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

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I am going to give it to the hon. member. She did something that is quite unique in this place. She brought a lot of us together tonight in agreement on, maybe, the ridiculousness of the speech. However, I really want the member to continue to explain to me what the “church of climate socialism” means.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I am a Christian. I only hear the proselytizing from the other parties, so I have not joined that and I have not attended one of their religious meetings. I think this time it is going to be held in the United Arab Emirates, or perhaps it is going on right now. Perhaps they will tell one of the crowd of people who have been dispatched from Canada to tell us about it when they come back and explain that particular curriculum.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Mr. Speaker, honestly, if I did not work here, I would pay money to just hear stuff like that every day of the week.

In all seriousness, we have heard a couple of references this evening and today about plagiarism. Political plagiarism reigns supreme on the other side of the House. The Leader of the Opposition continues to steal political themes from former president Trump. He has adopted Mike Harris's “common sense revolution” tag. If the Leader of the Opposition has any original ideas when it comes to housing or the bill that is in front of us, when can we expect to hear them in the House?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, that is misinformation, disinformation and malinformation. Call up the Kremlin and have them bring their spy back over there. The next thing we know, we are going to be watching an episode of what the member of Parliament has been doing on Spy Ops. We will have to tune into Netflix if it is not censored yet.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Mr. Speaker, I was wondering, to wind up, if the member had anything to add to her remarks.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I can say that Canadians, especially the ones I have been talking to across the country, know they are being gaslit and are tired of it. Not only that, they are tired of the carbon tax being applied to the gaslighting fuel the Liberals are gaslighting them with.

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

Mr. Speaker, it is disappointing to see that the House will have to once again sit until midnight to discuss this bill. Why? Because this government chose to impose a super closure motion. We think that this approach, the muzzling of parliamentarians, makes a mockery of democracy. Everyone here was elected by the people in our ridings, and this government should give more weight to our voices. This just shows how much respect the Liberals have for our democratic institutions.

An even more serious problem with this super closure motion is the short period of time allocated to study the bill in committee. Only two evenings are allocated, and that is it. Even though my party supports the principle of the bill, we think it is essential to study it in depth in committee. However, this super closure motion forces us to skip over the study in committee. It would therefore not be surprising if there are still problems with the bill after it is studied in committee, and that is really disappointing.

Let me give an example. The first part of the bill exempts rental property construction from the GST. It applies as of September 14. If the bill becomes law, construction projects undertaken on or after September 14 will be able to benefit from the measure. However, the bill does not say what constitutes the start of the project. Is it when the first shovel hits the ground? Is it when the first payment is made for the plans? Is it when the land is purchased? If the building has a dual purpose, what constitutes the beginning? We have no idea, because the bill does not define these concepts.

Let us use a concrete example to illustrate the uncertainty this creates for businesses. A company is planning to build a rental property. The ground floor will be occupied by commercial premises, so not part of the project, but all the upper floors will be used for rental housing. On September 14, work had not yet started on any of the rental housing floors, but work had begun on the ground floor. I repeat, the ground floor will be used for commercial purposes, so it is not a part of the rental project. The company does not know whether it will be entitled to benefit from the measure for the upper floors because of the date and the lack of definition in the bill. We also know that with skyrocketing construction costs, high interest rates and a shortage of skilled labour, developing a housing project is complex, and not having clear information from the government about its bill does nothing to help the company in its current choices. The fog caused by this bill, which was drafted too quickly, is creating uncertainty for businesses.

Will we be able to clarify the situation in committee in just two evenings? There are no guarantees. We will work on it, but I would like to remind the House that it would have been really important not to shut down the committee's work in this way.

As members know, Bill C‑56 has two parts. The first part provides a GST rebate to the builder of a rental housing building. The rebate will be given during the sale or pending sale if the builder becomes an owner.

The rebate does not apply when the buyer is already totally exempt, as in the case of a government agency or a municipality, or partially exempt, as in the case of a not‑for‑profit organization or a housing co‑operative. Bill C‑56 will have no impact on the cost of social or community housing projects. It only pertains to private housing.

In practice, the rental housing builder will bill the GST to the government instead of to the buyer at the time of sale. To qualify for the rebate, the building will have had to have been under construction between September 14, 2023, and December 31, 2030, and the project will have to be completed before December 31, 2035.

However, the bill does not include any details on the type of building or housing nor does it specify any affordability requirements to qualify for the rebate. Instead, the bill gives the government the power to clarify these issues through regulations. We are seeing the government gloss over its bills by giving too much power to the minister, who will be able to complete the bill with his own regulations once it has been implemented. That is not an approach that we appreciate.

