Bill C-59

Fall Economic Statement Implementation Act, 2023

An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023

Part 1 implements certain measures in respect of the Income Tax Act and the Income Tax Regulations by
(a) limiting the deductibility of net interest and financing expenses by certain corporations and trusts, consistent with certain Organisation for Economic Co-operation and Development and the Group of Twenty Base Erosion and Profit Shifting project recommendations;
(b) implementing hybrid mismatch rules consistent with the Organisation for Economic Co-operation and Development and the Group of Twenty Base Erosion and Profit Shifting project recommendations regarding cross-border tax avoidance structures that exploit differences in the income tax laws of two or more countries to produce “deduction/non-inclusion mismatches”;
(c) allowing expenditures incurred in the exploration and development of all lithium to qualify as Canadian exploration expenses and Canadian development expenses;
(d) ensuring that only genuine intergenerational business transfers are excluded from the anti-surplus stripping rule in section 84.1 of the Income Tax Act ;
(e) denying the dividend received deduction for dividends received by Canadian financial institutions on certain shares that are held as mark-to-market property;
(f) increasing the rate of the rural supplement for Climate Action Incentive payments (CAIP) from 10% to 20% for the 2023 and subsequent taxation years as well as referencing the 2016 census data for the purposes of the CAIP rural supplement eligibility for the 2023 and 2024 taxation years;
(g) providing a refundable investment tax credit to qualifying businesses for eligible carbon capture, utilization and storage equipment;
(h) providing a refundable investment tax credit to qualifying businesses for eligible clean technology equipment;
(i) introducing, under certain circumstances, labour requirements in relation to the new refundable investment tax credits for eligible carbon capture, utilization and storage equipment as well as eligible clean technology equipment;
(j) removing the requirement that credit unions derive no more than 10% of their revenue from sources other than certain specified sources;
(k) permitting a qualifying family member to acquire rights as successor of a holder of a Registered Disability Savings Plan following the death of that plan’s last remaining holder who was also a qualifying family member;
(l) implementing consequential changes of a technical nature to facilitate the operation of the existing rules for First Home Savings Accounts;
(m) introducing a tax of 2% on the net value of equity repurchases by certain Canadian corporations, trusts and partnerships whose equity is listed on a designated stock exchange;
(n) exempting certain fees from the refundable tax applicable to contributions under retirement compensation arrangements;
(o) introducing a technical amendment to the provision that authorizes the sharing of taxpayer information for the purposes of the Canadian Dental Care Plan;
(p) implementing a number of amendments to the general anti-avoidance rule (GAAR) as well as introducing a new penalty applicable to transactions subject to the GAAR and extending the normal reassessment period for the GAAR by three years in certain circumstances;
(q) facilitating the creation of employee ownership trusts;
(r) introducing specific anti-avoidance rules in relation to corporations referred to as substantive CCPCs; and
(s) extending the phase-out by three years, and expanding the eligible activities, in relation to the reduced tax rates for certain zero-emission technology manufacturers.
It also makes related and consequential amendments to the Excise Tax Act and the Excise Act, 2001 .
Part 2 enacts the Digital Services Tax Act and its regulations. That Act provides for the implementation of an annual tax of 3% on certain types of digital services revenue earned by businesses that meet certain revenue thresholds. It sets out rules for the purposes of establishing liability for the tax and also sets out applicable reporting and filing requirements. To promote compliance with its provisions, that Act includes modern administration and enforcement provisions generally aligned with those found in other taxation statutes. Finally, this Part also makes related and consequential amendments to other texts to ensure proper implementation of the tax and cohesive and efficient administration by the Canada Revenue Agency.
Part 3 implements certain Goods and Services Tax/Harmonized Sales Tax (GST/HST) measures by
(a) ensuring that an interest in a corporation that does not have its capital divided into shares is treated as a financial instrument for GST/HST purposes;
(b) ensuring that interest and dividend income from a closely related partnership is not included in the determination of whether a person is a de minimis financial institution for GST/HST purposes;
(c) ensuring that an election related to supplies made within a closely related group of persons that includes a financial institution may not be revoked on a retroactive basis without the permission of the Minister of National Revenue;
