are delighted to report that all stakeholders have expressed their desire and their commitment to assist and support the implementation of a voluntary industry-led code in Canada,” said the report to ministers.
The code has been in the works for years and was the subject of a federal-provincial-territorial working group examination in 2020-21 and a later House of Commons agriculture committee study.
A main concern was the power that retailers had over suppliers, dictating fees they paid to get their products on store shelves and payment terms. Tension built within the food supply chain, and Canada looked to other countries that had established codes.
Canada’s code differs in that it is a grocery, not a retailer, code.
The code sets out rules around fees and has a dispute resolution mechanism. Penalties for not following the code are still to be determined.
Gary Sands, senior vice-president at the Canadian Federation of Independent Grocers, said members were happy to see something they called for about 15 years ago finally come to fruition.
“I’m just relieved and I’m optimistic. I think this is going to be good for the entire industry,” he said.
“I think it’s going to have a positive impact on costs.”
Sands said the finger pointing that characterized the first meetings of the steering committee is gone, and industry players are talking with each other instead of at each other.
He expects the code to end the distorted market practices in the industry over the last few years. He likened the industry to a highway with no signs or speed limit and said the code will change that.
Sands also said the code will have a positive impact on costs throughout the supply chain.
Although high food prices were not the impetus for the code, he said they should drop.
He has already heard reports that behaviour is changing, and he noted that reciprocity is a key pillar in the Canadian code because the principles apply to suppliers and retailers.
MacAulay said the code is not meant to lower food prices but to create fairness.
Quebec agriculture minister Andre Lamontagne said the code will establish predictability, transparency and fairness in the supply chain.
He said the fact industry developed the code and will subscribe to it is “a great day for Canada, for consumers, for the whole supply chain.”
“One thing that will be very important is the adjudicator will have the responsibility to come up on a regular basis with kind of a state of health of our chain of supply from the grocery sector,” Lamontagne said.
