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.

[Mark Schaan]

Thank you, Mr. Chair, for the question.

The question is correct in that we've made a number of important changes to the Competition Act over a series of legislative efforts, the first being in the Budget Implementation Act of the last budget. There was a set of further measures in Bill C-56, the groceries and affordability act.

That first set of changes were essentially broad, consensus-based measures. The groceries and affordability part targeted a number of key pieces. One was competitor collaborations, or the degree to which the bureau would have the capacity to look at collaborations in the marketplace. Notably, it's not necessarily those among competitors. It's also those in the value chain. It ended the efficiencies defence—the reliance on the presumption of efficiencies as the basis for a uncompetitive merger, or a merger that is significantly less in competition—and introduced a market study power with the capacity to compel information on the part of the commissioner.

This proposition now adds to that in a number of ways.

One is that it allows the commissioner to better use some of those other tools in mergers. Killer acquisitions is one, which is the capacity to have a longer look-back period, in order to ensure there's time to look at transactions that might be very compelling, particularly in spaces such as digital or innovation companies. It might be the acquisition by a very large player of a very small player, one that normally wouldn't be a risk detection but that turns out to be very important for the structure of the business place.

Others include more mergers being notified and making a transaction irremediable, or essentially allowing for a transaction not to close until the merger has been considered by the bureau. A number of others include revamping the enforcement framework, or incentivizing private enforcement, which gives more players within the marketplace access to the tribunal to take on...and to competitive effects, noting that the bureau has only certain capacities. Sometimes a competitor might be best placed to understand the transaction and why it's significantly lessening competition.

We already talked about some of the greenwashing provisions and the ways in which there will be enhanced powers there. It's also clarifying that labour markets are relevant to a merger review, in terms of the degree to which a transaction is changing the skills basis, which might be impacting the worker composition. That is a factor that can be considered.

Then there are a few housekeeping changes.

In sum, I think you'll see that the measures between the first two legislative efforts and this last one build out a comprehensive framework that gives the commissioner not just the powers but also the scope to be able to look at the effects in the marketplace.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, Mr. Chair.

First, I want to thank everyone here today. I think often it takes a room where you see a lot of people who've done a lot of hard work to know that there are a heck of a lot of people working in our government doing really important work, so I just want to say a huge thanks to all of you. I know all of you won't get a chance to speak today, but I thank you for being here. Thanks for your hard work.

Since our competition team is here, I might as well ask a question of them. I know that we've been working really hard as a government to try to improve our competition within Canada, and I know there have been elements in Bill C-56 in addition to Bill C-59 around modernizing our competition regime.

If you could, maybe talk to how the measures in Bill C-59 build on those measures that we've introduced in Bill C-56, which was, I believe, our budget. Thank you.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

That’s a possibility, but we also gave the Competition Bureau new powers through Bill C‑56. It now has the power to demand information. That’s why the first study was incomplete. People could say “thanks, but no thanks” when they were asked for information. Today, the bureau is better equipped. Furthermore, we’ve invested $90 million to make sure that the bureau has the means to uphold the Competition Act, which will change things.

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

Thank you, Mr. Chair.

Mr. Champagne, I have only two and a half minutes, so I would ask you to keep your answers short, if possible.

I want to come back to the Competition Tribunal. You once again referred to the Rogers-Shaw merger. Basically, you are saying that you agree that more work needs to be done, despite the passage of Bill C-56, and that you are going to work on it.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you for your very relevant question.

The reform of the Competition Act is a three-pronged process, which began with the 2022 budget. Second, there was an update in Bill C-56 and, third, other measures are set out in Bill C-59. It has been said that this is the biggest reform in the past 40 years, since the Competition Act was passed. This law needed to be modernized. For example, under the old version of the act, witnesses could not be subpoenaed. When the committee and people saw that there was a study without—

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

Sorry to cut you off, but I don't have much time. Yes, we know each other, but not very well. My job is to ask you questions. That is what we are here for.

