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.

[Jeanne Pratt, Senior Deputy Commissioner, Mergers and Monopolistic Practices Branch, Competition Bureau Canada]

Good morning, Mr. Chair and members of the committee.

My name is Jeanne Pratt. I am the senior deputy commissioner of the mergers and monopolistic practices branch at the Competition Bureau. Joining me today are my colleagues Anthony Durocher, who is the deputy commissioner of the competition promotion branch, and Laura Sonley, who is the associate deputy commissioner in our mergers directorate.

The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses. We do this because competition drives lower prices and innovation while fuelling economic growth. We administer and enforce the Competition Act by investigating and taking action to address anticompetitive business practices that harm consumers, competition and our economy.

The Competition Act’s merger provisions are the first line of defence against harms to competition. They are a preventative tool that guard against harmful concentration of market power.

Competition in the telecom sector has been and continues to be a priority for the bureau. It's the backbone of commerce in the digital age and a critical service for businesses and consumers alike. This committee is well aware that the bureau filed an application to the Competition Tribunal seeking to block the proposed merger between Rogers and Shaw. While we were unsuccessful in our attempt, we stand by our decision to bring the case and our reasons for it. We are continuing to monitor the markets since the transaction closed.

The bureau will continue to prioritize our work in this sector through both our enforcement and our advocacy roles. Just two weeks ago, Ms. Sonley participated with other bureau personnel in the ongoing CRTC hearings on the review of the wholesale high-speed access service framework.

Recent amendments to the Competition Act, notably those made in 2022 and more recently through the Affordable Housing and Groceries Act, have given the bureau more tools to protect and promote competition in Canada. The committee will also be aware that Bill C-59, which is currently before the House and is being prestudied in the Senate, contains several other amendments that, if passed, will further strengthen the Competition Act.

We are committed to using the new tools wherever necessary to protect competition. We also look forward to updating our guidance to Canadians and Canadian businesses on how the bureau will enforce these amendments.

The Bureau strongly believes that competition can play a greater role in the concentrated telecom sector, with Canadian consumers, businesses, and the overall economy reaping the benefits. More competition unlocks innovation and productivity, and helps us to maintain a high standard of living.

We share the committee’s interest in enhancing competition and working to ensure that high quality telecommunications services are reliable and affordable for all Canadians.

Before fielding your questions, I would note that the law requires the bureau to conduct its investigations in private and to keep confidential the information we have. This obligation may prevent us from discussing certain facets of our investigation.

I would like to thank the committee for the opportunity to appear today. We look forward to your questions.

[Helena Sonea, Director, Advocacy, Canadian Cancer Society]

Thank you very much.

Hello. My name is Helena Sonea, director of advocacy at the Canadian Cancer Society. With me today is Ciana Van Dusen, manager of prevention, and our colleague Rob Cunningham, senior advocacy adviser.

Cancer is the leading cause of death in Canada and is responsible for 26% of all deaths. In 2023, researchers estimated that there would be over 200,000 new cancer cases and nearly 87,000 cancer deaths in Canada, about half of which are expected to occur in women.

Lung cancer is the leading cause of death in women. About 72% of lung cancer cases in Canada and 30% of all cancer deaths are due to smoking tobacco. A comprehensive strategy is needed to reduce tobacco use among women and girls to achieve Canada's objective of under 5% tobacco use by 2035.

We recommend that tobacco taxes be increased by six dollars per carton; that Bill C-59's legislative measures for a cost-recovery fee be adopted with strengthening amendments and subsequent regulations to cover the full cost of the initiatives in Canada's tobacco strategy from tobacco and vaping companies; that tobacco legislation be strengthened by banning all remaining tobacco promotion and banning flavours in all tobacco products; that measures be adopted to reduce youth vaping, including banning flavours in e-cigarettes; that cessation and other programs be enhanced; and, finally, that action be taken on nicotine pouches, which can be sold to children of any age and are advertised in places where youth are exposed to them.

