Finance Committee on Nov. 20th, 2023

[Matthew Boswell]

No, I don't believe that happened. I believe it was part of budget 2022 and flowed from there.

[Adam Chambers, Conservative, Simcoe North, ON]

Right. At the time, the government billed these Competition Act changes as monumental, but only provided industry an ability to comment on them once. Fast-forward another year, and they made off-budget cycle changes to the Competition Act with a separate bill, and they also called them monumental. They obviously forgot about them in the budget just a couple of months ago but came up with these new ideas just a few months later.

Are you concerned that we have significant changes to Competition Act law being driven a bit more by politics than by good public policy?

[Matthew Boswell]

I don't want to get into the political sphere; that's clearly not my role, but what I can say is that a very extensive consultation on the future of competition policy in Canada was undertaken by Innovation, Science and Economic Development. There were some officials here earlier. We participated in that as one of the multiple parties that were interested in the future of competition policy.

I think there were 400 submissions, including from business organizations and the Canadian Bar Association. It was extensive and long; it went on for a while. We put in a lengthy submission of over 50 recommendations, and lots of other parties responded to our recommendations and put forward their own.

As somebody who was involved and also an observer, I would describe it as a pretty comprehensive consultation.

[Adam Chambers, Conservative, Simcoe North, ON]

I can appreciate that. I guess what I'm a bit concerned about is that every three or four or six months, the government comes out with what they call monumental changes to the Competition Act, which is kind of on a piecemeal basis and with not as much time to consult on the final version of what they're proposing.

I mean, this is the consultation on the final version of significant Competition Act changes, when they could have put it in the budget just a couple of months ago.

[Matthew Boswell]

I'm sorry. I'm not really placed to comment on what they can or can't do. I'm just a lowly government employee.

[Voices]

Oh, oh!

[Adam Chambers, Conservative, Simcoe North, ON]

Listen, with what's going on in the world, I appreciate that you're in a very tough spot.

Mr. Lee, thank you for coming back to committee. I always love having you here.

The government talks about significant houses that will be built as a result of cutting the GST off of purpose-built apartment rentals. I'll concede that point. It's something that the Conservatives had proposed previously.

At the same time, Natural Resources Canada has come out with proposed changes to Canada's building code. They proposed these changes in 2017. No department, as far as we can tell, because we've asked officials, has done an analysis on how much additional cost that will add to each unit.

Don't you think that's a number we should want to know?

[Dr. Ian Lee]

Well, of course, because we're talking about the problem of housing today. As you've already heard from the other panellists, we have a problem with housing. Whether the figure is CHMC's 2.5 million or 3.2 million, we have an enormous supply shortage. Second, because of the land prices going up, it's far more costly to build a unit. Anything that drives up the cost now will make it even more acute. We should at least have a good cost-benefit analysis of what the cost is before we go forward and make a policy decision.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair. I think that's my time.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Now we go to MP Dzerowicz, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, Mr. Chair.

I want to thank everyone for answering questions and being here with us this evening to answer questions on Bill C-56.

My first question is for you, Mr. Boswell. We had officials here earlier, and I asked questions about all of the ways we're trying to improve competition policy in Canada. For me, it didn't seem like it was willy-nilly. It seemed like there was a very deliberate plan to improve competition in Canada. It was very thoughtful in terms of how they were going about doing it.

One thing we are worried about here in Canada is around productivity and business investment. Can you comment on the changes we've made to competition policy? Do you think it will have a positive impact on improving productivity and business investment here in Canada?

[Matthew Boswell]

Well, more competition in the economy, however that's generated, will result in a bunch of very positive outcomes. I'm sure you've heard about it all day today in terms of lower prices, more choice, more innovation and better service. It also drives productivity growth, though, which we all know Canada is in desperate need of at this time, and GDP growth. Improvements to the competition law framework over time will, we believe, improve competition in Canada.

I should say, though, and Mr. Lee referenced this in his opening statement, that this is not the end of the discussion. One of the big problems we have in Canada is regulatory barriers to competition. We at the bureau have been pointing this out for some time now. We really need to take a whole-of-government approach to competition in our economy, at all levels of government, to examine the regulations we have that might unnecessarily hinder competition.