We are talking about competition. I listened carefully to the answers that you gave to questions from previous speakers. You said that this doesn't make any sense and that more competition is needed. We agree on that, and the Bloc Québécois supported Bill C-56. However, representatives from the Competition Bureau recently appeared before the committee and they told us that Bill C-56 is not enough. They explained that the bill is missing certain measures when it comes to proving that a merger will not harm competition, implementing better standards of repair and so on. Do we agree that more work needs to be done and that we need to avoid being negligent?

I really liked your document with the list of grocery store mergers and acquisitions. I don't want to be impolite, but this shows me that we have been negligent in this sector. How did all of these mergers and acquisitions get approved? When I spoke to the people from the Competition Bureau, they told me that the government should have stopped more of these from happening.

When it comes to another sector that falls under your department, the Competition Bureau representatives told me that the bureau advised against the Shaw-Rogers merger but that the Competition Tribunal went ahead and approved it anyway. The government is putting on a good show with the grocery sector by saying that it wants to take grocers to task and help people, but why then it is allowing similar negligence to happen in another sector at the same time? What is happening? Do changes need to be made to the Competition Tribunal?

[François-Philippe Champagne, Liberal, Minister of Innovation]

Mr. Chair, on that note, you know, we're all going to be..., but I want to thank colleagues who are here.

Colleagues from both sides of the House, thank you for being here. I think that this is a committee where we can have one of the most important discussions. We know that grocery prices and the cost of living are a day-to-day concern for Canadians.

I'm really very pleased to be here with colleagues whom I interact with on a daily basis.

Food affordability is a critical issue. It's facing all Canadians. That's why this committee is probably one of the most important in the work because of the work it's doing. Our government, as you've seen, is really committed to stabilizing food prices in Canada. You've seen over the last month and, I would say, the last year that we've been taking decisive action to do so, and we're starting to see results from that.

Last summer our government launched the grocery rebate, which delivered a payment to eligible Canadians, alongside the quarterly GST/HST credit payment. Then, last fall, our government held a series of meetings with the major players in the food supply chain, both grocers and suppliers, to encourage them to take appropriate measures to stabilize grocery prices in Canada. I was told that this was one of the first times that the CEOs of the five major grocery store chains met in Ottawa. On behalf of 40 million Canadians, I expressed our frustration and asked that they take meaningful action to stabilize grocery prices in Canada.

Indeed, in September of last year, I met with the leaders of Canada's five largest grocery chains to stress the government's expectation that they take action to stabilize food prices in Canada.

Then, in October, you will recall that I announced the tripling of our investment to support consumer advocacy organizations, from $1.6 million to $5 million for the next five years. That was really to create a consumer advocacy culture, I would say. You find it in some parts of the country but not everywhere. I would say that in Quebec that culture is very well ingrained. Monsieur Perron, I'm sure, will be able to talk about that. We need to do that nationally far more to make sure that consumers' interests are well represented.

By providing this additional funding, we are ensuring that consumer interest organizations have the support they need to advocate for consumers and address pressing issues like shrinkflation, which, as you know, Professor Charlebois addressed in this committee. Shrinkflation and dequaliflation are big issues facing consumers.

A few weeks later, in November of last year, we launched the food price data hub to improve the availability and accessibility of data on food prices. That's something we've heard from a number of constituents in the supply chain. You want to establish better leverage between different market participants, and access to information is key to that. The food price data hub provides Canadians with more detailed information on food prices and helps consumers make informed decisions about their food purchases.

As part of our efforts to stabilize grocery prices, we are taking into account the pivotal role that the provinces and territories play, and we understand the need for greater co-operation between Ottawa and our provincial and territorial counterparts. I know that you've had the opportunity to hear from many stakeholders in this sector.

That's why, in December 2023, my colleague, Minister MacAulay, and I met with our provincial and territorial counterparts to discuss the next steps in stabilizing food prices across the country. I want to recognize the work of those counterparts. There is a lot to do. For example, unit price is a measure that exists only in Quebec. What can we do to make that a national thing?

