Fall Economic Statement Implementation Act, 2023

An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023

Sponsor

Status

Third reading (Senate), as of June 13, 2024

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Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

Part 1 implements certain measures in respect of the Income Tax Act and the Income Tax Regulations by
(a) limiting the deductibility of net interest and financing expenses by certain corporations and trusts, consistent with certain Organisation for Economic Co-operation and Development and the Group of Twenty Base Erosion and Profit Shifting project recommendations;
(b) implementing hybrid mismatch rules consistent with the Organisation for Economic Co-operation and Development and the Group of Twenty Base Erosion and Profit Shifting project recommendations regarding cross-border tax avoidance structures that exploit differences in the income tax laws of two or more countries to produce “deduction/non-inclusion mismatches”;
(c) allowing expenditures incurred in the exploration and development of all lithium to qualify as Canadian exploration expenses and Canadian development expenses;
(d) ensuring that only genuine intergenerational business transfers are excluded from the anti-surplus stripping rule in section 84.1 of the Income Tax Act ;
(e) denying the dividend received deduction for dividends received by Canadian financial institutions on certain shares that are held as mark-to-market property;
(f) increasing the rate of the rural supplement for Climate Action Incentive payments (CAIP) from 10% to 20% for the 2023 and subsequent taxation years as well as referencing the 2016 census data for the purposes of the CAIP rural supplement eligibility for the 2023 and 2024 taxation years;
(g) providing a refundable investment tax credit to qualifying businesses for eligible carbon capture, utilization and storage equipment;
(h) providing a refundable investment tax credit to qualifying businesses for eligible clean technology equipment;
(i) introducing, under certain circumstances, labour requirements in relation to the new refundable investment tax credits for eligible carbon capture, utilization and storage equipment as well as eligible clean technology equipment;
(j) removing the requirement that credit unions derive no more than 10% of their revenue from sources other than certain specified sources;
(k) permitting a qualifying family member to acquire rights as successor of a holder of a Registered Disability Savings Plan following the death of that plan’s last remaining holder who was also a qualifying family member;
(l) implementing consequential changes of a technical nature to facilitate the operation of the existing rules for First Home Savings Accounts;
(m) introducing a tax of 2% on the net value of equity repurchases by certain Canadian corporations, trusts and partnerships whose equity is listed on a designated stock exchange;
(n) exempting certain fees from the refundable tax applicable to contributions under retirement compensation arrangements;
(o) introducing a technical amendment to the provision that authorizes the sharing of taxpayer information for the purposes of the Canadian Dental Care Plan;
(p) implementing a number of amendments to the general anti-avoidance rule (GAAR) as well as introducing a new penalty applicable to transactions subject to the GAAR and extending the normal reassessment period for the GAAR by three years in certain circumstances;
(q) facilitating the creation of employee ownership trusts;
(r) introducing specific anti-avoidance rules in relation to corporations referred to as substantive CCPCs; and
(s) extending the phase-out by three years, and expanding the eligible activities, in relation to the reduced tax rates for certain zero-emission technology manufacturers.
It also makes related and consequential amendments to the Excise Tax Act and the Excise Act, 2001 .
Part 2 enacts the Digital Services Tax Act and its regulations. That Act provides for the implementation of an annual tax of 3% on certain types of digital services revenue earned by businesses that meet certain revenue thresholds. It sets out rules for the purposes of establishing liability for the tax and also sets out applicable reporting and filing requirements. To promote compliance with its provisions, that Act includes modern administration and enforcement provisions generally aligned with those found in other taxation statutes. Finally, this Part also makes related and consequential amendments to other texts to ensure proper implementation of the tax and cohesive and efficient administration by the Canada Revenue Agency.
Part 3 implements certain Goods and Services Tax/Harmonized Sales Tax (GST/HST) measures by
(a) ensuring that an interest in a corporation that does not have its capital divided into shares is treated as a financial instrument for GST/HST purposes;
(b) ensuring that interest and dividend income from a closely related partnership is not included in the determination of whether a person is a de minimis financial institution for GST/HST purposes;
(c) ensuring that an election related to supplies made within a closely related group of persons that includes a financial institution may not be revoked on a retroactive basis without the permission of the Minister of National Revenue;
(d) making technical amendments to an election that allows electing members of a closely related group to treat certain supplies made between them as having been made for nil consideration;
(e) ensuring that certain supplies between the members of a closely related group are not inadvertently taxed under the imported taxable supply rules that apply to financial institutions;
(f) raising the income threshold for the requirement to file an information return by certain financial institutions;
(g) allowing up to seven years to assess the net tax adjustments owing by certain financial institutions in respect of the imported taxable supply rules;
(h) expanding the GST/HST exemption for services rendered to individuals by certain health care practitioners to include professional services rendered by psychotherapists and counselling therapists;
(i) providing relief in relation to the GST/HST treatment of payment card clearing services;
(j) allowing the joint venture election to be made in respect of the operation of a pipeline, rail terminal or truck terminal that is used for the transportation of oil, natural gas or related products;
(k) raising the input tax credit (ITC) documentation thresholds from $30 to $100 and from $150 to $500 and allowing billing agents to be treated as intermediaries for the purposes of the ITC information rules; and
(l) extending the 100% GST rebate in respect of new purpose-built rental housing to certain cooperative housing corporations.
It also implements an excise tax measure by creating a joint election mechanism to specify who is eligible to claim a rebate of excise tax for goods purchased by provinces for their own use.
Part 4 implements certain excise measures by
(a) allowing vaping product licensees to import packaged vaping products for stamping by the licensee and entry into the Canadian duty-paid market as of January 1, 2024;
(b) permitting all cannabis licensees to elect to remit excise duties on a quarterly rather than a monthly basis, starting from the quarter that began on April 1, 2023;
(c) amending the marking requirements for vaping products to ensure that the volume of the vaping substance is marked on the package;
(d) requiring that a person importing vaping products must be at least 18 years old; and
(e) introducing administrative penalties for certain infractions related to the vaping taxation framework.
Part 5 enacts and amends several Acts in order to implement various measures.
Subdivision A of Division 1 of Part 5 amends Subdivision A of Division 16 of Part 6 of the Budget Implementation Act, 2018, No. 1 to clarify the scope of certain non-financial activities in which federal ‚financial institutions may engage and to remove certain discrepancies between the English and French versions of that Act.
