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

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Madam Speaker, I am very pleased to answer the question of the parliamentary secretary of my counterpart on climate change and environmental issues. We have the pleasure of working together at the environment committee.

If I were the parliamentary secretary who just spoke, I would be very embarrassed to judge our proposals so harshly when his party has been in power for eight years. What have the Liberals done on housing for the past eight years? The cost of housing has doubled.

Renting an apartment is twice as expensive as it was eight years ago. Getting a loan is twice as expensive as it was eight years ago. Making a down payment is twice as expensive as it was eight years ago. Ontario is one of the worst, if not the worst province in terms of the housing bubble. Is that the legacy of this government? Houses in Canada are twice as expensive as in the U.S. Is that the legacy of eight years of Liberal governance? A common-sense government cannot come soon enough.

[Martin Champoux, Bloc, Drummond, QC]

Madam Speaker, we hear the Conservatives make criticisms and talk about what they will do when they are in power if they are elected. However, the housing crisis is urgent and is happening right now. The election might happen at any time, but it might not happen for another two years.

In the meantime, $900 million is dormant in the federal government's coffers and it is meant to go to Quebec City. I was pleased to hear my colleague talk about solutions such as repurposing federal buildings and using them for affordable housing. I think that is great, but that does not apply in every region or in every town. That being said, I was pleased to see that solutions were being proposed.

I would like know whether my colleague agrees that the $900 million meant for Quebec that is currently dormant at the federal level should be sent to Quebec and the municipalities so that they can take care of fixing the housing crisis, which is their responsibility.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Madam Speaker, I would like to thank my colleague from Drummond, whom I respect and hold in high esteem. I think it is reciprocal. Perhaps he could pass the message on to others.

I want to say two things.

First of all, not all office buildings can be converted into apartment buildings. I have spoken with some leading experts who told me that it is not easy to do. That is why our common-sense plan does not apply to all buildings. Our current goal is to convert 15% of the buildings we currently have and then do an assessment to identify the ones with the most potential. It may be easier in large urban centres than in rural or suburban areas. We recognize this right away, and that is why there is no question of implementing a one-size-fits-all solution overnight. Instead, we want to target the places where it is most likely to happen.

Clearly, the money that is available must be used. We do see a problem right now. Initially the Prime Minister said he had ambitious targets, but then he went on to insult the cities, saying that it was their problem and they were incapable of solving it. That is not exactly the right approach.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Madam Speaker, I want to cite a report from 2019 that suggests, “Over 800,000 rental units...were 'lost' in the decade between 2006-2016. When these units shift to higher rent bands, more households pay over 30 percent and many over 50 percent to afford the remaining homes.”

The last time the Conservatives were in power, we lost 800,000 homes in our country, affordable homes that were lost. These are credible reports from, for example, Steve Pomeroy, a fantastic housing expert across our country. He cites this directly during the period the Conservatives were in power.

How can Canadians trust them?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Madam Speaker, I would just like to remind members that our government faced the worst economic crisis since the Great Depression. Our country, under the leadership of the Right Hon. Stephen Harper, was the first in the G7 to get back on its feet during that major crisis.

We are very proud of the way we managed Canada under Stephen Harper. Let us wait and see what we do with the MP for Carleton. It will be extraordinary. Common sense will finally be in power.

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

Madam Speaker, I will be sharing my time with the member for Davenport.

It is a pleasure to rise in the House this evening. This is the first time I have had a chance to give a speech in this fall session after having been at home, like all other members, and having the chance to speak with constituents.

It is very appropriate that I am able to speak in support Bill C-56, which is an act to amend the Excise Tax Act and the Competition Act, perhaps more appropriately known as the affordable housing and groceries act. Among other concerns that I heard from constituents, including ferries, congestion on the roads and the impact of the climate crisis, it was really the cost of living and the cost of housing that are top of mind for residents of West Vancouver—Sunshine Coast—Sea to Sky Country. While inflation has slowed in Canada, it is still increasing with grocery prices and housing prices, which is why it is very appropriate that the first legislation we have introduced this fall session would take significant steps in tackling both of these challenges.

