Finance Committee on March 19th, 2024

[Mark Schaan]

Thank you, Mr. Chair, for the question.

The question is correct in that we've made a number of important changes to the Competition Act over a series of legislative efforts, the first being in the Budget Implementation Act of the last budget. There was a set of further measures in Bill C-56, the groceries and affordability act.

That first set of changes were essentially broad, consensus-based measures. The groceries and affordability part targeted a number of key pieces. One was competitor collaborations, or the degree to which the bureau would have the capacity to look at collaborations in the marketplace. Notably, it's not necessarily those among competitors. It's also those in the value chain. It ended the efficiencies defence—the reliance on the presumption of efficiencies as the basis for a uncompetitive merger, or a merger that is significantly less in competition—and introduced a market study power with the capacity to compel information on the part of the commissioner.

This proposition now adds to that in a number of ways.

One is that it allows the commissioner to better use some of those other tools in mergers. Killer acquisitions is one, which is the capacity to have a longer look-back period, in order to ensure there's time to look at transactions that might be very compelling, particularly in spaces such as digital or innovation companies. It might be the acquisition by a very large player of a very small player, one that normally wouldn't be a risk detection but that turns out to be very important for the structure of the business place.

Others include more mergers being notified and making a transaction irremediable, or essentially allowing for a transaction not to close until the merger has been considered by the bureau. A number of others include revamping the enforcement framework, or incentivizing private enforcement, which gives more players within the marketplace access to the tribunal to take on...and to competitive effects, noting that the bureau has only certain capacities. Sometimes a competitor might be best placed to understand the transaction and why it's significantly lessening competition.

We already talked about some of the greenwashing provisions and the ways in which there will be enhanced powers there. It's also clarifying that labour markets are relevant to a merger review, in terms of the degree to which a transaction is changing the skills basis, which might be impacting the worker composition. That is a factor that can be considered.

Then there are a few housekeeping changes.

In sum, I think you'll see that the measures between the first two legislative efforts and this last one build out a comprehensive framework that gives the commissioner not just the powers but also the scope to be able to look at the effects in the marketplace.

[Julie Dzerowicz, Liberal, Davenport, ON]

When you're looking at competition, a lot of what has been in the news has been around food prices.

Is there anything in terms of the buildup of improvements we're trying to make around the Competition Act? How is it going to....? For someone in my riding of Davenport saying, “Well, Julie, my food prices still keep on going up”, what is it you're doing around the Competition Act or competition policy that might have some impact on keeping things competitive within the marketplace and that, overall, will have an impact on lowering prices?

[Mark Schaan]

I think the biggest pieces around competition changes that have impacts on the grocery and food sector were in Bill C-56, for the most part. One is the competitor collaboration piece. We know that one of the factors potentially reducing competition is access to retail space. There are restrictions between, for example, land owners and grocery stores that prohibit the entry of new players within the retail footprint of the broader developer. Two is the market study powers that allow the bureau to understand the particular dimensions. Sometimes that requires information you would normally have to compel, in order to ensure it's accurate.

Both of those are important provisions, but I wouldn't undercut even something like the killer acquisitions piece. There's been a ton of innovation in the food and grocery space, including around some of the direct-to-consumer aspects. Sometimes that's a function of buying up small companies that have some of those tools and widgets that become part and parcel. However, if that becomes an act of dominance by which a player potentially has the controls to further hoard their market share at the expense of competition in the marketplace....

I think those are other elements I would point to, in terms of things that may impact the price of food for your constituents.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Dzerowicz.

Now it's over to MP Ste-Marie.

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

Thank you, Mr. Chair.

Still on the subject of the Competition Act amendments, I'm interested in repair capacity rights, particularly in the automotive sector. We have to make sure that people can get their car repaired wherever they want. However, we see that filing a complaint would be a complex affair.

My question is more specifically about clarity in the bill. In my opinion, Quebec's and the U.S.'s right to repair legislation is clearer. For example, both acts stipulate that manufacturers cannot withhold information from the outset. However, it's getting harder and harder to demand access to car repair diagnostics. The data are often stored in the cloud.

Why was this not addressed more clearly in Bill C‑59, following the United States' and Quebec's lead?

[Mark Schaan]

Thank you for the question.

When it comes to vehicle repair capacity, it's important to understand what tools are available within the government. The Competition Act isn't the only tool. Why has the government addressed this issue through a few measures?

First, there are some bills before Parliament right now. They cover the role that copyright plays in gaining access to what may be protected by copyright, such as vehicle software. This is one of the major aspects that will help ensure that consumers can have their vehicle repaired.

The changes in this bill are another tool. That may be the role of the Competition Act. It's not enough to have access to some of the most important vehicle repair tools, such as the marketplace. This is really a question for the Competition Act. These cases only cover situations where an operator attempts to stand in the way of a competitor, which would be breaking the law. It's important that a few aspects of right to repair be clarified, but that may fall more under other jurisdictions.

