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

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

I have to resume debate.

The hon. Parliamentary Secretary to the Minister of Indigenous Services.

[Jenica Atwin, Liberal, Parliamentary Secretary to the Minister of Indigenous Services]

Madam Speaker, today I rise to address this chamber with respect to Bill C-56, specifically its amendments to the Competition Act. This is the regime that enables the Competition Bureau to protect our economy from actors and acts that would unduly and artificially increase prices and decrease product choice for consumers. An empowered Competition Bureau means a Canadian marketplace that is more innovative, efficient, and, most important, affordable. In my home province of New Brunswick in particular, where household incomes on average are lower than in the rest of the country, we need to use every tool at our disposal to bring down food prices for Canadians and their families.

The series of proposals enclosed in Bill C-56 may be part of the response to a global inflation crisis driving up the costs of Canadian necessities, but they are also a long-awaited package that would better align our competition framework with international best practices.

The bill includes three significant changes to the Competition Act: the abolition of the efficiencies exception in merger review, the ability to compel information during a market study, and the ability to review agreements between non-competing actors that are designed to reduce competition.

The efficiencies exception, a defence that allows anti-competitive mergers to survive a challenge if the corporate efficiencies they are expected to generate are greater than the harm to competition, is unique among advanced competitive regimes. It allows a merger to proceed knowing full well that consumers may pay higher prices, to help the merging companies save costs.

The European Commission, one of the most active and visible competition authorities around, does not treat efficiencies in this manner. Our European counterparts will consider efficiencies as relevant only when those efficiencies are likely to benefit consumers; they never rely on corporate efficiencies to justify an anti-competitive merger.

In Australia, the law itself does not list efficiencies as a factor to consider in deciding merger cases. In fact, the Australian Competition and Consumer Commission has published guidelines stating that it will not clear anti-competitive mergers even if the new firm would enjoy a lower-cost structure.

Of course, the comparison often used, given our proximity, is the United States. The courts in our neighbouring jurisdiction have specifically ruled that possible corporate efficiencies from a merger cannot be used as a defence to justify an anti-competitive merger. Efficiencies must be pro-competitive and passed through in some capacity to the marketplace and not just the merging companies.

In this way, Canada is out of step, which is illustrated perfectly by the fact that the U.S. Federal Trade Commission has successfully challenged a Canadian merger that our own Competition Bureau could not, because of claimed efficiencies. For example, when Superior Plus Corp. was going to acquire Canexus in 2016, the bureau found that the competition would suffer materially in a number of markets. It predicted a lack of remaining competition and higher prices for consumers. Nevertheless, because of the provision in the Competition Act, the bureau had no choice but to refrain from challenging the transaction, as the efficiency gains could be shown to outweigh the anti-competitive impacts.

With no similar constraints, the United States Federal Trade Commission mounted a challenge because of what would be the resulting high rate of concentration in the sodium chlorate market. It also found evidence of the acquiring party's desire to restrict output post-merger, an increased ability to collaborate with competitors, and its desire to neutralize Canexus as a disruptive lower-price alternative.

Without even delving into the important question of whether promised efficiencies are ever delivered, it should be clear that this defence can lead to detrimental effects on competition. It is about time that Canada joined the rest of the world in putting competition first.

I would now like to speak specifically about the market study powers. Our current market study framework is another area where we are out of step. The bureau can periodically study industries to better understand their competitive dynamics and make recommendations to government, such as the retail grocery market study that it released last June. However, the bureau has no means to compel parties to provide any information and instead relies on voluntary submissions, public data or information it already happens to have.

This is not the case in comparable jurisdictions, once again. In the United States, the Federal Trade Commission has the authority to demand a compulsory special report that answers specific questions about an organization's business, conduct, practices, management and relationship to other parties. The European Commission can conduct studies into sectors or agreements across various sectors and can request necessary information or carry out inspections. The Australian Competition and Consumer Commission can also ask the treasurer to instigate a price inquiry that allows authorities to access information on a wide variety of topics.

All of the above jurisdictions have serious sanctions for failure to comply, ranging from the ability for the enforcers to conduct a much wider study to fines based on the company's annual turnover. Moreover, these studies have proven to be a valuable tool for market insight. The USFTC, when faced with the novel problem of serial acquisitions by dominant tech platforms, launched its version of a market study to compel information on relevant mergers.