First is housing. The cost of housing has always been a huge challenge in my riding, but it has set new records, where the average home was selling for about $4 million in West Vancouver and Whistler. With low interest rates and the ability to work more from home, we have actually seen house prices increase significantly in other regions in the riding. With people being increasingly priced out of the markets, we are seeing additional demand for rentals, and with a highly constrained supply, we are seeing prices continue to elevate. Now, some of the most expensive rents in the entire country are in my riding.

This is a profound injustice for young people, who have not benefited from owning rapidly appreciating real estate nor having long-term rents at low cost. They are still mostly at entry-level positions and lower-paying jobs. Worst yet, with interest rates rising to where they are now, developers are abandoning new construction projects, because the business case is simply not there, and badly needed rental stock is being sidelined even further. This challenge has been highlighted by CMHC, which shows that we need to build an additional 3.5 million homes, on top of what we are already on track to build, just to restore affordability in Canada. This is a big challenge to make sure that we can build homes for the middle class, and it requires all orders of government to work together.

The federal government used to be heavily involved in the housing market, particularly in the business of building rentals. From the mid-1970s to the mid-1980s, the Government of Canada brought in financial assistance for new home buying, loans for co-operative housing, and low-interest loans for municipal, private and non-profit housing. In fact, I can still see the apartment buildings that line Ambleside and Dundarave in West Vancouver, which were built during this era. Unfortunately, Brian Mulroney's government eliminated these measures in 1986, and for three decades successive Conservative and Liberal governments stayed out of the housing game. A good example of this is the net of over 800,000 affordable homes that were lost during the dark lost decade of the Harper Conservative government.

The federal government launched the national housing strategy in 2017 to get back into building housing, and by my count, 784 below-market homes have been funded through this program in my riding in the last four years alone. We are also now rolling out the housing accelerator fund, where we are supporting municipalities to speed up their processes to get more housing built. I note that nearly all of the municipalities in my riding have applied to this program, showing that they are also on board to do what needs to be done. I am pleased that we have a strong partnership with the Province of British Columbia, with the premier and cabinet joining in Ottawa this week to coordinate how we can do more together on housing.

However, it is clear that more needs to be done, which is why I am so pleased to see that Bill C-56 would be eliminating the GST on all purpose-built rentals. This would greatly assist in getting more rental housing built. Do not take my word for it. The Smart Prosperity Institute estimates that this will lead to an additional 200,000 to 300,000 new rental units being built. The B.C. housing minister, Ravi Kahlon, notes that this is “positive news, and a significant step toward enhancing housing affordability.” B.C. has similarly eliminated the PST on purpose-built rentals.

With that, I see my time is up and I look forward to continuing at our next session.

The House resumed from September 26 consideration of the motion that Bill C-56, An Act to amend the Excise Tax Act and the Competition Act, be read the second time and referred to a committee.

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

Madam Speaker, when I left off in my speech, I was talking about some of the stakeholder reaction to the proposed measure to remove the GST from purpose-built rentals.

The Squamish Community Housing Society from my riding stated that this “will have a real and meaningful impact on the delivery of critically needed rental housing” and “support lower rents for residents moving into newly constructed homes”.

The Sunshine Coast Affordable Housing Society stated that “The removal of GST on purpose-built rentals is an excellent example of a simple federal policy adjustment that when combined with other affordability measures makes a meaningful difference in local housing systems.”

The Whistler Housing Authority stated that “The removal of GST on new purpose-built rental housing will help to decrease the financial burden experienced by those who are trying to create much needed affordable rental supply across the country. Every financial consideration throughout the development process ultimately impacts the end user.”

From the Resort Municipality of Whistler, Councillor Cathy Jewett noted to me that it would save Whistler $725,000 on a rental project they are building, provided that it is eligible.

This gets me to the only gripe that I have with this particular piece of legislation, which is that we should really look to extend it to projects that are already being built by the non-profit sector. That way, future tenants will be able to benefit from lower rents from these projects; in the end, that is the entire point of this exercise.