We spoke about several large initiatives during that important meeting. I was told that the last meeting took place around 2017. You see how important it is to hold these kinds of meetings. It is not very often that we have big meetings like this that bring together our provincial and territorial partners. I think that this is the right thing to do to work together.

As you're well aware, federal, provincial and territorial governments have been hard at work with industry partners on the grocery code of conduct. This is a substantial measure that will bring fairness, transparency and stability to our grocery sector and supply chain.

That being said, following three years of negotiations and missed deadlines, we are extremely disappointed that some supply chain partners, including two of the five major retailers, have still not signed on to the grocery code of conduct. That is why the government is currently having a hard look at all the options, including legislative options, to ensure fair and transparent practices in the grocery industry.

Let me be clear. There will be a grocery code of conduct in Canada, one way or the other. I think those who are listening—I'm sure that there are a few folks listening today—should take these words very seriously. We demand action. We judge the action taken, and then there are consequences.

You saw that when we amended the Competition Act. We are looking at all of the tools in the tool box to make sure that we have a code of conduct.

We also recognize that maintaining and enhancing healthy competition in the grocery sector is paramount to stabilizing food prices.

This is why our government introduced and passed Bill C-56, the Affordable Housing and Groceries Act. Among other things, this new law provides the Competition Bureau with subpoena powers to conduct effective and complete market studies. I would say, Mr. Chair, that this was demanded by most market actors. It was unthinkable that in 2024 our main enforcement agency would not have subpoena power, so we fixed that.

We also removed the so-called efficiencies defence to ensure that anti-competitive mergers can now be challenged. It gives the bureau more powers to challenge business practices by large, dominant companies that harm competition and drive up prices.

Mr. Chair, these new powers will not lie dormant. Just last month, I think it was in front of this committee that a representative of the Competition Bureau testified. I also sent a letter to the competition commissioner commending the work done by the bureau in its 2023 retail grocery study report. That report clearly identified important barriers to competition and made helpful recommendations to address this issue.

In that letter, I took the opportunity to express how disappointed I was to learn that the Competition Bureau's study did not benefit from the full co-operation of large grocers. I am hopeful that the new powers provided by Bill C-56 will be a useful tool for the Competition Bureau in countering potential abuses in the marketplace.

Additionally, we are committed to further enhancing competition in Canada through targeted reforms in Bill C-59, the fall economic statement implementation act of 2023. This comprehensive proposal is designed to encourage more competition in all markets, including in Canada's grocery sector.

I want to take this opportunity in front of colleagues in this committee to once again call on all parliamentarians to support this much-needed reform to support Canadian consumers. One concrete action that every member can take is to vote to make sure that we continue our reform of the Competition Act.

Among other things, the proposed measure will modernize the merger review regime. I would think that all colleagues would agree to that. It would strengthen the enforcement framework with respect to collaborations that harm competition. I could not imagine any member being against that. Also, it would broaden recourse to the Competition Tribunal by private parties, which we have heard about from witnesses.

Mr. Chair, beyond modernizing Canada's competition regime, we of course continue to encourage more choice for Canadian consumers. That's why we are engaging with international grocers that have played a key role in improving affordability in markets around the world. If you have questions, I'll be happy to report on that.

Mr. Chair, in conclusion, let me say this. When it comes to grocery prices in Canada, our government is taking decisive action. We are committed to stabilizing food prices across the country and we will continue to work with all levels of government to make sure Canadian consumers get the much-needed relief they deserve at the checkout counter.

I want to thank all the members of this committee. I know, Mr. Chair, that you sent a letter recently to ask for action. I think everyone on this committee has a role to play to make sure we work for Canadians.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Can I follow up in terms of guardrails?

If we look at the Shaw-Rogers deal and the Vidéotron takeaway of assets that happened and the guardrails in place if certain promises weren't met, what guardrails are in place right now or after the fact from Bill C-56 and Bill C-59?

