Finance Committee on March 19th, 2024

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

Please do. It's so important for families.

[Douglas Wolfe]

Of course.

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

Thank you.

I have a sense that I'm quickly running out of time, so I'll be really quick. Could you speak to the rationale of why you brought forth the EI changes for adoption leave?

[Mona Nandy, Executive Director, Employment Insurance Policy, Skills and Employment Branch, Department of Employment and Social Development]

Thank you for the question, Chair.

The rationale for bringing forth the 15-week shareable new EI benefit that would support those who become parents through the process of adoption or through the process of surrogacy would respond to a Government of Canada commitment to introduce such a benefit. It was outlined in the mandate letter of 2021 for the then Minister of Employment, Workforce Development and Disability Inclusion.

It would also ensure that the EI program continues to be responsive to the different ways in which families are formed, including, as I said, through the many different types of adoption and surrogacy. It would cover the same types of adoption that are currently covered by EI parental benefits.

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

Am I still good, Chair?

[The Chair, Liberal, Peter Fonseca]

You have a little over a minute left.

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

Okay. Thank you.

I think I'm going to have to change the table seating again. I'm sorry about that.

I'm just wondering how the changes to the Canadian Payments Act will deliver faster and more secure options to pay bills and transfer money. Again, it's linked to families.

I'm sorry about the musical chairs.

[The Chair, Liberal, Peter Fonseca]

Is there a particular division or particular officials who can answer that?

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

I think it's probably more general, if anyone wants to take the question.

[The Chair, Liberal, Peter Fonseca]

I do understand, members and officials, that we are losing some time in transition here. We will build some of that into members' time.

Would you identify yourself and your department?

[Nicolas Marion, Senior Director, Payments Policy, Department of Finance]

Absolutely. I am Nick Marion of the payments policy team at the Department of Finance.

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

Thank you, and welcome.

The question is about the Canadian Payments Act. Obviously, it strengthens Canada's payment system to deliver faster, more secure and lower-cost options to Canadians to pay their bills and transfer money. How will that change basically benefit Canadians? Obviously, it's an important question in light of the challenges so many are facing.

If you could just speak to that, I would be grateful.

[Nicolas Marion]

Yes, absolutely.

Maybe I can just start by describing the payments modernization program.

Payments modernization has three components, the first being expanding membership eligibility in Payments Canada, which is the subject of the amendments before this committee, as well as the establishing of the Retail Payment Activities Act regime, which will effectively enable the Bank of Canada to supervise registered payment service providers. The regime itself, that is, the final regulations, has been released. Registration of payment service providers will begin in November of this year, with the substantive elements of the regime coming into force in September 2025. That's the second part of the program.

The third part of the payments modernization program is Payments Canada launching the real-time rail, which is effectively a new payment system that enables instantaneous data-rich payments to be exchanged, cleared and settled instantly 24/7. The purpose of this payments modernization program is to provide new payment options for consumers and for businesses that enable these fast payments, allowing new payment participants into the ecosystem, regulated payment participants in the ecosystem, and provide lower cost opportunities, again for the benefit of Canadian consumers and businesses.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Thompson.

Now we're going virtually to MP Ste-Marie in the riding of Joliette.

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

Thank you, Mr. Chair.

Good morning, everyone. Thank you to all the officials for being here.

My first questions will be about the proposed amendments to the Competition Act and the Competition Tribunal Act found in division 6 of part 5 of the bill.

The Commissioner of Competition sent a letter to the Standing Senate Committee on National Finance. I imagine that the commissioner will also send us a letter—perhaps it's being translated right now. The commissioner welcomes the amendments that expand the powers of his office, but he has a list of recommendations for us to consider that will strengthen and improve the amendments. There are six recommendations on the list.

I'd therefore like to know if you've considered the six recommendations and if you have any general comments on them. If you don't have them, I can read them out to you.

[Mark Schaan, Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry]

Mr. Chair, I thank the member for those questions.

My name is Mark Schaan, and I'm the senior assistant deputy minister for the Strategy and Innovation Policy Sector at Innovation, Science and Economic Development Canada. I'm here with my colleagues Samir Chhabra and Martin Simard.

With respect to the letter from the Commissioner of Competition, we looked at the recommendations he proposed. Some of the recommendations are not specific amendments, but rather general suggestions to the committee for future legislation.

In terms of the recommendations for amendments to Bill C‑59, I'll turn it over to my colleagues to say a few words about those suggestions.

[Martin Simard, Senior Director, Corporate, Insolvency and Competition Directorate, Department of Industry]

Good morning. My name is Martin Simard, and I report to Mark Schaan.

There are six recommendations. I don't know how much time we have, but I can quickly explain why the government introduced this bill. The rest will be up to the committee.

First, the commissioner is proposing an amendment regarding drip pricing or last-minute price changes. That's not necessarily within the scope of this bill. This recommendation came from a [Inaudible—Editor] two years ago. The commissioner suggested changing what was done two years ago, because there was an oversight. However, in Bill C‑59, we simply reproduced what had been done, because we wanted all provisions on equal footing. That's why the amendment proposed by the commissioner is not in Bill C‑59.

Next, with respect to greenwashing, as Mr. Schaan mentioned, this just recommends that greenwashing be considered as a factor. Therefore, it doesn't suggest a specific amendment.

In terms of the ordinary selling price of products, the commissioner suggests reversing the burden of proof. In Bill C‑59, the government seeks to correct a concordance error between the English and French versions. This meant that, to prove that someone was posting a sham discount, people had to look at the entire marketplace to determine the average price of the product in question. The bill corrects that by requiring instead that the past prices posted by sellers themselves be used to determine whether a discount is genuine. So the government wants to clarify that.