Subdivision B of Division 1 of Part 5 amends the Trust and Loan Companies Act , the Bank Act and the Insurance Companies Act to, among other things, permit federal financial institutions governed by those Acts to hold certain meetings by virtual means without having to obtain a court order and to permit voting during those meetings by virtual means.
Division 2 of Part 5 amends the Canada Labour Code to, among other things, provide a leave of absence of three days in the event of a pregnancy loss and modify certain provisions related to bereavement leave.
Division 3 of Part 5 enacts the Canada Water Agency Act . That Act establishes the Canada Water Agency, whose role is to assist the Minister of the Environment in exercising or performing that Minister’s powers, duties and functions in relation to fresh water. The Division also makes consequential amendments to other Acts.
Division 4 of Part 5 amends the Tobacco and Vaping Products Act to, among other things,
(a) authorize the making of regulations respecting fees or charges to be paid by tobacco and vaping product manufacturers for the purpose of recovering the costs incurred by His Majesty in right of Canada in relation to the carrying out of the purpose of that Act;
(b) provide for related administration and enforcement measures; and
(c) require information relating to the fees or charges to be made available to the public.
Division 5 of Part 5 amends the Canadian Payments Act to, among other things, provide that additional persons are entitled to be members of the Canadian Payments Association and clarify the composition of that Association’s Stakeholder Advisory Council.
Division 6 of Part 5 amends the Competition Act to, among other things,
(a) modernize the merger review regime, including by modifying certain notification rules, clarifying that Act’s application to labour markets, allowing the Competition Tribunal to consider the effect of changes in market share and the likelihood of coordination between competitors following a merger, extending the limitation period for mergers that were not the subject of a notification to the Commissioner of Competition and placing a temporary restraint on the completion of certain mergers until the Tribunal has disposed of any application for an interim order;
(b) improve the effectiveness of the provisions that address anti-competitive conduct, including by allowing the Commissioner to review the effects of past agreements and arrangements, ensuring that an order related to a refusal to deal may address a refusal to supply a means of diagnosis or repair and ensuring that representations of a product’s benefits for protecting or restoring the environment must be supported by adequate and proper tests and that representations of a business or business activity for protecting or restoring the environment must be supported by adequate and proper substantiation;
(c) strengthen the enforcement framework, including by creating new remedial orders, such as administrative monetary penalties, with respect to those collaborations that harm competition, by creating a civilly enforceable procedure to address non-compliance with certain provisions of that Act and by broadening the classes of persons who may bring private cases before the Tribunal and providing for the availability of monetary payments as a remedy in those cases; and
(d) provide for new procedures, such as the certification of agreements or arrangements related to protecting the environment and a remedial process for reprisal actions.
The Division also amends the Competition Tribunal Act to prevent the Competition Tribunal from awarding costs against His Majesty in right of Canada, except in specified circumstances.
Finally, the Division makes a consequential amendment to one other Act.
Division 7 of Part 5 amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to exclude from their application prescribed public post-secondary educational institutions.
Subdivision A of Division 8 of Part 5 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,
(a) provide that, if a person or entity referred to in section 5 of that Act has reasonable grounds to suspect possible sanctions evasion, the relevant information is reported to the Financial Transactions and Reports Analysis Centre of Canada;
(b) add reporting requirements for persons and entities providing certain services in respect of private automatic banking machines;
(c) require declarations respecting money laundering, the financing of terrorist activities and sanctions evasion to be made in relation to the importation and exportation of goods; and
(d) authorize the Financial Transactions and Reports Analysis Centre of Canada to disclose designated information to the Department of the Environment and the Department of Fisheries and Oceans, subject to certain conditions.
It also amends the Budget Implementation Act, 2023, No. 1 in relation to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and makes consequential amendments to other Acts and a regulation.
Subdivision B of Division 8 of Part 5 amends the Criminal Code to, among other things,
(a) in certain circumstances, provide that a court may infer the knowledge or belief or recklessness required in relation to the offence of laundering proceeds of crime and specify that it is not necessary for the prosecutor to prove that the accused knew, believed they knew or was reckless as to the specific nature of the designated offence;
(b) remove, in the context of the special warrants and restraint order in relation to proceeds of crime, the requirement for the Attorney General to give an undertaking, as well as permit a judge to attach conditions to a special warrant for search and seizure of property that is proceeds of crime; and
(c) modify certain provisions relating to the production order for financial data to include elements specific to accounts associated with digital assets.
It also makes consequential amendments to the Seized Property Management Act and the Forfeited Property Sharing Regulations .
Division 9 of Part 5 retroactively amends section 42 of the Federal-Provincial Fiscal Arrangements Act to specify the payments about which information must be published on a Government of Canada website, as well as the information that must be published.
Division 10 of Part 5 amends the Public Sector Pension Investment Board Act to increase the number of directors in the Public Sector Pension Investment Board, as well as to provide for consultation with the portion of the National Joint Council of the Public Service of Canada that represents employees when certain candidates are included on the list for proposed appointment as directors.
Division 11 of Part 5 enacts the Department of Housing, Infrastructure and Communities Act , which establishes the Department of Housing, Infrastructure and Communities, confers on the Minister of Infrastructure and Communities various responsibilities relating to public infrastructure and confers on the Minister of Housing various responsibilities relating to housing and the reduction and prevention of homelessness. The Division also makes consequential amendments to other Acts and repeals the Canada Strategic Infrastructure Fund Act .
Division 12 of Part 5 amends the Employment Insurance Act to, among other things, create a benefit of 15 weeks for claimants who are carrying out responsibilities related to
(a) the placement with the claimant of one or more children for the purpose of adoption; or
(b) the arrival of one or more new-born children of the claimant into the claimant’s care, in the case where the person who will be giving or gave birth to the child or children is not, or is not intended to be, a parent of the child or children.
The Division also amends the Canada Labour Code to create a leave of absence of up to 16 weeks for an employee to carry out such responsibilities.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Votes

