Bill C-56

Affordable Housing and Groceries Act

An Act to amend the Excise Tax Act and the Competition Act

Part 1 amends the Excise Tax Act in order to implement a temporary enhancement to the GST New Residential Rental Property Rebate in respect of new purpose-built rental housing.
Part 2 amends the Competition Act to, among other things,
(a) establish a framework for an inquiry to be conducted into the state of competition in a market or industry;
(b) permit the Competition Tribunal to make certain orders even if none of the parties to an agreement or arrangement — a significant purpose of which is to prevent or lessen competition in any market — are competitors; and
(c) repeal the exceptions in sections 90.1 and 96 of the Act involving efficiency gains.

Report Stage

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I am fortunate to work with my hon. colleague on the Standing Committee on Finance. He always has a thorough knowledge of the issues and makes constructive suggestions.

I want to ask him about the amendment to the Competition Act. He referred to it in his speech. For years, the Minister of Innovation, Science and Industry has been announcing a comprehensive reform. However, the reforms have come in bits and pieces, in Bill C‑56 and Bill C‑59.

The commissioner of competition told us it was not enough, that it would take this and that. Public officials replied that if we did such and such, it would affect something else that was not in the bill. In fact, we were supposed to have a bill to reform the entire Competition Act.

Does my colleague think that doing things this way amounts to incompetence on the part of the government?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I was not expecting such a lively debate tonight. I thank the hon. member for Vancouver Kingsway for his speech, and I congratulate him on the six amendments that he was able to get passed in committee. He touched on them briefly. I would like him to tell us more about that, but I will ask my question.

There have been a lot of changes and improvements to the Competition Act, some of which were requested by the commissioner of competition. When it comes to the Competition Act, we know that Canada had a long way to go. Bill C‑56 improved the act, and Bill C‑59 and its amendments are improving it even more.

Does the member think that the system is now robust enough that consumers can expect healthy competition at all times, or is there still more work to do in that regard?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Esteemed colleagues, we're in a predicament here. It's really not easy to do what we're doing here.

On the one hand, we have a competition issue and that has an impact on the economy, that's for sure. There are a lot of things being done to address that. The commissioner of competition is suggesting amendments to the bill with respect to the Competition Act. I consider him to be an expert in the field. He's in a position of authority and he's suggesting that we adopt the amendment Mr. Davies proposed to us.

On the other hand, senior officials from the Department of Finance are telling us that some key issues around this could have serious consequences.

Our role is that of legislator, but we're caught between two authorities who are not saying the same thing. That's a real problem.

How did we get here? For years, the government has been promising that it will do a comprehensive reform of the Competition Act, but instead of going through with that reform, it's using a piecemeal approach with this omnibus bill, which deals with a whole host of subjects and acts and implements certain provisions of last year's budget. Meanwhile, this year's budget has been tabled and there's a briefing tomorrow on the notice of ways and means. That's where we're at. We never get to see the big picture.

That leads to situations like the one we're in right now. The government is telling us that we have to look at the Competition Act as a whole. That's its reasoning for rejecting the amendments proposed at the commissioner's request. For example, it's arguing that the threshold would be different in two parts of the act. The government never lets us see that darned big picture.

In my opinion, this shows that the government isn't doing its job well. If they'd wanted to do things properly and ensure that we, elected members who are legislators, had the time to get a complete look at this situation, they would have moved these amendments in a separate bill. That way, we could have taken the time we needed to get a good look at this.

The committee has heard from the commissioner of competition. We've heard the officials' presentations. Now, some officials with us are still making some very important and valuable points. We're flying half-blind, and we can't see the big picture. We're in this situation because the government is doing a bad job, and I condemn the situation.

Yes, the commissioner did say that the issue of his powers to block mergers was largely resolved thanks to the provisions in Bill C‑56 and what's in Bill C‑59. That said, when the Standing Committee on Agriculture and Agri-Food did its study on grocery prices, the commissioner of competition's arguments were the same ones this amendment is based on, and that committee accepted them. Therefore, if we don't pass this amendment, we're putting ourselves at odds with the Standing Committee on Agriculture and Agri-Food.

Frankly, I would have preferred that the commissioner be with us to debate this amendment in depth.

We're hearing from public servants that there are some very significant issues. However, their arguments are at odds with the commissioner of competition's request, even though the Standing Committee on Agriculture and Agri-Food accepted the commissioner's suggestions.

I find myself having to reject valid arguments to decide on this. As it stands, I will support the commissioner of competition's suggestions, agree with the Standing Committee on Agriculture and Agri-Food and the work it has done, and support Mr. Davies' amendment. Nevertheless, I strongly condemn this situation.

