Loblaw has been integrating artificial intelligence into its business for several years including personalized product matching, according to an internal government document. The country’s largest grocer also tried to influence government policy on the technology with an attempt to join the national AI Strategy Task Force.
A briefing note, prepared for Innovation, Science and Economic Development associate deputy minister Mark Schaan, reveals that the company requested a meeting in October last year with ISED officials to pitch its participation in the task force – a group of experts convened to set national AI strategy.
The document, obtained by Do Not Pass Go through an Access to Information request, says a separate meeting to more broadly discuss the government’s AI strategy was proposed since the task force was already in motion. That meeting, to discuss “potential regulatory or legislative changes relative to data and privacy,” occurred on Oct. 29.
“Loblaw Digital has been integrating AI into its products for several years, through products like Garfielld, an internal large-language gateway internally [sic] at Loblaw for employees to play with conversational generative AI models,” the document reads. “Generative AI has also been integrated into operational efficiencies like finance automation and procurement optimization, and other Loblaw Digital offerings, including personalized product matching.”
Representatives from the Brampton. Ont.-based company, which operates more than 2,400 stores across Canada, have met with government officials and Members of Parliament to discuss “privacy and access to information” at least 17 times since that October meeting. One of those meetings, on July 6, was Cabinet-level with Finance Minister Francois-Philippe Champagne.
Neither company representatives nor ISED officials, including Schaan, returned requests for further information on what was discussed at those meetings.
The briefing document also features a redacted section following the disclosure of Loblaw’s request to join the task force and the subsequent proposal for more broad AI discussions. ISED declined a request by Do Not Pass Go to remove the redaction.
“We will not be in a position to disclose that bullet as it contains sensitive information used to support the deputy minister in a strategic meeting with a stakeholder and includes advice resulting from discussions and deliberations on future policy development and collaboration between the department and the third party,” said ISED access to information advisor Jarret Anderson in an email. “Disclosure would impact ongoing and future negotiations.”
The use of AI in pricing is controversial, with an increasing number of jurisdictions enacting or considering limits on the practice. Earlier this year, Manitoba became the first province to introduce legislation that would ban so-called surveillance pricing, or the use of customers’ data to set individualized prices.
In a corporate blog post dated July 13, Loblaw said it does not use customers’ incomes, demographics, loyalty profiles, purchase or browsing histories, locations or AI-derived personal characteristics to charge individuals more for groceries. Its PC Optimum loyalty program is designed to provide savings as opposed to higher prices.
“While these concerns have emerged in other industries, this type of pricing does not exist in grocery,” the post reads. “Customers expect grocery pricing to be fair and consistent. If a retailer appeared to profit from timing, weather, demand spikes or customer urgency, trust would erode quickly. At Loblaw, we will never use this type of pricing, be it on shelf labels, online, or otherwise.”
Such statements aren’t necessarily satisfactory to regulators. With grocery prices having surged by 22 per cent between 2022 and 2025, compared to a 13-per-cent increase in other consumer goods, the Competition Bureau in June launched an inquiry into the food supply chain. The study is investigating numerous parts of the industry, such as processing, distribution and pricing – including loyalty programs and algorithms.
The Bureau says the probe will look into how customer and loyalty data combine with algorithms to influence prices, promotions, store-level prices and the effective prices that different customers pay.
The task force’s recommendations, returned earlier this year, informed the “AI for All” plan announced by the federal government in June. The strategy dedicates billions of dollars toward AI development but does not expressly put limits on surveillance pricing. The government has instead promised to address the issue by strengthening existing privacy laws.
The task force itself was criticized for skewing toward industry and advocating for rapid adoption of AI by businesses and government without sufficient safeguards for the public.
More than 160 academics, civil society and human rights groups wrote an open letter to ISED Minister Melanie Joly and AI Minister Evan Solomon last October, “to protest and reject the deeply misguided and wrongheaded approach to public consultation demonstrated by the government’s 30-day ‘national sprint’ on Canada’s artificial intelligence strategy.”
