Evidence of meeting #136 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was productivity.
A video is available from Parliament.
11:55 a.m.
Liberal
11:55 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I have two questions. The first is for Ms. Love.
Can you update us on what the sign-up by dental hygienists has been for the CDCP?
11:55 a.m.
Chief Executive Officer, Canadian Dental Hygienists Association
We don't have the exact numbers, because the government has that data and hasn't shared it with us, but we know through social media that dental hygienists across the country are posting that they've signed up and enrolled.
We're waiting for the government to share that data, but we've had positive feedback across the country.
11:55 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Can you give us a sense anecdotally of what the reaction has been? Are most dental hygienists excited to sign up for the program?
11:55 a.m.
Chief Executive Officer, Canadian Dental Hygienists Association
I think most dental hygienists are excited, but there are concerns. We have had a number of information sessions, because there needs to be clarity.
There's not a lot of popularity with Sun Life as the benefits administrator, because it has been difficult for dental hygienists to work with Sun Life for many years. The government is aware of that, and Sun Life has committed to being ready for full electronic claims by May 1.
11:55 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Thank you.
Ms. Houle, can you confirm how the federal government has responded, if at all, to those six calls to action about encampments?
11:55 a.m.
Federal Housing Advocate, Office of the Federal Housing Advocate
I'm actually expecting a briefing today on the housing plan that's being released tomorrow, so I'll be able to answer that tomorrow.
11:55 a.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, MP Davies.
We thank the witnesses for their great testimony. We appreciate it. We wish you the best with the rest of the day.
We're going to suspend now as we transition to our next panel.
Noon
Liberal
The Chair Liberal Peter Fonseca
Members and witnesses, as you know, we have many panels today, and we want to make sure they have as much time as we can possibly give them.
With us today we have, from the Canadian Anti-Monopoly Project, Keldon Bester, who is the executive director. Welcome, Keldon.
From the Canadian Chamber of Commerce, we have Jessica Brandon-Jepp, the senior director of fiscal and financial services policy, and Bryan Detchou, senior director of natural resources, environment and sustainability.
From the Canadian Renewable Energy Association, we have Fernando Melo, who is the federal policy director.
From the Réseau FADOQ, we have Gisèle Tassé-Goodman, who is president of the provincial secretariat. Joining Gisèle is the special adviser on government relations, Philippe Poirier-Monette.
We're going to start with the Canadian Anti-Monopoly Project, please, for five minutes.
12:05 p.m.
Keldon Bester Exective Director, Canadian Anti-Monopoly Project
Thank you so much to the committee for inviting me to speak today on this important piece of legislation.
As you said, my name is Keldon Bester. I'm the executive director at CAMP, a think tank dedicated to addressing the harms caused by monopoly and building a more democratic economy in Canada.
We appreciate the opportunity to return to this committee and discuss improvements to Canada's competition law contained in Bill C-59.
Of the changes to the Competition Act in Bill C-59, I'm going to focus my time in two areas—the opening up of private access to the Competition Act as well as improvements to the merger enforcement framework.
Today, in contrast to places like the United States, where individual companies can bring cases against corporations harming competition, in Canada nearly every competition law case originates from the Competition Bureau. Despite the bureau's best efforts, it's an organization with finite resources and it can't have eyes on every aspect of Canada's $2-trillion economy. A more decentralized competition law enforcement framework is more likely to address harms to competition, especially those affecting small and medium-sized businesses.
Accordingly, a robust private access framework is an important complement to the expert work of the Competition Bureau, and Bill C-59 creates the foundation for this by expanding the scope of private access as well as allowing for damages to be claimed for harms caused by anti-competitive conduct.
I will shift to enforcement against harmful mergers. Today the Competition Act downplays the role that market structure and the number and relative size of players in a market play in determining competition. By removing language that rejects market structure as a potential indicator of the likelihood of competitive harm and by adding increases in concentration as a factor in evaluating a merger, Bill C-59 gives our competition law a better defence against mergers in markets where Canadians already face limited choices.
Bill C-59 also addresses a gap in Canada's law that excludes a core component of our economy from the analysis of mergers. We often talk about competition and the benefits to consumers, but Canadians benefit from competitive markets not just as consumers but as entrepreneurs and workers as well. Competition law has long focused on the effects of consolidation on consumers and businesses, but has largely ignored the potential effects on workers.