I want to contrast this bill with the housing policy and legislation that has been put forward by Conservative Party members, as proposed by their private member's bill and otherwise. Believe it or not, Madam Speaker, their bill and policy would actually increase taxes on purpose-built rentals for projects meant for middle-class Canadians. It would take away the resources that would allow municipalities to get more housing built faster with things like the housing accelerator fund. Given that the Conservatives invested 13 times less on transit when in government than our government has, their commitment to withhold funding to municipalities unless there is sufficient density around transit projects is just another avenue where they would not only cut housing funding but also cut the pathetic amount of funding they delivered towards transit. Well-known housing expert Mike Moffatt said that this private member's bill is incredibly “weak” and would actually substantially increase federal bureaucracy. This is not serious housing policy. This is unintelligible housing policy as crafted by a bully, and Canadians deserve better than that.

The second aspect of the bill that we are debating today would make some significant changes to the Competition Act. It would increase competition in our economy and ultimately lower costs for Canadians. In particular, it would take aim at the failings the Competition Bureau had in ascertaining the reason for high grocery prices, because of some of the structural challenges in the act.

The changes announced in Bill C-56 would amend the Competition Act to allow the Minister of Industry to direct the commissioner of competition to conduct an inquiry into the state of competition in a market or industry. It would permit the Competition Tribunal to compel information to allow it to do its work, as well as to look at vertical collaborations. It would also repeal the exception under the act for efficiency gains brought on by mergers. These new measures would allow the minister to ensure that the bureau is keeping a watchful eye on anti-competitive behaviours in different sectors.

By looking into the state of competition, for instance, in gas stations, we could answer the question of why gas prices are consistently higher in Squamish and Whistler than they are in metro Vancouver. They are often 10¢ a litre higher. Meanwhile, they do not have the 18.5¢ tax that the metro Vancouver transit authority charges at gas stations. By looking into the grocery sector with these new powers, we could answer the question of why the amazing small-scale farms on the Sunshine Coast and in the Sea to Sky corridor are able to produce delicious, nutrient-dense, organic produce at a lower price at farmers' markets compared with the mass-produced, non-organic produce that is found in a lot of grocery stores. I would suggest that these might be two areas that the minister should direct the bureau to investigate with these newfound powers.

Lastly, I want to talk about the efficiency defence. Long ago, Canada brought in the defence for a merger that otherwise would be anti-competitive, if it showed that it would allow businesses to be more efficient so that Canadian companies would become large enough to compete with foreign counterparts. Given how concentrated parts of these sectors have become and how large companies have become, this defence no longer makes sense, if it ever did.

Each of these changes to the Competition Act is very welcome, but much more can be done, and it must be done when a more fulsome update of the act is undertaken.

In particular, I would like to see stronger penalties for anti-competitive behaviour, and I would like for us to take a closer look at the thresholds to ensure that more regional monopolies are tackled as well. However, both the proposed changes to the Competition Act and the removal of GST on purpose-built rentals are very welcome; these things would make a huge difference in tackling the rising cost of living and the rising cost of housing.

[Greg McLean, Conservative, Calgary Centre, AB]

Madam Speaker, I noticed my colleague is speaking about economic benefits, and he had spoken to somebody in a town in his riding; I think he mentioned Whistler. He talked about the importance of the GST benefit that is presented in this bill.

I just wonder if he had a date on that actual benefit. I think the Liberal government promised this eight years ago and abandoned it six years ago, but the GST benefit is starting to come back now. The member also criticized, and compared it to, the bill on the floor of the House of Commons put forward by my leader. That is interesting, because he took that shot, but we just had a federal budget here, and none of this was in it. It is late to the game for the government to say it is starting to recognize that there are things it should have been paying attention to for the last six years. Is this coming to the game late? Does he finally recognize this? Is it because we have actually identified this for years in the opposition that the lights are going on, they are seeing what is happening and people are talking about it to him in his riding?

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

Madam Speaker, I quite enjoyed working with the hon. colleague on multiple different committees.

The contrast with the policy that has been put forward by the Conservative Party is that it plans to get rid of the GST on only purpose-built rentals that are below market, not all rentals. Therefore, I think it is missing part of the puzzle to make sure we can get more rental housing built faster, particularly right now, when we are seeing high interest rates impacting the business case for making those projects happen.

