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.

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

I'm subbing in for a colleague.

We live in a country where oligopolies exist, especially in the protected markets in which the telecom companies operate.

If I can use the analogy.... Look at the grocery sector. For a long time, a lot of the grocery participants said these leases for where you could set up shop didn't exist. All of a sudden, we brought in legislation—I think it was Bill C-56—and now you have entities saying, “Jeez, these leases may have existed to prevent competitors from entering the grocery market.” Now we have a voluntary code of conduct in the grocery sector, which I hope becomes a legal code of conduct, because there is too much corporate concentration.

Please forgive me if I don't.... The other analogy is that you folks are like the Energizer bunny because you're like the gift that keeps on giving, in a very negative sense, to your customers. Regrettably, we have to say this. Canadians are frustrated when they see their bills increasing. I understand it in some sectors. We have seen reductions in certain services, like wireless and so forth. Have the reductions happened quickly enough? I would say no. Do we have a protected market? I would say yes. I can probably glean over all your financial statements, your P and L and your cash flow statements and see the billions of dollars in share repurchases, dividend stock buybacks and so forth.

Frankly, I love competition and I love wealth creation, but I hate crony capitalism and I hate crony concentration in markets. This is independent of political allegiance or alignment. We really need to look at this in this country and where we're going. Canadians work hard for the money they make and they want to see the value for it. We're here to represent our residents and Canadians. We're not here to represent anyone else's interests. We're here to promote competition and get rid of the crony...especially competition within competitive markets.

Today, I found out that one of your entities is selling your assets to one of the PE shops out of New York City. I'm going to look at that when I finish up here and read more about it. It creates some worries.

On the wireless side, how competitive or uncompetitive is our market versus other jurisdictions? When you travel abroad, it seems much cheaper there than it is here at home.

I'll go to Bell first, and then to Rogers.

[Anthony Durocher]

Bill C‑59received royal assent in June, I believe, and almost all the changes were implemented, save a few provisions that will come into effect one year later. It's similar to Bill C‑56, which obtained royal assent in December 2023 and, if I'm not mistaken, some changes will come into effect one year later, so in December 2024.

[Ryan Turnbull, Liberal, Whitby, ON]

Just really quickly, I think this is an attempt to fix and back out. We removed the efficiencies defence in Bill C-56. I think the original clause that was proposed by the NDP threatened to reintroduce that back in. Perhaps that wasn't intended, and I think this tries to fix that. I think it's just simpler to vote this down because we already did the work on this, and let Bill C-56 and Bill C-59 stand.

[Ryan Turnbull, Liberal, Whitby, ON]

Very quickly, I believe that this is also redundant following the passage of Bill C-56. This would result in inconsistencies if it were to pass.

Thank you.

[Samir Chhabra, Director General, Marketplace Framework Policy Branch, Department of Industry]

Sure. Thank you for the question.

There are a couple of issues that we've identified with NDP-1. The first, in our view, is that the amendment fails to repeal the entirety of the redundant provisions that would be created against Bill C-56, which would leave incongruencies and duplication in this section. My understanding is that particularly subsection 79(4) remains unaddressed by NDP-1.

On the second point, you're quite correct that this amendment would only increase the backup calculation. The primary calculation for a maximum amount of an administrative monetary penalty would continue to be driven off the benefit derived by the action. This is simply a backup calculation in the rare instances when it's not possible to calculate the benefit derived by the party.

The current formulation was adopted by the House in 2022. The backup calculation has not yet been invoked at any time, and no issues have yet arisen that would suggest that a change to the law this soon after is necessary.

On two issues, I think there's some consideration for the committee. The first is the lack of complete amendment considerations against the bill vis-à-vis 79(4) being outstanding. The second is whether it's important to move forward with amending this backup calculation, at this time, given the lack of evidence.

[Ryan Turnbull, Liberal, Whitby, ON]

My understanding is that this amendment would increase the backup calculation for a maximum amount of an administrative monetary penalty in the rare situation where the benefit derived from an abuse of conduct cannot be determined. It's really a backup calculation. It's not actually....

Maybe I'll just quickly ask Mr. Chhabra or any of the team if they could quickly comment on how they see this one interacting with the changes that have already been made in Bill C-56 and Bill C-59.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Specifically, clause 6 increases penalties from 3% of worldwide revenue to 10%. Other aspects of this clause are deleted since the need to prove anti-competitive efforts to find abuse of dominance have already been dealt with through the NDP amendments in Bill C-56. This would align the penalties that we have proposed to deal with conspiracy, and we would hope the committee moves on this. I think it's one of the ones for which we had a lot of testimony that supported this part of adding the competition strength that's necessary.

