Finance Committee on April 18th, 2024

[Yves Giroux]

For every single piece of policy proposal, be it legislation or a program, there has to be a memorandum to cabinet, which normally would include the number of employees required to implement that legislative piece or that program—or at the very least, in the Treasury Board submission. It's an integral part of the budget submission and the budget request to have the number of FTEs required to implement a plan.

[Adam Chambers, Conservative, Simcoe North, ON]

I have heard that there may be some significant amendments coming to Bill C-59. Do you think that those amendments, if they're substantial, would be better put forth to committee with some time to review them, as opposed to at report stage?

[Yves Giroux]

That's a question related to parliamentary procedure, and I don't think I'm the best person to answer that. It depends on the nature of these amendments, but if they're substantial, I would think so.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you and your office for all your work.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Now we'll hear questions from MP Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to say a huge thank you for the excellent presentations.

I'll start off with our competition commissioner. I have been very worried for years about a lack of business investment by our businesses in Canada. Before the pandemic, we had probably over 10 years of historic low interest rates. Typically, the theory is that if you have low interest rates, companies are going to take the cheap capital and actually reinvest in their companies. We did not see that.

I've suspected that one of the key things is around competition. Our government has done a lot of consultations around competition and how we strengthen competition law. I think we've had three bills that have attempted to strengthen our competition law and update it: Bill C-19, Bill C-56 and now Bill C-59.

Just as a general first question, would you say that collectively the changes we've made to the competition law and the act have made it overall much better and that Canada will be more competitive?

[Matthew Boswell]

What I can say is that the amendments we saw to Bill C-19 and Bill C-56, and the amendments that are proposed to Bill C-59, are significant changes to Canada's competition laws. They are generational, in fact. They make positive changes in multiple different ways.

With them, Canada is catching up to the rest of the world. As I've said before this committee, we have been an international outlier on many fronts in terms of how we handle competition in Canada. What we've seen are positive changes to catch us up.

I would say it's not a question of putting a banner up that says, “Mission accomplished” on a ship in New York Harbor. This is constant work that we need to do. There are other things that other countries are doing that we have not yet tackled in Canada, including really talking about how to deal with digital platforms and the serious competition issues that they can present. Other countries are taking very definitive strides in that regard.

To go back to your point about the lack of business investment in Canada, about a month ago, StatsCan put out a report that analyzed a 15-year period that demonstrated quite clearly the decline in business investment across the country. It pointed to competition as a significant factor in the lack of that investment. When you're not afraid of somebody eating your lunch—I'm sorry to use the proverbial term—there isn't that drive to invest in order to get better, produce better products, be more efficient and all of those things. It's a big issue.

The amendments are certainly significant. As you heard in my opening comments, I don't think we could go further, even in Bill C-59, to further strengthen various aspects of the Competition Act in Canada.

[Julie Dzerowicz, Liberal, Davenport, ON]

I want to go there next.

I want to thank you for those two very strong recommendations, and for articulating that they already exist in the U.S. In the second recommendation, you gave other examples of other countries. I appreciated that.

In the panel before this, we had a professor who mentioned that the structure of your bureau isn't effective. I wanted to know if you had any comments related to that.

I don't know if you heard that. I'm not able to articulate it, so if you didn't hear it, I will move on to my next question.

[Matthew Boswell]

I apologize. I didn't hear that question and answer portion. I assume it was Professor Quaid who said our structure wasn't....

[Julie Dzerowicz, Liberal, Davenport, ON]

I don't think she meant to be mean. I think it was more to be helpful. I just found it to be an interesting comment and wanted to know if you had any thoughts on it. If not, I'll just go to the next question.

You and I had a conversation once. I'm always wondering what more we can do around competition within our own government. I believe there's an Australian example. The Prime Minister asked for a whole-of-government review about anything that might be stopping competition from happening.

Could you talk to that, and whether you would recommend us doing so here in Canada as well?

[Matthew Boswell]

Absolutely. This is something I've been talking about publicly for several years now. We need a whole-of-government approach to competition in Canada. We needed it years ago. It's overdue. It's very important for driving productivity in the Canadian economy.

There's the Australian example of the Productivity Commission in the 1990s, which took a whole-of-government look at regulations and laws that hindered competition across the economy. It was the federal government plus the states. They looked at 1,800 laws and regulations, amended them to allow for more competition and saw huge benefits. A 2.5% increase in GDP is a conservative estimate. That's $5,000 Australian per household. This is what we need to do. We're second-last in the OECD in terms of regulatory barriers to competition in this country, and that is a huge problem.