Loblaw sparked controversy last week for deploying a night-time drone advertisement over downtown Toronto. The large-scale display had AI-powered drones showing messages such as, “Is that third coffee keeping me up?” to promote the company’s new President’s Choice AI chatbot.
The company said it obtained all the necessary permits for the display and that it was inspired by “many questions Canadians find themselves asking late at night,” but that didn’t stop the stunt from being heavily criticized.
“What dystopian hell are we in for now?” urban planner Sean Galbraith told CBC. “Do we not have enough advertising along the highways and such that we have to now pollute the night sky with more ads?”
The company also announced a partnership in May with Toronto-based technology firm Shakudo to “accelerate AI adoption to enhance its customer shopping experience and enhance its organizational capabilities.”
Loblaw also last week announced a deal with Markham, Ont.-based Eaigle to deploy the company’s AI gate-automation technologies at its distribution centres.
🎧 ON THE PODCAST THIS WEEK:
THE ANTI-COMPETITIVE BARRIERS HOLDING CANADIAN FILMS BACK
🛒 GROCERIES
Speaking of large grocers, New Zealand’s National political party is making the break-up of one of its large chains a key part of its re-election platform. The centre-right party, which is currently leading the nation’s coalition government, says it will split FOODSTUFFS into several units to increase the number of independent grocery chains, subject to a six-month review by its antitrust agency, the Commerce Commission. The pledge comes in the face of runaway food prices, with other political parties either supporting the plan or critiquing it for not going far enough. If the effort goes ahead, it wouldn’t be the first time the country carved up a dominant company. Telecom New Zealand, the nation’s largest telco, decided to split itself into three separate companies in 2008 in response to public and government pressure over high broadband prices.
✈️ AIRPORTS & AIRLINES
Canada’s AIRPORTS continue to be the hot topic after Prime Minister Mark Carney announced a quasi-privatization plan at last week’s investment summit in Toronto. The controversial plan to sell off operations of the nation’s four major hubs – Toronto, Vancouver, Montreal and Calgary – has drawn vociferous concern and commentary, forcing the government to promise blocks on “unjustified price increases” on airfares under the scheme. At the summit, Carney said that selling the concessions while retaining ownership would raise billions that could then be used to invest in and expand regional airports that could then provide more competition to the hubs. As we noted in our coverage from the summit, it’s still an open question as to why investors might want to buy such concessions knowing that the proceeds of doing so would go to funding their competitors. The additional promise of blocks on fee increases adds to the question.
British Columbia sea plane operator HARBOUR AIR is buying PACIFIC COASTAL AIRLINE for an undisclosed amount, creating a single operator with up to 300 daily flights and a workforce of 900. The companies, both of which are based in Richmond, B.C., said the merger will allow them to navigate difficult weather conditions with a combined fleet of 40 float planes and 19 wheeled aircraft. Harbour Air chief executive Bert van der Stege says in a press release that he is looking forward to building “the leading regional airline group in Western Canada.”
🥊 COMPETITION
The other big piece of news to come out of the investment summit was the PRODUCTIVITY MEGA DEDUCTION, which are new rules that will allow companies to write off up to 65 per cent of capital expenditures. This will cover spending on fibre-optic cables, mining property, oil and gas pipelines, software, research and development, computer equipment, aircraft and vehicles, patents, rail track, bridges and roads. Prime Minister Mark Carney touted the measure as lowering the marginal effective tax rate — a measure of tax on businesses used to compare competitiveness between nations — to the lowest in the G7. The news was largely cheered as a big step toward getting Canadian firms to re-invest in capital and thereby improve the nation’s productivity, a measure where it has been lagging peers for years. “This is a huge incentive for capital allocators to invest in productivity-enhancing tools and systems (something Canadian firms have been historically bad at),” reads the Canadian Shield Institute’s assessment. “Actual stuff that drives economic growth.”
💾 BIG TECH
Canadian AI company COHERE last week confirmed it has reached terms to acquire German peer ALEPH ALPHA. The companies announced the planned merger back in the spring, with the joint entity valued at around $27 billion at the time. As BetaKit points out, Cohere and France’s MISTRAL are the only leading AI companies not based in the United States or China, which makes them appealing options to governments that are looking to avoid doing business with those two countries.