Thankfully, this is changing. It's changing at home with the addition of wage-fixing and no-poach agreements to our laws, and it's changing abroad with the inclusion of the effects on workers in a recent U.S. Federal Trade Commission challenge against a major merger in the grocery sector.
Bill C-59 is another positive step in this direction. By including effects on workers as a potential factor for review, Bill C-59 gives our competition law a more complete view of the costs of consolidation to Canadians.
In addition to these changes, the committee should consider the ways in which Bill C-59 could go further to protect Canadians in markets where they already face limited choices. When a market is highly concentrated and is characterized by a few large players, further mergers and consolidation are more likely to harm competition at a cost to Canadian consumers, workers and entrepreneurs.
To recognize this, a bias against mergers and markets with few players, often referred to as a “structural presumption”, should be incorporated into Canada's competition law. With a structural presumption, merging parties must work harder to prove that a merger truly is to the benefit of Canadians, and these presumptions can intensify as markets become more concentrated, banning them outright where a single firm dominates a market, for example.
As others have pointed out, Canada's current competition law has repeatedly allowed mergers that create a near or literal monopoly, killing competition and choice for Canadians. This is a consequence of a competition law that does not take market structure seriously, a trend that Bill C-59 has an opportunity to break with.
Bill C-59 is an important component of comprehensive reform to the law that Canadians depend on to protect competition and affordability in all sectors of the economy, and this committee has a chance to strengthen these reforms to truly protect Canadians.
Thank you for your time. I look forward to your questions.
12:10 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Bester.
Now we'll hear from the Canadian Chamber of Commerce. I believe you're splitting time, Mr. Detchou and Ms. Brandon-Jepp.
12:10 p.m.
Bryan Detchou Senior Director, Natural Resources, Environment and Sustainability, Canadian Chamber of Commerce
Thank you, Mr. Chair and honourable members.
We are pleased to appear before you on behalf of 400 chambers of commerce and more than 200,000 companies of all sizes from every sector of the economy and every region of the country.
The Canadian Chamber of Commerce's main concern today is that Canada's economic competitiveness is declining at the same time as our productivity has shrunk in 11 of the past 12 quarters. This means that Canadians have fewer opportunities to pursue their personal goals and that they have to spend more to maintain the same lifestyle.
The government should treat all businesses, whatever their size, as essential partners in our collective successful endeavours, because they can generate investment and growth, and help meet the productivity challenge.
The committee has already received our formal submission on Bill C‑59, which included seven specific recommendations and proposed amendments. Today we will focus our comments on investment tax credits, competition policy and the digital services tax.
First, on Canada's new investment tax credits, overall the Canadian Chamber of Commerce applauds new investment tax credits such as the CCUS ITC as tools to unlock private sector investment in a low-carbon economy. In order to maximize the impact of the clean technology manufacturing tax credits, we recommend that they be refined to include intangible property and mine development investments.
Further, we believe the clean technology ITC should be expanded to include pension plans, similar to the fall economic statement inclusion of real estate investment trusts. We recommend expanding the eligibility of this tax credit to encourage investment in housing and in commercial real estate that supports the decarbonization of Canada's economy.
Given the current uncertainty around the permitting environment in Canada, we also recommend extending the timeline for phasing out the clean technology manufacturing ITC and the clean electricity ITC in order to secure large investments within the Canadian mining, manufacturing and electricity sectors.
Finally, it is imperative that all the new ITCs be implemented as soon as possible, with clarity on procedure and eligibility, so that the private sector can fuel the next wave of long-term investment in our economy.
12:10 p.m.
Jessica Brandon-Jepp Senior Director, Fiscal and Financial Services Policy, Canadian Chamber of Commerce
Moving on to competition policy, we remain concerned by the ad hoc approach to changes to the Competition Act and we encourage the government to carefully review our submission and continue to consult with the business community, including the U.S. Chamber of Commerce, on changes to the act.
In particular, there are concerns around overwhelming the Competition Tribunal with frivolous claims, and there has been a lot of talk about structural presumptions in merger reviews pointing to misguided interpretations of U.S. merger guidelines as inspiration. These issues, among others, have the potential to make Canada’s competition regime less effective, rather than improving it.
