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.

Affordable Housing and Groceries Act

[Some hon. members]

Agreed.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Speaker, I thank the House for having this debate today because in Oshawa this is one of the issues I am hearing about over and over again. I was listening to the parliamentary secretary's speech. One of the complaints I get from municipal leaders is that there has been a lot of money put out there but really there is not a lot of results.

I believe in the last eight years the Liberal government has announced $89 billion in funding for affordable housing, and we just do not know how many houses that has actually helped build. I was wondering if the parliamentary secretary could tell us today how many houses were successfully built over the last eight years with that $89 billion and how much the cost was per house.

[Rob Oliphant, Liberal, Don Valley West, ON]

Mr. Speaker, as the hon. member knows, we have a market-driven economy that builds houses across this country in many different ways. There are houses that are built as rental units. There are apartments that are built and condominiums that are built.

I invite him to come to the riding of Don Valley West to the area at Redpath and Broadway to see the construction project, which is a fascinating public-private partnership building hundreds of units of affordable housing and market rent housing, as well as condominiums. It is one concrete example, literally concrete, where houses are being built and a difference is being made.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I was listening to my colleague speaking proudly and enthusiastically about the fantastic measure that we have just adopted to build rental housing by removing the GST on the construction of apartment buildings. This only applies to privately owned buildings, however. Municipal organizations are already exempt. Non-profits that are already partially exempt will not be fully exempt. Housing co-ops will not be fully exempt either.

Does the member find that logical? Does he think that we should make an effort to change that and take truly meaningful measures, like investing 1% of the annual budget in social housing to take pressure off the market?

[Rob Oliphant, Liberal, Don Valley West, ON]

Mr. Speaker, housing subsidies and other measures offered on the market, including by not-for-profit organizations, are not the same. It is a complex situation, with an integrated market overlapping two sectors. I think it is necessary to have housing supports offered by not-for-profit organizations and others aimed at the private market. Both sectors need different things in different parts of the country.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I have known many young people, and I actually spent the summer helping move people out of Toronto because this is no longer a city they can live in. It now takes 20 years for a family to save for a down payment. It has been reported that 40% of the condos in Toronto sit empty or are being rented out on Airbnb.

This is a manufactured crisis. Therefore, when I hear my hon. colleague talk about the response, what I am not hearing is a credible plan for co-operative housing, which was a linchpin of making urban living possible and also of making rural and northern living possible. Due to the fact that the market forces have failed us, that there is market manipulation and that the housing market has been used by speculators, we really need a strong all-hands-on-deck approach to address the housing crisis that exists in every one of our communities across this country.

[Rob Oliphant, Liberal, Don Valley West, ON]

Mr. Speaker, the member will get no argument whatsoever from me about the importance of building co-operative housing. I have four such buildings in my riding, and I want eight or 10 or 12. We have to set the conditions for co-operative housing to be increased. I am happy to be on record as saying that I will push my own government to make sure that we have a way to encourage such projects. They are innovative. We may need to look for a 21st-century solution to what used to be a 20th- century example. I have been part of those projects. I myself have built three affordable-housing projects and I will engage in any good and credible solutions to find a way to put roofs over people's heads.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Speaker, I am pleased to rise today to discuss Bill C-56. This affordability bill has two important parts: the temporary removal of the goods and services tax, the GST, from new purpose-built rental housing, and a significant improvement to the Competition Act. On September 14, the government announced that the GST would be temporarily removed from new purpose-built rental housing to encourage an increase in the construction of rental housing. This removal would be in effect until the end of 2035.

That being said, I would like to spend the rest of my speech today on the second part of this bill, which is about enhancing the Competition Act. Bill C-56 would make three targeted improvements to the Competition Act. It would stop big-business mergers with anti-competitive effects, would enable the Competition Bureau to conduct precise market studies and would stop anti-competitive collaboration that stifles small businesses, specifically small grocers.

Canada's current Competition Act was first passed in 1985. It is an understatement to say that since then, our market has evolved. For this reason, the government launched a wide-ranging consultation on competition legislation and what ought to be done to modernize it and make sure it serves the best interests of Canadians. One thing we know for sure is that over the years, there has been an increase in mergers and market concentration in many Canadian industries, such as retail grocery. Canadian consumers have made it very clear that they have concerns about how the competitive landscape has changed in these markets and that they believe the law needs to be changed to that ensure the marketplace is fair.