I should point out, as well, that President Biden in the United States put in place an executive order on competition several years ago that directs all agencies of the federal government to look at ways they can enhance competition in their particular area. They've been taking tremendous steps to do that. That's another example we can point to.

This is incredibly important for our country, because these regulatory barriers to competition are holding us back and holding our economy back. It's an unforced error—to use a tennis term—that we need to address. It can only be done through leadership at the highest level working with the provincial, territorial and municipal governments to attack these problems hurting our economy.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Welcome to our committee, MP Savard-Tremblay. You'll have six minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

I thank the committee for welcoming me. I'm here to replace my colleague Mr. Gabriel Ste‑Marie, who is busy two floors up.

Mr. Giroux, I have the report on household formation and housing stock that you published last week. The report uses a new term, “non-household formation”, which amounts to 631,000 households. Since this is a new term, could you tell us a little more about it? In particular, I'd like to know what it brings to the current debate on access to housing, as well as how many people it might include.

[Yves Giroux]

As you mentioned, this new expression is now part of our terminology.

In English, we use the adjective “suppressed”. In French, one could speak of demande réprimée, but we have chosen not to use these words, given their negative connotation.

We speak of non-formation of households when the demand is there, but there isn't enough relatively reasonably priced housing available, whether it's a condominium, a house or whatever. So we're talking about people who, for example, are forced to live with roommates or their parents for a little longer than they would have liked because of the lack of suitable housing, which has consequences. When such housing becomes available, one might think that demand is likely to come solely from demographics, i.e., immigration and normal household formation. However, there is also this demand that has been suppressed over the years, and these people are also coming onto the market. As a result, when the supply of housing increases, the easing of pressure on prices is not as great as expected, given that this stock of some 630,000 households is also waiting for housing.

It's difficult to get an idea of the number of people affected. We'd have to make some assumptions about the average number of people per household, but we can estimate that it's at least two to one. So for 630,000 households, I'd say that easily corresponds to over one million people.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

That's very good, thank you.

I now turn to the representatives of the Competition Bureau Canada, namely Mr. Durocher, Mr. Boswell and Ms. Pratt.

The letter that the bureau sent to the committee on March 1 states that the amendments proposed in Bill C‑59, as well as the recent reforms made in bills C‑19 and C‑56, represent a generational upgrade to Canada's competition legal framework. All three bills mentioned are budget implementation bills.

Do you believe that reform of the Competition Act, through a bill dealing solely with it, would be beneficial so that parliamentarians can weigh every effect of the act and of any amendments made to such a bill?

[Matthew Boswell]

Thank you for the question. If I may, I'll answer in English, because it's quite technical.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

We have interpretation. Don't worry.

[Matthew Boswell]

Thank you, sir.

The question, as I understand it, is the following: Would it be better to have a stand-alone act that just looks at the Competition Act?

I suppose it's always better when you can focus on one particular topic, but let's not let perfection get in the way of momentum. We need these changes. We've needed them for a long time. They're long overdue. From the Competition Bureau's perspective, as the only competition agency for the entire country, we'll take change and we'll take modernization any way we can get it.

I hope that answers your question.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.

Your letter was sent on March 1 and you received a response from the departments on March 19. Do you have any comment on this?

[Anthony Durocher, Deputy Commissioner, Competition Promotion Branch, Competition Bureau Canada]

Are you referring to the testimony of officials from—

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

I'm talking about the answer you received on March 19.

[Anthony Durocher]

I think we listened carefully to all the testimony, including that of the public servants who are responsible for the legislation.

We offer our perspective as an enforcement agency. Our day-to-day experience is to identify gaps in the act, and which elements we believe should be strengthened. Of course, we bring a different perspective. But I would say, having listened to the testimony of public servants, that there was a great deal of interest from all stakeholders.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Giroux, in terms of financial viability, health care costs are putting a strain on provincial finances, particularly those of Quebec. Do you get the impression that the budget will change the trend in the financial viability of the provinces?

[Yves Giroux]

This is a question we address every year when we publish our report on the financial sustainability of the federal and provincial governments. It's an exercise we usually do in the summer.

The last time we did this exercise, we realized that the long-term financial viability of the provinces had reached its limit. That said, some provinces were in better shape than others, notably Quebec, which was in relatively good shape. We will repeat the exercise this summer and update our data.

However, as you mention, it's clear that the determining factor for the provinces and territories is the aging of their populations, which has a very significant impact on the cost of health care services. An aging person obviously costs the health care system more. What's more, this increase is not linear: a 90-year-old person costs much more on average than a 65-year-old, for example.