Thank you very much, Mr. Chair.
I think it's my first time at your esteemed committee. I feel privileged to be here today.
Good afternoon everyone.
It is a pleasure to be able to speak today to the Competition Act amendments contained in Bill C‑56, the affordable housing and groceries act.
Competition drives innovation. I think every member would agree. It lowers prices and encourages better product quality and choice. That's what we want for Canadians.
Our competition framework needs to be updated to keep up with today's reality. This is why we've introduced Bill C-56, which includes some of the most significant reforms to the Competition Act since 1986, some 37 years ago.
As I said, over the past decades, markets have greatly changed due to digitization and globalization. We have seen corporate consolidation and an imbalanced distribution of economic power in our country.
Delivering on the government’s commitment to undertake a formal review of the law and its enforcement regime, I launched the consultation on the future of competition policy in Canada, in November 2022.
The consultations were extensive and very comprehensive. They lasted 120 days, with five round tables across Canada. We received more than 400 submissions from Canadians and stakeholder organizations.
Bill C‑56 contains important amendments that give the Competition Bureau increased powers. We focused on prioritizing these changes because we knew they would have a real and significant impact on Canada’s retail grocery sector, which needs greater competition and, certainly, more choice for consumers.
It's very simple, colleagues. The bill makes three key amendments. The first one is to allow the bureau to seek subpoenas to compel information when conducting market studies. Second, we will repeal the so-called efficiencies defence, which currently allows harmful mergers to proceed, even if they don't benefit Canadians. Third, we'll expand the scope of reviewable agreements that could harm competition, such as restrictive covenants you find in leases when you have a large grocery store that collaborates with the landlord to block a small grocery store from coming in nearby.
Let me talk a bit about market studies.
The purpose of market studies conducted by the Competition Bureau is to better understand competitive dynamics and make recommendations to government. Currently, the bureau cannot compel companies to provide information outside a law enforcement investigation. As a result, the studies it releases may be missing important information.
This deficiency was made clear by the bureau’s recent retail grocery market study. The bureau did not benefit from the full co-operation of the major grocery chains for its study, and the Standing Committee on Agriculture and Agri-Food recently recommended that this gap be remedied.
A large number of submissions to the public consultation were also in favour of granting formal information-gathering powers for market studies.
However, many stakeholders insisted that any framework that would be put in place should also provide safeguards to avoid fishing expeditions and undue burdens on companies. Our proposed framework takes these concerns into account, and it balances the need for the collection of vital information with reasonable safeguards to protect businesses.
On the so-called efficiencies defence, as you would recall, Mr. Chair, that's quite a unique and highly criticized feature of our competition law regime. It currently protects a merger that harms competition so long as generated corporate efficiencies offset the harm to competition.
Think about that for a moment. Why should we allow mergers that demonstrably harm competition in this country? That's the question we need to ask ourselves.
In our consultation, we heard that this exception was possibly the single-largest weakness in a law that had failed to rein in corporate concentration, including in the grocery sector.
The elimination of the efficiencies defence will give priority to the protection of competition in merger review. I would say to my esteemed colleagues that it is time for corporate mergers that don't benefit Canadians to be consigned to the history books.
Next is vertical collaboration.
However, agreements between non-competing entities, such as landlord and tenant, also known as vertical agreements, are outside the scope of the bureau’s review of potentially anticompetitive agreements.
An example of the kind of agreement that we want to stop is the use of what we call “land controls”, such as restrictive covenants that can prevent new grocery stores from setting up shop across our country. This hurts competition and can even lead to food deserts, when the original tenant leaves a particular location. This is, simply put, unacceptable, and I hope every member of this committee thinks so too. We will ensure that these agreements, whose very purpose is to restrict competition, will be reviewable.
In conclusion, the bill will benefit Canadians with an empowered Competition Bureau, enable greater competition, bring more transparency to markets, block harmful mergers and ensure the bureau can review all forms of anti-competitive agreements. I think what we want, and what every Canadian wants, is less consolidation, more competition and better prices for Canadians.
With that, Mr. Chair, I will be more than happy to take questions from my esteemed colleagues.