Cancer does not solely touch the person who lives with it. It takes a community and a society to care for them, and no one understands that better than caregivers. Caregivers provide vital, unpaid, practical, physical and emotional support to loved ones with complex health conditions, including cancer. Half of the people in Canada will be caregivers in their lifetimes.

In 2018, caregivers provided 5.7 billion hours of care work, the value of which is estimated to be between $97 billion and $112 billion annually. Women disproportionately bear the challenges of this work.

The Government of Canada has tried to recognize the tremendous role of caregivers; however, substantial unmet needs remain. We recommend the federal government improve support for current and future caregivers by implementing or enhancing accessible, refundable federal tax credits to compensate these families.

I will now turn it over to Ciana to speak to cervical cancer.

Amendments to Bill C-318 at Committee Stage

[Leah Gazan, NDP, Winnipeg Centre, MB]

Mr. Speaker, I rise to intervene on a point of order raised by the member for Winnipeg North this morning respecting Bill C-318, an act to amend the Employment Insurance Act and the Canada Labour Code, adoptive and intended parents.

My colleague, the member for Winnipeg North, mentioned the committee process, where I tabled crucial amendments to this legislation that would bring the bill into compliance with Canadian law, specifically with the United Nations Declaration on the Rights of Indigenous Peoples. Let me remind the government that it is the government that passed Bill C-15, which affirms that all legislation going forward has to be compatible with the United Nations Declaration on the Rights of Indigenous Peoples.

Not including these important amendments means that the legislation now is not compliant with articles 19, 21 and 22 of the United Nations Declaration on the Rights of Indigenous Peoples. The member of Parliament for Winnipeg North talked about the amendments being out of scope, but even the sponsor of the bill said that the amendments were absolutely within the scope of what Bill C-318 was trying to do.

My colleague, the member for Winnipeg North, also pointed out the need for a royal recommendation for these amendments. I would like to encourage him to reconsider this, considering he has the highest number of kids in care in an urban area in the whole country, 90% who are indigenous.

What my colleague failed to mention is that the Liberal government has the power to allow the amendments to proceed by giving notice of a royal recommendation for Bill C-318. In fact, Bosc and Gagnon, at page 839, states the following:

...since Standing Order 79 was changed in 1994, private Members’ bills involving the spending of public money have been allowed to proceed through the legislative process on the assumption that a royal recommendation will be submitted by a Minister of the Crown before the bill is to be read a third time and passed

The only ones who can act right now are the Liberals. On their watch, they are not upholding Canadian law, which includes Bill C-15. We are meeting about the red dress right now, about murdered and missing indigenous women and girls. The child welfare system is called the pipeline for becoming murdered and missing. The government's failure is not addressing the 90% of kids in care.

It is only the Liberals who can save the lives of indigenous children who are being dropped off at shelters, separated from their families and communities. I am asking them to table a royal recommendation to do the right thing to ensure that Bill C-318 can go to a vote at third reading with the amendments adopted by committee. Although they have mentioned they are putting forth Bill C-59, a similar bill, once again it is not consistent with upholding Canadian law and the United Nations Declaration on the Rights of Indigenous Peoples.

It is in the hands of the Liberals. Lives are in their hands. They need to put forward a royal recommendation. This is a life and death matter. They have to stop playing with indigenous lives and do what is needed now.

[Anthony Durocher]

I think it's fair to say that some of the Competition Act changes proposed in Bill C-59 are certainly desirable and are in line, frankly, with some of the recommendations that we made in the government's consultation on the bill.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

At this committee, we're looking at grocery prices. There has been progress, but we want them to come further and we want stability.

From your perspective, would it be useful in this study to recommend that the changes in Bill C-59 be adopted? Would that be useful in addressing some of the concerns you have?

[Anthony Durocher]

The way we're going to approach Bill C-59 is that if and when we're called to committee, we will certainly provide our views.