In a ruling that was unsealed last week, the U.S. Federal Court rejected the Department of Justice’s request to break up parts of GOOGLE’s online advertising business despite the company being found to have illegally acquired and maintained dominant power in the market. The court instead is instead requiring Google to make its advertising products interoperable with rivals and to share data about its ads auctions with publishers. The DoJ’s request for measures to break up the company’s ad tech business were “neither realistic nor needed,” wrote Judge Leonie Brinkema in her 106-opinion. Google is set to fight a similar case in Canada at the Competition Tribunal early next year, with the Competition Bureau arguing that the company also abuses its dominance of the online advertising market. Google cheered the U.S. decision, but competition advocates here are not happy with it. “Canada should learn from the U.S. decision, not copy it,” said Canadian Anti-Monopoly Project director Keldon Bester in a release. “Interoperability, data access and rules against self-preferencing can help, but the Bureau should keep making the case for structural change. If one company still controls the tools publishers use to sell ads and the marketplace where those ads are sold, the underlying conflict remains.”
📱 TELECOM
The fight over new wireless fees in Canada is getting deeper and more mired in legal mud, with TELUS asking the courts to overturn a procedural decision made by the CRTC last month. As per a report from iPhone in Canada, the company is seeking leave with the Federal Court of Appeal to argue against a regulatory consultation on the new fees, which range from device handling to charges for SIM cards.
The CRTC had earlier in the summer asked Telus, ROGERS and BELL to explain how these new charges can be considered to be exempt from a ban on service activation, modification and cancellation charges that came into effect in June. Telus replied by saying that the CRTC is biased and had already made up its mind that its SIM card fees – which it maintains are optional – are offside. It also wanted the consultation split into two parts – one to determine if it broke the rules, and another to assign penalties if so – and said the CRTC hadn’t clearly explained what the company was doing wrong.
The regulator rejected those arguments and launched the consultation, which ultimately provoked the new court challenge.
Consumer advocates are not impressed. “This Telus appeal is outrageous and should offend every Canadian,” says OpenMedia executive director Matt Hatfield, adding that the CRTC acknowledging that SIM cards are not optional and necessary to phones operating “is no more prejudging this case than if a judge acknowledged before a trial that the sky is blue, or the sun rises in the east.”
“Telus’ actions here are profoundly bad faith, and an attempt to punish and discourage the CRTC from advancing the most basic consumer interests,” he adds. “We sincerely hope the court and the CRTC itself will take the temerity of these efforts into consideration in issuing their respective judgments.”
Speaking of the CRTC, fellow Substacker and former ROGERS senior customer service advisor Stephen Lawton has an excellent three-part summary of the 140-plus submissions to the regulator’s ongoing consultation on combining its various consumer protection codes into one. Part one summarizes the positions of the big telcos, including his former employer as well as BELL and TELUS, while part two looks at the regional firms’ submissions, including SASKTEL, COGECO and QUEBECOR. Part three summarizes consumer groups including the Public Interest Advocacy Centre and indie competitors such as TEKSAVVY. It’s juicy reading for telecom nerds.
🕺 ENTERTAINMENT
The Competition Bureau’s case against Canada’s Wonderland began its hearing at the Competition Tribunal last week. The Bureau is arguing that the amusement park’s owner, North Carolina-based SIX FLAGS, is advertising tickets and other items at lower prices than what consumers actually end up paying online – a process known as drip pricing. The enforcement agency wants the Tribunal to order the park to stop the practice, pay a penalty and offer restitution to affected consumers. The park is defending itself by saying that all applicable fees are adequately disclosed and that forcing all-inclusive pricing could lead to higher upfront costs.
🚨 COMING UP
Canadian workers are among the most restricted by non-compete clauses in a survey of 15 countries released by the Organization for Economic Co-operation and Development this summer. DAN ANDREWS, head of the growth, competitiveness and regulation division in the OECD economics department and author of the study, joins the Do Not Pass Go podcast this Thursday to discuss how this may be leading to Canadian workers making less at their jobs than they should be.