It would be hard to impose affordability criteria on builders because they do not own buildings once they are built. However, it is possible to make the buyer pay the GST after the fact if the units are rented at exorbitant prices. These are the kinds of amendments and clarifications the committee should look at, but will it have time?

I would also point out that, in our view, it would have been possible to do more to promote the construction of housing, particularly social housing, by allocating the same amount, but implementing other measures. Obviously, we are debating what the government is proposing, and that is what we will be voting on, but we will continue to make suggestions, just in case it decides to listen.

The second part of the bill makes three amendments to the Competition Act.

The first amendment gives the commissioner of competition real power. Right now, when the Competition Bureau examines the competitive environment of a given sector, it cannot compel anyone to testify or order the production of documents. It will be able to do so under Bill C-56. The Bloc Québécois has been calling for that change for 20-odd years.

The second amendment broadens the scope of anti-competitive practices prohibited by the act. Right now, the act prohibits agreements between competitors to remove a player from the market. With this bill, it will also be prohibited to reach an agreement with someone who is not a competitor in order to reduce competition. Let me give an example. When a grocery store rents a space in a mall, it is standard practice for the contract to contain clauses prohibiting the landlord from renting a space to another grocery store. This type of practice, which limits competition, will now be prohibited under Bill C-56. We applaud that measure.

The third amendment will make mergers and acquisitions more difficult. Currently, when a company wants to buy a competitor, the Competition Act states that the Competition Bureau will allow it if it can be demonstrated that the takeover will result in efficiency gains, even if the merger shrinks competition. This provision, which favours concentration and is unique in the industrialized world, is repealed in Bill C-56. We have also been calling for this change for a long time, and the member for Terrebonne has been particularly keen to see it.

We strongly support the principle of this second part and even feel it is long overdue. We have been asking for these changes for years, decades even.

We understand that, thanks to the government's super closure motion, Bill C-56 is going to be amended. Government Business No. 30 authorizes the Standing Committee on Finance to broaden the scope of the bill to make three amendments.

The first change is an increase in fines. It is taken directly from Bill C-352, which was introduced by the leader of the NDP and amends the Competition Act. Many of its provisions would become obsolete because of Bill C‑56. The other two changes have to do with abuse of dominance and investigating powers when the Competition Bureau conducts a market study. Subject to the wording of the amendments to be submitted in committee, these changes have no real effect. They were probably added to the motion to please the party that is supporting the closure motion, but the changes will have no real effect.

Let us come back to the first change, which is to “increase the maximum fixed penalty amounts for abuse of dominance to $25 million in the first instance, and $35 million for subsequent orders, for situations where this amount is higher than three times the value of the benefit derived (or the alternative variable maximum)”. As I was saying, that is taken from Bill C‑352.

Currently, in addition to imprisonment for a term not exceeding 14 years for executives who commit an offence under the Act, the bureau and the tribunal can impose a maximum fine of $5 million on the offending company. The motion proposes increasing the maximum fine to $25 million, and to $35 million for repeat offenders. In the case of a large company, the maximum penalty could be even higher, up to three times the value of the benefit derived from the practice.

We know that the NDP bill went even further and specified the following: “if that amount cannot be reasonably determined, 10% of the person's annual worldwide gross revenues”. Clearly, the government was not prepared to go that far. It is a good change. The maximum fine of $5 million could be seen as the cost of doing business. The revised amounts are designed to have a real deterrent effect. That makes the Canadian legislation comparable to the U.S. and European laws.

The second amendment is “allow the Competition Bureau to conduct market study inquiries if it is either directed by the Minister responsible for the Act or recommended by the Commissioner of Competition, and require consultation between the two officials prior to the study being commenced”. The Competition Bureau has significant power. It can compel witnesses to appear, demand documents and request searches if necessary. However, these powers are available to the bureau only when it is investigating a clear infringement following a formal disclosure. The investigation then becomes quasi-criminal.

However, when the bureau is conducting a study to determine whether competition is working properly in a given field or market, it has no such powers. For example, in its report on the state of competition in the grocery sector, published in June 2023, the bureau noted that the grocery chains did not really co-operate with its study. They refused to hand over the documents it had requested and refused to answer some of its questions. Bill C-56 solves that problem and gives the Competition Bureau investigative powers when it is conducting a market study.