May 28, 2024 Passed 3rd reading and adoption of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 323 to 341)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 320 to 322)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 318 and 319)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 273 to 277)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 219 to 230)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 145 to 167, 217 and 218 regarding measures related to vaping products, cannabis and tobacco)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 197 to 208 and 342 to 365 regarding amendments to the Canada Labour Code)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 137, 144 and 231 to 272 regarding measures related to affordability)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 1 to 136, 138 to 143, 168 to 196, 209 to 216 and 278 to 317 regarding measures appearing in the 2023 budget)
May 28, 2024 Failed Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (recommittal to a committee)
May 21, 2024 Passed Concurrence at report stage of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023
May 21, 2024 Failed Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (report stage amendment)
May 9, 2024 Passed Time allocation for Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023
March 18, 2024 Passed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 323 to 341.)
March 18, 2024 Passed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 320 to 322; and)
March 18, 2024 Passed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 318 and 319;)
March 18, 2024 Passed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 273 to 277;)
March 18, 2024 Passed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 219 to 230;)
March 18, 2024 Passed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 145 to 167, 217 and 218 regarding measures related to vaping products, cannabis and tobacco;)
March 18, 2024 Passed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 197 to 208 and 342 to 365 regarding amendments to the Canada Labour Code;)
March 18, 2024 Passed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 137, 144 and 231 to 272 regarding measures related to affordability;)
March 18, 2024 Passed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Clauses 1 to 136, 138 to 143, 168 to 196, 209 to 216 and 278 to 317 regarding measures appearing in the 2023 budget;)
March 18, 2024 Failed 2nd reading of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (reasoned amendment)

February 8th, 2024 / 11:35 a.m.
See context

Deputy Commissioner, Competition Promotion Branch, Competition Bureau Canada

Anthony Durocher

One of the most important changes flowing from Bill C-59 is opening up the Competition Act to more private enforcement so that it's not just the Competition Bureau as the sole authority that can bring cases. There are changes there that I think are capturing a lot of interest from stakeholders in the competition space. The role of private enforcement and the test for obtaining leave have been clarified, so what we might see emerge there is a more robust space where private actors, not just the Competition Bureau, can bring cases directly to court.

As I mentioned, in respect to mergers there are certain important changes. One is to allow greater emphasis on market share and concentration evidence as well. As another, there are important changes to section 90.1—which is the competitor collaboration provision of the Competition Act—with an ability to look at past conduct, which allows for a broader range of remedies too. These are examples.

Also, to give an example, one very interesting change relates to reprisal actions. It adds a new civil provision that would prohibit a party from taking reprisal action against another person for their co-operation under the act. That is a very interesting change and potentially important, because whenever companies complain to us, there's always the concern about reprisal. If you're complaining about the actions of one of your business partners, obviously confidentiality is paramount to our work. It's something we take extremely seriously and protect, but additional protections and peace of mind about lowering the risk for reprisal action are important.

These are just a few examples, but there's a lot to cover with Bill C-59.

February 8th, 2024 / 11:35 a.m.
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Liberal

Leah Taylor Roy Liberal Aurora—Oak Ridges—Richmond Hill, ON

Thank you very much for being here, and indeed it's good news to hear the pendulum's swinging and that food prices are coming down more in line with general inflation and that Bill C-56 did help.

We also have Bill C-59 right now under consideration, and you mentioned that there were aspects of that bill that you thought would be very helpful in continuing to combat the concentration and issues around competition. What, in particular, would those aspects be?

February 8th, 2024 / 11:25 a.m.
See context

Deputy Commissioner, Competition Promotion Branch, Competition Bureau Canada

Anthony Durocher

We would want to give that some careful thought. If and when we appear at the INDU committee for the study of that bill, we want to be as helpful as we can with the interpretation.