Similarly, in 2022, the United Kingdom's competition authority concluded a market study in the music and streaming industry to better understand why there had been a 40% revenue drop over 20 years. The retail grocery code that is currently in effect in the U.K. is also the direct result of recommendations by the competition authority after a detailed market study. Also, the Government of Australia, in response to ballooning electricity prices, ordered a price inquiry that resulted in a series of high-impact recommendations to government, many of which were directly related to enhancing competition.

Canada has had five market studies since 2007: retail grocery, digital health care, financial technology, self-regulated professions and the generic drug sector. Were the bureau empowered with the ability to compel information from elected companies, it is not difficult to imagine just how much more fruitful these studies really could have been.

Lastly, the third reform in this bill concerns agreements in restraint of competition that are made between parties who are not competitors. Sometimes this is called “vertical collaborations”. This has been identified as an issue relevant to restrictive clauses made between commercial landlords and supermarket tenants to keep grocery competitors out of the property, thus limiting competition. The Competition Act has a number of provisions that could apply to some vertical collaborations, but will not necessarily if the specific facts do not quite line up perfectly with the statute. Its most basic provision on anti-competitive collaborations meanwhile is limited to those between real or potential competitors or horizontal collaborations.

Once again, we are the outlier in this approach. Our peers in the United States, Europe and Australia can examine vertical agreements that limit competition, such as by restricting distribution channels or territories of operation. In one notable case, the United States' Department of Justice challenged Visa and Mastercard for their contract terms with merchants that limited consumer options. When our own Competition Bureau tried to mount a similar case, the limits of the Competition Act meant it was forced to bring the case under an ill-suited provision, and it lost. The Competition Tribunal could not issue an order, even though it recognized the competitive harm. It was a viable lesson in the importance of a modern legal framework that reflects how today's marketplace operates.

We have seen that it is time for Canada to join the club, so to speak, and emulate the best practices of our peers. This is why I encourage my colleagues to join me in supporting this bill's passage.

[Greg McLean, Conservative, Calgary Centre, AB]

Madam Speaker, I congratulate the member on her expanding role, having started in a different political party, moving over to a new political party and actually getting a parliamentary secretary position. Her trajectory is clearly on the rise here, and I congratulate her for that. There is a life in politics, obviously, that requires a lot of advancements and those kinds of things.

I will ask the member clearly if she thinks that advancing this legislation through Parliament would be better served if she paid attention to the bill that was being brought forward rather than just trying to reinvent a new bill. If she were actually serious about it, like her party should have been serious about it, it would have been in the budget last year.

[Jenica Atwin, Liberal, Fredericton, NB]

Madam Speaker, I thank the hon. colleague for his kind words. I certainly paid attention, and I pay attention to all the happenings in the House.

Consultations began on this quite some time ago. I think it is important to look at the process when we bring in legislation and involve multiple provinces and territories, and have conversations with retailers and everyone who is going to be involved in what we are trying to achieve here.

There is never a better time to put forward legislation. I am glad that we are certainly stepping up and acting because, as we have clearly stated in this House, affordability and grocery prices are what we are hearing from all of our constituents. As I said, we have to use every tool at our disposal. I am happy to see the legislation now, and again, those consultations began quite some time ago.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, a bill that seeks to eliminate the GST on housing construction should be based on one obvious principle. It should significantly lower the rent paid by current tenants who are having a hard time making ends meet.

Make no mistake, the crisis is affecting all of Canada and Quebec. The cost of housing in Abitibi—Témiscamingue is almost as high as it is in Montreal. How will abolishing the GST on new housing construction lower the price of existing housing? Should we not be looking for a solution that regulates or lowers rents instead?

[Jenica Atwin, Liberal, Fredericton, NB]

Madam Speaker, I thank my colleague for his question.

We were already hearing from developers across the country about how this was going to incentivize them to really increase that stock and supply. The biggest thing we can do right now on the federal side is to look at those rising costs for rent and homes. It is specifically an issue in my riding as it is for every member of the House.

I have had these conversations with developers, and they are looking for tools. They are looking for that support from the government. This is one really important measure that could help with that densification and increase that stock. That is the biggest thing we can do to bring down prices. It is not going to happen overnight, but we are working as fast as we can.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Madam Speaker, I congratulate my colleague on her new role.

We have heard the Conservatives talk about selling off 15% of private lands and 6,000 government buildings. We saw what happened with the greenbelt with the Conservatives in Ontario. We saw what happened in British Columbia with private forest lands. Basically, it ends up in the hands of developers and it does not create any affordable housing.