When we compare Canadian law with some of what you might have seen on the right to repair in certain provinces or potentially in certain states in particular, they have a much broader federal jurisdiction than we have here. We've attacked it through the mechanisms that are the primary levers we have.

It's really about copyright and that aspect of the Competition Act. All it does is regulate the marketplace and minimize competition in the market. That's why the revision was made about failure to provide information.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

MP Blaikie, go ahead, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much, Mr. Chair.

I have questions about division 7 on post-secondary educational institutions.

I think some things in the example of Laurentian University were quite concerning. My colleagues Charlie Angus and Carol Hughes have done a lot of work on this, and the fallout was that the CCAA was being used for a public institution. It seemed that part of the motivation for that was to get around good-faith bargaining and to get out of their collective agreement commitments. That's presumably something that can happen with other public institutions outside of the post-secondary educational institution space.

I'm wondering if the government has looked at what it would take to be able to apply provisions like this more generally so that we don't have to suffer another example in order to move to prevent this kind of bad-faith engagement with employees.

Under the Harper government, the Canadian Nuclear Laboratories was created, and we saw workers get pushed out of their pension plan, for example. What was created was not quite a public entity, and those employees were moved from a public entity into this amorphous organization that wasn't quite private and wasn't quite public.

What else can and should we be doing in order to avoid workers' getting screwed when governments decide they don't want to live up to their commitments?

[Mark Schaan]

Thank you so much, Mr. Chair, for the question.

I'll try to avoid talking about the multiple tools in the tool kit again, but I will in one sense.

In this particular instance, we've essentially allowed for the regulations to set out an institutional category that would not have access to the CCAA for the purposes of an orderly wind-up. That definition will be set out in the regulations and will then be added to. There is context and capacity for the government to potentially augment or consider other entities that might need to live within that regulatory structure. We probably have to come back legislatively to think about other categories, but generally speaking, the regulations will set out what we're talking about when we talk about a publicly funded institution. I think in many of these cases we do need to be thoughtful about the marketplace out there and about why these people wouldn't have access to an orderly wind-up, because there are certain protections actually in place under the CCAA that we would want to afford to other cases that would potentially benefit from the CCAA.

I do think, in the context of other protections, that this is part of the rationale for our having done a number of other things in this space, including changes to the Pension Benefits Standards Act. Those were not by me but by my colleagues in Finance. There were also the changes we've made to the bankruptcy proceedings in terms of some of those considerations for other organizations or groups, including labour and including as they relate to pension rights, as well as things such as what we've done under the Canada Business Corporations Act, under which a federally incorporated corporation is under obligation to report back on a regular basis as it relates to the treatment of its workers and pensioners.

There are other protections, particularly for the types of transformational aspects that you're talking about, but as they relate to bankruptcy and to access to the CCAA, the test is size, and the second piece will be determined in the regulations.

[The Chair, Liberal, Peter Fonseca]

Thank you.

That is the time, so we're off to MP Chambers now.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

I'll stay with Mr. Schaan, if I can.

With regard to greenwashing, I'm very interested. It seems like it's a fairly narrow provision, but I want to pose a question to see if it might be captured.

Regarding the financial products that investment firms, mutual funds, ETFs and asset managers promote as ESG investing—or saving the world by investing through green—but that turn out to have their highest holdings in oil and gas companies or other extractive sectors or tobacco companies, would the new powers give the bureau the ability to examine that element of the financial services sector?

[Mark Schaan]

Insofar as there is a technical claim being made about the product in question.... In this case, if it's a technical claim about an environmental standard that's being offered in relation to the product—if it were an ETF that potentially made a very technical claim on an environmental basis—and not just something general but something for which a test would exist, like “Are you investing or not investing in the clean energy or some part of the greener sector of the economy?”, then it would afford the commissioner the capacity to be able to evaluate whether or not the test was actually being sufficiently reported back to the consumer.

If it's a broader claim, then that's not within the scope of this particular provision.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

I just want to stay on this for a second because it's very important.

Most of the asset management flows over the last five years have actually gone to companies that slap the label “ESG” onto their funds. They're making claims that, by choosing to invest there, you are saving the planet.

I will editorialize and say that it's a scam, and I hope you'll consider putting the financial services companies on notice that you may be able to capture them for their claims and for what they're telling investors about what they can do. There are multiple entities that do ESG ratings, and they would say, “Yes, this is high,” so if someone promotes the fact that they have a high ESG rating and it turns out that they aren't really doing that, I would hope that you're going to examine those cases.

[Mark Schaan]

I have two comments, Mr. Chair.

As it notes, this provision reverses the onus on who needs to make representations related to the claim in the marketplace. If it's a technical standard and they're relating claims related to the technical standard, it reverses the onus. The entity in place, whether it is a financial company or otherwise, would need to be able to prove that it is meeting the technical standard to the position of the bureau.

Deceptive marketing provisions do apply more generally without the necessity, but the onus is in reverse for the claims for which there aren't technical standards in place.