[Ryan Turnbull, Liberal, Whitby, ON]

I'll just make a very quick comment here. This language is adopted verbatim, exactly as is in Bill C-56, so I believe this is clearly redundant. We'll be voting against.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

This is the bill of Mr. Jagmeet Singh. One of the things that took place—just for the public to know—is that a couple of competition bills came forward. Bill C-56, as the parliamentary secretary noted, already took care of this issue. I have a number of quotes from different witnesses for this that call for this clause to be removed because it's redundant with other legislation.

Thank you very much for that.

[Ryan Turnbull, Liberal, Whitby, ON]

This clause proposes to give market study power to the Competition Bureau. This was already done in Bill C-56. This version of the wording lacks the necessary and widely supported checks and balances that were built into Bill C-56, so Liberal members will be voting against this clause.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you.

My last question is around is another point of debate that is left over, I think.

In previous rounds and consultations that were done after Bill C-19 was passed, in the lead-up to Bill C-56 and Bill C-59, and those rounds of changes there were lots of conversations about what are called structural presumptions and the idea that within a merger review, we're looking at a number of different factors.

I think a lot of what we heard in the consultation was that market share could be an indicator of a substantial lessening of competition, but is not sufficient in itself to determine whether a merger should be blocked or not.

Bill C-352, the private member's bill that we're discussing, reinserts that into the bill. We repealed that, on the one hand, in Bill C-59. We repealed the section of the Competition Act that expressly prohibits the tribunal from concluding that a merger is likely to harm competition “solely on the basis of evidence of concentration or market share.”

The reason is that most of the experts say that market share isn't sufficient in itself because there are contextual factors. There are times where market share or concentration may increase slightly with a merger, but that doesn't necessarily harm competition in every case. The point is that the tribunal can still consider any factors. It's the same with the efficiencies defence. The tribunal can still consider efficiencies within its merger review process and it can still consider market share and concentration, but we don't want to reinsert that as a structural presumption that is the only factor that determines their decisions.

Mr. Charlebois, maybe I could ask you if you concur with that finding as well.

Should we stick with the things we heard in the consultation, which led to the change that Bill C-59 introduced or should we go backwards and reintroduce market share back into it?

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks, Chair.

Just following up on my last line of questioning, I'd like to focus my remaining time on two other lines of questions. Two other pieces of Bill C-352, which is the private member's bill we're talking about, have not been addressed.

What I think we heard from witnesses is that about 98% or 99% of all the things that are in Mr. Singh's private member's bill have already been dealt with in Bill C-19, Bill C-56 and Bill C-59, which have made successive rounds of changes—I would call it a comprehensive package of amendments—over time, in three different bills, to our competition laws. I could go through all those changes, but we would run out of time very quickly.

I want to focus on two points.

One is that the fines that are being introduced in Bill C-352 put an upper limit on the fines.

We heard from the lawyers who were here earlier in the week that, in fact, allowing the discretion of the courts to basically determine a maximum fine is better—to have harsher penalties—than actually including a maximum upper limit to the fines people could be ordered to pay.

Mr. Charlebois, would you agree with the expertise of the lawyers that we shouldn't be reintroducing an upper limit?

Most legal proceedings that happen don't end up starting at a maximum penalty and over time, the courts could decide, if there's repeated behaviour, to surpass any upper limit we might conceive of here today.

What would you say about that, Mr. Charlebois?

[Dr. Sylvain Charlebois]

I would say yes. I believe that the food distribution landscape in Canada would be very different today if that had happened, I would say, before 1998, when Provigo was acquired by Loblaws; and in 2005, I believe, when A&P was acquired by Metro; and in 2013 when Sobeys acquired Safeway.

Those three specific acquisitions wouldn't have happened if Bill C-56 had been approved or ratified before 1998.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you.

I think that's a good sign, and it's good to hear that both witnesses today agree with that change.

One other notable change in Bill C-56, a government bill, is the repeal of the efficiencies defence, which, under merger review for a long time, was used as a way to justify mergers that would otherwise be considered to substantially lessen competition.

Would you agree that repealing the efficiencies defence, which is a tool that was used to justify mergers that often increased the concentration in markets, is a good thing for increasing competition?

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you for that.

Mr. Sylvain Charlebois, I'm going to ask you a similar question about Bill C-56. The example that I have given is a recent report where the Federal Court judge has upheld in a way the new powers that Parliament has given the Competition Bureau.

We know, or at least the Competition Bureau suspects, that there are anti-competitive practices within those property controls that are embedded and that, in some cases, Loblaw and other companies have substantive stakes in the REITs that control the plazas and shopping centres.

Essentially there are covenants and requirements within there. There may be ways that they are blocking—or it's embedded in those contracts that they are blocking—competitors from operating within those same plazas.

Can you speak to the fact that the Competition Bureau now has this new power? Do you see this as a positive sign that an investigation can go deeper into what's really going on in those collaborations that may be anti-competitive?