Finance Committee on Nov. 20th, 2023

[Mark Schaan]

It is important to consider the Competition Act as a whole. It includes measures for intervening in situations where there is insufficient competition. It regulates the practices and behaviours of actors in the economy. In places where there is only one service station, or where there is a true monopoly, as you said, it is important to increase competition in the market.

The Competition Act cannot restore competition, but it makes it possible to combat the behaviours and practices that throw up barriers to competition, such as abuse of dominance, the use of practices intended to exercise control, attacking competitors, or any other behaviour that has a negative effect on the market. It is important to understand that.

That Act contains a set of measures for intervening in those situations, but that is not the only thing that promotes competition in the market.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Garon.

Now we'll go to MP Blaikie, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you.

I just want to follow up on that question, because I think the question had a lot to do with saying that we need a Competition Act that—and I think this is what Mr. Singh is trying to accomplish in his own private member's bill—recognizes that consumer protection isn't completely satisfied by having good competition law, but that there are times when, given the location of a business, there's just not going to be competition. You're not going to be able to get the fixed costs of running a gas station or a grocery store in northern communities down to the point where you have two businesses competing, because between them they can't make enough money in that community in order to run two profitable businesses. That's why Mr. Singh is trying to include in our Competition Act the idea that where you don't have competition, you can't abuse that market position in order to price-gouge.

With that context, I would just put the question again: Why is it that the government doesn't seem to want to move ahead with providing some important consumer protection in areas where competition is not possible? You can make the circumstances as favourable as you like; there are some real-world constraints on whether you have two competing businesses in the same community.

[Mark Schaan]

Thank you for the question.

It is important to say a couple of things on the subject. One is that the minister, quite rightly, pointed to the fact that a comprehensive competition reform looks at effects and judges on the basis of effects, rather than just stating that...there is no right prohibition on a particular kind of aspect. This is because they are often use case-specific. The goal of the Competition Act is not to be a price regulator in every single market vertical, but instead to ensure that there are effective restraints on behaviour, and where those behaviours significantly lessen competition, we have the tools to be able to act.

Between the actions of Bill C-56 and what was announced in the fall economic statement, there's a pretty comprehensive approach to try to make sure that we have actually targeted and provided the right tools for those effects that are particularly noxious to competition, whether that's abuse of confidence, whether that's a merger that potentially rules things out, whether that's the betrayal of inputs that are fundamental to the competition or whether that's competition that will harm the labour market. All of those kinds of functions are built into the changes that are proposed.

An outright prohibition that simply suggests something is prima facie anti-competitive is often best left to vertical regulators that are versed in the specifics of that use case, rather than trying to do it through a lot of general application, which can then apply on the basis of effects.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I was glad to hear the minister almost commit to using the new powers in Bill C-56 to launch an investigation into the more specific market conditions than I'm talking about, but I wonder what the effect is of a minister almost recommending that such an investigation be launched. Does that meet the threshold for actually getting an investigation, or does it just meet the rhetorical threshold for getting through committee testimony?

[Mark Schaan]

Thank you, Mr. Chair.

The member will know that the test for ordering a market study as proposed in Bill C-56 is not for me, but the minister. I won't speak for the minister on the determination he will make on market studies, but I think he has been clear that the last market study certainly lacked some of the full information that would give rise to the transparency about what's actually happening in some of those marketplaces.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

To our folks at Finance, I wanted to ask if we could get information here at this committee, and I'm happy to have it presented in a way that doesn't name proponents, if that's problematic for some reason.

We know there are a number of projects that have been approved under the national housing strategy with non-profits that were in process prior to September 14, 2023. We know, anecdotally, that a number of those have been put on pause because the escalation in the interest rate has meant that they can no longer proceed with those projects.

I'd like to know how many such projects there are—projects that have been approved for federal funding under any national housing strategy program and have indicated they are not able to proceed, given the state of interest rates—and the estimated costs of applying the GST rebate to those projects. I'm wondering if we can get a commitment to have the department bring that information to committee, or send it to committee. I'm not suggesting a second appearance. Preferably, we'd have it before we do clause-by-clause of the bill, which I believe is to take place on Wednesday.

