Industry Committee on April 7th, 2021

[Matthew Boswell]

That's correct. The Federal Trade Commission, one of our counterparts in the United States, has those powers.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

I'll move to you, Mr. Scott. In a general sense, the CRTC has a lot of capabilities. Really quickly, why have prices been rising and competition been stifled when the CRTC has had some powers? Is there something we're missing in exercising some type of long-term vision?

[Ian Scott]

I think I have to take issue with the premise of the question, Mr. Masse. The prices are going down. I will grant you that they should go down further, as it's always in the public interest to see the most affordable rates for Canadian consumers. For example, in 2019, if you look at an offering with five gigabytes of data, rates decreased about 14% to $49 a month, so prices are not going up. They are going down, but I will absolutely agree with you that they can and should go down further.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Scott.

We'll start our second round of questions.

The first round of five minutes goes to MP Dreeshen.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much.

It's good to hear the testimony here this morning. This is sort of the end of our discussion of this acquisition, but of course this is where the other three groups will be starting the work that is required. I think with the discussions we've had here, there should be some alarm bells sounding as far as Canadians are concerned. We've heard that the proposed merger agreement will be of no benefit to Canadians: It will reduce competition, raise prices, lessen innovation and lower services to rural communities. We also heard from a rural mayor yesterday that the merger will do nothing to reduce the gap between urban and rural broadband services and that we need more competition, not less. We need legislation to ensure that there's a backbone network so that the smaller players can hook up to it. Of course, I heard the testimony this morning saying, well, it's inappropriate to comment on things that have been said because...until it comes to your table.

To the CRTC, you said there's a notice of consultation that you will be dealing with. Will your organization be reaching out to those voices that we have heard at this committee so that you can hear what they have to say? If not, will the commentary that we have heard at the industry committee be something that you will base any of your discussions on?

[Ian Scott]

In response to your question, there are two parts to it. In terms of our taking decisions and what evidence we rely on, we can only make decisions on information filed with us in the context of a particular proceeding.

To be clear, though, in the context of the current wireless proceeding where there's an important decision pending, a number of the parties that appeared before you yesterday and in previous sessions were participants in that proceeding and have led evidence. Some have not. All of them are entitled to their opinions, but we rely on the facts in front of us. Then we'll render a decision that we believe to be in the public interest.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

I have a similar question for the Competition Bureau, Mr. Boswell. What can those people who have presented information to our committee expect from you when you're looking at what is taking place?

[Matthew Boswell]

I can tell you, sir, that in the course of our merger reviews we talk to a very wide array of people—businesses, industry associations, customers, consumer groups and citizen groups—to obtain their views with respect to the transaction. We also have an online feedback form related to merger reviews. I can tell you that the online feedback form has received something in the neighbourhood of 7,500 submissions since March 15, if I have the date correct. We will examine those submissions and take them into consideration.

Our reviews are broad, sir, and we examine all aspects of a matter.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

That's great, because as you mentioned earlier, the Competition Bureau approved the acquisition of MTS by Bell in 2017. You said that you're monitoring the agreement. What specifically are you monitoring for? If people were to know that, then maybe they could tailor some of the comments to you in such a way that it would be more useful.

[Matthew Boswell]

With respect to the Bell-MTS consent agreement, we monitor compliance with the provisions in the agreement—which is available to all Canadians on the Competition Tribunal's website to look at—namely, certain transitional services that Bell agreed to provide to Xplornet when it took over MTS subscribers as a result of the transaction. Those are the types of things we monitor in making sure that everything is done according to the consent agreement.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Are those specifics public?

[Matthew Boswell]

Yes, the consent agreement, sir, or almost all of it, is public. There may be a section that's commercially sensitive and confidential, but the consent agreement is public.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We now go to MP Badawey.

You have the floor for five minutes.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair. I appreciate the opportunity and time at this committee today.

I really want to concentrate on Mr. Boswell's comments with respect to a comprehensive review of the Competition Act, which somewhat concerns me because of this very important decision that we're looking at now. Under the Competition Act, we do see that it's federal law governing most business conduct in Canada to expand opportunities for Canadian participation in world markets, ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy, and provide consumers with competitive prices and product choices.

