Finance Committee on Nov. 20th, 2023

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

If that's true—

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

You have talked down the investment with Stellantis.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Minister, I have limited time—

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

You have talked down the one with Volkswagen, and you're talking down on Northvolt.

You should be proud, sir, about what we have done in this country.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Minister, your own Government of Canada website lists jobs from Stellantis. They mention candidates with or without a valid Canadian work permit. That's for Stellantis and it's on the Government of Canada website.

I think it's the government that's confused when it's advertising jobs for foreign workers on its own website for this, and it can't seem to get its story straight.

[The Chair, Liberal, Peter Fonseca]

That is the time.

I'm going to ask that we stop with the crosstalk because it does affect the interpreters.

We are going to MP Thompson, please.

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

Thank you, Mr. Chair.

I'll share my time with my colleague MP Dzerowicz.

I'll begin with you, Minister. Thank you for coming to speak about the Competition Act. It's very important.

Would you speak to the ways in which government plans to introduce the additional measures that were outlined in the fall economic statement?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Yes. Thank you, dear colleague, for asking that question.

On the point about the Competition Act, it was really like a three-part act. As you said, in budget 2022 we did a number of things at the time. There was an issue about penalties and wage-fixing, for example. I called that a down payment on competition. We knew at the time that there was much more to be done. That's why we've had this consultation work that has lasted for about two years. I think members on both sides would agree that competition is key in our country. If nothing has been done in 37 years and you're going to do something, you need to do it quickly but certainly you need to do it right. That's why we have consulted widely.

What we are presenting in Bill C-56 are these three measures—subpoena power, an end to the efficiencies defence, and looking at vertical agreements—but you also saw in the fall economic statement a reflection of what we heard. In the “what we heard” report, there are a number of things that people have said we need to look at. You're talking about predatory pricing, about what they call “killer acquisitions”, about greenwashing and a number of other things.

Take greenwashing as an example. We're going to have a regime where if you're making a statement that what you're doing is improving the environment, or you're linking that to your record on the environment, you'll have a framework around that. I think with these provisions we're also allowing more private parties to raise actions. This is really going to complement things.

I think we'll be the government, Ms. Thompson, that will have done for this country, with both the Competition Act and the Investment Canada Act, the biggest reform we've seen in decades for the country to really be able to protect itself. We want foreign investment, but we also want more tools in the tool box to protect our national and economic security. On Bill C-56 and what you find in the fall economic statement, if you take these three acts together, you'll have the broadest reform of competition in the country.

The reason we want to do that is to bring us into the best in class in the G7. I'm always looking at what we're doing and how it would compare with the G7 countries. I think these reforms are much needed to really modernize our framework and for market participants to take us seriously when it comes to competition. The subpoena power comes to me as one very simple example that people look at and say, “Wow, imagine. To think that in Canada you have to engage with the competition commissioner, but he doesn't really have any power.” That doesn't make sense. We need to put a stop to that as quickly as possible.

The work of this committee and Bill C-56 will help with that.

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

Thank you.

[Julie Dzerowicz, Liberal, Davenport, ON]

How much time do I have?

[The Chair, Liberal, Peter Fonseca]

You have about two minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you for being here today, Minister.

You said the changes in Bill C‑56 would ensure greater transparency.

Would you mind explaining how?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

First off, thank you for asking your question in French. I am delighted to be able to speak with committee members in French.

The first amendment proposed in Bill C‑56 pertains to market studies, which will provide more transparency and help the Competition Bureau better understand the market dynamics.

The bureau's study on the retail grocery industry across the country is the most recent example of how that change comes into play. The study revealed a number of deficiencies, and that is why your fellow members on the Standing Committee on Agriculture and Agri-Food recommended that the Competition Bureau be given enhanced powers.

One of the problems your fellow members flagged was how difficult it was to understand the market dynamics without all the information. That is a deficiency today. We have a regulator that doesn't have all the tools it needs to compel information and evidence, so it can understand the dynamics of the market. To understand anticompetitive practices, you first have to understand the dynamics of the market.

I'll give you an example. When I spoke with executives at U.S. grocers who were interested in entering the Canadian market, I learned that one of the barriers they faced was vertical collaboration between suppliers and customers in the form of agreements. As I was telling Mr. Ste‑Marie, something that happens a lot in mall settings, especially in rural and remote areas, is that the mall has only one major grocery store. Leases contain non-compete clauses that prevent competitors from opening within several kilometres of the area.

If a wholesale-style retailer decides to leave the mall, which does happen, it creates a food desert. In other words, you end up with no grocery store within several kilometres, because the non-compete clauses have deterred new players from entering the market over the years.