I think it is a very important time for us to be moving forward on these measures because of that. Prior to this, we really tackled low-income and social housing with our national housing strategy. However, given the changing economic circumstances, it is really important that we are bringing forward this measure now.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Madam Speaker, this bill is very worthwhile. It is welcomed by some, but it is getting a cooler reception from others, depending on the community. That just shows that we cannot please everyone.

Clause 3 of Bill C-56 seeks to amend the Competition Act by adding, after section 10, subsection 10.1(2), which reads as follows:

Before making the direction, the Minister must consult the Commissioner to determine whether the inquiry would be feasible, including with regard to its cost.

My question has three parts.

If the inquiry is feasible but the cost is too steep, does that mean that no inquiry will be conducted? How are we defining what constitutes too steep of a cost? If an inquiry is in the best interests of consumers but does not go forward, are we ignoring the interests of consumers? Whose interests are we then considering instead?

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

Madam Speaker, I want to thank my colleague for that good question.

We could invite experts to come to committee to get more details on these issues. I know that to conduct these studies, the bureau needs resources. I think that is an issue we should study a bit more. We gave more money to the bureau in budget 2022, but if resources are the problem, then we need to look at that too.

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, I note that this bill would suspend the GST on purpose-built rental housing, but the 2015 ministerial letter on this issue talked about giving tax breaks for the building of purpose-built affordable rental housing. Can my hon. colleague explain to the House why the present bill drops the word “affordable”?

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

Madam Speaker, this is more inclusive. It is not just for below-market rental housing; it is for all rental housing, because we have a need right now to get as much supply to make sure we are able to meet the very high targets that CMHC said we need to meet: 3.5 million homes on top of what we are already building right now. A big part of this needs to be below-market rentals, but market rentals are also needed, so that we are able to bring down prices overall.

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, as always, it is a true honour for me to speak on behalf of the residents of my riding of Davenport on Bill C-56, an act to amend the Excise Tax Act and the Competition Act, though I will note that the short title is the affordable housing and groceries act. It is an important piece of legislation. It would help build more rental homes that would be affordable for Canadians and help us to start making much-needed changes to the Competition Act. More competition will create a healthier and more prosperous Canadian economy.

There are two key changes within the legislation. The first would remove the GST from new purpose-built rental housing. The second would make changes to the Competition Act that would enable the Competition Bureau to conduct market studies and would remove the efficiencies exception from merger review. There are also a number of other changes that I will get into in the time that I have. I am going to speak for five minutes on the first part and five minutes on the second part because it is important for us to understand why we are introducing this legislation and why is it important right now.

As we know, over the last almost eight years, our federal government has done a lot on housing. I am very proud of our investments in all of the programs we have implemented. Since 2017, when we introduced the national housing strategy, we have introduced a number of programs. There are about 82 billion dollars' worth of programs that have been introduced. Their purpose is to build supply and support first-time buyers in purchasing their first home. I will run through some of the key programs and initiatives we have introduced.

There have been a number of incentives for more affordable rental units to be built. We have also introduced some disincentives for house flippers and foreign buyers. We have introduced the multi-generational home tax credit. We have made a massive commitment of $1.5 billion to build the next generation of co-op housing, and I am eager for that to get started. We have put in a historic amount of money for rapid or modular housing, which has been a game-changer for most of our big cities across the country. We have introduced a Canada housing benefit, a home accessibility tax credit, long-term supports for the homeless and a number of programs for Canadians trying to buy their first home: the first home savings account, the homebuyers' plan, the first-time homebuyers' tax credit and the first-time homebuyer incentive. We realize, as always, that we need to do more, and more is part of this legislation.

I spent a lot of time over the summer meeting with a number of groups, including groups trying to build deeply affordable housing within Davenport and Toronto, and I want to give a special shout-out to West Neighbourhood House and St. Michael's Homes. They took me through their examples of how they are trying to use the programs at all levels of government for additional housing. They did point out that there are some issues at all levels that need to be addressed, but they are not huge, insurmountable issues. They are working with our programs, are happy with our programs and look forward to us resolving some of the issues with the programs. They are very happy with the introduction of Bill C-56.

