Liberals make affordability, public safety top priorities as grocery executives meet with minister

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Grocery store CEOs agreed to stabilize food prices Monday following a government-ordered meeting, the federal government said as it tries to respond to the affordability crisis, which opposition parties say Prime Minister Justin Trudeau has ignored for too long.

There were no details provided on how the country’s leading grocery stores would stop the growth in prices, which have increased dramatically in the past two years. Innovation Minister François-Philippe Champagne said the “bottom line” was that the large grocery store chains had agreed to work with the government and stabilize prices.

But Mr. Champagne stopped short of repeating Mr. Trudeau’s demand made just last week that the grocery stores come up with a plan by Thanksgiving to “stabilize and lower grocery prices across the country.” And CEOs leaving the meeting did not commit to lowering prices.

The top grocery store executives were summoned to Ottawa on the same day members of Parliament returned to the House of Commons for the fall sitting. The minority government says affordability and public safety will top its agenda as the Liberals respond to faltering fundraising numbers, falling public support and an emboldened Conservative Party.

The House resumed amid a shifting political landscape and with the Liberals now openly acknowledging that Canadians are struggling and the government needs to do more to respond to affordability concerns.

The change in message and new plans to address affordability are the first signs of a reset from the government, which four senior Liberals had acknowledged to The Globe and Mail was urgently needed. Still all of the sources believe that with two years before the next federal election, the Liberals have time to turn their fortunes around. The Globe is not naming the sources because they were not authorized to discuss internal party matters.

Two of the sources dispute that Mr. Trudeau’s bid for a fourth consecutive mandate is as much of a long shot as history suggests, because it’s been done at the provincial level. The last prime minister to hit that winning streak was Wilfrid Laurier, more than a century ago.

In a minority Parliament, the Liberals have no guarantee that the next election will be in 2025, but all of the sources said they expect to stay in office the full four years as long as they hold up their end of the deal struck with the NDP to keep the Liberals in power. The sources also all said they don’t believe the NDP is in a hurry for an election.

As part of the Liberal reset, the government last week revived a broken election promise from 2015. It will retroactively remove GST from all new rental construction effective Sept. 14. The change needs to be made through a new law that hasn’t yet been introduced. The government says it will unveil more housing policies later this fall.

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Conservatives, meanwhile, say their focus will be on housing and affordability, highlighted by Leader Pierre Poilievre’s new bill aimed at spurring home construction and his continued push to “axe the carbon tax.” For his part, NDP Leader Jagmeet Singh will table a bill that would bolster Canada’s competition laws in a bid to bring prices down.

Under Mr. Poilievre’s plan, cities would be penalized if they fail to increase housing supply by 15 per cent each year. The Conservatives also propose removing the GST from new purpose-built rental construction where the rent prices are below market value.

The Liberals and Conservatives traded barbs over what each party is offering Canadians as a solution to the housing crisis.

Housing Minister Sean Fraser called the Tory plan underwhelming and said the government won’t support a plan that is rife with half measures and “bizarre suggestions.”

In Question Period, Mr. Poilievre described the government’s latest response to the housing crisis as a panicked response to plummeting polls. On offer from the Prime Minister are “recycled promises that he had broken six years earlier.”

The government’s plan to remove the GST from new rental construction will be included in a broader piece of legislation that will also contain changes to the Competition Act. Mr. Trudeau has also threatened new tax measures on grocery stores if they don’t bring down prices.

Concern over food prices has been championed by the New Democrats for months now. It’s driven by the fact that while the annual rate of Consumer Price Index inflation has fallen significantly since last summer, food prices continue to rise quickly.

After their nearly two-hour meeting with Mr. Champagne on Monday, leaders for Loblaw Companies Limited, Costco Wholesale Canada and Walmart Canada dodged reporters.

The CEOs for Metro and Sobeys both said prices need to be stabilized.

Metro president and CEO Eric La Flèche said that any talks on food prices should include the entire industry and not just retailers. “We’ve had thousands of cost increases and that’s why there’s inflation,” he said.

Economists already expect food price inflation to fall in the coming months. Canadian food manufacturers are raising their prices at a slower pace, and U.S. food inflation, which tends to lead Canada’s, has dropped considerably in recent months.

Sylvain Charlebois, the director of the Agri-Food Analytics Lab at Dalhousie University, was part of Monday’s meeting in Ottawa. He told The Globe there was recognition in the room that grocers are not “overly popular right now.”

He said the talks focused on stabilizing food inflation. He said while the meeting was “triggered by politics,” there were some meaningful issues addressed as a group.

With a report from Mark Rendell in Toronto