Industry and Technology Committee on Sept. 17th, 2025

[Matthew Boswell]

That was Bill C-56 as well, which—and this is a very important point for grocery competition—effectively created a provision where the bureau could pursue agreements not between competitors. I think Minister Champagne even talked about it in the House of Commons when he came to speak to it, or perhaps it was in the Senate. These are what we refer to as property controls, where a grocery company will put in place a restrictive covenant on title so that no other grocery business, or that type of business, can locate on a property. They can put that in place and then leave, so there's no ability for a grocery store to open in some areas.

That amendment to section 90.1 of the act was very important. It was something that the bureau used and relied upon in an investigation that we initiated in June 2024 into the use of property controls in the greater Halifax area. We were investigating George Weston and Empire, the owner of Sobeys, in the Halifax area. Also, we were able to get a property control removed in the Crowsnest Pass municipality in Blairmore, which had been put in place by Sobeys and had effectively prevented anybody from coming into the only realistic spot where you could open a second grocery store in that mountain town.

Those are important developments in terms of helping advance competition in the grocery sector, based on that amendment.

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

Thank you, Mr. Boswell.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste‑Marie.

Thank you, Mr. Boswell.

Colleagues, we're going into our second round. I have five minutes for the Conservatives. Ms. O'Rourke will be second for the Liberals. Then I will go back to Monsieur Ste-Marie for five minutes. I'm not sure how our timing will track for a third round, but I'll keep an eye on it here.

Mr. Guglielmin, the floor is yours.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you. I'll be splitting my time with Brad Vis. I'll be giving him two minutes right at the three-minute mark.

Thank you, Commissioner, for attending today and for all the great work you do.

I'd like to ask you about airfare in this country. Like many Canadians, when I'm travelling abroad in places like Europe or the United States and within those countries, I find it very striking how expensive it can be to fly within Canada. According to the International Air Transport Association, Canada ranks 101 out of 116 countries for the cost of air travel. We know from the study issued by the Competition Bureau on airline competition back in June of this year that government subsidies have not reduced the cost of airfare for Canadians.

I'm just curious to know what you would say is the cause of the increased price of airfare in Canada.

[Matthew Boswell]

I have lots to say on that.

What I'm going to do is ask Mr. Durocher, who is the lead of our market study into passenger airline competition in Canada, to provide his evidence-based thoughts.

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

When we look at airline competition, as we did for close to a year, it's a concentrated market in Canada. Air Canada and WestJet have a combined control of anywhere between 56% and 78% of passenger share in most major airports in Canada. There have been inroads on competition, if we look at Porter and Flair, but if we look at the history, competition can be fragile.

We also know that competition matters for airfare. We did some data work that showed that when you have one more competitor flying on a given route in Canada, prices go down by 9%. Competition is very important, especially given concerns about affordability.

We provided 10 recommendations for tangible steps that governments can take to increase competition in the market. There are three broad categories. The first is prioritizing competition in federal aviation policy. The second is looking at lowering barriers to foreign investment in the Canadian industry so that we can tap foreign investment and experience to enable it to thrive. The third is looking at northern Canada and remote regions, and how we can take steps to prioritize contestability in these remote markets.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

There's a recent Fraser Institute report that states that government- and airport-imposed taxes and fees comprise 25% to 35% of airfare costs in Canada. These charges have been repeatedly cited as major contributors to rising ticket prices and limited competition in the sector, as you just mentioned.

Given the government's role in setting these taxes, how much impact do you believe they have on airfare costs?

[Anthony Durocher]

Thank you for the question.

That's an issue that we discuss at length in our report. In fact, it constitutes a sizable portion of ticket pricing in Canada, to the order of 30%. From a competition perspective, what's important is that it can have a disproportionate impact on lower-cost airlines, which are very important in providing the disruptive competition that helps with airfares in Canada.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

I'm sorry to interrupt.

I'm ceding the rest of my time to MP Vis.

[Brad Vis, Conservative, Mission—Matsqui—Abbotsford, BC]

Thank you.

On January 25, 2023, Ms. Pratt was before this committee and outlined that “the commissioner filed an application with the Competition Tribunal under section 92 of the Competition Act, seeking to block the proposed merger” between Rogers and Shaw. Ms. Pratt mentioned that it would negatively impact “millions” of British Columbians and Albertans. Today, we're seeing the negative impacts of that merger. In fact, United Steelworkers Local 1944 in my riding is on strike because its members, who previously worked for Shaw, don't have wage parity with the long-term Rogers employees.

When Rogers executives came before this committee, they made big promises, stating they would invest $6 billion in rural infrastructure. They said there would be more jobs and prices would be lower. It's a fact that prices went up and we haven't seen those investments.

What can we do a better job of in this country to ensure that workers are protected in future mergers moving forward?

[Jeanne Pratt, Senior Deputy Commissioner, Mergers and Monopolistic Practices Branch, Competition Bureau Canada]

I will say that we fought that merger of Rogers and Shaw. We brought a case to the tribunal. We thought it was going to be harmful to competition.

In that case, we were under our old framework, which was before Bill C-56 and Bill C-59. We couldn't consider labour directly under our old test, because job losses were actually an efficiency. That might have been a plus factor for the tribunal, to look at the merger as a good thing.