However, the commissioner wants us to go further and make companies responsible for keeping a price list and proving that they offer genuine discounts. The government didn't go that far. All the government said was that it had to be based on the prices set by the seller. Here, we're taking into account the fact that not all SMEs have a price list, and that could be a burden for them. Currently, the commissioner's power of examination gives him access to large companies' price lists. That's why the government didn't go any further.

Furthermore, with respect to mergers, the commissioner suggests setting a percentage by default and reversing the burden of proof there as well. Currently, the Competition Tribunal cannot prevent a merger solely on the basis of market share. In Bill C‑59, the government removes this barrier, which would allow the tribunal to make intuitive presumptions if market share has become very high. Once again, the commissioner wants us to go further and set a percentage in the act. To our knowledge, no other countries are doing that. Bill C‑59 is in line with what the United States is doing, which is allowing the courts and jurisprudence to evolve.

Basically, in order for a merger to be challenged before the Competition Tribunal, it has to significantly reduce competition. The commissioner proposes requiring that the solutions put forward in the event of a challenge, such as the sale of a company's shares, be used to fully restore competition. The government didn't go that far because a merger can only be challenged if it has a significant impact on competition. It's therefore not clear why the solution to a problematic merger should mean that it has no effect on competition. That's why the government didn't go as far. Once again, the commissioner will be able to present his view on this.

Finally, the commissioner expressed doubts about the new environmental certification process established in Bill C‑59. I can tell you why the government wants to establish the process. A number of companies and environmental groups have told us that getting together to stop the sale of certain toxic products to protect the environment could be considered a cartel and therefore a criminal offence under the Competition Act. The government therefore recommends that a pre-authorization system be set up within the Competition Bureau. That way, people will be able to tell the Competition Bureau that they want to agree not to sell certain toxic products to protect the environment, and the commissioner will then be able to issue a letter saying that they are not at risk of criminal charges. The commissioner will be able to explain why he has doubts. I think his concern is that people will hide behind fake environmental concerns to create a cartel.

However, in the government's view, all the bases are covered. The commissioner has full discretionary powers, so when in doubt, he can simply not issue the letter.

However, we've heard from businesses and environmental groups that criminal penalties can deter companies from engaging in environmentally friendly collaborative efforts. That's why, once again, the system that allows for these collaborative efforts is administered at the commissioner's discretion.

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

Thank you very much for making your responses so clear.

[The Chair, Liberal, Peter Fonseca]

That is the time.

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

Okay. Thank you.

I'll come back to this in the next round of questions.

[The Chair, Liberal, Peter Fonseca]

We go to MP Blaikie, please.

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

Thanks very much, Mr. Chair.

I'm going to start with my question about the Competition Bureau provisions just to save a little bit of time and exercise for officials.

I want to ask about the greenwashing provision in the bill. I think it talks about ensuring that there are adequate and proper tests for environmental claims about products, but I think folks are concerned that there are other ways to falsely promote something as being environmental, for instance, activities, services or a brand generally.

I'm wondering how "product" is defined and whether it covers that more broadly or whether changes would have to be made to the legislation in order to have a more comprehensive prohibition.

[Mark Schaan]

I'll start and then may turn to my colleagues for supplemental responses.

The entry point for the Competition Act is on the substantial lessening of competition or price competition in the marketplace, and the deceptive marketing provisions of the Competition Act rest in that assurance that what a consumer is experiencing in the marketplace is not unduly uncompetitive or potentially provides false information about a given transaction. Hence, there is hardwiring around a product being the transaction that a consumer is potentially undertaking.

If the product claim that's being made by the organization extends to the point in which there might be deception of the consumer to the point where it might actually sway their overall choice in the actual transaction, then, potentially, there's an understanding that that could feed within the conceptions of deceptive marketing when an environmental claim is made. However, broad environmental claims that are not specific to the actual transaction—which is the heart of the constitutional underpinning of the act itself and the enforcement powers of the bureau—would not necessarily be subject to that because that's not the hardwiring of the act. The act is about that transaction and the potential for deception for a consumer in that transaction.

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

Aren't you concerned that that's a pretty narrow way of looking at it, though? If a company is making deceptive claims about its brand, and giving consumers the impression that it's a green brand and using that indirectly to give a kind of green credibility to its products, that's not captured if we look narrowly at the product transaction, but it's certainly part of informing consumer decision-making. If the point of the legislation is to try to promote honesty within the market and build confidence for consumers that when they're relating to companies that sell them products, they're getting a pretty above board representation of what they're buying into when they purchase a product, shouldn't we be concerned to have legislation that isn't so narrowly focused on product transactions? I understand that the European Union, for instance, has a more general application of its anti-greenwashing provisions.

[Mark Schaan]

I'd make two points. One is, obviously it's difficult to port other systems into ours, particularly, the European Union's, which is able, at the commission level, to do things that, potentially, aren't necessarily part of the same federated structure that we possess here within the Canadian Competition Act specifically.

Our view isn't necessarily that there shouldn't be some standards, for instance, around the types of environmental messaging that companies are making. This relates back to climate disclosures and climate reporting—which is work that's also under way within both our department and the department of ECCC, and where, I think, there can be greater standardization around environmental messaging without necessarily trying to get outside of the remit of the Competition Act. That's where we would probably differ, which is to say, within the guise of the Competition Act and its constitutional underpinnings in the trade and commerce power, we are about that transaction, we are about that deception.