(d) making technical amendments to an election that allows electing members of a closely related group to treat certain supplies made between them as having been made for nil consideration;
(e) ensuring that certain supplies between the members of a closely related group are not inadvertently taxed under the imported taxable supply rules that apply to financial institutions;
(f) raising the income threshold for the requirement to file an information return by certain financial institutions;
(g) allowing up to seven years to assess the net tax adjustments owing by certain financial institutions in respect of the imported taxable supply rules;
(h) expanding the GST/HST exemption for services rendered to individuals by certain health care practitioners to include professional services rendered by psychotherapists and counselling therapists;
(i) providing relief in relation to the GST/HST treatment of payment card clearing services;
(j) allowing the joint venture election to be made in respect of the operation of a pipeline, rail terminal or truck terminal that is used for the transportation of oil, natural gas or related products;
(k) raising the input tax credit (ITC) documentation thresholds from $30 to $100 and from $150 to $500 and allowing billing agents to be treated as intermediaries for the purposes of the ITC information rules; and
(l) extending the 100% GST rebate in respect of new purpose-built rental housing to certain cooperative housing corporations.
It also implements an excise tax measure by creating a joint election mechanism to specify who is eligible to claim a rebate of excise tax for goods purchased by provinces for their own use.
Part 4 implements certain excise measures by
(a) allowing vaping product licensees to import packaged vaping products for stamping by the licensee and entry into the Canadian duty-paid market as of January 1, 2024;
(b) permitting all cannabis licensees to elect to remit excise duties on a quarterly rather than a monthly basis, starting from the quarter that began on April 1, 2023;
(c) amending the marking requirements for vaping products to ensure that the volume of the vaping substance is marked on the package;
(d) requiring that a person importing vaping products must be at least 18 years old; and
(e) introducing administrative penalties for certain infractions related to the vaping taxation framework.
Part 5 enacts and amends several Acts in order to implement various measures.
Subdivision A of Division 1 of Part 5 amends Subdivision A of Division 16 of Part 6 of the Budget Implementation Act, 2018, No. 1 to clarify the scope of certain non-financial activities in which federal ‚financial institutions may engage and to remove certain discrepancies between the English and French versions of that Act.
Subdivision B of Division 1 of Part 5 amends the Trust and Loan Companies Act , the Bank Act and the Insurance Companies Act to, among other things, permit federal financial institutions governed by those Acts to hold certain meetings by virtual means without having to obtain a court order and to permit voting during those meetings by virtual means.
Division 2 of Part 5 amends the Canada Labour Code to, among other things, provide a leave of absence of three days in the event of a pregnancy loss and modify certain provisions related to bereavement leave.
Division 3 of Part 5 enacts the Canada Water Agency Act . That Act establishes the Canada Water Agency, whose role is to assist the Minister of the Environment in exercising or performing that Minister’s powers, duties and functions in relation to fresh water. The Division also makes consequential amendments to other Acts.
Division 4 of Part 5 amends the Tobacco and Vaping Products Act to, among other things,
(a) authorize the making of regulations respecting fees or charges to be paid by tobacco and vaping product manufacturers for the purpose of recovering the costs incurred by His Majesty in right of Canada in relation to the carrying out of the purpose of that Act;
(b) provide for related administration and enforcement measures; and
(c) require information relating to the fees or charges to be made available to the public.
Division 5 of Part 5 amends the Canadian Payments Act to, among other things, provide that additional persons are entitled to be members of the Canadian Payments Association and clarify the composition of that Association’s Stakeholder Advisory Council.
Division 6 of Part 5 amends the Competition Act to, among other things,
(a) modernize the merger review regime, including by modifying certain notification rules, clarifying that Act’s application to labour markets, allowing the Competition Tribunal to consider the effect of changes in market share and the likelihood of coordination between competitors following a merger, extending the limitation period for mergers that were not the subject of a notification to the Commissioner of Competition and placing a temporary restraint on the completion of certain mergers until the Tribunal has disposed of any application for an interim order;
(b) improve the effectiveness of the provisions that address anti-competitive conduct, including by allowing the Commissioner to review the effects of past agreements and arrangements, ensuring that an order related to a refusal to deal may address a refusal to supply a means of diagnosis or repair and ensuring that representations of a product’s benefits for protecting or restoring the environment must be supported by adequate and proper tests and that representations of a business or business activity for protecting or restoring the environment must be supported by adequate and proper substantiation;
