Chair and honourable members, it's a pleasure to be here today.
The honourable members would have seen the submission that the chamber made via the clerk, so I'm going to focus my remarks mostly on the competition policy provisions of the budget implementation act as well as the luxury goods tax.
Let me start on competition policy. Given the evolving nature of the economy, our competition policies certainly need to keep pace; however, getting it right is critical. This means robust consultation with stakeholders, including the business community and others in legal, civil society and consumer groups as well.
The chamber is particularly concerned with three elements. It is urging this committee and the government to remove them from Bill C-19 and place them into the mandate of the full Competition Act review that the minister of industry has committed to undertaking later this year.
First is the abuse of dominance provisions and codifying a number of definitions. An overly broad approach to defining what is anti-competitive is particularly problematic because every act of competition may, at least in the eyes of the competitor, impede their progress or expansion. Indeed, an action seeking to outdo a competitor is at the very heart of healthy and necessary competition. Clarity is also needed on areas like privacy, given that we have a separate federal privacy regulator in this country.
While some have argued that these proposals codify existing practice, we should not be haphazard about amending legislation, given that it cannot be then changed back on a whim later on.
Second is the changes made to the administrative monetary penalties. The proposed changes to the AMPs represent a significant overcorrection. Such significant penalties of up to 3% of worldwide revenues are problematic when the provisions are being expanded and companies are left without the benefit of existing jurisprudence to understand what they mean in practical terms. The penalties additionally scope in activities that are not linked to violations occurring in Canada, by virtue of taking a worldwide revenue approach instead of a Canadian revenue approach.
Third, and finally, is the other provisions relating to no-poach. Others have pointed out in separate forums that this poses challenges in the franchise context where companies often have provisions written into contracts as a means to ensure that investments in training their employees are not being undermined. Interactions with provincial labour laws also need to be considered.
I don't have specific amendments to offer today, which reflects the time needed by the chamber to consult our members that sit across different sectors. A few hours of meetings on legislation at committees unfortunately does not suffice for the consultations we hope the government will make as part of the phase two review, rather than putting these three provisions into the budget implementation act.
Despite the assertions made by some that we should make the changes now and figure it out later through administrative guidance or by reopening it in the phase two review, I think that would be a mistake. We don't know what will happen from that review, given that it has not yet actually begun.
Additionally, there may be a tendency to view these Competition Act changes in the context of the current inflationary environment. Unfortunately, these changes will not address current inflationary pressures, so we should not have a knee-jerk reaction with that goal in mind.
I want to briefly end by talking about the luxury goods tax.
Members will be aware from other witnesses who have appeared about what the luxury goods tax means for Canadian aircraft manufacturers. The industry is still in recovery mode from the pandemic and concerns persist, from our standpoint, as to what this tax means for industry. We hope to see amendments made to specific areas of the bill, should the government continue to go ahead with the proposal. This includes exemptions for exports and also the treatment of liabilities when it comes to usage by the buyer after a sale has occurred.
We also need to understand how the tax will impact our competitiveness relative to other jurisdictions. The U.S. experience, of course, was to introduce such a tax, only to then repeal it a short time thereafter.
Thank you for taking the time to consider the chamber's perspective. I'd be happy to answer your questions.