Industry Committee on April 7th, 2021

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Mr. Lemire, you have the floor for six minutes.

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

Thank you, Madam Chair.

I will address Mr. Boswell from the Competition Bureau first.

During his appearance before our committee on March 29, Mr. Joe Natale of Rogers said this about the merger of Shaw and Rogers: “[...] the ability to bring two teams together with two balance sheets and two capabilities will allow Canada to lead in the future of a digital economy. ”

Will this be the case, in your view, or will this merger instead cause a decline in competition, negatively impacting Canada's current digital economy?

[Matthew Boswell]

First of all, at this time it's not appropriate for me to comment on what others have said. We will be conducting a thorough, deep review of this transaction to determine whether or not it would result in a substantial lessening or prevention of competition in Canada. That's the work we're going to do. It may take time, but we're going to do it.

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

I see. I assume that your thoughts will take into account what has been mentioned in the four sessions of our committee devoted to this study.

Do you intend to make an early decision on the acquisition of Shaw by Rogers? If another option ever comes up, will you adapt to move the decisions forward or propose other options to expedite this?

[Matthew Boswell]

Generally speaking, we conduct our investigations, our reviews, in confidence, in private, so that we are not commenting as the investigation of any merger evolves. Once we've reached the end of our investigation and have arrived at conclusions, whatever they may be, at that point we will pursue the next steps and, potentially, there will be public commentary.

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

I'm going to venture to ask another question.

We need to find effective ways to maintain competition. In particular, we need to ensure that we have the conditions for a fourth player, or even a fifth or sixth player. To that end, what do you see as the key conditions that must be met for Rogers to acquire Shaw?

[Matthew Boswell]

As I said, it's not appropriate for me to comment on the components of the Rogers-Shaw deal. What I can say is that in the past we have provided competition advice in terms of competition generally in Canada and in different sectors of our economy. Of course, we have also made, as I have already referred to, extensive submissions to the CRTC on their wireless review.

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

Thank you.

My next question is for Mr. Dagenais.

According to the most recent Consumer Price Index released by Statistics Canada, wireless prices have fallen 15% over the past 12 months.

What do you think is driving this decline? Could it be threatened by Rogers' acquisition of Shaw?

[Éric Dagenais]

Thank you for the question.

Last month or two months ago, in a publication, it was reported that wireless prices were down 10% to 18%, depending on the package. I think the department has had discussions with the wireless providers over the last 12 months to say that if prices don't go down 25%, there may be regulatory implications.

With respect to the transaction under consideration, I hope you will understand that I cannot comment. However, I can happily explain the regulatory framework that we will use to analyze this transaction.

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

I was just getting to that question.

The Minister of Innovation, Science and Industry, Mr. François-Philippe Champagne, released a statement in which he mentioned, among other things, the government's objectives for greater accessibility, more competition and more innovation in the Canadian telecommunications sector.

What benchmarks will be used to analyze these elements of competition?

[Éric Dagenais]

We have a framework that guides the transfer of spectrum licences. According to article 40 of that framework, such an analysis typically takes into account the following factors, among others: spectrum licence holdings; the general distribution of allocated spectrum; current and potential services; the availability of other spectrum bands; the relative usefulness of that spectrum; the degree of network deployment; the characteristics of the region; and any other relevant factors, taking into account the policy objectives.

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

Thank you.

How could the federal government foster the growth of competition in these different markets?

[Éric Dagenais]

The government has taken several steps to—

[The Chair, Liberal, Sherry Romanado]

I am sorry, but Mr. Lemire's time has expired. Perhaps you can continue your response in a future round.

[Éric Dagenais]

Very well.

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

Thank you.

[The Chair, Liberal, Sherry Romanado]

We will now go to MP Masse for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair, and to our witnesses.

The Competition Act is barely worth the paper it's printed on for protecting Canadian consumers right now. I do have a great deal of empathy for the women and men at the Competition Bureau who have to serve under such an archaic statute in a modern society right now, especially when we compare it with the situation in the United States and some of its issues. They're going through a full review for consumers there.

With that, Mr. Boswell, I do want to ask about some previous decisions of the Competition Bureau and find out really what the reflections are now, or whether there has been further review of the actions that took place. The first would be the previous Rogers takeover of Mobilicity. How did that help consumers and push competition? Can you provide some insight on that, please?

[Matthew Boswell]

Yes. Thank you, Madam Chair.

Perhaps my colleague Mr. Durocher can comment on that particular transaction.

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

As with all merger reviews, the legal standard for the review is whether the evidence suggests that there will be a likely substantial lessening or prevention of competition. In that past merger review, the decision was made that it did not meet that standard. That was the conclusion.

[Brian Masse, NDP, Windsor West, ON]

Are those decisions, then, reflective of current analysis? Does that move us forward? You're mentioning your Bell decision with MTS. Again, is there an evaluation of that in relation to the decision? That's the second one of the three that I wanted to discuss.

[Matthew Boswell]

Madam Chair, an after-the-fact assessment of the Bell MTS transaction hasn't taken place. I can indicate that quite clearly. We are monitoring the compliance with the consent agreement.

I should say, sir, that we simply don't have the resources to conduct after-the-fact assessments of our merger remedies. The resources we have are going full out on current mergers, which we are tasked with reviewing under the law.

Second, we don't have powers in the Competition Act to compel the necessary information and data from parties in the marketplace in order to properly assess the effectiveness of a prior remedy. I can tell you, sir, that internally we would like to set up what we call a “remedies unit”, where we would have a centre of expertise inside the organization that monitors consent agreements, goes back and looks at them for their effectiveness and advises us on future agreements, but we simply don't have the human or financial resources to set up that remedies unit at this time.

[Brian Masse, NDP, Windsor West, ON]

To be clear, Madam Chair, this testimony from Mr. Boswell is like testimony from previous Competition Bureau representatives at this committee, who which have mentioned this on numerous occasions. This is no different from any of the years that I've been here. This is something that has continued to exist.

I want to briefly touch on the next one, which is the Telus takeover of Public Mobile. Again, is it in the same context of evaluation parameters, resource constraints and so forth? It just seems to me that there's a pattern here, and it would be inappropriate, I guess, for the Competition Bureau to be expected to give a thorough evaluation of these things later on. I'll leave it to you to talk about that, because I think there are some consequences here that leave us flying blind after these decisions are made.

[Matthew Boswell]

What I can say is exactly what my colleague Mr. Durocher said. We apply the tests set out in the law and in the jurisprudence to our reviews, to the facts in any particular matter. We're an independent prosecutorial, law enforcement agency. We have to take cases to court and put up the evidence that aligns with the tests set out in the Competition Act and with the jurisprudence if we're looking to challenge a matter. Those are, if I can say, sir, the confines within which we work, but I can assure you that the team at the bureau is dedicated to a thorough review of this particular transaction.

[Brian Masse, NDP, Windsor West, ON]

Yes, and I have no doubt about that, but I would like a quick confirmation, though. You have fewer tools legally available to you than they do in the United States to compel information for review for competition matters. Is that correct, yes or no?