(c) strengthen the enforcement framework, including by creating new remedial orders, such as administrative monetary penalties, with respect to those collaborations that harm competition, by creating a civilly enforceable procedure to address non-compliance with certain provisions of that Act and by broadening the classes of persons who may bring private cases before the Tribunal and providing for the availability of monetary payments as a remedy in those cases; and
(d) provide for new procedures, such as the certification of agreements or arrangements related to protecting the environment and a remedial process for reprisal actions.
The Division also amends the Competition Tribunal Act to prevent the Competition Tribunal from awarding costs against His Majesty in right of Canada, except in specified circumstances.
Finally, the Division makes a consequential amendment to one other Act.
Division 7 of Part 5 amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to exclude from their application prescribed public post-secondary educational institutions.
Subdivision A of Division 8 of Part 5 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,
(a) provide that, if a person or entity referred to in section 5 of that Act has reasonable grounds to suspect possible sanctions evasion, the relevant information is reported to the Financial Transactions and Reports Analysis Centre of Canada;
(b) add reporting requirements for persons and entities providing certain services in respect of private automatic banking machines;
(c) require declarations respecting money laundering, the financing of terrorist activities and sanctions evasion to be made in relation to the importation and exportation of goods; and
(d) authorize the Financial Transactions and Reports Analysis Centre of Canada to disclose designated information to the Department of the Environment and the Department of Fisheries and Oceans, subject to certain conditions.
It also amends the Budget Implementation Act, 2023, No. 1 in relation to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and makes consequential amendments to other Acts and a regulation.
Subdivision B of Division 8 of Part 5 amends the Criminal Code to, among other things,
(a) in certain circumstances, provide that a court may infer the knowledge or belief or recklessness required in relation to the offence of laundering proceeds of crime and specify that it is not necessary for the prosecutor to prove that the accused knew, believed they knew or was reckless as to the specific nature of the designated offence;
(b) remove, in the context of the special warrants and restraint order in relation to proceeds of crime, the requirement for the Attorney General to give an undertaking, as well as permit a judge to attach conditions to a special warrant for search and seizure of property that is proceeds of crime; and
(c) modify certain provisions relating to the production order for financial data to include elements specific to accounts associated with digital assets.
It also makes consequential amendments to the Seized Property Management Act and the Forfeited Property Sharing Regulations .
Division 9 of Part 5 retroactively amends section 42 of the Federal-Provincial Fiscal Arrangements Act to specify the payments about which information must be published on a Government of Canada website, as well as the information that must be published.
Division 10 of Part 5 amends the Public Sector Pension Investment Board Act to increase the number of directors in the Public Sector Pension Investment Board, as well as to provide for consultation with the portion of the National Joint Council of the Public Service of Canada that represents employees when certain candidates are included on the list for proposed appointment as directors.
Division 11 of Part 5 enacts the Department of Housing, Infrastructure and Communities Act , which establishes the Department of Housing, Infrastructure and Communities, confers on the Minister of Infrastructure and Communities various responsibilities relating to public infrastructure and confers on the Minister of Housing various responsibilities relating to housing and the reduction and prevention of homelessness. The Division also makes consequential amendments to other Acts and repeals the Canada Strategic Infrastructure Fund Act .
Division 12 of Part 5 amends the Employment Insurance Act to, among other things, create a benefit of 15 weeks for claimants who are carrying out responsibilities related to
(a) the placement with the claimant of one or more children for the purpose of adoption; or
(b) the arrival of one or more new-born children of the claimant into the claimant’s care, in the case where the person who will be giving or gave birth to the child or children is not, or is not intended to be, a parent of the child or children.
The Division also amends the Canada Labour Code to create a leave of absence of up to 16 weeks for an employee to carry out such responsibilities.