[Samir Chhabra]

I am avoiding the fact specifics of that particular case or example, in the sense that there are a number of important changes to the Competition Act that have been proposed—there's Bill C-56, which has received royal assent, and then again there are changes being proposed here through Bill C-59. I think the key piece to recognize is that on mergers in certain federally regulated sectors, including in finance and including in transport, for example, there's a two-key system. There's the Competition Bureau making its assessment and providing analysis and advice, and then there's also an opportunity for a ministerial decision to be taken. Nothing that's being proposed here or in Bill C-56 specifically changed those ministerial engagements.

[Martin Simard]

It's asking us to opine on the decisions the tribunal has taken over the years.

I think the tidbit about the “least intrusive” remedy is fairly universal. If you look at all the merger guidelines around the world, there's a network of enforcers, and they have this part. I think the notion is you want to stop the harm, but you want to keep, if you can, the benefits of a merger, like efficiencies and so on. I don't think Canada is unique in taking the least intrusive remedy that fixes the problem. I think that's the important caveat.

I agree with you that those were the two things the commissioner highlighted, and he clearly feels that the decisions over time have been too timid and the tribunal should be constrained by the act to be more aggressive. It is also perhaps worth replacing this in the overall reforms of C-56 and C-59, which generally really strengthen...so, no efficiencies defence and stronger abuse of dominance. There's a lot that has been changed.

We were also going to talk about the potentially structural remedies just after this, and there's already the ability now for the tribunal to take into account market share alone, so there's a lot that has been done. Even if the diagnostic is that it was too weak before, there has already been a lot of change to strengthen this, and whether this one is needed or not is a question for the committee.

[Julie Dzerowicz, Liberal, Davenport, ON]

First, thank you for being here and for answering all these questions.

I think part of the reason it's so important, at least for me, is, one, we have made some really amazing progress on and generational change to our competition law, and when the commissioner came, he acknowledged that. Then he also said he felt there were two really important additions we also needed to consider for C-59. My ears did perk up at that, because I think he was very happy with C-56, C-19 and, now, the changes around competition here in C-59. However, he then very deliberately said there are two things he really feels we need to have right now. I believe, if I'm correct, the amendment that's before us.... It was when he was talking about merger reviews that he said:

Merger review is our first line of defence for protecting competition. However, when we find that a merger is anti-competitive, the law does not require strong remedies.

That's this one that we're referring to.

Then he said:

The Supreme Court held that the goal of a merger remedy is simply to mitigate the harm from a merger so that it is no longer substantial, and to do so in the least intrusive way. As a result, we sometimes end up with merger remedies that take a strong competitor in a market and replace it with a weaker one.

Do you agree with his assessment on that? Do you agree with those statements?

[Samir Chhabra]

In clause 236, the government had proposed to make an adjustment to the English version of the act to ensure that representations about prices—particularly a discounted product—are presumed to be making the comparison to their own prices, rather than potentially to an unspecified market price or the prices of competitors. This enables the bureau to be much clearer and more targeted about going after any deceptive marketing in this space that takes advantage of a different selling price.

The bureau, of course, has its investigatory tools and the ability to compel information from organizations that are under investigation. Following the passage of Bill C-56, it also has the ability to seek orders to compel information in the course of a market study. There are a couple of different ways that the bureau can get access to this type of information.

My understanding of the change that's being proposed by NDP-7 is that it would introduce additional requirements that include demonstrating or establishing that a business has “sold a substantial volume of the product at that price or a higher price within a reasonable period of time before or after the making of the representation” and that “they have offered the product at that price or a higher price in good faith for a substantial period of time”.

Some considerations before the committee are about whether those time periods are testable, relatable and consistently applied across the board. It's about whether businesses would have the ability to understand what's expected of them in that circumstance and, frankly, what a “substantial period” might mean. Do any interim discounts that were offered for a short period of time in between, say, a Black Friday and then a Boxing Day, obviate the ability to demonstrate it as a discount, if they've done it within previous months?

Those are a few issues for the committee's consideration today.

[Matthew Boswell]

As I set out in my opening, rebuttable structural presumptions are incredibly important and would be a very significant change in terms of merger law in Canada. As I pointed out, it's not some sort of magic thing that we've come up with at the bureau by ourselves. It's an approach they've been taking in the United States for 60 years, including through endorsing it at the level of the Supreme Court of the United States. That's why we make a strong point about how Bill C-59 could be amended. We provide very clear language on how it could be amended to mirror the U.S. merger guidelines.

The other point would be the remedy standard, which is—I went through it in my opening as well in terms of the United States, the European Union and the United Kingdom—to restore competition to what it was before, when you have an anti-competitive merger. That should be the remedy.