Business collaboration can take all sorts of forms, from innocuous dealings to the problematic anti-competitive agreements. In this latter category, we have the sorts of practices that are always considered harmful under our competition law, such as cartels to fix prices, allocate markets or restrict production. Rigging bids in response to a call for tenders is also treated in this manner, as now are wage-fixing and no-poaching agreements between employers, because of changes we introduced in 2022. These forms of agreements are criminal offences. They are the most direct and straightforward way to undermine marketplace competition and are illegal, no matter their results.

There are other sorts of collaboration, however, that are not so clear-cut. One might think of joint ventures involving two competitors, or an agreement to share certain information or jointly conduct research. These agreements are not cartels but may, nevertheless, still lessen competition because they involve co-operation between parties that are meant to compete. The Competition Bureau may examine these kinds of collaborations, and if it finds that they harm competition, the bureau may apply for a court order to remedy that. There is one hitch, however. The bureau can look to remedy these agreements only if they are struck between real or potential competitors in the same market.

Most other countries have a more straightforward rule, which is that an agreement made to restrain competition can be remedied. It is as simple as that, because there are cases where we should be concerned by an agreement made between two companies that are not direct competitors. Imagine, if we will, that a large grocery retailer opens a store in the only shopping plaza in the community and that, as part of its agreement with the landlord, it indicates that it does not want another supermarket or maybe even a specialty food store to open in the same plaza. The supermarket does not want a competitor eating into its profits. The landlord agrees because it wants the big grocery retailer to come to the plaza and generate traffic. The landlord is still free to rent other spaces to hardware stores, furniture stores or even pet shops. It is a win-win between them, right? It is not really. The end consumer is actually the one who loses.

First and foremost, the consumer misses out on the benefits of competition. The supermarket can raise prices because of its territorial exclusivity. How about a local entrepreneur who would like to open a butcher shop or a bakery? Unfortunately, they will be cut out of the list of potential tenants because the landlord made a promise.

What I have shared is not just a hypothetical scenario. Earlier this year, the Competition Bureau conducted a retail grocery market study. In its report, the bureau shared that it heard from Canadian businesses that said they have been unable to open stores in places they wanted to set up shop, because of property controls. As the bureau would conclude, these property controls limit entry by new grocers and deny consumers all of the benefits from added competition, like lower prices and more choice.

The Canadian Federation of Independent Grocers, or CFIG, raised an even more worrisome version of property control in its submission to the government consultation. CFIG raised the topic of restrictive covenants, which arise when a retail store is sold but the vendor wants to protect the land it is leaving from any rivals. When the chain sells its space, it may negotiate a covenant into its sale agreement with the purchaser, preventing any future owners from ever using the property to operate a grocery store. This can happen with lease agreements too, shielding the plot of land from new entrants even after the original supermarket has left.

CFIG and the Public Interest Advocacy Centre both point to this practice as contributing to so-called food deserts in many communities. This is not a good outcome, and it is the result of restraints on competition. It is time for Canada to update our legislation and ensure that we catch up to our international counterparts at the forefront of promoting fair competition. Amendments to the Competition Act would ensure that the Competition Bureau can review agreements like these where their very purpose is to restrict competition, even when they are made between non-competing parties like landlords and tenants. If the collaboration would substantially lessen or prevent competition, then the bureau would be able to seek a remedy, including an order to shut down the activity.

I wish to highlight that our office places great importance on proactive community engagement. To this end, we have established five community councils, among which the Affordability Council stands as one of the most actively engaged. It is with eager anticipation that I intend to present the affordability bill to my local Richmond Hill Community Council.

The matter of affordable housing and access to essential groceries stands as a paramount concern for constituents, and we are committed to addressing these critical issues through this affordability bill. I look forward to working with members of the House on passing this important piece of legislation.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, my colleague did make some good points. The member mentioned independent grocers. I work a lot with independent grocers, and he is right; they do face a lot more challenges than big chains. There are challenges in trying to get competitive pricing on goods they want to buy and resell in their stores. That is just one of the issues that independent grocers face.

If we have more competition in the grocery industry, we will see grocery prices fall, and that is the crux of the matter in Canada. I have been asking about this for years. In fact, I asked the Competition Bureau if it would look at abuse of dominance with big grocers in the industry, and I have had the opportunity to question the CEOs of major grocery stores.