The NDP's Bill C-352 did basically the same thing. Government Business No. 30 proposes a technical amendment to the manner in which the bureau can initiate a market study, but it does not really do much to change the current practice. This aspect was likely only added to the motion to please the NDP, but it really does not do anything.

It is the same thing for the third amendment, which proposes to “revise the legal test for abuse of a dominant position prohibition order to be sufficiently met if the Tribunal finds that a dominant player has engaged in either a practice of anti-competitive acts or conduct other than superior competitive performance that had, is having or is likely to have the effect of preventing or lessening competition substantially in a relevant market”.

Currently, a company that monopolizes a significant share of the market cannot take advantage of its dominant position to limit competition, for example, by preventing a supplier from working with a competitor. The existing act prohibits several of these kinds of practices, which effectively limit competition, prevent it from working properly or make it virtually impossible for a new player to enter the market. On the other hand, there is nothing stopping a company from taking advantage of a lack of competition to sell products at excessive prices. If, for example, a grocer enjoys a monopoly in a given region, there is nothing to stop that grocer from taking advantage of the monopoly to gouge consumers by charging exorbitant prices.

Bill C‑352 addressed this loophole. A whole range of anti-competitive practices were already prohibited, and it added a new one: “directly or indirectly imposing excessive and unfair selling prices”. It was a good measure, but clearly the government did not want to move in that direction. To please the NDP and hide the fact that it has given up on defending consumers against the major players, the government's motion adds a procedural amendment to Bill C‑56 to give the tribunal the power to prevent an anti-competitive practice that the current law already prohibits anyway. Again, it is nothing but hot air.

The day before yesterday, the Minister of Finance tabled the fall economic statement. As we all know, an economic statement is not quite as big a deal as a budget. It usually includes measures the government intends to take to deal with emergencies that have arisen since the budget was tabled.

There are emergencies aplenty, including the housing crisis, homelessness, the media, the rising cost of living, the small business emergency account deadline, seniors' buying power and scandalous oil industry subsidies, not to mention EI reform, the plight of seasonal forestry workers following the summer's forest fires, support for culture, support for the market garden and horticulture sectors following the summer's floods, and the funding that was promised for school breakfasts but has not yet been delivered, to name but a few.

However, the only emergency mentioned in the economic statement has to do with housing. Ottawa does need to do a lot more for housing, especially social housing. Unfortunately, the government's response is nothing more than what has already been announced in Bill C‑56. In fact, the rest will not be delivered until after the next election, and only if the Liberals are re-elected. Responding to the urgency of the housing crisis with election promises that are two years or more away is simply unacceptable, especially when we know that once the money is available, it takes two to three years before it is actually flows. It is like the $900 million that was finally announced for Quebec this fall, but that had been budgeted two years earlier.

We in the Bloc Québécois had proposed an acquisition fund for non-profit organizations, as well as an interest-free or very low-interest loan program, to stimulate the construction of affordable social rental housing, while waiting for a comprehensive policy in the next budget.

Still on the subject of housing, I would like to point out that the minister brought forward a good measure concerning Airbnbs, which will have to comply with municipal rules, or else the people and businesses that manage them will no longer have access to federal tax deductions for their operations. It remains to be seen whether the Canada Revenue Agency will be able to properly apply this new constraint.

One not so good measure is the creation of a new department that specializes in interference: the department of housing, infrastructure and communities. The purpose of that department is to impose its conditions on Quebec, the provinces and the municipalities. If they do not abide by the interference, Ottawa will cut their transfers. The Liberals come here to steal the only bill that the Conservatives introduced, their plan to build more housing, by threatening the provinces and municipalities with cutting their infrastructure funding. I should note that it was the Conservative leader himself who introduced Bill C‑356 in the House.

With this bill, Ottawa would impose an obligation to increase housing starts by 15% compared to the previous year on all municipalities where the cost of housing is high, and that list is growing longer and longer. If the housing starts in municipalities do not increase as required by Ottawa, the Conservative leader would cut their gas tax and public transit transfers by by 1% for each percentage point shortfall under the target that he unilaterally set.

For example, housing starts in Quebec dropped by 60% this year rather than increasing by 15%, largely because of rising interest rates. If the Conservatives' bill were already in force, this would mean a roughly 75% reduction in transfer payments to the Quebec government. This is a really dangerous and unfair bill that centralizes power in Ottawa. The fact that the Minister of Finance is making use of the principle of that bill is a major offensive action in terms of centralization of power. We will have detailed numbers shortly.