What I want to know is whether my colleague will look at creating legislation so that all federal buildings and lands that are used for affordable housing are not sold but leased or transferred back to the indigenous peoples whose lands we sit on. I want to make sure that it does not end up in the hands of and profiteering for developers. We know that the private sector has never solved an affordable housing crisis, ever. We need non-market housing, and we need to work together on that.

[Jenica Atwin, Liberal, Fredericton, NB]

Madam Speaker, there is a combination of things. Again, this is a multi-faceted issue that is impacting Canadians right across the country. We absolutely have to look at the non-market rentals. We have to ensure that we are looking at models like co-ops. We have to look at every available tool that we have.

However, the private sector does have a role to play. I know that there is certainly lots of vilifying of developers that is happening. I can point to some examples in my home riding. We have an incredible developer, whose name is Marcel LeBrun, who has been integral in putting forward really inclusive and creative ways to deal with our housing crisis.

It is going to take a combination, and we certainly need to bring the developers into that conversation while protecting those who will be impacted by the housing crisis in the country.

[Ruby Sahota, Liberal, Brampton North, ON]

Madam Speaker, we see in this piece of legislation that there would be amendments made to the act that would stop big business mergers with anti-competitive effects. I want to know what kinds of benefits the member thinks this could have in her community when it comes to small businesses and especially small grocers.

[Jenica Atwin, Liberal, Fredericton, NB]

Madam Speaker, I come from a province that is very familiar with corporate capture and what can happen when one does not have a competitive market, especially to protect the smaller retailers and grocers, in particular. We are having this conversation. Competition is always better. This is a really big step forward, bringing us in line with some of our other nations as well.

The House resumed from September 27 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.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Mr. Speaker, I am going to talk today about Bill C-56, which is the Liberal-NDP government's attempt at dealing with the affordability issue.

To talk about the legislation itself, we first need to look at where we are in this country, and it is not a very pretty picture. If we look at where we are right now, mortgage payments over the last eight years have virtually doubled in this country from coast to coast to coast. We have a similar issue now with rent all across the country. If we look at the average rents being paid now, that amount has also virtually doubled. This is the track record of the Liberal government, which now suddenly seems to be concerned about affordability for Canadians.

However, the bad news for Canadians does not stop there. It used to take 25 years to pay off one's mortgage. Now it takes the average Canadian 25 years to save for their mortgage. Think about what the difference between those is. Some people might say that is not their problem and that this is a young person's problem when they are trying to get into the market. It is bad enough if it is a young person's problem, but it is also affecting average Canadians right here and right now.

I was recently informed about a person whose mortgage has come up for renewal. Their mortgage was coming from that nice, low fixed interest rate. People will remember those low interest rates the Prime Minister said were going to be there for a very long time, the interest rates the Governor of the Bank of Canada said were going to stay low for a very long time. Based on that, many people took mortgages with a very low interest rate because it allowed them to have a mortgage payment they could afford. However, as mortgage rates have continued to go up, as the Bank of Canada has continued to raise interest rates in order to fight inflation, average Canadians now have to pay the bill as a result of this.

In this particular circumstance, this family has said that it can hold on for about another six months with this increased mortgage payment. They can dig into savings and they can further borrow for about six months, and then they are not going to be able to make the mortgage payments on their home. That is the consequence of eight years of the Liberal government.

Inflation is out of control. I hear it all the time in my riding of Dufferin—Caledon. People come up to me in the grocery store and say to me that they now have to only go to the grocery store to shop bargains. They do not actually have a grocery list, because they can buy only what is on sale. This is all they can afford. After eight years of the Liberal government, this is what people are saying to me in the grocery store. It is a shocking turnaround for Canadians. They are having trouble paying their mortgages. They are having trouble buying groceries. They are having trouble heating their homes as a result of the carbon tax. All of these things are making life more expensive for Canadians.

There is a simple solution. There are actually two very simple solutions the government could implement right away. Number one is that it could cut the carbon tax. We know that would have an immediate impact, because, as has been said by Conservatives in the House of Commons over and over again, the farmers are taxed on farm produce. As they produce it, they are taxed with the carbon tax. Whether that is for drying the grain, driving the combines or whatever, they are paying a carbon tax. When that crop is harvested, the driver of the truck that comes to pick it up is going to pay the carbon tax. When it goes to be processed, there is a carbon tax. When a truck picks it up to take it to the grocery store, there is a carbon tax. At the grocery store, the carbon tax is heating the grocery store; therefore, the store owner is paying a carbon tax as well.