[The Chair, Liberal, Peter Fonseca]

Welcome to meeting number 136 of the House of Commons Standing Committee on Finance.

Pursuant to the order of reference of Monday, March 18, 2024, and the motion adopted on Monday, December 11, 2023, the committee is meeting to discuss Bill C-59, an act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023, and certain provisions of the budget tabled in Parliament on March 28, 2023.

Today's meeting is taking place in a hybrid format, pursuant to Standing Order 15.1. Members are attending in person in the room and remotely by using the Zoom application.

I'd like to make a few comments for the benefit of members as well as witnesses.

Although this room is equipped with a powerful audio system, feedback events can occur. These can be extremely harmful to interpreters and can cause serious injuries. The most common cause of sound feedback is an earpiece worn too close to a microphone. We therefore ask all participants to exercise a high degree of caution when handling the earpieces, especially when their microphone or their neighbour's microphone is turned on in order to prevent incidents and safeguard the hearing health of our interpreters.

I invite participants to ensure that they speak into the microphone into which their headset is plugged and to avoid manipulating the earbuds by placing them on the table away from the microphone when they are not in use.

I remind everyone that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can. We appreciate your patience and understanding in this regard.

I believe all witnesses appearing virtually have been tested, Mr. Clerk. It looks as though everybody is ready to go.

We welcome, from the Canadian Association of Physicians for the Environment, Dr. Leah Temper, economic and health policy program director. Joining us from LKQ Corporation is the vice-president of external affairs, Tyler Threadgill, as well as the regional vice-president of Canada and New England, Derek Willshire. From the Macdonald-Laurier Institute we have a senior fellow, Mr. Philip Cross. He is with us here today in person in the room.

With that, we're going to have some opening remarks by the witnesses. We'll start with the Canadian Association of Physicians for the Environment.

Go ahead, please, for up to five minutes.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Mr. Greer, I hear you loud and clear. The ITCs are vital to manufacturing, to jobs and to manufacturers. The Conservatives are holding up Bill C-59 at committee. They are delaying, obstructing, holding up, this vital piece of legislation that contains the ITCs.

Can you tell us what that delay and Conservative obstruction is costing and risking to Canadian manufacturers?

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Mr. Chair.

I thank you all for being here today.

You just heard from one of the apostles of the do-nothing Conservatives on climate change, but I want to provide you with a different perspective.

I want to especially thank you, Mr. Greer, for being here today, representing the Canadian Manufacturers and Exporters.

In my home town of Windsor, there's a saying: “If you want it built right, build it in Windsor.” We have a lot of manufacturers in our community. It's a huge part of our prosperity in our community and of our economy, so I want to say thank you for your tremendous advocacy.

You mentioned the investment tax credit. I read the “Manufacturing Canada's Future” report, and it highlighted the importance of the investment tax credits for helping manufacturers transition to a zero-emissions clean economy.

How important are the investment tax credits that are contained in our federal government's Bill C-59?

[Kate McNeece]

In my personal view, I think Bill C-59, along with a number of other reforms that have come up in the last couple of years, is quite comprehensive and really does represent a sea change in the approach to competition and enforcement.

I think this does go far enough. There are a number of questions that this bill and the collective changes to the Competition Act have raised in terms of how enforcement will play out, how some of these private actions will increase enforcement, what is addressed and how they address them.

I am personally of the view that we should let these amendments sit in place and settle to see if we get some more clarity as to how courts would interpret the law and how the bureau has interpreted the law and to see if we get greater guidance so that our business communities can understand what this new version of the Competition Act means and can ensure that they are modelling their practices to comply with it.

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

Thank you, Mr. Chair.

My question is for Ms. McNeece.

Bill C‑59 addresses the issue of revising the Competition Act. Do you think we're not going far enough? Could we have gone further in this review? Are there issues that we may have to come back to in another bill because we left things on the table?

Is this bill too late? We all agree that large oligopolies have already been created in Canada. We can think of grocery stores, telecommunications and the oil industry, for example.

Could more vigorous action have been taken to encourage a stronger return to competition in Canada, notably by enabling the dismantling of certain monopolies that disadvantage consumers?

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

Mr. Ross, I'm going to stay with you.

It's interesting that in my riding of St. John's East, there has traditionally not been a lot of co-operative housing, even though this is a model that I support. Since the GST link for the new co-operative builds, there's been energy among the groups in wanting to come together, seize the moment and spread the word on how important co-operative housing is to a full and robust housing strategy that really ensures no one is left behind.