I would like to say a few more words about the new department of housing, infrastructure and communities. This announcement essentially creates a federal department of municipal affairs. Since municipal affairs fall under provincial jurisdiction, this is nothing less than a department of interference, which is threatening to cut transfers, exactly as the Conservatives are hoping for and proposing in their bill.

Here are a few more details about this new department. It is worth noting that Trudeau senior's government tried to do much the same thing. In 1971, it created the Ministry of State for Urban Affairs. A Library of Parliament research document states that, “[g]iven the inescapable constitutional limitations, the ministry had no program responsibilities”. Faced with a lack of co-operation from the provinces, this attempt from Trudeau senior's government to interfere in municipal affairs ended in failure. The research document also states that “[i]n view of the Ministry's lack of credibility and the government's desire to cut expenditures, the [Ministry of State for Urban Affairs] was abolished on 31 March 1979”.

In the coming years, we will see whether Quebec and the provinces will once again be capable of defending their jurisdiction against this new department. This is the same story a generation later, so I would like to quote a philosopher: “All great world-historic facts and personages appear, so to speak, twice...the first time as tragedy, the second time as farce”. I believe that is what we are witnessing now.

In closing, let me reiterate that the Bloc Québécois will vote in favour of Bill C‑56 because it contains a few good measures and nothing that is downright harmful. However, Bill C‑56 is but a drop in an ocean of need. On housing, there is no indication that the bill will help lower the cost of rent. If nothing is done to correct this problem, we are headed for a major national tragedy. We need three times more rental housing in new construction to stop the housing crisis from getting worse. If Bill C‑56 did even a little to increase the proportion of rental units in new construction developments, that would be something, but we are light years away from meeting those needs.

The changes to the Competition Act are good, and the Bloc Québécois wholeheartedly supports them. Still, the government's claim that these changes will help lower grocery bills seems like misrepresentation. Removing from the act the section that called for mergers and acquisitions to be allowed if the company could demonstrate efficiencies is a good thing. This section of the Competition Act encourages concentration, which often leads to higher prices.

Since 1996, the vast majority of grocery chains have disappeared and been bought up by competitors. I am talking about companies like Steinberg, A&P and Provigo. IGA was bought by Sobey's, and Adonis by Metro. The same is true in Canada. Think of Woodward's, Commisso's, Safeway, Whole Foods, T&T, Longo's, Farm Boy and so on. Of the 13 chains we used to have, now there are only three, or five if we include Costco and Walmart. They control 80% of the market. It is an oligopoly.

While Bill C‑56 proposes some good measures, it is inconceivable that this is the government's only response to skyrocketing housing and food prices. When it comes to housing, we need to review and improve the failed Canada housing strategy.

Regarding competition, we need to review the concept of abuse of dominance to prevent the big players from taking advantage of their disproportionate share of the market to increase prices will, for lack of competition, or to abuse farmers and processors, whom they are holding hostage. These two things need to be done, whether or not Bill C‑56 is passed.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Mr. Speaker, I always enjoy the speeches from the member from the Bloc. I always learn a lot and I really appreciate the research that is done.

Just in the closing remarks, the member talked about the oligopoly of the grocery chains in Canada. Really, only three families take so much profit away from Canadians and leave Canadians hungry.

I wonder if the member would not mind sharing whether they would support the NDP's ask for an excess profits tax on big grocery chains.

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

Mr. Speaker, I thank my hon. colleague for her kind words. I feel the same way about her. It is always a pleasure to listen to her speeches, for which she does a lot of research.

I want to specify that, when it comes to the oligopoly in the food sector, passing Bill C‑56 will prevent the situation from getting worse, but it will not bring back the competition there used to be.

Taxing the excess profits of giants in these situations may be very useful, and we are in favour in principle, as we have said often. Obviously, this needs to be done scrupulously to respect the rights of these companies. When it is conclusively established that they have excess profits, we have to be able to tax them.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, when looking at this legislation and looking at the title, we know that here in Canada, inflation is still high and has been high for a long time and that inflation is the cause of high interest rates, which is then causing high mortgage payments.

When we look at the title of this particular legislation, one would think that it would actually, truly be affecting affordability for Canadians, which is the cost of everything that they are buying and then also their mortgage costs.

I am wondering if the member can speak to whether this legislation will actually be affecting inflation, the cause of inflation and also the cause of interest rates.

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

Mr. Speaker, I thank the hon. colleague for her very deep, content-rich question.

As I said, Bill C‑56 has some good measures for fighting inflation, but they are just a drop in the bucket. They are inconsequential.