I'd like to dig a bit deeper into those comments, Mr. Boswell, with respect to a comprehensive review, some of which may be changed and/or needed to make a more proper decision in this case. Moving forward, what are you looking at? Please be very specific. What are you looking at in terms of a very comprehensive review tomorrow as compared with what the Competition Act outlines today?

[Matthew Boswell]

I was suggesting, sir, that a comprehensive review and debate ought to take place in Canada with respect to our competition laws generally. I don't think perhaps going through different sections of the act today would be useful to you, sir, but I can tell you that around the world with our key trading partners, there are extensive and ongoing public policy debates about their competition laws and the ways in which they could be changed to better reflect the digital and data-driven economy that we all live in now, to consider those issues and to consider issues with respect to the standard for a merger review—for example, whether there ought to be presumptions in Canadian law with respect to mergers and parties then have to rebut those presumptions. There are many issues.

My point simply is that it would be of benefit to the Canadian people to take a comprehensive look at this and consider these issues in the modern economy. Now, I have to caveat that and say that the policy function is not something the bureau has. The legislative policy function is with our friends and colleagues at ISED, and obviously with the minister at ISED, but the minister, in a letter to me in May of 2019, invited me to consider these issues to make sure that the act and the framework and the investigative and prosecutorial processes were fit for purpose. We've been engaged in that work with the department since that time.

[Vance Badawey, Liberal, Niagara Centre, ON]

With that said, much of the discourse around the proposed merger suggests a binary outcome. Either it will be approved or it won't be. Based on past precedent in both telecommunications and other sectors, that's not the case. Can you discuss the range of outcomes that the Competition Bureau might consider for a case like this?

[Matthew Boswell]

Thanks for that question. It's a good one.

After conducting a thorough review, and if we make a determination that the merger will likely result in a substantial lessening or prevention of competition, that determination in any merger review could apply to the whole transaction or could apply to part of the transaction. At that point, depending on the outcome of the analysis, we can engage in examining what potential remedies would address that issue, which is the substantial lessening of competition, taking that substantial lessening of competition out of the transaction. Sometimes it's divestiture of one part of the transaction. Sometimes it's blocking the whole transaction or seeking to block the whole transaction. It really depends on how the investigation unfolds, sir.

[Vance Badawey, Liberal, Niagara Centre, ON]

But once again, it's based on the current Competition Act and the rules that are part of that act, which, as you said earlier, needs a comprehensive review.

[Matthew Boswell]

The provision with respect to mergers is something that certainly the bureau works with and we have the tools to review.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Boswell.

Thank you, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Mr. Lemire now has the floor for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

My question is for Mr. Boswell.

You said that your decisions were binding and that the minister could not override them. I have a little difficulty understanding the process, because your report on Air Transat said that the Air Canada buyout would have been bad for competition, yet that did not stop the minister from approving the transaction.

Why would it be different in the case of Rogers?

[Matthew Boswell]

The Air Canada-Air Transat transaction was a different type of transaction from a normal merger review. Under the Canada Transportation Act, the Minister of Transport can determine if a merger involving a transportation undertaking is worthy of a public interest review. If the minister makes that determination, then the bureau's role is different. Our role at that point in time is to provide advice to the minister on whether there are potential competition concerns with respect to the transaction. The minister takes our advice into the mix of public interest issues that he or she is considering and makes a recommendation to cabinet. Cabinet makes the decision. That is one of the rare instances where the bureau doesn't have independent decision-making with respect to a merger.

In that particular case, you're correct: I provided a letter to the Minister of Transport at the time indicating that the bureau's review suggested there would be a substantial lessening of competition as a result of that transaction with respect to 83 different routes—that is, origin-destination pair routes between Canada and Europe and Canada and southern vacation destinations. Subsequent to that, the minister then seeks advice from the bureau, from me, with respect to any remedies. We provided that advice.

So it's a different situation, Mr. Lemire.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you very much. You have answered my question well, as well as the sub-questions I wanted to ask.

Thank you.