Those two amendments, combined with repealing the efficiencies defence—which happened, as you will recall, in Bill C-56—would probably be the most significant amendments to our merger law ever. That's why we're pushing so hard. As the enforcer who sees these things, we're at the coalface every day. That's why we're pushing so hard for these amendments. They would make a big difference.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

All right. We'll have to take a closer look. I also imagine that your office would need more resources to be able to conduct these investigations and have access to all the necessary expertise.

I now have a question about the cost of living. Many of the people we represent tell us about the rising cost of living and the cost of many things, including the grocery basket. Food is becoming increasingly expensive. There are provisions relating to this in Bill C‑56 and in Bill C‑59.

I have a very naive question, where I put myself in the place of the citizens I represent: Can we have hope, thanks to the provisions of Bill C‑59, that the cost of groceries will stabilize and perhaps even decrease? We can't control global inflation, I understand that, but can the measures in this bill give people hope that prices will stop rising as they have and that we'll stop seeing crazy prices?

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

That's very good, thank you.

I now turn to the representatives of the Competition Bureau Canada, namely Mr. Durocher, Mr. Boswell and Ms. Pratt.

The letter that the bureau sent to the committee on March 1 states that the amendments proposed in Bill C‑59, as well as the recent reforms made in bills C‑19 and C‑56, represent a generational upgrade to Canada's competition legal framework. All three bills mentioned are budget implementation bills.

Do you believe that reform of the Competition Act, through a bill dealing solely with it, would be beneficial so that parliamentarians can weigh every effect of the act and of any amendments made to such a bill?

[Matthew Boswell]

What I can say is that the amendments we saw to Bill C-19 and Bill C-56, and the amendments that are proposed to Bill C-59, are significant changes to Canada's competition laws. They are generational, in fact. They make positive changes in multiple different ways.

With them, Canada is catching up to the rest of the world. As I've said before this committee, we have been an international outlier on many fronts in terms of how we handle competition in Canada. What we've seen are positive changes to catch us up.

I would say it's not a question of putting a banner up that says, “Mission accomplished” on a ship in New York Harbor. This is constant work that we need to do. There are other things that other countries are doing that we have not yet tackled in Canada, including really talking about how to deal with digital platforms and the serious competition issues that they can present. Other countries are taking very definitive strides in that regard.

To go back to your point about the lack of business investment in Canada, about a month ago, StatsCan put out a report that analyzed a 15-year period that demonstrated quite clearly the decline in business investment across the country. It pointed to competition as a significant factor in the lack of that investment. When you're not afraid of somebody eating your lunch—I'm sorry to use the proverbial term—there isn't that drive to invest in order to get better, produce better products, be more efficient and all of those things. It's a big issue.

The amendments are certainly significant. As you heard in my opening comments, I don't think we could go further, even in Bill C-59, to further strengthen various aspects of the Competition Act in Canada.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to say a huge thank you for the excellent presentations.

I'll start off with our competition commissioner. I have been very worried for years about a lack of business investment by our businesses in Canada. Before the pandemic, we had probably over 10 years of historic low interest rates. Typically, the theory is that if you have low interest rates, companies are going to take the cheap capital and actually reinvest in their companies. We did not see that.

I've suspected that one of the key things is around competition. Our government has done a lot of consultations around competition and how we strengthen competition law. I think we've had three bills that have attempted to strengthen our competition law and update it: Bill C-19, Bill C-56 and now Bill C-59.

Just as a general first question, would you say that collectively the changes we've made to the competition law and the act have made it overall much better and that Canada will be more competitive?

[Ryan Williams, Conservative, Bay of Quinte, ON]

We saw that with Bill C-56, too, I think. You've mentioned in the past that it tinkers around the edges.

I really want to get into how we fix competition in Canada. You talked about probably looking more at a focused approach, looking at the Competition Act as a whole. The amendments to these bills fix some of the overlying problems that we've had for years. We know that we have, when we look at mergers that were approved by this government.... Let's start with mergers, perhaps.

We had the Rogers and Shaw merger that was approved. Even though the Competition Bureau said that this merger shouldn't have gone through, the tribunal that was in place said that it should go through. Then what was really surprising was that Rogers sued the Competition Bureau and got over $13 million from it because of the tribunal's reaction.

How do we fix mergers, and if that's one of the main aspects, is that the most important aspect we should be looking at? What are the one or two most important aspects that we should be looking at in the Competition Act to fix?

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for attending today on a very important act, specifically talking about competition.

Canadians know that we have a competition monopoly problem in Canada. Canadians are paying some of the highest fees and have an affordability problem for groceries, airlines, cellphones and banking. We've been very focused on looking at those changes, and the government has brought forth some of those changes and some of those bills.

Ms. Quaid, the first bill you mentioned, Bill C-56, was the Affordable Housing and Groceries Act. Of course, we're looking at Bill C-59 now with new changes.