That brings us to new corporate taxes and the digital services tax. The irony is that just as we’re contemplating ITCs and refinements to our competition regime to spur private sector investment, innovation and growth, a range of new and potential business taxes threaten to repel investment, create uncertainty and discourage new players from entering the Canadian marketplace.
Specifically, we call on the government to avoid imposing new taxes on the business sector, which Bill C-59 proposes to do with a digital services tax. A DST is particularly concerning, as it includes a retroactive tax to 2022 on online services that Canadians have come to rely on, even though over 120 countries, including our largest trading partner, the U.S., have agreed to delay imposing such taxes. The DST is the latest proposed tax that violates several critical tax principles of providing clarity, certainty and stability for businesses and help ensure Canada remains a competitive environment for investment.
First, we strongly object to the concept of tax retroactivity, which has been a concern in the latest proposals regarding both the DST and EIFEL. The effective date of proposed taxes should be during the following tax year or, at a minimum, upon proclamation. Retroactivity robs businesses of the certainty they need to make productive investments in innovation and growth, and it has a chilling effect on future investment across the economy.
Second, we oppose any measure that will increase costs for businesses and Canadians when both are facing challenging economic headwinds.
This new tax will affect far more than just large multinational corporations; if enacted, the DST will ripple across the Canadian economy, affecting many small and medium-sized businesses and hurting Canadians. In fact, this tax will disproportionately impact businesses with low profit margins, because unlike corporate income taxes, digital services taxes are levied on revenues rather than profits. As a result, there is a disproportionate tax burden being placed on companies with low profit margins, such as the online travel sector.
Third, and finally, we must sound the alarm that successive administrations in Washington have signalled that enacting a DST could provoke damaging trade retaliation, potentially against key sectors of the Canadian economy. We are hearing directly from business owners in many sectors beyond the digital services space who are concerned that their products may be impacted by retaliatory tariffs.
At a very minimum, we call for the punitive and retroactive application of the DST to be cancelled and for the introduction of a safe harbour for low-margin businesses similar to the OECD's amount “A” of pillar one, in which there is a safe harbour provision.
Bill C-59 and the forthcoming 2025 budget present an opportunity for decisive action. We urge Ottawa to adopt pro-growth policies that will invigorate Canada’s economy, instead of regressive taxes—
12:15 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you. We've gone well over time, but you'll have an opportunity to add more when answering members' questions.
Now we're going to the Canadian Renewable Energy Association.
Mr. Melo, please go ahead.
12:15 p.m.
Fernando Melo Federal Policy Director, Canadian Renewable Energy Association
Good afternoon, Chair.
Thanks to you and this committee for inviting me to testify on behalf of the Canadian Renewable Energy Association, also known as CanREA.
As part of this chamber study on Bill C-59, the fall economic statement implementation act, 2023, I would like to start by acknowledging that I am joining you today on the traditional and unceded territory of the Anishinabe Algonquin people.
CanREA is the voice for the wind energy, solar energy and energy storage solutions that will power Canada's energy future. Our 300-plus members are uniquely positioned to deliver clean, low-cost, reliable, flexible and scalable solutions for Canada's energy needs. With the passage of this bill, they will be able to do so at a pace and scale like never before, thanks to the proposed clean technology investment tax credit.
My members and the whole team at CanREA are very optimistic about the opportunities that the clean technology investment tax credit will create. This measure will allow companies to invest in a variety of low-carbon technologies to recoup between 20% and 30% of their project's capital costs as a refundable tax credit. When the enabling legislation for this investment tax credit is passed, it will rapidly accelerate the deployment of technologies like battery energy storage, solar systems and wind across Canada by strengthening the economics of renewable energy projects and crowding in capital to the sector.
As you well know, achieving Canada's climate goals will require a doubling or tripling of our generation capacity, but this is not the only reason to invest in new renewable electricity generation. The International Energy Agency notes that electricity consumption from data centres, artificial intelligence and the cryptocurrency sector could double by 2026. If Canada wants to stay ahead in a rapidly digitizing global economy, we will need more electricity generation, and the clean technology investment tax credit and the forthcoming clean electricity investment tax credit will enable that.
