Finance Committee on April 30th, 2024

[Martin Simard]

To add a bit of historical perspective, so to speak, it's important to put on the record that in the U.S., they're guidelines, but the guidelines came from the cycle I was discussing before. It started with the courts. It started with jurisprudence in the U.S., and then it was codified in the guidelines.

This exact level that we have here in the proposal is the latest assertion of the enforcement authorities of the U.S. of what the threshold should be. There will then be the cycle. This is going to be tested in the courts, and so on.

In fact, it's a return to form, because the authorities in the U.S. had stopped using 30% for many decades. To your question, it went with the evolution of economic thinking in the U.S. toward a more liberal.... In the 1980s and so on, they were more skeptical of antitrust as a tool. Now we have a revival that we see in Canada as well. They've returned to the level of the 1960s. Just the fact that it evolved over time with the evolution of economic thinking shows that it's a more flexible approach in the U.S.

We would, in effect, be codifying the current point in time in the statute. That is the proposal to vote on.

[Ryan Turnbull, Liberal, Whitby, ON]

Essentially, as economic theory and understanding evolve, we need the threshold to evolve with them. If you codify it in law, it will not be as easy to adapt.

Based on that testimony, I would like to suggest a subamendment that is meant to be very constructive and further allow for that adaptation to happen. I move a subamendment to NDP-13 to add: “(5) The Governor in Council may, by regulation, prescribe different values than those provided in paragraph 92(3).”

[The Chair, Liberal, Peter Fonseca]

I have a subamendment.

I have some speakers who were still on the board. Those are MP Weiler and then MP Chambers.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Chair.

I appreciate my colleague's subamendment, because I think it gets at a really challenging issue here if we were to set this threshold at the wrong level and, frankly, import something from the United States economy, which is 10 times the size of Canada's.

Getting back to this threshold level, do we have a sense of how many mergers the bureau has reviewed and calculated this HHI for?

[Martin Simard]

I don't, but what I've said previously at committee is worth repeating, I think.

Right now, at least in our understanding of the guidelines, unless it reaches 35%, the bureau is not in the habit of challenging. I imagine it's changing, aligned with the fact that it's changing in the U.S. They are intending to be more aggressive since the proposed 30%, but I don't have numbers for you.

It's important to understand that the effect of these things is not only in the cases the commissioner takes. I've talked about the pyramid before. There are many mergers in the economy in a given year. Only a subset are large and need the bureau to be notified. Then, usually, it's a consent agreement.

Someone mentioned sophisticated lawyers. Everybody can read the writing on the wall, and they get and have an agreement. It's only in the fringe cases, where both sides disagree about the state of the law, that they get challenged in the tribunal.

Adding the statutory presumption is quite meaningful, because every negotiation before the tribunal happens in the shadow of what people think will happen at the tribunal. By putting a rebuttal presumption, you are clearly strengthening the hand of the commissioner in these negotiations in many more cases than the number that end up in a tribunal.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

With this in mind—and maybe the statistics are not being gathered for it—what other evidence would the bureau or we, as MPs, be able to marshal to satisfy ourselves that the benchmark gets set at the right point, to capture the more problematic mergers but, at the same time, not actually chill the potentially permissible mergers?

[Samir Chhabra]

Mr. Simard mentioned the 35% threshold that's currently codified in the Competition Bureau's guidelines versus the 30% here. That's exactly why it's important to maintain some degree of flexibility, as other jurisdictions do. It's not just about evolving economic theory. It is also about specific markets and testing these approaches, as the Competition Act is an enforcement statute and it is meant to be tested in law.

If it's the will of the committee to move forward with using an HHI—to put that in place and then have certain thresholds established—it's prudent, in our view, to ensure that there's an opportunity to adjust those as the bureau and the tribunal are learning going forward, to have an opportunity to make adjustments based on changing market conditions.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you. I completely agree with you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Weiler.

MP Chambers.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

Just in the interest of expediency and so the government knows, Conservatives are also going to support NDP-14. If there is a subamendment they have to make, maybe they want to table it right away.

[Ryan Turnbull, Liberal, Whitby, ON]

We will, when we're on NDP-14.

[Adam Chambers, Conservative, Simcoe North, ON]

That's great. That's understandable.

If the Bloc is also in favour, we can move it along a little quicker.

[Ryan Turnbull, Liberal, Whitby, ON]

We're almost done.

[Adam Chambers, Conservative, Simcoe North, ON]

That's nice. That's good.

I'd like to congratulate Mr. Davies. I've actually never seen, in probably half a dozen budgets, a budget bill get amended like it's getting amended right now. I can understand why the government's a bit nervous about it. They had six months for drafting the clauses, and we're still fiddling with some subamendments, which they've also had from all members of the committee for a couple of weeks.

I also note, just out of interest, that the ways and means motion that was tabled today amends this bill. I find it really convenient that on the day we're doing clause-by-clause on a bill that is supposed to pass, the government tables a ways and means motion that amends Bill C-59.

I think that's a whole other story that we'll save for another day, but it's not above board.

Thanks, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

I see no further debate on the subamendment.

(Subamendment agreed to)

(Amendment as amended agreed to on division [See Minutes of Proceedings])

(Clause 249 as amended agreed to on division)

(On clause 250)

We are on clause 250 with NDP-14.

MP Davies, would you like to move your amendment?

[Don Davies, NDP, Vancouver Kingsway, BC]

I would, Mr. Chair. It's a very small, targeted amendment.

We recommend amending clause 250, the new discretionary factor for market share and concentration under section 93 of the act. We would delete the words “any effect from”. This would clarify that an increase in concentration or market share brought about by a merger is itself relevant evidence that the tribunal can consider in evaluating whether the merger is anti-competitive.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Davies.

I have Mr. Turnbull to speak.

[Ryan Turnbull, Liberal, Whitby, ON]

We support this one wholeheartedly and have no subamendment. It's only because Mr. Chambers intervened, though.

[The Chair, Liberal, Peter Fonseca]

I see no further debate.

(Amendment agreed to on division [See Minutes of Proceedings])

(Clause 250 as amended agreed to on division)

There are no amendments to clauses 251 to 317. We need UC again to....

Yes, we have MP Hallan.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

I have a suggestion. I would be okay with not moving CPC-4 and CPC-5.

[The Chair, Liberal, Peter Fonseca]

If you want to do that, MP Hallan, you can.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

I was just going to say that we can group clauses 251 to 365 together after that. We can pass it all on division.

[The Chair, Liberal, Peter Fonseca]

Yes, we can do that. That's great.

This is for clauses 251 to 365—right to the end.

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

(Clauses 251 to 365 inclusive agreed to on division)

There we go.

Thank you for that contribution, Jas.

Members, we're almost done. We are 30 seconds away.

Shall the short title carry?