[Anthony Durocher, Deputy Commissioner, Competition Promotion Branch, Competition Bureau Canada]

I think Bill C-56 and what's proposed in Bill C-59 are very important changes and very much welcome. Many of the changes are in fact entirely in line with recommendations the Competition Bureau had made to government in the context of consultation.

I would flag this: If we look at the merger regime in particular, merger is the first line of defence in protecting competition in the economy.

There are a couple of other areas where we believe this can be strengthened. One relates to the adoption of structural presumptions in the merger review process, while the other relates to the remedial standard when there is harm to competition. What needs to be fixed? These are issues we will continue to advocate for.

However, by and large, Bill C-56 and Bill C-59 have been very significant in moving Canada forward in having a robust competition regime.

[Jeanne Pratt]

Maybe I'll start and talk from the mergers perspective. I'm going to defer to my colleague to talk about the larger changes in the acts.

We are incredibly welcoming of the changes in Bill C-56 and Bill C-59. I do think that these are the first significant changes to our act since 1986. The merger provisions are affirmed. That is transformative. The repeal of the efficiencies exception, as well as the addition of being able to consider concentration under the merger provisions, is very different from a world where the tribunal explicitly could not do that, and adding that is a factor.

It is also very helpful when we're talking about sectors like telecommunications, which tend to have fairly stable oligopolistic market structures, that we have an explicit provision to deal with tacit and explicit coordination in section 93, the merger provisions, as well. We're very welcoming of all of those changes to the merger provisions.

Mr. Durocher can speak to the larger view of the other changes in the act.

[Jeanne Pratt]

It's really difficult to say what impact it would have had, because we did our entire investigation, all the litigation, under the existing framework, which included section 96.

What I can tell you, though, is that with Bill C‑56 and the end of the efficiencies exception in addition to the proposals in Bill C‑59, I do think there would have been a difference, particularly through Bill C‑59, since concentration levels will now be a factor that the tribunal can consider.

For example in the Rogers-Shaw case, we would have seen that the four largest firms would have held a market share of 95% collectively. The repeal of the provision that says the tribunal can't look at concentration as well as the addition of a factor that says that they can actually consider it, in addition to coordinated effects—a specific factor being added for that—definitely would have changed some of the analysis in the Rogers-Shaw trade talks.

[Jean-Denis Garon, Bloc, Mirabel, QC]

You've answered well. Maybe that explains why we'll have to discuss a subpoena later today. Thank you for the clarification.

I will now address the representatives of the Competition Bureau.

We are currently studying Bill C-56 in Parliament. The Canadian competition regime is quite special—it's not your fault, you have a mandate—in that it places a lot of emphasis on efficiency gains. Elsewhere in the world, people try to ascertain whether efficiencies affect the consumer in any way, shape or form. I'm thinking of consumer surplus, for example, but I won't go into the technical details.

If Bill C-56 had been in force, would the transaction between Rogers and Shaw have taken place in the same form, in your opinion?

Alleged Inadmissibility of Amendment to Motion, Government Business No. 34

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Mr. Speaker, I appreciate your accommodating the timing of this. I apologize to the members who are involved in debate, but because the matter is currently under consideration by the House, I think giving the Speaker as much time as possible to consider it would be appropriate.

I am rising to ask that you rule the amendment made to the motion, Government Business No. 34, out of order, since according to Bosc and Gagnon, at page 541, it introduces a new proposition which should properly be the subject of a separate substantive motion.

The main motion proposes two things in relation to Bill C-62. Part (a) would establish committee meetings on the subject matter of Bill C-62. It proposes one hour to hear from a minister and two hours to hear from other witnesses.

Part (b) deals specifically with the time and management for each stage of the bill. Part (b)(i) would order the consideration by the House of a second reading stage and provides for the number of the speakers, length of speeches, length of debate and deferral of the vote at second reading. It would also restrict the moving of dilatory motions to that of a minister of the Crown. Part b(ii) would deem that Bill C-62 be referred to a committee of the whole and be deemed reported back without amendments, and it would order the consideration of third reading on Thursday, February 15, 2024.