Do you feel that moving this legislation forward, Bill C-59, is important to growing the co-operative movement and building co-operative housing in Canada?

[Don Davies, NDP, Vancouver Kingsway, BC]

Bill C-59 also enacts the department of housing, infrastructure and communities act, which would transfer part of the federal housing portfolio to the Office of Infrastructure Canada. What impact, if any, do you believe this reform will have on public infrastructure and housing outcomes in your sector?

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

Mr. Ross, I'd like to address some questions to you, if I could.

Bill C-59 would make co-operative housing corporations that meet certain prescribed conditions eligible for the 100% GST rebate for new purpose-built rental housing. Can I get your views on whether the conditions that are described are appropriate?

[Kate McNeece]

There are a couple of different topics. I'll take them in turn.

Bill C-59 does change the limitation period for mergers, specifically as it applies to mergers that are not notified to the commissioner. It extends that period from one year to three years, and I think there is some sense in doing so.

In my experience, bureau investigations for mergers that the bureau believes potentially harm competition or lead to an SPLC, which is the legal standard, take quite a bit of time. There's a lot of information gathering. There's a lot of analysis. There are a lot of submissions going back and forth and gathering of that sort of information. In a case where the limitation period is only one year for a non-notified merger, the bureau may simply not have time to conduct that analysis, which may lead to them rushing a case to the tribunal to try to catch it before the limitation period ends. That may not be the most efficient way to address these issues. They may also simply may run out of time.

It's not clear to me how many of those mergers have been missed, rushed or caught. I'd be interested in hearing about the magnitude of this issue, but to the extent that it is perceived as an issue, I think a three-year period is a sensible extension. It's bringing us back to what the limitation period was prior to the 2009 amendments to the act. We wouldn't want it to go too long because as time goes by, it's much harder to pin effects in a market to the merger itself rather than to other structural considerations. I wouldn't want to extend that, but I think that's a fairly limited and sensible amendment.

To my comments about the merger control thresholds, I don't think any merger control threshold is going to be perfect. If you're setting out asset- and revenue-based thresholds, or even the market share threshold that some jurisdictions have, you're always going to capture some mergers that are not problematic and you're always going to miss some mergers that are problematic.

What I would recommend is taking a look at that and trying to figure out whether our thresholds as they currently exist, the $93-million transaction-size threshold and the $400-million party-size threshold, are capturing many mergers. Are we missing a lot of mergers?

As I said in my statement, I think between 65% and 75% a year of the mergers that are notified to the Competition Bureau are non-complex or are characterized as not having any competition issues. With that number being so high, is there a way we can exclude certain non-problematic mergers from notification?

[Kate McNeece]

I think that's a great question.

As Mr. Weiler said, there are a number of changes largely expanding the rights of private access to many of the different provisions under the act. The way our act is set up is it's relatively codified, so there are specific provisions for different types of conduct that could be seen as contrary to competition, and previously, only certain of those provisions have been subject to private rights of action for private litigants. They've been solely the purview of the commissioner in a number of cases, and by and large, Bill C-56 and Bill C-59 together have expanded private rights of action to most of those areas.

As I said in my opening statement, I think private rights of action are an important complement to the commissioner of competition's work. I think, as you say, the bureau is a body of limited resources and there are ways that private litigants can help fill the gap for our competition enforcement, so I'm generally in favour of a lot of these changes.

It's important that the leave test was somewhat lowered in order to make this more accessible, because I think the previous test was very difficult to overcome since all of a business had to be substantially affected rather than part of the business, as it is now. I think that makes a great deal of sense because certain businesses have multiple business lines, and I don't think they should be barred from potentially addressing a harm to one business line if it isn't in all of their business.

I'm generally in favour of the leave test. We'll have to see how it's interpreted. I think the public interest branch of the leave test is a new concept for Canadian competition law. I'd be looking to the Competition Bureau to consider how they might be supporting assessments that certain actions taken by private litigants may be in the public interest, or maybe there's some guidance from the tribunal, through either litigated cases or otherwise, as to how that will be interpreted in light of existing jurisprudence in analogous areas.