I have a short question first. Yes or no, does Bill C-59 fix our monopoly problem, our competition problem, in Canada?

[Dr. Jennifer Quaid, Associate Professor and Vice-Dean Research, Civil Law Section, Faculty of Law, University of Ottawa, As an Individual]

Mr. Chair, Deputy Chairs, members of the House of Commons Standing Committee on Finance, good morning.

For those who don't know me, I'm an associate professor and vice-dean of research at the University of Ottawa's Civil Law Section. My areas of expertise are corporate criminal law, general criminal law, business law, corporate regulation and competition law.

I am very pleased to appear before you to share my thoughts on section 6 of Bill C‑59, namely competition-related measures.

Let me add that, although I have prepared this statement primarily in English, I will, of course, be happy to answer your questions in the official language of your choice.

This is the first time that I am appearing before FINA—I'm glad to be here—but it is not the first time that I have appeared before parliamentary committees over the past couple of years, as the government has undertaken a major reform of the Competition Act, the first since 2009. As you know, the reform has been split into three parts: Bill C-19, enacted in June 2022, then Bill C-56, enacted in December 2023, and now Bill C-59 before you.

In the interests of time and given the scope of the proposed reform to the Competition Act, I will make four general points rather than going into detail about the extensive changes proposed, but I am at your disposal to answer questions on any aspects of the reform, and I may very well submit a brief if I have time.

Let me start by saying that the reform has made a lot of changes to the Competition Act, but not enough. Given the amount of political and public attention being directed at the state of competition—or the lack thereof—expectations for positive change flowing from this reform are very high, but are they warranted? To me, this is the central question that cuts across all aspects of the reform. Will we have better and more effective enforcement against anti-competitive practices and will we also at the same time promote better market and business conditions to promote a dynamic and innovative economy?

In my opinion, whether these expectations can be met depends on whether we are prepared to do what is necessary to operationalize the reform in a way that respects the spirit of what is driving the changes. It is also essential that we adopt a mindset of competition law and policy as a dynamic process that adapts to an ever-evolving economy while remaining true to the underlying values that Canadians share.

While there have been many changes to the act, fundamentally, it's still a cumbersome, overly detailed legislative text. This in the past has led to the development of complex analytical frameworks requiring specialized expert evidence. Obtaining remedies to anti-competitive behaviour is difficult, expensive and uncertain.

Many of the changes in the act right now are designed to respond to long-standing criticisms and to enforcement challenges, but I worry, to be frank, that fixing these problems is only.... We're not really addressing the underlying structural problems of how the act is designed. The fact that we've got all of these little different ways of going about characterizing conduct is actually just going to generate new problems. We haven't really done the rethink we need.

I could give one example. There's been an attempt to standardize the way we approach different reviewable practices, but in doing so, the fundamental question is, do we need to do that or could we just have one recourse for anti-competitive practices? Why, all of a sudden, are we blurring the lines between all of these different recourses? To me, that's creating a legal ambiguity that's not going to help anyone. I have other examples, but I'll talk about that in the questions, because I see my time going.

The second thing we need is a mechanism by which the act can be updated on a regular basis. Even with a perfect reform right now, we can't just stop and rest on our laurels. I think it's prudent to think about that now. We've had 15 years between the last reform and now; that's too long. What that means is that we've had to take on a huge reform and split it over three bills, but we've done it in two years. Everyone is still catching their breath, it's been so fast.

Given the pace at which technological and societal changes are occurring, I think it would make sense to plan for periodic review at maybe a three- or five-year interval. That way, we could do things in manageable chunks and not have to use this sort of wholescale giant process and then put it in a budget bill. I think we have to get into that mindset.

The third thing I'm going to raise is that for this reform to work it needs to be supported by adequate resources and expertise. Bill C-56 and Bill C-59 especially add considerable components to the bureau's mandate, and I don't see any new resources coming here. The last ones were allocated in 2021, as far as I know.

I worry for things like understanding labour impacts in mergers and trying to determine whether the bureau can issue a certificate for expertise in environmental issues. Are those things that we should just leave to the existing resources? I think we need to ask ourselves that question: Do we have the resources to make this work?

Finally, this is not the end—and I will close quickly, Mr. Chair. At the beginning of this process a couple of years ago, there was a lot of energy and enthusiasm, and it seemed like there was more audacity and willingness to think outside the box. Then we kind of got into a more technocratic mindset, and what we have before us are a lot of changes, but they are mostly technical and legal.

I think we still need to have that broader conversation about what competition law and policy in the 21st century look like, and we need to do that by consulting people and talking to Canadians about what they want and then maybe having a broader process of approaching it. There's a lot of energy. There are a lot of new voices to the conversation. There's a lot of enthusiasm. I really wish they would do that.

Thank you.