Part of these issues come to something that we've advocated, which is the potential benefit of structural presumptions. This is how the U.S. jurisprudence around antitrust has evolved. It's basically the notion that past a certain increase in concentration and threshold, the onus should shift to companies to prove that they are not anti-competitive. That's certainly a discussion worth having.

There are changes in Bill C-59 that are important in that regard. We're removing a requirement that existed in section 92 so that we could not challenge mergers on the basis of market shares or thresholds. There might be a greater role to play in looking at market share and concentration in our work.

Of course, there are other factors that are always going to be relevant, such as looking at barriers to entry, effective remaining competition and the role of innovation in the marketplace. We hear there are significant concerns about concentration in the Canadian economy. We think it's important to debate these issues, especially when we look at our merger review framework and the law.

February 8th, 2024 / 11:25 a.m.
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NDP

Alistair MacGregor NDP Cowichan—Malahat—Langford, BC

I think you're right. As a case in point, Loblaws had to climb down from its tone-deaf decision to reduce discounts from 50% to 30%. Of course, we then had the Manulife and Loblaws climbdown because of the intense scrutiny, I think, that exists at the moment.

You made mention of a couple of pieces of government legislation: Bill C-56, which has received royal assent, and Bill C-59, which is still in the works. There is another bill that received a second reading vote yesterday, which is Bill C-352 from NDP leader Jagmeet Singh. There are some similarities, but one of the interesting aspects of his bill—I know this is primarily with the Competition Tribunal—is that it would require the Competition Tribunal “to make an order dissolving a completed merger or prohibiting the merger from proceeding if the merger would result in excessive combined market share.”

I would just like to understand the Competition Bureau's understanding of that term “excessive combined market share.” How would you interpret that particular phrase in the law?

February 8th, 2024 / 11:20 a.m.
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Deputy Commissioner, Competition Promotion Branch, Competition Bureau Canada

Anthony Durocher

A number of recommendations that aren't covered in Bill C-59 come to mind.

I think provisions pertaining to mergers are important, which ties in with the discussion with Mr. Williams. Specifically, I'm talking about provisions to ensure that mergers don't harm competition.

I'll give you an example: the remedy standard for transactions that have an anti-competitive effect on the market. Currently, when a transaction lessens competition substantially, the remedy standard in the case law merely requires that the lessening of competition cease to be substantial. It's fine if competition is lessened, because there's no remedial requirement that competition be restored to pre-merger levels. That's one of the recommendations we provided during the consultations.

We also submitted recommendations pertaining to concentration thresholds and the importance of building concentration-related presumptions into merger reviews to ensure that the merger does not exceed a certain concentration threshold. The burden would be on companies to prove that it was not an anti-competitive merger, which is similar to the practice in the U.S.

February 8th, 2024 / 11:20 a.m.
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Bloc

Yves Perron Bloc Berthier—Maskinongé, QC

Thank you.

You said that you're happy with Bill C-56 and that Bill C-59 will be helpful. You made recommendations to the government. Can you give us your top two or three recommendations, the ones that are crucial to strengthen the act? We could include them in our report to the government.

February 8th, 2024 / 11:15 a.m.
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Deputy Commissioner, Competition Promotion Branch, Competition Bureau Canada

Anthony Durocher

Bill C-56 has been very significant for us. It has brought about major changes that will help bring Canada in line with other countries as far as enforcing the law is concerned.

In our view, the Competition Act can always be strengthened in order to ensure a modern and effective regime. Bill C-59 also includes significant changes to the act. Through the government's consultation process, the bureau made over 50 recommendations to improve the act. Considerable progress has been made.

February 8th, 2024 / 11 a.m.
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Anthony Durocher Deputy Commissioner, Competition Promotion Branch, Competition Bureau Canada

Good morning, Mr. Chair and members of the committee.

My name is Anthony Durocher. I’m the deputy commissioner in the competition promotion branch. Joining me today is my colleague Brad Callaghan, associate deputy commissioner in the policy, planning and advocacy directorate.

I would like to begin by recognizing the importance of your study. We believe it has been invaluable to shaping and advancing the public discourse around food affordability, and the testimony at this committee has benefited the Competition Bureau in our efforts to protect and promote competition in the grocery sector.

The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses.

We do this because competition drives lower prices and innovation, while fuelling economic growth. We administer and enforce the Competition Act by investigating and taking action to address anti-competitive business practices that harm consumers, competition and our economy.

In June 2023, the bureau released its retail grocery market study report. Our report found that grocery prices have been increasing at their fastest rate in more than 40 years and since late 2021 have been significantly outpacing the general rate of inflation in the Canadian economy. Additionally, the retail grocery industry has become much more concentrated over time. Today most Canadians purchase their groceries from only a few grocery giants that operate most grocery store banners, including the top discount chains.

Our report makes a number of principle-based recommendations to federal, provincial and territorial governments to improve competition in the grocery industry. They include stimulating innovation and supporting the growth of independent grocers, as well as the entry of international grocers through government policies and programs; limiting—and potentially banning—property controls; and lastly, introducing accessible and harmonized unit pricing requirements.

We continue to be actively engaged with policy-makers on our report's findings and its recommendations.