I have also met with a number of developers. I met with them not just over the summer but over the last year or so. They indicated that, due to inflation, many of the plans they had created a few years are just no longer viable. That is why our proposing to remove the GST on the construction of new apartment buildings to get more rental homes built faster is so important.

I am sure this has been quoted in the House, but there was a great article by the Canadian press, in which the CEO of Dream Unlimited Corp. said that high interest rates and construction costs had put many projects on pause, but given the federal government's announcement that it would eliminate GST charges off rental developments and the expectation that provinces would follow suit, this has changed the calculation for it. That is exactly the sentiment for many of the developers in my riding.

What are the actual changes being proposed in the bill? It would change the Excise Tax Act so that the goods and services tax would be removed from new purpose-built housing to encourage an increase in the construction of rental housing. These measures would modify the existing GST rent rebate by increasing the rebate rate from 36% to 100% and remove the rebate phase-out threshold for purpose-built rental housing projects.

What are experts saying about this? I took a couple of examples from a long list. Mike Moffat, one of Canada's leading housing experts, called this a “fantastic transformative step.” Toronto's former chief city planner Jennifer Keesmaat has said that this measure could be “the beginning of a sea change.”

This is very popular with developers in my riding and across Toronto. I want to note, before I go to the next section, that provinces such as Ontario, Newfoundland and Labrador, and Nova Scotia are already following our lead by eliminating provincial taxes on new rentals. This would of course result in even more building of the affordable rental homes Canadians need.

The second part of this legislation is about measures that would begin a much-needed update to Canada's Competition Act. I sit on the finance committee. It has been just over four years that I have been on that committee, and we hear a lot of concerns from those in the business community, and many Canadians in general, who are worried about our competitiveness. They are worried about the limited number of large companies in what many feel are oligopolistic sectors. They worry about Canada's productivity. They worry about the little business investment we have had in our country, despite historic low interest rates for over 10 years, until a year and a half ago. There is a great recognition that we have a lot to do to improve competition in Canada.

I was delighted when our Minister of Innovation, Science and Industry indicated in February of 2022 that he would undertake a review of the act. He wanted to begin with some immediate targeted improvements and follow up with some more consultations to consider some broader changes. We received a lot of feedback, so Bill C-56 gets us started on the changes that were suggested.

What would Bill C-56 do? It would provide the Competition Bureau with powers to compel the production of information to conduct effective and complete market studies; remove the efficiencies defence, which currently allows anti-competitive mergers to survive challenges if corporate efficiencies offset the harm to competition, even when Canadian consumers would pay higher prices and have fewer choices; and empower the Competition Bureau to take action against collaborations that stifle competition and consumer choice, in particular situations where large grocers prevent smaller competitors from establishing operations nearby.

Our Deputy Prime Minister and Minister of Finance spoke in the House on this bill the other day and said:

This bill also seeks to amend the Competition Act to give more power to the Competition Bureau so that it can investigate price gouging and price-fixing.

It would put an end to anti-competitive mergers that drive up prices and limit Canadians' choices. It would also enable the Competition Bureau to ensure that big grocery stores cannot prevent smaller competitors from opening stores nearby. Our [federal] government is relentlessly focused on building an economy with stable prices, steady growth, and abundant, well-paying, middle-class jobs.

While this bill includes these measures, it is only our initial response to the feedback we heard during the ongoing consultation on the future of competition policy in Canada. This bill's amendments strike at the core of Canada's competition law and would empower the Competition Bureau to better serve the public in its role as enforcer and advocate, and it would allow the country to reap the well-documented benefits of more competitive markets.

Now more than ever, effective and modern competition law and enforcement are necessary to promote affordability for Canadians and to help our economy grow. With our federal government's 2022 amendments to combat price-fixing and the changes proposed in this bill, our federal government is promoting greater affordability and the type of marketplace that allows our economy to grow.

In conclusion, our federal government is relentlessly focused on building an economy with stable prices, steady growth and abundant, well-paying middle-class jobs. That is why this legislation, Bill C-56, is so important. It would provide key changes that may help to stabilize grocery prices for Canadians and would help accelerate the construction of new apartment buildings that are affordable for all Canadians.