These reforms are important to give the bureau more powers to be an effective law enforcement agency. The government increased our budget, which had been stagnant for a very long time. They did that in 2021. In 2022 there were amendments. There are amendments in Bill C-56. As we heard last week in the fall economic statement, there's more to come.

That's all very important for the policy framework and for the enforcement of the law, but we also have to be a country that takes competition seriously in the organization of all its affairs, including how governments regulate and how they can unintentionally hinder competition through regulations without analyzing the competitive impact.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, I appreciate that.

My next question, because I have only another two minutes left, is for Mr. Ross.

Mr. Ross, you have been in my riding a number of times, because I have a number of co-ops, and co-ops are very popular. I want to thank you for your leadership in promoting the co-op housing development program we announced in 2022. We hear your message very loud and clear in terms of getting that launched ASAP, so thank you for that.

Our federal government has also invested in supporting co-ops in terms of providing top-ups, I think for 10 years. Can you remind us of how federal government investment in co-ops has been supportive of them and keeping them going and healthy in Canada?

[Timothy Ross]

I believe you may be referring to the federal community housing initiative, which is a program that doesn't subsidize housing co-operatives but helps low-income members of housing co-operatives with their cost of housing so that they can remain affordably housed and stably housed within the communities they're so much a part of. That was a $500-million investment through the national housing strategy.

That program did replace stable rental assistance to low-income households that had been in place for decades previously, so we welcome the 10-year reinvestment to create security of tenure for low-income members of housing co-operatives, though 2028 is coming quite soon, so we will certainly be seeking solutions to make sure co-ops remain inclusive, mixed-income communities and affordable to low-income households as well.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

Members and witnesses, we're going into our third round, which will be our last round.

We are starting with MP Lawrence for five minutes.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

I'd like to thank you guys for all being here late on a Monday night. That's terrific—thank you very much for your commitment to Crown and country, as it were.

Mr. Boswell, I have a question for you, just a technical question. With respect, of course, to the fanfare for the elimination of the efficiencies defence, the amendment does leave in section 90.1(4), which has similar language to section 96. Are you concerned at all that the efficiencies defence stays in place or could potentially be in place without the elimination of section 90.1(4)?

[Matthew Boswell]

Yes, we believe it should be repealed as well in section 90.1(4), because it doesn't make sense that competitor collaborations could benefit from an efficiencies exception whereas mergers no longer can. We said in our lengthy submission to the government that 90.1(4) should be repealed. We've also made other submissions on how 90.1 could be improved that align with what Mr. Bester said earlier, because to a great extent, it's a toothless section.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

That's perfect. Thank you very much.

I hope all the members were listening, because there might be an amendment to that effect.

I want to change course a bit to talk about restrictive covenants. It's my understanding that the intention is to remove those restrictive covenants, where they say, for example, you can't have a bakery within 1,000 miles of the other bakery. My question is, first, is that true? Secondly, is it retroactive, or is it only going forward in your understanding?

[Anthony Durocher]

The way it's framed in Bill C-56 right now is such that it would be going forward and take effect a year from royal assent. Part of what that provision for that change to section 90.1 would do is that it would enable us to address anti-competitive agreements between parties that are not direct competitors, so to address vertical agreements, including in the form of restrictive covenants, when appropriate.

To add on restrictive covenants, it's certainly an issue that we examined in the context of our grocery market study. One of our key recommendations to governments, particularly at the provincial and territorial level, was that these can be very harmful to competition, particularly in the grocery sector, and that provincial and territorial governments should consider limiting their use or banning them outright.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Lee, I see you nodding your head there.

Would you agree with those comments about the removal of restrictive...?

[Dr. Ian Lee]

Yes, and I don't want to leave the impression that I don't think the Competition Bureau is doing a great job. I think they are.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Oh, oh!

[Dr. Ian Lee]

They're doing a fabulous job.

However, that's the sort of.... Those kinds of anti-competitive practices are what should be pulled out, banned and abolished. Absolutely.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

That's perfect.

I'm sorry. Is it “Mr.” Lee or “Dr.” Lee?

[Dr. Ian Lee]

It's Ian Lee.