We recognize that food price inflation remains a significant issue for Canadians and that we need to approach our work in the grocery industry with heightened vigilance and scrutiny to ensure that Canadians benefit from greater choice and more affordable groceries. This includes by thoroughly and quickly investigating allegations of wrongdoing. To that end, we are actively pursuing an enforcement investigation in the grocery sector relating to the use of property controls.

Recent amendments to the Competition Act, particularly through Bill C-56, have given the bureau more tools to protect and promote competition in Canada and mark a key step in modernizing Canada's competition law. The bureau is committed to using the new tools made available through these amendments wherever necessary to protect competition. Further, as you know, Bill C-59 contains several other amendments that will, if passed, further strengthen Canada's Competition Act.

Before fielding your questions, I would note that the law requires the bureau to conduct investigations in private and to keep confidential the information it has. This obligation may prevent us from discussing past or current investigations.

I would like to thank the committee very much for the invitation to appear today, and we look forward to your questions.

Agriculture and Agri-FoodCommittees of the HouseOrders of the Day

February 6th, 2024 / 6:30 p.m.
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NDP

Alistair MacGregor NDP Cowichan—Malahat—Langford, BC

Madam Speaker, it is nice to be able to resume where I left off back in December.

Just to refresh the memory of everyone in this place, we were discussing the 10th report of the Standing Committee on Agriculture and Agri-Food.

I have been a proud member of that committee for six years now and I would say that it is the best standing committee out of any committee of the House, because we often arrive at our decisions on a consensus model. We certainly have our differences, but the collegiality stems from the fact that, no matter what political party we represent, we all represent farmers in our respective ridings and have a great deal of respect for the work they do.

This particular study is unusual, if we look at the long list of studies the agriculture committee usually embarks on, in that we are dealing more with a retail issue, which of course is the subject of food price inflation. I am happy to say that this 10th report was the result of a unanimous vote on my motion for a study. The study was also backed up by a unanimous vote in the House of Commons when the NDP used our opposition day to move a motion backing up the committee's work.

Given the brutal food price inflation rates that many Canadians have been experiencing over the last couple of years, the political and public pressure of the moment, I think, really helped focus parliamentarians' efforts on this important issue in making sure we were paying it the attention it deserved, given what many of our constituents were telling us they were suffering through. Therefore, it was nice to see that unanimous vote and the fact that we were able to get into this study.

If we look at the news these days and the experts who research this particularly brutal problem, we already know that a record number of Canadians are having to access food banks. I certainly hear from my constituents in Cowichan—Malahat—Langford that they are having to make those difficult decisions every single week. It has affected not only the quality of food they have been able to buy, but also the quantity of food.

I think that is an enduring shame on our country, given that we pride ourselves on being an agricultural powerhouse. If we look at our standing vis-à-vis other nations around the world, we are a very wealthy country, but what we have seen over the last number of decades is that wealth is increasingly being concentrated in fewer hands, and too many of our fellow citizens are struggling to get by on the basic necessities of life.

I think this is a call to action for all parliamentarians. It is obvious that the policies we have put in place over the last 40 or 50 years and this sort of obscene corporate deference we have seen from successive Liberal and Conservative governments and the neo-Liberal orthodoxy that exists are not serving our fellow citizens right. We need to take a critical look at why that is.

This report contains a number of recommendations. I want to focus on a few of them, particularly on recommendations 11 and 13. Recommendation 11 is something that we heard not only in the course of this study, but also in other studies. It deals with the fact that many people who work in the food value chain, particularly the ones on the other side of the ledger from where the retail grocers come into play, have long been calling for a grocery code of conduct.

Initially, the calls were for a voluntary code. I think there was a tremendous amount of goodwill and a bit of leeway given to the industry to figure this out on its own and to come up with something whereby all players could develop the issue and have faith in it. However, what we have seen recently is that some of the big grocery retailers, namely Loblaws and Walmart, are now indicating they are uncomfortable with the direction the code is taking. In my humble opinion, this code simply cannot work if it is going to exclude major players like Loblaws and Walmart, so we may be arriving at a point at which the government needs to step in and enforce a mandatory code. That way, the rules are clear, concise and transparent, and all players in the food supply value chain can understand what they are and abide by them.

What we are seeing is that there is a complete lack of trust in the grocery retail sector, and for good reason. Grocery retailers have been accused and found guilty of fixing the price of bread. They have engaged in practices that, on the surface, look a lot like collusion. They have often followed each other's leads in setting prices and so on. Recently Loblaws was forced to climb down from its decision to reduce the discounts. There used to be a 50% discount on items that had to be sold that day. Often people are looking for those kinds of bargains. Loblaws was going to reduce that to 30%. That company consistently shows that it is unable to read the room and that it is completely tone deaf to the public environment in which it is operating.

Not only have consumers lost trust in grocery retailers, but on the other side, the suppliers, the food manufacturers and the hard-working men and women who work in primary production and farming have also lost trust, because when they are trying to get their goods put into a grocery market, and let us understand that 80% of Canada's grocery retail market is controlled by just five companies, which is a brutal situation and a totally unfair stranglehold on the market by those five companies, they were often subjected to hidden fees and fines for which they had no explanation.

As such, I am glad to see that recommendation 11 calls for a mandatory and enforceable grocery code of conduct.

