Finance Committee on April 18th, 2024

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Giroux.

Thank you, Mr. Savard‑Tremblay.

We'll go to MP Boulerice, please, for the next six minutes.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chair.

I thank the witnesses for being with us today to participate in this discussion.

Mr. Boswell, from the Competition Bureau, in the letter you sent on March 1, you talked about the phenomenon of “greenwashing”, which can be translated into French as écoblanchiment. I've just checked the translation.

This is a concern for more and more consumers, as brands and products use phrases in their advertisements like “net zero” or “carbon neutral by 2030”. Sometimes it's about an entire company, not just a product, or it doesn't take into account the supply chain and different environmental impacts, which could be considered misrepresentation or misleading advertising.

In your opinion, do we need to amend section 236 of Bill C‑59 to include these environmentally related misrepresentations?

[Matthew Boswell]

Thank you for the question. I'll answer in English again, if I may.

As we point out in our submission to this committee, the issue of greenwashing is a very significant issue on which the bureau has multiple, ongoing investigations. We've brought cases in the past. For example, we fined Keurig $3 million for false or misleading claims about the recyclability of its pods.

We welcome the amendment that is in Bill C-59 now, but as you point out, it's limited to products, not to claims with respect to a business or a brand as a whole being, you know, net zero by 2030 or carbon neutral. These are claims that can be false or misleading.

What we say in our report is that we recommend further study to expand the greenwashing provisions to potentially include a requirement where companies are able to substantiate those business-wide claims. It wouldn't be a situation like the amendment in Bill C-59 now, where it relates to a product and they have to have done adequate and proper testing and the proof is on them. It's more a question of whether there should be a clause that says that the company needs to be able to substantiate its claims and that the proof should be on the company.

I can indicate at a high level that these investigations into business-wide claims or brand-wide claims are extremely difficult investigations for the bureau. Obviously, we're not environmental experts; we're competition law experts. These investigations are incredibly resource-intensive. As is publicly known, we get complaints from multiple organizations to look into these types of greenwashing claims. We are pursuing them, and we take these very seriously. We can also attack them under our general false and misleading claims..., but the point in our letter is that perhaps there should be further study about expanding....

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

All right. We'll have to take a closer look. I also imagine that your office would need more resources to be able to conduct these investigations and have access to all the necessary expertise.

I now have a question about the cost of living. Many of the people we represent tell us about the rising cost of living and the cost of many things, including the grocery basket. Food is becoming increasingly expensive. There are provisions relating to this in Bill C‑56 and in Bill C‑59.

I have a very naive question, where I put myself in the place of the citizens I represent: Can we have hope, thanks to the provisions of Bill C‑59, that the cost of groceries will stabilize and perhaps even decrease? We can't control global inflation, I understand that, but can the measures in this bill give people hope that prices will stop rising as they have and that we'll stop seeing crazy prices?

[Matthew Boswell]

Thank you. I'll ask Mr. Durocher to respond.

Mr. Durocher led our market study into competition in the grocery retail sector and is an internal expert on these issues.

[Anthony Durocher]

I would say that the reforms to the Competition Act are important to better equip the bureau to protect competition in markets across Canada. Clearly, there's a link between competition and affordability. So, these measures can help, but it's clear that it won't happen overnight. It takes time for competition to emerge.

With regard to the grocery basket, the bureau conducted a market study and made very clear recommendations on how we should go about increasing competition in the grocery sector in Canada. We published our report in June last year, and we're still working with governments to ensure that our recommendations are well understood so that, wherever possible, the necessary steps are taken to increase competition in the grocery sector.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

We are moving into our second round. Times are a little different in terms of the time allocated to each of the parties in this round.

We're starting with MP Hallan for five minutes, please.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Thanks, Chair.

Mr. Giroux, thank you for being here.

Before the 23% carbon tax increase on April 1, you were quoted as saying that when you factor in the fiscal and economic impacts of the carbon tax, most households are at net loss or worse off.

Since this is the first time you're speaking to any committee since that 23% carbon tax increase, can you confirm that it's still the case that most households are worse off or experience a net loss?

[Yves Giroux]

In our successive reports where we looked at the distributional impact of carbon pricing, I think we had, in the annexes, a profile by year to take into account the evolving price of the carbon tax or the pricing on pollution.

To the best of my knowledge, it is still the case that the majority of households are better off once we also take into account the economic impacts of the price on carbon or the tax on carbon.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Okay.

You said “better off”.

[Yves Giroux]

I'm sorry, I meant worse off.

[Voices]

Oh, oh!

[Yves Giroux]

I'm sorry, I misspoke.

It's a bit like the chair's mistake indicating that Diarra's title is political analysis. I'm sorry.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

You are confirming that after the April 1 increase this year, most households are worse off and at a net loss.

[Yves Giroux]

Yes.

I'm sorry for the confusion.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

The senior deputy governor of the Bank of Canada recently said that productivity in Canada is a huge concern. It's actually an emergency, break glass situation right now.

We know that in Canada there have been six consecutive GDP per capita declines. We also know that Canada's GDP per capita growth is the lowest in all of the OECD countries. In fact, the GDP per capita now is lower than it was in 2018.

Do you agree with Deputy Governor Rogers that productivity is a break glass emergency situation today?

[Yves Giroux]

I probably would not have chosen that type of analogy, but I agree with her overall assessment that productivity is an essential part of economic growth and success. It's something that needs to be addressed if we want to maintain and increase our standards of living.

Yes.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

What factors do you think lead someone to believe that we're in this kind of situation?

[Yves Giroux]

There is the fact that productivity growth in Canada has been lagging that of the U.S. and that of many other European countries and advanced economies.

That is a worry for many reasons. It means that our economy is not growing as fast as it should and that we are more than at risk of losing ground compared to our main competitors and the nations with which we trade.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Canada's tax burden today is the 12th highest in the OECD. It's higher than the U.S., U.K. and even the average of the OECD.

Would you agree that the tax burden is also a factor when considering our low productivity?

[Yves Giroux]

The evidence on this is mixed.

More than the tax burden itself, it's the mix of tax and whether you tax labour and capital versus consumption. The mix is an important factor. There are countries with a relatively high tax burden, such as France and Denmark, that do relatively well on productivity.

Much more than the overall level of tax burden, I think that where the taxes are levied is probably the most important factor—more than the overall.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

To an average Canadian family that's going to get groceries, they see high grocery prices...or filling up their gas.

In regard to productivity, would you agree that the carbon tax is one of those impacts on any Canadian's everyday life when we say Canadians are getting poorer?

[Yves Giroux]

The tax on carbon has an impact on everyday prices, especially those that are heavily reliant on fossil fuels, such as transportation and heating. It's something that is hard to disagree with.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

If we were to axe the consumer carbon tax today, do you think this would have a positive impact on Canadians' everyday life or the productivity that we see here in Canada?