As I mentioned, and as was in our opening statement, there are important improvements to the Competition Act contained in the bill, and what we really want to do is help inform parliamentarians and provide whatever evidence we can in committee to help deliberations.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

We've been trying to get Bill C-59 passed since the fall, and the Conservative Party has been very against Bill C-59. Recently we found out that Jenni Byrne, who is advising the Conservative Party and joins their caucus advising their leader, is actually a consultant or a lobbyist, we could say, for Loblaws. I'm wondering.... It sounds to me as though Loblaws might not be in favour of some of these changes, but it seems that Bill C-59 is very important. Would you recommend, from your perspective in the Competition Bureau, that Bill C-59 should be passed so that we can get these measures in place?

[Anthony Durocher]

One of the most important changes flowing from Bill C-59 is opening up the Competition Act to more private enforcement so that it's not just the Competition Bureau as the sole authority that can bring cases. There are changes there that I think are capturing a lot of interest from stakeholders in the competition space. The role of private enforcement and the test for obtaining leave have been clarified, so what we might see emerge there is a more robust space where private actors, not just the Competition Bureau, can bring cases directly to court.

As I mentioned, in respect to mergers there are certain important changes. One is to allow greater emphasis on market share and concentration evidence as well. As another, there are important changes to section 90.1—which is the competitor collaboration provision of the Competition Act—with an ability to look at past conduct, which allows for a broader range of remedies too. These are examples.

Also, to give an example, one very interesting change relates to reprisal actions. It adds a new civil provision that would prohibit a party from taking reprisal action against another person for their co-operation under the act. That is a very interesting change and potentially important, because whenever companies complain to us, there's always the concern about reprisal. If you're complaining about the actions of one of your business partners, obviously confidentiality is paramount to our work. It's something we take extremely seriously and protect, but additional protections and peace of mind about lowering the risk for reprisal action are important.

These are just a few examples, but there's a lot to cover with Bill C-59.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much for being here, and indeed it's good news to hear the pendulum's swinging and that food prices are coming down more in line with general inflation and that Bill C-56 did help.

We also have Bill C-59 right now under consideration, and you mentioned that there were aspects of that bill that you thought would be very helpful in continuing to combat the concentration and issues around competition. What, in particular, would those aspects be?

[Anthony Durocher]

We would want to give that some careful thought. If and when we appear at the INDU committee for the study of that bill, we want to be as helpful as we can with the interpretation.

Part of these issues come to something that we've advocated, which is the potential benefit of structural presumptions. This is how the U.S. jurisprudence around antitrust has evolved. It's basically the notion that past a certain increase in concentration and threshold, the onus should shift to companies to prove that they are not anti-competitive. That's certainly a discussion worth having.

There are changes in Bill C-59 that are important in that regard. We're removing a requirement that existed in section 92 so that we could not challenge mergers on the basis of market shares or thresholds. There might be a greater role to play in looking at market share and concentration in our work.

Of course, there are other factors that are always going to be relevant, such as looking at barriers to entry, effective remaining competition and the role of innovation in the marketplace. We hear there are significant concerns about concentration in the Canadian economy. We think it's important to debate these issues, especially when we look at our merger review framework and the law.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

I think you're right. As a case in point, Loblaws had to climb down from its tone-deaf decision to reduce discounts from 50% to 30%. Of course, we then had the Manulife and Loblaws climbdown because of the intense scrutiny, I think, that exists at the moment.

You made mention of a couple of pieces of government legislation: Bill C-56, which has received royal assent, and Bill C-59, which is still in the works. There is another bill that received a second reading vote yesterday, which is Bill C-352 from NDP leader Jagmeet Singh. There are some similarities, but one of the interesting aspects of his bill—I know this is primarily with the Competition Tribunal—is that it would require the Competition Tribunal “to make an order dissolving a completed merger or prohibiting the merger from proceeding if the merger would result in excessive combined market share.”

I would just like to understand the Competition Bureau's understanding of that term “excessive combined market share.” How would you interpret that particular phrase in the law?