I am also happy to see in this report recommendation 13, which asks the Government of Canada to strengthen the Competition Bureau's mandate and its ability to ensure competition in the grocery sector. The first two bullet points were about giving the Competition Bureau more legislative muscle through the Competition Act and making sure the competitive thresholds the Competition Bureau uses to evaluate mergers and acquisitions ensure that competition does not suffer.

I think, based on the hard work of this study and the recommendations of this report, we have actually seen legislative change come to this place, and it was great to see, in particular, Bill C-56 receive a unanimous vote in the House of Commons. It has passed the Senate, and it has now become a statute of Canada by virtue of the Governor General.

There are more measures contained in Bill C-59, and our leader, the member from Burnaby South's private member's bill also includes a number of very important changes. Of course members of Parliament are going to have the opportunity tomorrow, after question period, to vote on that bill, and Canadians will be watching to see which members of Parliament are serious about stepping up to fix that particular problem.

I also want to talk about the supplementary report that I included as the New Democratic member of the committee, because committee reports reflect the majority view of the committee. In the case of the Standing Committee on Agriculture and Agri-Food, that is almost always the unanimous view of the committee. I do not think I have ever really seen a dissenting report, but sometimes some recommendations that some members would like to have seen added to the report do not get in there.

I agree absolutely with the main thrust of the report. I think the recommendations were very strong. There were some additional ones, some supplementary ones, that I would have liked to see added. We heard from a number of witnesses who asked our committee to recommend that the government embark on legislative recognition of the right to food, so one of our recommendations would have been:

that the Government of Canada acknowledge its obligation as a party to the International Covenant on Economic, Social, and Cultural Rights to respect, protect, and fulfill the human right to food by adopting a framework law that would enshrine this right in Canadian law and require the federal government to legislate binding, specific, and measurable targets toward realizing the policy outcomes it set out in 2019 in “The Food Policy for Canada”.

Again, when so many in our population are going hungry, it is incumbent upon us as legislators and policy makers to really step up to the plate and meet that need in the moment with specific action. I think that, given that this recommendation came from people who are directly involved in the national food bank network and are dealing with this issue every single day, we would do well as policy makers to listen to that on-the-ground expertise and follow through.

I also want to take some time in the final four minutes that I have to really recognize two witnesses who appeared before our committee. They are both economics professors who go against the prevailing orthodoxy of corporate deference that so many economics professors practise. They are, particularly, Professor D.T. Cochrane and Professor Jim Stanford, who I think offer a refreshing and alternative view to the dominant orthodoxy, to look critically at why systems are the way they are.

I just want to quote Dr. Jim Stanford:

Greed is not new. Greed long predates the pandemic, but greed has had a good run in Canada since the pandemic. After-tax profits in Canada during the pandemic or since the pandemic have increased to their highest share of GDP in history. Amidst a social, economic and public health emergency, companies have done better than they ever have.

In response to one of my questions, he went on to say:

At the top of the list, there's no doubt about it, is the oil and gas sector. The excess profits earned there since the pandemic account for about one-quarter of the total mass of profits across the 15 sectors I identified in that work. The increased prices that embody those huge profit margins then trickle through the rest of the supply chain. Food processors have to pay that, so they have higher costs, nominally, but then they add their own higher profit margin on top of that. The same goes for the food retail sector. By the time the consumer gets it, there's been excess profits added at several steps of the whole supply chain. That magnifies the final impact on consumer price inflation.

Two things have been true over the last number of years. Canadians have been suffering through brutal inflation. They have seen the cost of almost everything rise to almost unsustainable levels, in fact, to unsustainable levels for too many of our fellow citizens. That is one truth of which we can see empirical evidence.

The other truth we are dealing with is that since 2019, many corporate sectors have been raking in the cash. Those two facts exist side by side, and we know for a fact that when profits are increasing in many different corporate sectors that Canadians rely on, that money has to come from somewhere, and it has been coming directly from the wallets of the constituents that I represent, the constituents that every MP in this place represents from coast to coast to coast.

I will wrap up my speech there by saying that this was an important report and these are important recommendations. I am glad to have been a member of the committee that produced this report. Of course, I will be voting to concur in it. With that I will conclude my remarks.

Public SafetyOral Questions

February 6th, 2024 / 2:35 p.m.
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Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

Mr. Speaker, Bill C-59 will do little to combat the problem of organized crime and money laundering in this country, which by the government's own estimate is $133 billion a year, equal to 5% of GDP. The government has ignored numerous reports and protected lawyers from money laundering and terrorist financing law and failed to crack down on Canada's big banks and their funnelling of money laundering and terrorist financing through our financial system.

When is the government going to subject lawyers to federal law and start cracking down on our big banks and the gobs of money laundering going through our financial system?

Opposition Motion—Auto theftBusiness of SupplyGovernment Orders

February 6th, 2024 / 1:50 p.m.
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Parkdale—High Park Ontario

Liberal

Arif Virani LiberalMinister of Justice and Attorney General of Canada

Mr. Speaker, I am pleased to rise to speak on this very important issue. Auto theft is a critical one that impacts Canadians.

As a GTA resident, and as a GTA member of Parliament, I have heard from my constituents, friends and neighbours about fear of theft and increased risk in their communities. I can assure each and every one of those individuals right across the country that I take these concerns very seriously and I am determined to address this problem alongside the Minister of Public Safety, the Minister of Transport and other colleagues.