Will eliminating the GST on the construction of rental housing lower the price of homes and apartments? The answer is no, far from it. Even the government is unable to tell us how much it expects and by how much the rents could go down. If it has any research or models, it is keeping them well hidden and we cannot get any access to them. It is a principled position. It is limited.

We know that improving the Competition Act will help lower prices, but we cannot turn back time. It will help stop or slow down the situation, nothing more. Many other measures need to be taken. Fighting inflation is complex. If the government's response to inflation is just that, then it is lacking. It is a drop in the bucket.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, I would like to thank the member for taking this debate seriously, unlike the previous MP, who chose to use her time to entertain people and possibly create some kind of platform for future entertainment.

Knowing that Canada's three largest grocers, Loblaws, Sobeys and Metro, made more than $3.6 billion in combined profits in 2022, it is good to see that the Liberals are finally talking to CEOs and asking them to stabilize prices, although just nicely.

I hear from this member that we have to be more serious about how to make better efforts to amend the Competition Act and bring more grocery competition into Canada.

I wonder if the member can share his thoughts on how we could make sure that we can bring grocery prices down.

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

Mr. Speaker, that is a very good question. Bill C‑56 amends the Competition Act. This should have been done at least 20 years ago. If we look at what was happening in 1986, we see that there were 13 major players. As my colleague said, now there are only three. That number goes up to five if we include the two big American retailers that sell groceries, Walmart and Costco. These five companies form an oligopoly that controls 80% of the market. The Governor of the Bank of Canada told the Standing Committee on Finance that the problem is that there is no competition in that market because they are able to pass on 100% of the increase in input costs to consumers without reducing their profits. The competition is not working.

Bill C‑56, when implemented, will prevent further issues in the long run, but it will not automatically restore a competitive market ecosystem in the food sector. Major challenges will remain. There is still a lot to do. Reducing food inflation requires many micro-interventions involving farmers, primary processors, and so on. It is a complex challenge, but there is certainly room for intervention in terms of large retailers that constitute an oligopoly. Bill C‑56 is a step in the right direction, but it is not the only solution.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Mr. Speaker, I thank my colleague, who is always interesting, always brilliant, always thorough and always has relevant things to say.

As we have heard, the GST rebate will not solve the entire housing crisis. Housing is a complex issue. At the current rate of construction, we know that we will never be able to build the amount of housing we need. We are talking about 3.5 million units in Canada and 1.1 million in Quebec. We have never built more than 70,000 units. We will never get there.

We also need to tackle the financialization of housing. That is extremely important. We proposed a measure, and I would like my colleague to talk about it. It is an acquisition fund. We know that we are losing affordable housing. In fact, we are losing more than we are creating right now, which is rather interesting, because these large groups and real estate funds, which are often international, are buying up the affordable housing stock right now. It is a real tragedy.

What we need is an acquisition fund. The government needs to make a fund available to not-for-profit organizations to be able to buy housing that is still affordable—there are still some out there—and remove them from the market to guarantee affordability. I would like my colleague to talk a bit about this measure and tell us how this might greatly improve things in the market.

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

Mr. Speaker, I want to first point out that my hon. colleague did a tour of Quebec to talk about housing. He stopped in Joliette. We had a full house. Everything he is contributing is wonderful and informative.

My colleague spoke about the financialization of housing and how to put an end to that. For example, that is what we are seeing in Montreal, and it is mainly the Bronfman family's company that is doing it. It is hard to get any closer to the Liberal Party than that. These people are taking affordable housing off the market, and not enough housing is being built to counter that.

What we suggested is to offer an acquisition fund interest rate, which is something that the Union des municipalités du Québec has been calling for. This would involve implementing a measure to fund the purchase of these buildings at an interest rate that is lower than the market rate, to get them out of the financialization spiral that is causing people to be evicted and rents to go up.

The current market rate is very high. However, with the borrowing authority of the government or the CMHC, we could simply pass the better rate on or even subsidize it to make this acquisition possible. Let me give an example. The government borrows at 3.6%. Suppose we want to give a non-profit organization an interest rate of 2% for one billion housing units that we want to get out of the financialization trap and that we are going to make truly affordable in the long term. That would cost $16 million. The difference between 3.6% and 2% is almost nothing for the government.

By using its leverage, the non-profit would have an advantage. That would prevent financialization, which is what happens when big conglomerates like the Bronfmans get their hands on housing that is affordable and make it so that it is no longer affordable. This is one possible solution we are proposing to the government.