With these investment tax credits in place, Canada will be a competitive market for international developers of wind, solar and energy storage projects to invest in. Their relatively straightforward design and refundability will put the country in a competitive position relative to the U.S. and other jurisdictions that are looking to decarbonize their electricity systems. Companies looking to invest in renewable energy have also stated that the fact that the clean technology investment tax credit is available out to 2034 gives them confidence that Canada will remain competitive in the long term.
That said, CanREA members and their capital providers have made it clear that without these credits, they will invest in the U.S., the EU and other markets where a path to profitability is clearer. In a world where the demand for electricity is significantly growing, projects and capital will move to the area of highest return.
The reason I emphasize the importance of both the clean technology investment tax credit and the clean electricity investment tax credit, which has not had its enabling legislation introduced, is that the clean technology investment tax credit fails to include CanREA's indigenous members. CanREA and its members are committed to economic reconciliation, and this is why partnership with indigenous communities and companies is the industry norm.
This norm has been institutionalized, with every province and territory that has issued a call for power recently requiring that all projects bidding into these processes have some component of indigenous equity ownership. The exclusion of indigenous entities from the clean technology investment tax credit makes it incredibly difficult for bids into calls for power to be structured and renders the industry's traditional limited partnership ownership structure unworkable.
CanREA has been advocating change since the draft legislation for the clean technology investment tax credit was introduced in the summer of last year. Including indigenous entities as eligible entities to receive the clean technology investment tax credit will resolve the issues I've outlined.
For further details on this, I would encourage members of this committee to refer to CanREA's submission, which accompanies my testimony today.
Thank you very much for your time and consideration. I look forward to your questions.
12:20 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Melo.
Now we will move to Réseau FADOQ and Madame Tassé-Goodman, who will be speaking on their behalf.
April 11th, 2024 / 12:20 p.m.
Gisèle Tassé-Goodman President, Provincial Secretariat, Réseau FADOQ
Thank you very much, Mr. Chair.
Ladies and gentlemen, my name is Gisèle Tassé-Goodman, and I'm the president of Réseau FADOQ. With me is Philippe Poirier-Monette, our special advisor on government relations.
I'd like to thank the committee members for their invitation to comment on Bill C‑59.
Réseau FADOQ is an assembly of over 580,000 members aged 50 years and over. Through our various activities, we strive to make elected representatives and members of civil society aware of the realities facing seniors who are attempting to improve their quality of life.
As Bill C‑59 is highly technical, we will use our time before this committee to go over a number of measures that could be highly beneficial for seniors.
As we approach the tabling of the federal budget, it's important to point out that efforts are needed to improve the quality of life for a major segment of the population. When the previous budget was announced, our organization was pleased with the introduction of a measure to assist those who are less well-off with their grocery purchases.
Réseau FADOQ was also delighted with the government's intent to extend the Canadian Dental Care Plan to seniors. This initiative was enthusiastically welcomed by our members. Bill C‑59 also includes technical amendments to promote the implementation of the Canadian Dental Care Plan. People are eagerly looking forward to the deployment of this plan. Réseau FADOQ is hoping to see it come into effect smoothly and soon.
However, we would like to comment on some measures that were missing from the previous budget and from last November's fall economic statement.
During the 2021 electoral campaign, the government promised to increase the guaranteed income supplement by $500 per year for people aged 65 and over living alone, and by $750 per year for couples. Three years on, seniors are still waiting. It's important to remember that those receiving the guaranteed income supplement are among the least affluent in our society. That is why Réseau FADOQ is hoping they will deliver on their promise.
In 2021, the Canadian government was also working on introducing a tax credit for experienced workers. Given the current worker shortage, this would be a welcome measure because it would encourage many to either continue working or return to work.
Another proposal that is taking its time is expanding the Canada caregiver credit to make it a refundable tax-free benefit. Through these changes, this tax measure would become accessible to those who are less well-off and it would benefit more of the caregivers who are providing essential care.
Lastly, we'd like to return to the matter of the 10% increase in the old age security pension, which is now applicable only to those aged 75 years and over. This increase was, and continues to be, essential. However, those aged 65 to 74 do not understand why they are still excluded from the increase. At the moment, those under 75 who are living strictly on the old age security pension and the guaranteed income supplement have an annual income of $21,345. This is below the Canadian poverty line, which is based on the market basket measure. This index establishes the cost of a basic subsistence-level basket of goods. Those at this income level are living in economically precarious circumstances.