[Anthony Durocher]

A number of recommendations that aren't covered in Bill C-59 come to mind.

I think provisions pertaining to mergers are important, which ties in with the discussion with Mr. Williams. Specifically, I'm talking about provisions to ensure that mergers don't harm competition.

I'll give you an example: the remedy standard for transactions that have an anti-competitive effect on the market. Currently, when a transaction lessens competition substantially, the remedy standard in the case law merely requires that the lessening of competition cease to be substantial. It's fine if competition is lessened, because there's no remedial requirement that competition be restored to pre-merger levels. That's one of the recommendations we provided during the consultations.

We also submitted recommendations pertaining to concentration thresholds and the importance of building concentration-related presumptions into merger reviews to ensure that the merger does not exceed a certain concentration threshold. The burden would be on companies to prove that it was not an anti-competitive merger, which is similar to the practice in the U.S.

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

Thank you.

You said that you're happy with Bill C-56 and that Bill C-59 will be helpful. You made recommendations to the government. Can you give us your top two or three recommendations, the ones that are crucial to strengthen the act? We could include them in our report to the government.

[Anthony Durocher]

Bill C-56 has been very significant for us. It has brought about major changes that will help bring Canada in line with other countries as far as enforcing the law is concerned.

In our view, the Competition Act can always be strengthened in order to ensure a modern and effective regime. Bill C-59 also includes significant changes to the act. Through the government's consultation process, the bureau made over 50 recommendations to improve the act. Considerable progress has been made.

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

Good morning, Mr. Chair and members of the committee.

My name is Anthony Durocher. I’m the deputy commissioner in the competition promotion branch. Joining me today is my colleague Brad Callaghan, associate deputy commissioner in the policy, planning and advocacy directorate.

I would like to begin by recognizing the importance of your study. We believe it has been invaluable to shaping and advancing the public discourse around food affordability, and the testimony at this committee has benefited the Competition Bureau in our efforts to protect and promote competition in the grocery sector.

The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses.

We do this because competition drives lower prices and innovation, while fuelling economic growth. We administer and enforce the Competition Act by investigating and taking action to address anti-competitive business practices that harm consumers, competition and our economy.

In June 2023, the bureau released its retail grocery market study report. Our report found that grocery prices have been increasing at their fastest rate in more than 40 years and since late 2021 have been significantly outpacing the general rate of inflation in the Canadian economy. Additionally, the retail grocery industry has become much more concentrated over time. Today most Canadians purchase their groceries from only a few grocery giants that operate most grocery store banners, including the top discount chains.

Our report makes a number of principle-based recommendations to federal, provincial and territorial governments to improve competition in the grocery industry. They include stimulating innovation and supporting the growth of independent grocers, as well as the entry of international grocers through government policies and programs; limiting—and potentially banning—property controls; and lastly, introducing accessible and harmonized unit pricing requirements.

We continue to be actively engaged with policy-makers on our report's findings and its recommendations.

We recognize that food price inflation remains a significant issue for Canadians and that we need to approach our work in the grocery industry with heightened vigilance and scrutiny to ensure that Canadians benefit from greater choice and more affordable groceries. This includes by thoroughly and quickly investigating allegations of wrongdoing. To that end, we are actively pursuing an enforcement investigation in the grocery sector relating to the use of property controls.

Recent amendments to the Competition Act, particularly through Bill C-56, have given the bureau more tools to protect and promote competition in Canada and mark a key step in modernizing Canada's competition law. The bureau is committed to using the new tools made available through these amendments wherever necessary to protect competition. Further, as you know, Bill C-59 contains several other amendments that will, if passed, further strengthen Canada's Competition Act.

Before fielding your questions, I would note that the law requires the bureau to conduct investigations in private and to keep confidential the information it has. This obligation may prevent us from discussing past or current investigations.

I would like to thank the committee very much for the invitation to appear today, and we look forward to your questions.