When we met with independent grocers across the country—

[The Chair, Liberal, Peter Fonseca]

Please wrap up, if you can, Minister, because we're at the time.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

When we met with them, they said it was one of the biggest changes they needed to ensure increased competition across the country.

[The Chair, Liberal, Peter Fonseca]

Thank you, Minister.

Thank you, Ms. Dzerowicz.

Now we'll go to MP Ste-Marie, please, for five minutes.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

I also want to let Ms. Dzerowicz know that her French is excellent. I commend her, and I want to say thank you.

Minister, if I understand correctly, you said that, if Parliament passes Bill C‑56 with the proposed amendments in Government Business motion number 30, the Competition Bureau will have powers when it conducts a study on competition. The powers don't apply for the purposes of legal proceedings. They apply to the study of a sector or market. The bureau will be able to compel witnesses as well as evidence.

Is that what you are saying?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I think you've fully understood what is being proposed.

That's why I'm saying that what we are doing here, today, and what you are doing with your fellow members, Mr. Ste‑Marie, matters. We are really moving into a whole new world. We are moving away from voluntary co-operation and towards judicial powers to compel information, documents or testimony, to fully understand the market dynamics.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Very well. It has to do with market studies, then.

That wasn't clear to me when I read Bill C‑56. Obviously, we don't have the text of the amendments flowing from Government Business motion number 30 yet, so we are eager to see them.

You said that a number of the amendments stemming from Government Business motion number 30 came from a bill introduced by NDP leader Jagmeet Singh. I'm thinking of the amendment to increase fines and really make them punitive instead of just being the cost of doing business. The fine would go from $5 million to $25 million. There is more to it than that, but the fine would be at least $25 million.

As it currently stands, Bill C‑56 still fails to address something, as far as I'm concerned. There is nothing stopping a company from profiting from the lack of competitors by overcharging consumers. For example, if a grocery store has a monopoly in a particular area, the bill wouldn't stop it from taking advantage of its monopoly to gouge customers by overcharging for products.

The bill sponsored by Jagmeet Singh, Bill C‑352, deals with that aspect. It adds the practice of directly or indirectly imposing excessive and unfair selling prices.

Why didn't you include that provision in the possible amendments covered by Government Business motion number 30?

Does the government agree with that amendment?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I would first like to thank you, Mr. Ste-Marie. You are always well informed when you analyze bills. I have known you a long time. I sat with you when I was parliamentary secretary to the minister of finance at that time.

I think the bill proposed by Mr. Singh talked about tackling the effects: price increases, or what you called price gouging.

What we want to do is tackle the cause: the lack of competition, which leads to these price increases. History shows that regulating prices is a complex undertaking. As you have seen, some countries have tried to do this. You talked about price gouging, which is the effect, when the cause is a lack of competition.

I think that all of the measures set out in Bill C-56, the fall economic update and budget 2022 are the best way of tackling the causes. We decided to focus on doing that, because that is really what we need to tackle.

With that said, we have incorporated a number of the suggestions in the bill introduced by Mr. Singh. For example, the penalties to which you referred will be reformed. There is also the legal criterion. It talks about intent and effect. That was taken from Mr. Singh's bill.

We are listening. I think we have demonstrated our goodwill and our desire to move forward. Bill C-56 is a step in the right direction. As you say, Government Business No. 30 allows you, as a committee, to look at these various aspects. There will then be the fall economic statement.

I think that when we have finished working on the three core areas, the Competition Act will bring us into the modern economy. We will have the tools we need to ensure more competition, better prices, and certainly more innovation in the Canadian market.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Your answer is clear. Thank you.

With respect, however, I think there will still be sectors in some economic regions where there will be monopolies. Competition is allowed to develop there, but there are times when it is not viable. In my opinion, there is still a blind spot in this regard.

Regarding the amendments proposed in Government Business No. 30, I do not understand the third one, which is a procedural amendment and gives the court the power to prevent an anti-competitive practice. As I understand it, the existing act already prohibits this kind of practice.

Will there be something else? Given that we do not have the amendments in front of us, I am forced to indulge in a bit of speculation.

Is that not simply a repetition, in the third amendment suggested by Government Business No. 30?

[The Chair, Liberal, Peter Fonseca]

Minister, give a very short answer, please.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

In the current act, you have "intent and effect". In the proposals that might be considered, what we have is instead "intent or effect".

The key is the "and" which is being converted to "or". I think that is the key.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Very good, thank you.

Thank you, Minister.

It's now over to MP Blaikie, who will be the final questioner. It's MP Blaikie for Minister Champagne.