I think we're all very curious to see how that's going to work, but overall, I think this will increase the number of means that potentially affected parties may have for addressing competition concerns and, subject to the leave test and appropriate pleading standards, plucking out vexatious litigants. We don't want that, but I do think an expansion of private access is warranted and is a positive aspect of Bill C-59.

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

First, before getting into questions, I just thought I'd mention that in the first half of last year, Canada had the largest per capita foreign direct investment of any country in the world and was the third-largest in gross foreign direct investment. Of course, there is more we need to do to increase productivity in Canada and get more investment opportunities. I think a lot of the measures in Bill C-59 do just that.

I want to direct my questions to Ms. McNeece.

Thank you for your testimony to date, particularly some of the suggestions you brought forward.

Many changes are being made to the Competition Act as part of Bill C-59, including private litigation opportunities, a new variety of rights of action, lower leave tests for applications and the introduction of administrative monetary penalties with awards for private litigants. We know that a lot of these changes are being brought in because to date, the Competition Bureau has largely been the initiator of proceedings, but it only has so many resources to go around to do its work and it prioritizes cases of national importance.

Ms. McNeece, I was hoping you could share your thoughts on how these changes might improve competition in Canada overall.

[Kate McNeece]

That's a very 30,000-foot question, and I'm afraid it's a bit above my pay grade. My comments were restricted to the Competition Act, which is covered in Bill C-59. However, I also deal with the Investment Canada Act, which governs the review of foreign investment going into Canada. We've seen a number of changes under the Investment Canada Act as well. Bill C-34 recently received royal assent. It is not yet enforced, but I think it soon will be.

The issue with foreign investment is multifold. First, there's a great deal of regulatory uncertainty for foreign investors who are subject to the Investment Canada Act in terms of what will be required of them. The national security provisions of the act are quite broad and are being applied more broadly. I think there is a lack of transparency in what investors can expect, especially in areas that aren't traditionally thought of as related to national security. You can think of defence and the military, but increasingly we're looking at investments in critical minerals and critical infrastructure as being very important to Canada's national security. Those categories are getting very broad.

The pending amendments that will come into force shortly will implement a mandatory reporting regime for certain investments in critical areas for prescribed businesses that involve prescribed rights. However, those will all be defined by regulations, of which the business community and the bar have not seen any drafts. There's a great deal of uncertainty right now as to where the foreign investment regime is heading.

Separately, I know the Canadian government and a number of people working in the civil service at ISED and other investment-related arms are doing good work in reaching out to foreign entities that may have an interest in investing in Canada. I've worked with a number of clients who have been the subjects of that type of outreach and who have come to Canada. We've worked with them in that context, so I know that work is being done. However, I think the more clarity we can get around the new amendments to the Investment Canada Act, the better, from a foreign investment perspective.

[Tim Ross, Executive Director, Co-operative Housing Federation of Canada]

Good evening, Mr. Chair.

Thank you to the members of the committee for the invitation to appear tonight. I would love to be there in person; however, I am in Fredericton for work, so I am appearing from Fredericton today. I represent the Co-operative Housing Federation of Canada, the national voice of the co-operative housing movement.

As a bit of co-op history for starters, co-op housing is a very well-documented success story in Canada. For over 50 years, co-ops have been providing good-quality, affordable homes owned and governed by the community members who live there. There are more than 2,200 housing co-operatives located in every province and territory, and co-ops are home to more than one-quarter of a million Canadians.

Co-ops offer at-cost housing, meaning housing charges are increased every year simply to cover the costs of maintaining buildings in a good state of repair and investing in the future. That's why co-op homes cost $400 to $500 less per month on average in Canada when compared to similarly aged apartments in the private rental market. Co-ops also offer greater security of tenure: There's no outside landlord who might sell, renovict or unreasonably increase rents.

Co-ops are inclusive by design, as almost all operate on a mixed-income model, administering available rental assistance programs for a portion of households with low incomes. They build strong communities because co-op housing brings people together, and they allow people the chance to have a say in how their housing is run.

Now I have some remarks to offer related to the fall economic statement and implementation.