At the end of the day, Canadians cannot afford to pay for food, and they end up saying that they do not even have a grocery list and just go to the grocery store and buy whatever is on sale. If we would have said this to Canadians eight years ago, they would have said that this was not possible. In a country like Canada, food is abundant. We feed the world because we have the best farmers in the world, who are great stewards of the land. If we had said eight years ago that Canadians would only be able to go to the grocery store and shop bargains, that would have been an inconceivable thought, but here we are.

After eight years of the Liberal government, that is the sad situation that Canadians find themselves in. It is very difficult to pay the mortgage, very difficult to buy groceries, very difficult to pay rent and very difficult to buy a house. That is the Liberals' record. That is the context that we look at when they bring in this bill.

This is not a new problem. Conservatives have been talking about this problem for the last number of years. In fact, the Conservative leader, many years ago, said that the inflationary spending caused by the government was going to drive up inflation, which would then drive up interest rates. He is looking more and more like Nostradamus with that prediction. As for me, 18 months ago, I rose to speak about the impact of the carbon tax on food production. I said that it was going to cause a massive increase in the cost of food, and here we are. The Liberal government cannot therefore claim that somehow this is a new problem, that it was unaware of the problem. It was well aware. It was well forewarned and did absolutely nothing about it.

When we look at this particular bill, what is amazing to me is that Liberal members will get up in this House during debate and during question period and talk about how, as a result of tabling this legislation, one developer has said it is now going to build 5,000 rental units. They puff out their chests and say to look at them, look at the amazing things they have accomplished. Well, let us put that into context.

According to the CMHC, we will need to build three million more homes between now and 2030 than are planned or scheduled to be built. The plan is that we will build two million homes. We will have to build three million more than that in order to get back some affordability.

As I have said a few times in this chamber, I went to law school because I was not good at math. However, what I did before I prepared for this speech is decided to get out my calculator and look at this. I saw that 5,000 units out of the three million we need is 0.0016%. If I had a child come home with a bad grade, and the teacher not only put an F on there but said that my son got 0.0016% on the test, I would not be a proud father. However, somehow these members walk around like they have discovered fire with this plan to build such a small number of houses.

It is even worse. To even come up with some of their plan, they had to take from the Conservative leader's plan. With grocery affordability, again, the best thing they could do is cut the carbon tax, which they repeatedly vote against. We know that this would bring the most relief. They also decided they are going to bring in some Competition Act changes, which they also stole from a Conservative member of Parliament's private member's bill. When a government is completely out of ideas, affordability has gone off the scale and Canadians are deeply hurting, what does the government, the brain trust and all of the political advisers they have come up with? Well, they just take what the Conservatives said they were going to do.

They have only taken some of it. What we have here is a plan that is not going to do anything to address the affordability crisis that is going on across the country, and there is a real consequence. I spoke about this in question period. For example, there is Paula in B.C., 71, who is retired. She is now saying that she might have to move out of her house because the landlord is going to sell it. She is also facing a 75% increase in rent as a result of that. That is their record. They have not provided solutions quickly or ones that are going to address the concerns of Canadians.

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

Madam Speaker, I am very fascinated when I hear Conservatives talk about affordability. I think of Doug Ford, Mr. X, the $8-billion scheme and the trip they took down to Vegas. They do not remember it, but they were all at the spa at the same time.

I would like to ask my hon. colleague about a meeting that was held on June 25, when four Conservatives were flown over to London, apparently paid for by my cousin Dan McTeague, which I find kind of surprising. The total cost of the meal was $4,690 Canadian. They drank one bottle of wine for $818, a second bottle for $265 and a third bottle for $719, and they topped it off with a bottle of champagne for $1,791.

I do not know a single Canadian who has ever drank that wealthily, yet the Conservatives were guzzling it back. Who paid for this trip and why were they there?

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Madam Speaker, when members cannot debate the ideas that are put forward, members go to where that member went.

I know the member is new, but there is a difference between the provincial government, which he referenced, and the federal government and federal Parliament, which we are actually sitting in right now. The member might want to take some time to read up on the functions of a member of Parliament.

However, I am glad he brought up sponsored travel, because the member took a trip to Germany, and his total expenses were $10,489.60. This was in 2022, and it does not stop there. In 2020, at the height of the pandemic, he spent 4,300 dollars' worth of sponsored travel to Washington, D.C.

Let us get out the dictionary and look up “hypocrisy”.

[The Assistant Deputy Speaker, Carol Hughes]

I want to remind members that when they ask questions or give answers, they need to make sure they do not interrupt others.

Questions and comments, the hon. member for Red Deer—Lacombe.