What is not helpful is spreading disinformation and stoking fear even in this very chamber. It is disappointing, but unsurprising, that the Leader of the Opposition and his colleagues across the way have taken this very tactic.

To start, let us discuss what we have done to address the issue of auto theft.

In December, we increased funding to fight organized crime. Last week, we redoubled our efforts by announcing $121 million for the Ontario police forces to combat guns, gangs and organized crime.

Let me open a parentheses here; that is guns and gangs funding. On the night of a marathon vote initiated by the opposition, the Leader of the Opposition, in his infinite wisdom, returned to cast a direct vote against guns and gangs funding. Let the record be clear about which side of the House actually supports guns and gangs funding to keep our communities safe.

I was delighted to attend the announcement a week ago in York region in the GTA alongside the Minister of Public Safety, Premier Doug Ford, and other key players who will help prevent auto theft by organized crime.

We are also holding a meeting in Ottawa this Thursday that will bring together the provinces and representatives of cities, ports, insurers, automakers and other key stakeholders to discuss and develop a coordinated approach to combatting auto theft.

While Conservatives are busy tweeting out videos, as a result of a news release by our government that they decided to read, and repeating childish slogans, we have a plan to keep communities safe.

I want to point out the very bill the Leader of the Opposition has weaponized on this issue, a bill I was pleased to work on as the parliamentary secretary at the time to the then minister of justice, Bill C-75. It raised the maximum penalty on summary conviction for motor vehicle theft from 18 months to two years. For everyone who is watching right now, let that sink in. Either the Leader of the Opposition does not understand the Criminal Code or he is purposely misleading Canadians. Either way, his objective is to repeal Bill C-75 and therefore lower the maximum penalty for motor vehicle theft. If it sounds a bit illogical, it is.

Additionally, a pillar of his so-called plan is to add an aggravating factor on sentencing to this issue. As I said yesterday in the House, and as I will repeat today, the Criminal Code already includes this provision. Section 718.2(a)(iv) specifies as an aggravating factor, allowing for a more increased sentence, involvement with organized crime.

I will be sharing my time with the member for Vaughan—Woodbridge, Mr. Speaker.

This is a critical measure. We know that the majority of auto thefts are not one-off crimes committed by first-time offenders. Auto theft is most often coordinated through an operation of organized crime networks. What are we doing with respect to those organized crime networks? We are cracking down, as the police agencies have asked us to do, on organized crime and the financing of it.

How are we doing that? We have the fall economic statement being debated in this very House, Bill C-59. That bill contains provisions to crack down on money laundering to stop the organized criminals who are making our communities unsafe.

What has the Leader of the Opposition done in his infinite wisdom? He has directed every one of his Conservative colleagues to vote against this measure, to vote against measures that would keep our communities safe and to basically empower organized criminals. Is this illogical? Yes, very illogical.

In a video posted just this morning, the Leader of the Opposition threw the CBSA under the bus for failing to solve the issue of auto theft. What he conveniently failed to mention, in a very polished video that was very professionally done, is that under his watch, when he was part of the Conservative government at the cabinet table, the Conservatives cut 1,000 jobs from the CBSA.

If one of the problems with this, which we will be discussing at the auto summit, is border security, I am not sure how we keep the borders safe when we are cutting employees working at the border. Is it illogical? Indeed, very illogical.

In addition, the Conservatives routinely vote against bolstering CBSA funding. They talk out of both sides of their mouths on this issue. Canadians watching right now deserve a heck of a lot better.

I am always open to good-faith suggestions for improving the Criminal Code. I take my mandate to keep our streets and communities safe very seriously. I look forward to working with the leaders on Thursday.

What I do not see from members of the official opposition is any sort of leadership on this issue. Instead, I see trifling slogans and redundant suggestions about how to amend the Criminal Code with provisions that are already there. Canadians deserve a lot better from that opposition.

February 6th, 2024 / 1 p.m.
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NDP

Alistair MacGregor NDP Cowichan—Malahat—Langford, BC

Thank you very much, Mr. Chair.

Mr. McCann, this committee has been involved in this study for quite some time, and I'm very thankful that I got the unanimous support of my colleagues when I proposed the original motion for the study. I think one of the great benefits of this study and the increased focus on food price inflation has been recent amendments to the Competition Act. Bill C-56 got unanimous support in the House of Commons. It's now part of the statutes of Canada. There are other provisions in Bill C-59 as well.

I put that in the context of your opening remarks about how sometimes we suffer from a bit of a data gap in Canada. Can you add any more to the conversation about these increased legislative powers for the Competition Bureau and what you hope they will result in, particularly now that the Competition Bureau has more legislative muscle when it comes to market studies and the ability to compel that information?

Public SafetyOral Questions

February 5th, 2024 / 2:50 p.m.
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Parkdale—High Park Ontario

Liberal

Arif Virani LiberalMinister of Justice and Attorney General of Canada

Mr. Speaker, the increase in auto theft affects us directly. The reality is that organized crime is connected to this type of theft. Here in the House of Commons, we have tabled a bill that tackles money laundering.

The Conservatives are opposed to Bill C‑59. If they are really serious about fighting auto theft, I invite them to change their mind about how they are voting.