Financial distress can affect people of any age, and those aged 65 to 74 years should also receive the 10% increase to old age security.
I'd like to thank the committee members for their attention. We are now ready for any questions they may have.
12:25 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Ms. Tassé-Goodman.
We are going to get into questions right now.
In this first round, each party will have up to six minutes. The first six minutes will be for MP Williams.
Welcome to our committee, MP Williams. You're not one of our permanent members, but we look forward to hearing your questions.
12:25 p.m.
Conservative
Ryan Williams Conservative Bay of Quinte, ON
You can tell by my name tag that I'm not a permanent member, but I'm happy, Mr. Chair, to be here again. It's always nice to be at the finance committee.
Thank you to our witnesses for joining us today.
Mr. Bester, it's great to see you back again to talk about the changes to the Competition Act.
We've had a series of bills to amend the Competition Act in this Parliament. The first was my bill, Bill C-339, to eliminate the efficiencies defence. I had another private member's bill, but that was taken with the last government bill on open banking, which is always great. The government followed our lead with Bill C-56 and Bill C-59.
I know we've had a lot of input from your group into these bills, but I want to start with what's missing. What recommendations did not get included that are really important to this bill and to competition in Canada?
12:25 p.m.
Exective Director, Canadian Anti-Monopoly Project
There's a laundry list, of course, but we focus on the big areas in which there's still room for improvement.
As I mentioned, on the merger side, it's taking that structure seriously and ensuring that our oligopoly situation doesn't continue to backslide for Canadians.
The second would be on the abuse of dominance side. Are we addressing the threat of abuse of dominance or are we just waiting for Canadians to be harmed and reacting well after the businesses may have failed?
Finally, I think there's an anchoring piece around the purpose of the competition law. We haven't looked at it since 1986. We're still too focused on things like efficiency, things that have led to consolidation.
If there were three big areas, they would be mergers, abuse of dominance and the core purpose of the legislation.
12:25 p.m.
Conservative
Ryan Williams Conservative Bay of Quinte, ON
We're talking a lot about promoting and protecting competition in Canada because Canada has a monopoly problem. The result is that Canadians pay some of the highest prices in the world, in particular for banking, for cellphones and for airlines.
Going back to the issue of addressing mergers in this bill, this government has been involved in approving three mergers that have hurt Canadians: Rogers-Shaw, RBC-HSBC and WestJet-Sunwing. Are you aware of the reports from a lot of academics in North America that show that 95% of mergers have resulted in price increases? Can you comment on what the approvals of these mergers have meant to Canadians?
12:25 p.m.
Exective Director, Canadian Anti-Monopoly Project
You're right. There's a wide academic literature on the effect of mergers on factors like prices, and it's not limited to that: it also includes things like quality and innovation. What we see, I think, is mounting evidence that we need to have this bias against mergers, especially in already concentrated markets. We need to look at what kind of growth we want to have. Is it paper growth through acquisition or is it through investment, hiring Canadians and offering new products?
12:25 p.m.
Conservative
Ryan Williams Conservative Bay of Quinte, ON
In your opening comments, you touched on how our monopolies problem not only hurts Canadians in their pocketbooks but also hurts workers. Mergers are monopolies. I think we want to make that very clear. The merger changes we need to make to the Competition Act are on monopolies. It's the abuse of dominance and it's mergers as a whole.
When these companies get bigger, their market power also extends to workers' wages and their ability to squeeze workers' wages and to collude to keep workers' wages down. The fact is that there are fewer employers to choose from and fewer employers that they can bring their skill sets to and have decent wages. What effect is the increase in mergers and monopolies having on wages and workers in Canada?
12:25 p.m.
Exective Director, Canadian Anti-Monopoly Project
This is analytical work that we need to engage in, but in the U.S., there's been evidence of highly concentrated labour markets. We might think about rural or remote communities, but it's even in relatively large urban centres.
What we need to think about, with Canada having relatively high levels of concentration and more oligopolies than our friends in the U.S., is that it would make sense that the effect is the same or is magnified, such that workers are limited and can be, prior to changes, frozen out through no-poaching agreements and wage-fixing agreements.