My other comment is that this does relate to the broader effort under way on climate-related financial disclosure reporting as it relates to a whole series of both financial and other entities with regard to how they report on both their GHG reduction commitments and their broader ESG claims. That is very much not the purview of the Competition Act, but the purview of my financial colleagues.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Schaan.

I'm going to run out of time here. Just to save some folks getting up and around, I'm going to request that we be able to submit questions in writing, as we have done before. I think that's fairly reasonable because I don't think it's fair to ask the Treasury Board Secretariat individuals, Ms. MacLean and Ms. Labrie. I think it's out of their scope, but I think it's in their department.

We often get large pieces legislation sent here without parliamentarians being told how many people are required to implement the new programs. I ask it every single time I come to committee. It's great to have a large group here, but it's all siloed off, and it's unclear to me who is actually looking at the people plan in the Government of Canada.

That's a request that we're going to make in writing.

Mr. Marion, with regard to the payments, I am wondering if there is a briefing note that you could share with the committee or some analysis on transaction costs, particularly for e-transfers. My understanding is that it costs pennies to actually do the e-transfer but that banks charge three dollars. I don't care how much fraud is in the system; that's a pretty good profit margin. You don't need to answer. I would just love you to share any analysis you have on that.

I believe my colleague has a question about the Canada water agency and will follow up about the water agency in Winnipeg.

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

We're actually at time, MP Chambers.

If you do have a question, MP Morantz, if you could put that in writing, we could put that out.

Thank you. I apologize for that.

All the questions that were captured, MP Chambers, we'll get out to the officials.

MP Thompson will be the last questioner for our officials today.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

I'm sorry. For the last questions, you'll need to do musical chairs again.

Perhaps you could come forward, Mr. Peets. I want to go back to the conversation on housing and the departmental change.

I'll begin by referencing that, last week, while I was in my riding of St. John's East, we were able to announce the accelerator fund. I was so pleased. It took some time, but it really showed the collaboration and also the complexity of the housing strategy in being able to work with municipalities to really break down some of the barriers that have been a challenge, especially in housing, and building homes at the most vulnerable entry points.

If you wouldn't mind, could you go back to the points you were discussing when we ran out of time? They were specifically on the implementation of the policy, which I presume is around the national housing strategy and also that framework, and how, with the department infrastructure and community linked, it really is able to expand the strategy that understands that this is not a linear conversation but really is quite complex and requires multiple supports.

[Gerard Peets]

Thanks very much for the question. Indeed, the housing accelerator fund is being implemented right now with a number of municipalities signing on. The target for that program is 100,000 units. Its uptake has been quite positive.

The national housing strategy, turning to another thing, is not in the legislation, per se, but that is part of the government's policy and program delivery on housing. The national housing strategy is an $82-billion group of programs and initiatives over 10 years that aim to put in place 160,000 new housing units, to renovate 300,000 units and to lift 530,000 Canadian families out of core housing need.

The departmental legislation, by joining housing with infrastructure and communities, really does enhance the ability for the government to receive advice from the public service that connects things that are intrinsically connected. How do you build housing? You need infrastructure. That's one of the key ingredients. You need to make sure that the people who are in that housing have access to transportation so that they can get to their jobs. That relies on transit, among other things.

Putting these things together allows for the interconnection of programming and allows for infrastructure funding to have housing considerations and occasionally housing conditions brought in. It really does, I think, put us on a solid footing for future programs as they are implemented and rolled out.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you for that. I really do want to have that as part of the record, because I think it is quite forward-thinking.

I'm sorry. We have more musical chairs here. I have a couple of minutes left, and I want to switch to something that's close to my heart—the nursing that's still present in my work life—and talk about the amendments on tobacco and vaping.

I'm not sure who here is able to speak to this. It's a very simple question. On the fees or charges that are paid to the tobacco and vaping product manufacturers, do they recover the full cost of Canada's tobacco control strategy?

[Sonia Johnson, Director General, Tobacco Control, Department of Health]

Thank you for that question, Mr. Chair.

Within Canada's tobacco strategy, the government expends $66 million every year for those activities. The first step in being able to recover those fees are these proposed legislative amendments, because it would then allow the set-up of the tobacco and vaping cost recovery frameworks.

That's the first step. There would be several steps following that, which would include consultations on what a fee proposal would look like, what eligible activities would be considered and so forth. It would be at that time that we could then go forward with regulations. The amounts at that point would be clarified.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

What circumstances would allow the Minister of Health to remit all or part of the fee or charge?

[Sonia Johnson]

Could you clarify that question, please, in terms of what—

[Joanne Thompson, Liberal, St. John's East, NL]

Yes. Are there any circumstances under which the Minister of Health would remit some of the charges or the fees?

[Sonia Johnson]

There's a component, and my colleague may want to elaborate on that further.

If there's an error in the calculation, for example, then there would be the ability within the authorities to be able to provide money back to the manufacturer. Those provisions are in place.