Will the member's government stop providing Canadian taxpayer dollars to multinational corporations or publicly traded grocers that are making hundreds of millions of dollars in profits every quarter, and perhaps focus on keeping our independent grocers alive and well in the communities they serve?

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Speaker, I would like to commend the hon. member across the aisle for advocating for independent grocers, as I have been in my riding.

There are two pieces to that comment. One is about international grocers and collaboration. As members know, our government called on at least five of those grocers, along with some of the manufacturers, over the last week or so to have a conversation with them and to work collaboratively to come up with a solution to reduce prices. On the other hand, I come from a riding that is highly diverse and the small grocers who provide to some of the ethnic community play a huge role, so this is welcome news. Bill C-56 is welcome news for those independent, ethnic-based grocers who are providing products for those types of communities.

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

Mr. Speaker, the Competition Act, which was the main focus of the speech by my colleague opposite, has two components. It prohibits certain anti-competition practices, and it makes corporate mergers and acquisitions more difficult. In Canada, the status quo boils down to a single practice: efficiency gains. The efficiency argument allows buyouts. The Competition Bureau gives them a pass.

Could my colleague give us practical examples of how these improved competition rules will affect prices, and therefore, inflation, and how these factors will improve the lives of our fellow citizens?

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Speaker, the point I was trying to make is that if we ensure that the bureau can review the agreements when the sale of a grocery store or a grocery chain has taken place and the land is not made available to other competitors of the same kind, specifically grocery, that violation is what we are going to look into, and that is what this bill intends to address.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Mr. Speaker, in Edmonton, I and the member for Edmonton Griesbach have been meeting with Mayor Sohi regularly to talk about housing, because we are so deeply worried about the housing crisis in Edmonton. One of the things Mayor Sohi has asked is that this rebate on the GST also include those properties that are currently being built. However, there are restrictions being added to this by the Liberals.

Could the member explain to me why those restrictions are in place and whether the Liberals would be open to amending it to expand the availability of that rebate?

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Speaker, any opportunity to improve Bill C-56 to ensure that we can increase the supply of housing, specifically purpose rental housing, is considered. I suggest that we pass this bill and get it to committee so that we can actually have the conversation that we need to have on that.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I would like to begin by stating that I will be sharing my time with my hon. colleague from Longueuil—Saint-Hubert. For that reason, I will be talking less about housing than about competition. I would have plenty to say about housing, but my colleague will do a better job.

All I am going to say about housing is what I said earlier: This is just window dressing, like most of the Liberal government's announcements. We need concrete action and money for social housing on an ongoing basis. I will come back to this if I have time at the end of my speech.

That said, let us move on to the positive feature of Bill C‑56, which is amending the Competition Act. It is good to see meaningful measures that are likely to actually improve things.

The first measure that was announced was one that was proposed in the report on a study during which we, too, met with the heads of the major grocery chains, but not only them. We also met all the stakeholders in the agri-food industry.

Let us talk for a minute about the smoke and mirrors show the government is putting on, convening CEOs and, this week, meeting with the major processors. I suggest that the government meet everyone, including everyday people. Of course this includes the small processors, people from the Conseil de la transformation alimentaire du Québec, which covers a significant number of SMEs, and those from the agricultural world. The message is being sent because if we want to act, then we need to be aware of the challenges that all these people meet along the way.

Let us come back to the first measure, which seeks to give real investigative powers to the Competition Bureau. I must make a confession. When we received people from the Competition Bureau at the Standing Committee on Agriculture and Agri-Food, there was a moment when I was embarrassed. I was embarrassed to be an elected member from a G7 country listening to the people responsible for providing assurances of a healthy competition among businesses in the country tell me that they did not have power, explain to me plainly that they would ask the major grocery chains for their profit numbers, but that the chains did not want to oblige. They kept having to say “please” to no avail.

I am going to tell you something even more galling. During the study, we hosted the five CEOs of the major grocery chains in committee. Knowing that the Competition Bureau had no authority to compel them to produce a breakdown of their profits, I personally asked each of them, one by one, to commit to provide Competition Bureau authorities with a breakdown of their figures, which these authorities would keep confidential.