The first is related to the rental rebate. Bill C-59 proposes to extend the GST rebate to certain co-operative housing. We really appreciate this policy change, as we know it will be directly passed on to households in need that occupy new co-op housing. This is a big part of the power of co-op housing. The non-profit, community ownership model ensures co-op homes are affordable and remain affordable for generations to come.

The co-op housing sector is also ready to build. We're ready to play a larger role in the housing crisis. The fall economic statement also included some resources for the forthcoming co-op housing development program. A budget commitment for this program was first made in 2022 for the launch of a new co-operative housing supply program, and we are very much looking forward to the launch of this program. We heard recently from the minister, at a conference a couple weeks ago, that the program is expected to launch in early 2024. We really hope that is the case, because any further delay in the launch of the program is costly—there is a lost opportunity cost to that.

I'll also to speak to the importance of acquisition in the national housing strategy's set of programs. Between 2016 and 2021, Canada lost 370,000 homes rented at or below $1,000 per month. This happens through demolition, conversion to condo or increasing rents at turnover, which leaves fewer affordable housing options. Unfortunately, we're actually losing more affordable housing supply than we're seeing built under current federal programs.

We recognize and welcome the recently announced Canada rental protection fund, which is meant to stem the loss of affordable housing by enabling co-ops and non-profits to buy rental housing to keep it affordable. We look forward to working with the federal government and our partners to expedite that fund's launch, because so many renters are in precarious situations today and housing co-operatives are ready to help.

Last but not least, it also must be said unequivocally that we need a fully funded “for indigenous, by indigenous” approach to the urban, rural and northern indigenous housing strategy. It's much needed right away. There's a $4-billion commitment on the table. We know that's not enough. Indigenous people in communities across the country disproportionately experience housing need, and we need to see a robust and dedicated response. This will help to both address the housing crisis and advance reconciliation.

In conclusion, the co-op housing sector is ready to work closely with the public, private and non-profit sectors to build more of the housing we need. The co-operative housing movement in Canada is well established and has proven to be very resourceful, passionate and committed to a vision of co-op housing for all. We believe that a housing system that works for all must include more co-operative homes.

Thank you, Mr. Chair. I look forward to the members' questions.

[Laurie Marquis, President, Association des psychoéducatrices et psychoéducateurs]

Good afternoon.

For my part, I'm going to tell you why we want psychoeducation services to be tax-exempt, both federally and in Quebec.

As my colleague Ms. Maillette said, psychoeducators carry out psychosocial interventions with a varied clientele, particularly in mental health. In fact, you had the chance to hear about it earlier, from Ms. Woo Dearden, who is a psychotherapist.

Psychoeducation is currently helping to reduce waiting lists for mental health services, which are a primary public health need in Quebec and Canada. However, the taxation of our psychoeducational services represents a real barrier to referral. For example, some professionals, and even some clients, are reluctant to come to our services, precisely because they are perceived as being a little more expensive, compared to the services of other professionals who are not taxed. Examples include occupational therapists, psychologists, acupuncturists and naturopaths. There are plenty of other services that are tax-exempt.

I can attest to this: often, taxes can prompt the client not to sign up for psychoeducational services, even when these would be the preferred services, for example because of adjustment difficulties or the need to develop a certain skill in their development. Professionals also tend not to refer their clients to a psychoeducator. We believe that tax exemption on our services would ease the financial burden on those seeking help. The costs of psychoeducation services are high. So, if we were to remove the taxes, which represent around 15% of the price of the session, it would allow people who need help to save significant amounts.

I'd also like to describe the expertise of psychoeducation. It lies above all in understanding the human being, developing abilities, managing emotions and developing skills. Moreover, our clinical process corresponds to the definition of the work of therapeutic counsellors, which we would like to see added to Bill C‑59, as we have seen. So, we believe that psychoeducation services could fall into the category of therapeutic counsellors.

To proceed in this way, you would first need to amend the Excise Tax Act by including the term “therapeutic counsellor” in the definition of “practitioner”. It should be made clear that psychoeducation is included, so that there is no ambiguity. That way, Revenu Québec, to which we also report, will be able to rely on federal documents to grant us tax-exempt status.

So there's still a long way to go before we can benefit from this exemption.

Thank you for listening.