[Pierre Mercille]

What I can say on this is that it's definitely not Ms. Riddell nor I who will provide the information. The information will be communicated to the department, and it will be up to the minister's office to decide if it can be provided to the committee that fast.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

At the very least, what I have is a commitment to take the request back, although I also made that request of the minister, so I'm hoping that we can get to “yes” quickly.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

We are moving into our second round. I will hold everybody to their exact time so that we can stop at seven o'clock and get out for a health break. We've been here for a number of hours already.

We are starting with MP Williams. I know he wants to get to the gym.

MP Williams, you have five minutes.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Yes. Let's do it. I'll meet you there.

Thank you, Chair.

Thank you, officials.

Much like the IRA in the States, the Inflation Reduction Act, this is the grocery affordability act. However, I think, as we've seen from testimony today from the minister, this isn't as much about grocery affordability as it is about some minor changes to the Competition Act. Granted, a lot of them are really needed.

There is supposed to be a second phase of the modernization of the whole Competition Act. Canadians are asking me, and I want you to answer for me, please. When is that coming?

[Mark Schaan]

Thank you for the question.

The fall economic statement noted that there would be a number of important comprehensive competition amendments that would be part of the implementing legislation, notably to:

Strengthen the tools...available to the Competition Bureau...to crack down on abuses of dominance...

Further modernize merger reviews, including [ending] “killer acquisitions”...

Enhance protections for consumers, workers, and the environment...[and prevent] “greenwashing” claims [as well as]...focus on worker impacts in competition analysis;

Empower the Commissioner of Competition to review a wider selection of anti-competitive collaborations...

Broaden the reach of the law by [allowing]...private parties [access to the tribunal, including with remedies].

I think the comprehensive changes outlined in the fall economic statement are consistent with the comprehensive nature of consultations.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Are you saying to me that there's not going to be a second-phase modernization of the full Competition Act coming from your department?

[Mark Schaan]

I think you'll find, when the legislation is tabled, that the amendments in the fall economic statement are quite comprehensive in nature and speak to nearly all the areas for which the department consulted over the course of the consultation.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Has the department done studies on what factors are impacting the rising price of groceries in Canada?

[Mark Schaan]

The department continues to analyze the overall sector as part of the overall consideration of potential measures to take.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Where did the carbon tax rank in some of those measures? Has the department studied that at all?

[Mark Schaan]

The specific analysis of that market is not under my domain, Mr. Chair. I'm here representing the Competition Act.

[Ryan Williams, Conservative, Bay of Quinte, ON]

I'm asking if there ever has been a study done by your department on the effect of the carbon tax on food pricing.

[Mark Schaan]

I couldn't say yes or no, Mr. Chair. I'm not in a position to know whether or not there's been work done in that area.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Last year, the government made $1 billion in GST revenues off grocery retail items, charging for somewhere over 3,600 items in grocery stores. Has your department ever studied food affordability in terms of the snack tax, prepared tax, where GST is having an impact on grocery prices at the grocery store for Canadians?

[Mark Schaan]

Thank you, Mr. Chair.

I know proposals like the snack tax and others were raised in the consultations and in the considerations of the meetings the minister and the department held with a number of players within the grocery market. Obviously, the jurisdiction for tax changes rests with my colleagues from the Department of Finance, but I think those considerations have been raised by members in terms of the overall discussions on the grocery file.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Are there any reports that have been tabled? Has there been any internal analysis of those taxes that's been developed, or are there any reports or documentation at all in your department?

[Mark Schaan]

I know there are a number of public reports—I've seen them on social media, for instance—that have indicated a certain amount of analysis. I know, obviously, the department has been looking broadly at some of the impacts and how to potentially stabilize food prices in the sector.

[Ryan Williams, Conservative, Bay of Quinte, ON]

If you have any of those reports in your department, please table them with the committee.

As part of what we were going to call the “theatre piece” earlier this fall, the minister admonished the grocery store CEOs and threatened them with penalties if they don't bring down prices. What are those penalties going to be?