Their standard response when we ask them for their figures is to claim that, as competitors, they cannot disclose that information to us. While they may be competitors, for some strange reason, they all change their prices at exactly the same time. Nevertheless, all five agreed to give us all their figures. A few weeks later I was bitterly disappointed on seeing the Competition Bureau's report. The bureau complained that several companies had refused to hand over their figures. I do not know how to characterize that. If we seriously want to ensure competition in a G7 nation, the institution responsible for market investigations needs the authority to do its job. It needs to be able to compel people to come testify and produce documents. I applaud this initial measure.

Now for the second measure. The law already prohibits agreements between competitors that will restrict competition. That is a no-brainer. However, agreements like that clearly happen at times; the trick is to catch them. Here is the adjustment that is being made to the legislation: Companies are not allowed to enter into an agreement with someone who is not their competitor for the purpose of restricting competition in a market. For example, if a business leases space in a shopping centre to set up a grocery store, it cannot tell the landlord that the only way it will sign the lease is if the landlord does not lease space to someone else who sells food in the same building. This restricts competition.

Another example is when a food-related business closes down. They sell the building and open another business a little further away. They renovate to make it look good. When selling the old building, they include conditions that the buyer will never be allowed to open a food market. These are real examples that show how competition is reduced. I applaud this measure.

The third measure will likely have a big impact, but it comes a bit late because we now have five major food chains that control 80% of the market. In economics that is called an oligopoly. Even though the owners of these five businesses swear, hand on heart, that they do not talk to each other, we can at the very least assume that they look at one another. We saw evidence of that when they simultaneously stopped giving COVID bonuses to their employees when COVID‑19 was over, on the same day. When the average person sees that, they think that if they are not talking to each other, then they are looking at one another a lot. That is what makes them an oligopoly.

The third measure in the bill relates to not authorizing a merger that reduces competition on the pretext that it increases a company's efficiency. It is important to note that there was a provision in a piece of legislation called the Competition Act that allowed a merger and acquisition to be authorized if it increased a company's efficiency. I should hope that it makes a company more efficient. No company buys another company thinking it will become less efficient or worse at what it does. This can happen because of poor calculations, a poor reading of the market or because it is just not a good company but, generally speaking, an entrepreneur who acquires a competitor on the market clearly intends to reduce competition and become more efficient. If that company is the only one, it can inflate its prices in the long term. That is how it always works.

I could not get over the fact that this criterion existed in the Competition Act. Bill C‑56 proposes to remove that and I applaud that as well. There are some markets that are oligopolistic, but they do not all have the same need for regulations. However, when we talk about food or housing, these are essential needs. I would go further than that and I am sure that my colleague from Longueuil—Saint-Hubert will agree with me. These are more than essential needs. Housing and putting food on the table are fundamental rights. The government needs to take effective measures to address these issues.

We need to be aware of other factors that cause the price of groceries to go up. Let us consider the consequences of climate change that our vegetable producers faced this summer. I have sounded the alarm about this in the House a few times now and we still have not received a meaningful answer from the Minister of Agriculture and Agri-Food nor the Minister of Finance.

At the start of summer, some people invest $2 million to $3 million in their fields. If year after year they are told that they will have to work themselves out of a tight spot all by themselves, they are eventually going to stop investing that $2 million to $3 million. Instead of growing cauliflower, they might go into field crops, where there is less risk. Consequently, we could end up with a food shortage.

I do not want to sound too alarmist, but it happened in Britain and Ireland this year. The shelves were empty or half empty. They turned to the farming countries that can usually sell food, except that they, too, were having production problems, unfortunately, and could not sell anything. There were empty shelves, or shelves where the product was extremely expensive. We do not want that either.

With pricing policies like these, we need a long-term strategic policy, not a short-term plan. Politics' main flaw is that most decision-makers operate on a four-year timeline centred on the next election. I am calling on elected members of the House to take the high road and make the decision that works best for the next generation. That is our job. Otherwise, we have no business here. That is my philosophical take on it.

In the 50 or so seconds I have left, I want to say that the war in Ukraine has put the world grain market under a lot of pressure. Although these factors are beyond our control, the same is not true of the 35% tax still applied to Russian fertilizer, and Canada is the only country that has it. This measure is not effective. Once again, I am asking that this money be returned to farmers. It will cost less in the end.

I could also talk about percentage margins and many other things. I hope that my colleagues in the House will give me an opportunity to say more by asking me intelligent and structured questions.