[Brad Vis, Conservative, Mission—Matsqui—Abbotsford, BC]

The work we did on efficiencies can make a big difference now.

[Jeanne Pratt]

I can only say that I did not look at these issues under the old framework. Under Bill C-56 and Bill C-59, where labour was specifically added as a factor to be considered in the merger provisions of the act, we would be able to consider it in an investigation if that merger were before us today.

[Brad Vis, Conservative, Mission—Matsqui—Abbotsford, BC]

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Vis.

Ms. O'Rourke, the floor is yours for five minutes.

[Dominique O'Rourke, Liberal, Guelph, ON]

Thank you, Chair Carr.

I would like to extend a warm welcome to the witnesses.

I really enjoy speaking with you about your impressive work on behalf of Canadians. Thank you.

I want to talk about grocery prices and competition in that really important sector. We know that many factors are driving prices up at the grocery store. It could be because of supply chain issues, climate change or scarcity, but competition is among the reasons.

In 2023, the Competition Bureau released a study of the Canadian retail grocery market. You had four recommendations to improve competition in the grocery industry, including the growth of independent grocers and the entry of international grocers into the Canadian market. What is the progress on those four recommendations, and how are you working with policy-makers and industry to implement those recommendations to improve competition in the grocery space for Canadians?

[Anthony Durocher]

Thank you very much for the question.

Yes, competition is fundamental when we look at grocery prices. We've seen good progress on some of our recommendations. I can name a few.

When we look at property controls, one of our recommendations was that provinces look to eliminate them. These can be very important barriers to entry or expansion for new grocery stores. There have been steps taken to amend the Competition Act to give us better tools to address this. There have been investigations launched as well, but provinces have also taken action. A recent move by the Province of Manitoba to eliminate property controls shows real leadership on this file.

We know that the government has actively worked to try to entice or promote the entry of a foreign grocery player in Canada. Internationally, we've seen that when foreign entrants come in, they can really shake up a grocery market and play an important role.

One of our recommendations was around pricing and to facilitate pricing comparison for Canadian consumers. We've seen the Province of Quebec take important steps with a bill to facilitate pricing comparisons for consumers.

We've seen important progress. I think work continues for the bureau in the grocery industry. It's a priority sector for us. It's one that's deeply important for Canadians, and we're on the beat.

[Dominique O'Rourke, Liberal, Guelph, ON]

That is a wonderful thing to hear. Thank you. Taking a look at what's happening in the provinces so they can join us in advocating for more competition in the grocery sector and lower prices for Canadians, I'm thrilled to hear that and fascinated by the investigation into the property controls.

Do you have any additional investigations in terms of those? I suppose you can't say. I suspect that where I come from there were a few of those.

I want to shift to ask this: When you're taking into account the business growth and market competition, how do you consider improving competition in more entrenched industries and sectors to make sure that Canadians are getting the best deal? How are you implementing improvements for Canadian competition in other sectors? You've mentioned some for groceries, so regale us with your innovative and impactful solutions.

[Matthew Boswell]

First, to go back to your previous subject, you asked about ongoing investigations in terms of groceries. We are continuing our investigation into bread price-fixing where Canada Bread pleaded guilty in the summer of 2023, leading to a $50-million fine for price-fixing with Weston bread. That investigation continues, and there are multiple companies under investigation. That's public, which is why I can talk about it.

Of course, our investigation in that area led to a class action that was just settled by Loblaws, in which they agreed to pay $500 million to Canadian consumers. That's an aspect of the grocery market that we continue to investigate. We've obtained some results in terms of a guilty plea by Canada Bread and Loblaws admitting their involvement through our immunity program.

In terms of other sectors, perhaps I'll quickly say that we have two roles in the bureau: to protect competition, which is mainly our enforcement role, and to promote competition in Canada, and the act contemplates us making submissions to federal boards and tribunals. Of course, now the act specifically contemplates us engaging in market studies to determine what the competition issues are in a given sector of the economy. You've already heard that we've done that in passenger air travel, and we had done that in the grocery industry before we had powers.

On September 4, we launched publicly a consultation for our new market study, which is looking into the financing sector for small and medium-sized enterprises in Canada with a focus—at least right now in our consultation paper—on term loans. We engaged in that study because we saw some—

[The Chair, Liberal, Ben Carr]

Mr. Boswell, I'm sorry to cut you off. If you could just wrap up, we are tracking to be behind.

[Matthew Boswell]

I'm sorry.

[The Chair, Liberal, Ben Carr]

It's okay. I know you're trying to give fulsome answers, but I need to make sure I get back to other members as well.

[Matthew Boswell]

That's our new area that we're looking into. We are doing this all the time at different levels of government all across the country on different subjects, as much as our resources allow, and as much as Mr. Durocher's team has capacity to take on advocacy projects to advocate for more competition in the Canadian economy, because we desperately need it.

[Dominique O'Rourke, Liberal, Guelph, ON]

I have no further questions, just a lot of thanks. Please continue your investigations into the grocery sector to make sure we're providing the best value and the most competition to Canadians.

[The Chair, Liberal, Ben Carr]

Thank you, Ms. O'Rourke.

Mr. Ste‑Marie, you have the floor.