Nowhere does the motion deal with the substance or the text of Bill C-62; it is a programming motion dealing with process, not substance. While this can and has been done by unanimous consent, it cannot be done by way of an amendment. The consequence of an amendment to allow for the expansion of the scope of Bill C-62 and, at the same time, proposing to amend the text of Bill C-62, is that it would, if accepted, expand the scope of the motion.

The process to expand the scope of the bill outside of unanimous consent is to adopt a stand-alone motion after the proper notice and procedures were followed. Page 756 of Bosc and Gagnon describes that procedure as follows:

Once a bill has been referred to a committee, the House may instruct the committee by way of a motion authorizing what would otherwise be beyond its powers, such as...expanding or narrowing the scope or application of a bill. A committee that so wishes may also seek an instruction from the House.

Alternatively, a separate, stand-alone bill would suffice to introduce the concept of the subject material that is under the amendment for MAID. It is not in order to accomplish this by way of a simple amendment to a programming motion dealing with the management of House time on a government bill.

If you were to review the types of amendments to programming motions, and I am not talking about unanimous consent motions, they all deal with the management of House and committee time, altering the numbers of days, hours of meetings, witnesses, etc. As recently as December 4, 2023, the House disposed of an amendment that dealt with the minister's appearing as a witness and the deletion of parts of the bill dealing with time allocation. This was also the case for the programming motions for Bill C-56, Bill C-31 and Bill C-12.

Unless the main motion strays from the management of time and routine procedural issues and touches on the actual text of the bill, an amendment that attempts to amend the bill is out of order. For example, on May 9, 2023, the House adopted a programming motion for Bill C-21, the firearms act. Part (a) of the main motion then stated that:

it be an instruction to the Standing Committee on Public Safety and National Security, that during its consideration of the bill, the committee be granted the power to expand its scope, including that it applies to all proceedings that have taken place prior to the adoption of this order...

The motion went on at some length, instructing the committee to consider a number of amendments to the act. This in turn allowed the Conservative Party to propose an amendment to the programming motion and offer its own amendments to the bill itself, which addressed illegal guns used by criminals and street gangs and brought in measures to crack down on border smuggling and to stop the flow of illegal guns to criminals and gangs in Canada, to name just a few.

The point is that if the main motion does not address the text of the bill, an amendment cannot introduce the new proposition of amending the text of the bill to the programming motion, which should properly be the subject of a separate substantive motion.

[Anthony Durocher]

The efficiencies defences now no longer exist. When Bill C-56 became law, the efficiency defence was no longer there. It was repealed.

One problem—there are quite a few—with the efficiencies defence was that it allowed harmful mergers. Those were mergers for which we could prove that the merger was going to lessen competition, prices were going to go up and it would be harmful to consumers and the economy, but that defence, the way the jurisprudence evolved, would go through. Canada was very much an anomaly in terms of how we looked at it.

Going forward, there is certainly scope for mergers that can be pro-competitive, such as when two companies are bringing their resources together. That actually can be good for consumers because it can stimulate competition.

Every case is different as to the net effect and how they're going to use resources and how they can argue that it is actually good for competition and pro-competitive, but since the passage of Bill C-56, it is a new day for how efficiencies are viewed.

[Anthony Durocher]

Every company is different in how they interact with the Competition Bureau. Some are more forthcoming than others, and they all have different incentives at play.

What we've come to see is that it's important to have a tool that you can use as a recourse. In our enforcement work, we have always had the ability to issue subpoenas or go to court to get subpoenas. Sometimes you don't need to do that, because companies know that this is a possibility and so they are going to fully co-operate.

Obviously, it's going to change the nature of the catalyst for companies, because before Bill C-56, the fact of the matter was that for market studies, co-operation was voluntary and we did not have recourse. If they didn't want to co-operate fully, there was no recourse. That will change going forward, and it is certainly going to be a helpful tool for us.