Public SafetyOral Questions

February 5th, 2024 / 2:20 p.m.
See context

Parkdale—High Park Ontario

Liberal

Arif Virani LiberalMinister of Justice and Attorney General of Canada

Mr. Speaker, the Leader of the Opposition purports to be tough on crime. Who do I listen to about crime measures? Police officers. What do they tell me? They tell me that this is not an individual crime; this is backed by people who are organized criminals. How do we deal with that? We get tough on money laundering.

When he is asking me to read the law, I would ask him to read Bill C-59, which has measures that deal with money laundering, which you are voting against.

Lowering Prices for Canadians ActPrivate Members' Business

February 2nd, 2024 / 12:10 p.m.
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Liberal

Patricia Lattanzio Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, today I rise to address the chamber with respect to Bill C-352, which would amend the Competition Act.

I think we all agree in the chamber that a stronger competition enforcement regime would be good for all Canadians. The bill proposed by the New Democratic Party, while receptive to the need for change in competition law, and generally aligned with the government's overall direction to date, must, however, be examined in light of the vast number of changes that overlap with and have already been introduced by Bill C-56 and Bill C-59.

Bill C-56 became law in December 2023, while Bill C-59 remains under consideration by Parliament at the present time. Bill C-56 implements, and Bill C-59 would implement, an overhaul of the Competition Act following the extensive consultations undertaken in 2022 and in 2023. The government received a great deal of input throughout its consultations, bolstering the knowledge gained over the years of stewardship over this law. The amendment packages assembled in its two bills address most of the issues identified in the law that historically made it weaker than regimes of Canada's closest partners. That would no longer be the case.

Modernizing the Competition Act is a necessary step in making Canada's economy more affordable for consumers and more fair and accessible to business. The government's extensive commitment to competition law reform was led by Bill C-56, the Affordable Housing and Groceries Act, followed by Bill C-59, the fall economic statement implementation act, 2023. Both of these bills are directed at enhancing affordability and competition, and together they represent the most comprehensive reform package to the Competition Act in decades. They respond to the submissions of hundreds of very different stakeholders, including businesses, legal experts, academics, non-governmental organizations and the commissioner of competition himself.

Bill C-56 implemented a set of targeted but critical amendments, following especially from the Competitions Bureau's market study on Canada's retail grocery sector. As members already know, Bill C-56 brought much-needed changes such as allowing information to be compelled under court order in the course of a market study, helping to remove barriers when diagnosing potential competition issues.

Bill C-56 also repealed the efficiencies exceptions for anti-competitive mergers and collaborations, and in so doing eliminated what many observers consider to have been the single biggest contributor to corporate concentration in Canada. The bill further allowed for better prevention and remedy of the abuse by larger players of their dominant position by requiring only proof of anti-competitive intent or effects to prohibit certain forms of conduct. This more appropriately allocates the burden of proof, as compared to the previous test, which significantly limited the number of instances where the bureau could intervene.

Finally, Bill C-56 addressed harm from collaborations between non-competing parties that are designed to limit competition. Once this provision is in effect, the bureau would be able to review any type of collaboration whose purpose it is to restrain competition and seek a remedy, including an order to prevent the activity where competition is being substantially harmed or is likely to be. This would be especially impactful on restrictive covenants between grocers and landlords, allowing more grocers to set up shop near competitors.

Bill C-56 was, of course, amended in committee through a multi-party effort, incorporating several of the elements in Bill C-352 that now no longer require consideration.

Bill C-59 represents an even more substantial overhaul in our competition enforcement regime, addressing a large variety of aspects of the Competition Act. The amendments would give the Competition Bureau a longer period to detect and address anti-competitive mergers that are not notified in advance, helping to address “killer acquisitions” in the digital market. The bill would broaden the bureau's review of competitor collaborations to include those that harmed competition in the past, and would allow for financial penalties to be sought when necessary.

Importantly, Bill C-59 would facilitate private actions against a broader range of anti-competitive or harmful practices and empower those affected to seek financial compensation in many cases. This improvement would complement the bureau's work in protecting the marketplace. The bill would also ensure that costs awards would not be ordered against the commissioner of competition in the vast majority of circumstances, another element addressed by Bill C-352.

The bill also includes anti-reprisal provisions, which would ensure that co-operation with the bureau or participation in legal proceedings could not be punished by stronger businesses. Additionally, it is worth mentioning that Bill C-59 would strengthen the law's testament of greenwashing the false advertising of sustainability claims while also facilitating environmentally beneficial collaborations that would not harm competition. Moreover, it would ensure that a means of diagnosis for repair could not be denied in a way that would harm competition.

All in all, little remains in Bill C-352 that has not already been addressed. On the contrary, Bill C-59 includes several elements missing from this private member's bill. The government's consultation saw over 130 stakeholders raise over 100 reform proposals. All submissions made by identified groups are publicly available, and the government published a “what we heard” report synthesizing them. This public process has been a key source of input to help us develop reform proposals. We are confident that the measures included in government bills comprehensively address the needs expressed by Canadians.

In conclusion, I think it is fair to say that the ambition of Bill C-352 correctly reflects the importance Canadians place on having a strengthened competition law framework. However, all of the major issues it raises have been or are being substantially dealt with through Bill C-56 and Bill C-59. As such, I would encourage members of the House interested in advancing competition reform to prioritize the rapid passage of Bill C-59.