[Kate McNeece, Partner, Competition, Antitrust and Foreign Investment, McCarthy Tétrault LLP, As an Individual]

Thanks very much.

Good afternoon, Mr. Chair and honourable members of the committee.

My name is Kate McNeece, and as the honourable chair just said, I am a partner at the law firm of McCarthy Tétrault, practising in competition, antitrust and foreign investment.

Thank you very much for inviting me to appear before you today.

Before I begin my statement, I want to note that I am appearing today in my capacity as an individual, and the views expressed today are my own, not those of my law firm or any client of McCarthy Tétrault. However, my submissions today are informed by my experience advising clients on the application of the Competition Act to their commercial agreements, conduct and mergers.

In my view, a comprehensive, clear and effective Competition Act is in the best interests of all stakeholders, including consumers and the business community. Bill C-59, along with the amendments enacted in 2022 and 2023, presents a comprehensive vision for the future of the act. I commend the government and this committee for their thoughtful approach to implementing meaningful competition law reform in Canada. In my remarks, I will highlight a few areas that I believe bear additional consideration.

First, I believe there is more work to be done to rightsize the merger control thresholds set out in sections 109 and 110 of the act. Over the past five years, the significant majority of transactions notified to the Competition Bureau have been designated non-complex, meaning they are identifiable by the clear absence of competition issues. Calibrating these thresholds to capture more potentially problematic mergers, while reducing the administrative burden on both merging parties and the bureau by excluding more mergers that clearly do not raise issues, should be a goal of any meaningful reform.

Bill C-59 changes the size of transaction thresholds to capture entities with significant sales in Canada. This is a step in the right direction. However, I suggest additional study to consider further calibration of these thresholds, including in particular an amendment to exclude from the “party-size” calculation assets and revenues of a vendor that is divesting its entire interest in a business. These are plainly irrelevant to the merged party's financial position.

Second, Bill C-59 introduces a disgorgement remedy for civil conduct that has been the subject of a tribunal order under section 75, 77, 79, or 90.1 of the act. I believe private actions under the act will be an important complement to bureau enforcement, and I understand these provisions are likely intended to incentivize use of these provisions.

However, the creation of a new collective redress mechanism from whole cloth risks confusion and uncertainty, when there is a simpler alternative. Section 36 of the act currently allows for collective redress for damages where there has been a violation of one of the criminal provisions of the act. I recommend that this committee consider revising Bill C-59 to remove the proposed disgorgement provisions, and instead allow private litigants to seek collective redress under section 36 of the act for conduct that has been the subject of a tribunal order concerning civil matters.

Third, Bill C-59 introduces private actions, administrative monetary penalties and financial remedies for conduct found to be contrary to section 90.1 of the act. I am particularly concerned that as drafted, these penalties could apply to agreements that would constitute mergers under section 92 of the act. It would cause significant uncertainty in transaction planning if mergers could be subject not only to bureau review and remedies under section 92 but also to AMPs, private actions and, potentially, disgorgement or damages under section 90.1. I urge the committee to explicitly exclude agreements and arrangements that constitute mergers for the purposes of section 92 from the scope of section 90.1 of the act.

Finally, I am concerned by the bureau's recent submission to this committee advocating for the inclusion of structural presumptions based on bright-line concentration and market share tests in the text of section 92. I caution the committee not to incorporate such a significant change into this bill without a careful study of the evidence supporting the magnitude of notified transactions that would be captured by the proposed thresholds and therefore be subject to a reversed burden, without consultation with a wide variety of stakeholders to understand the impact of such a change on merger activity and without consideration as to whether the proposed tests, which are taken verbatim from the new December 2023 U.S. horizontal merger guidelines, are appropriate in the context of Canada's economy.

While bright-line structural presumptions can be useful in providing direction to merging parties on the likely treatment of a prospective transaction and in potentially dissuading problematic transactions, in my view, they are most appropriately placed in enforcement guidelines, as they are in the U.S. The assessment of competitive effects is necessarily a contextual one, and the more balanced approach taken in Bill C-59, which permits but does not require the tribunal to assign greater weight to evidence of concentration and market share, is the more appropriate course.

Thank you very much for your time this afternoon. I would be happy to answer any questions.