Industry Committee on April 15th, 2021

[Vass Bednar]

You know, my understanding historically is that the policy function of the Competition Bureau was minimized in about 2011. I can follow up on this.

Yes, in terms of their intellectual independence, it's very difficult. I believe there was concern expressed that having the governance institution responsible for enforcement could create internal conflicts if they were also drafting the policy. Again, it's one of the reasons our bureau has fewer teeth than others.

[Brian Masse, NDP, Windsor West, ON]

The industry committee is the most lobbied place outside of the finance committee. They get it all with the budget consultations, including MPs. It's absurd that the Competition Bureau is in the same type of element.

I'll have to come back to Mr. Winseck for my second round because I've taken up time here. I will provide you an opportunity, as the chair has given me 30 seconds. I thought this was very important because there's a cultural and a structural problem with having the Competition Bureau policing itself versus all of the lobbying that takes place in the House.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will start our second round.

MP Dreeshen, you have five minutes.

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

Thank you, Madam Chair.

When I first entered politics in 2008, the first book I read was by Calvin Helin, Dances with Dependency, Out of Poverty Through Self-Reliance. It has helped guide me, having spent a number of years focused on aboriginal affairs and northern development, in my thoughts about how we should be looking at aboriginal leaders and the advances they should be able to use to help in their communities.

I've spoken with you, Mr. Jules, on a number of occasions as we've discussed different ways that which governments could allow first nations people to help look after themselves, rather than continue with the malaise they are in because governments seem to feel they know best how to run their lives.

This is where I'm coming from when I address these questions to both you, Mr. Jules, and Mr. Ross.

Mr. Jules, you've talked about the importance of decision-making for unemployment and about being able to look after the land. It's as though, if there were such a dirty thing as oil and gas being developed, or mining, somehow the first nations people would all of a sudden throw up their hands and say, well, obviously we want to be in on that; we don't want to look after the land we've lived on for so many generations.

Mr. Jules, what can we do to stop the concept that political people understand what you need and instead start listening to what is required to help all of our economy move forward?

[C.T. (Manny) Jules]

Fundamentally, the biggest issue we face is that when governments begin to deal with first nation issues, we're viewed as a liability. My understanding is that the government, when it looks at a myriad of issues, sees more than a trillion dollars' worth of liability, and that hampers much of the innovative methods by which we can begin to move forward.

What I've always maintained and said is, let us take on the responsibility of liability. Let us look after ourselves, because we know the priorities of our first nation people's needs.

This means recognizing the fundamental powers of first nation governments, meaning access to the resources that are exploited within our traditional territories. The way to do that would be to ensure that we have a resource charge; that we have skin in the game. One of the best incentives is not federal government or provincial government programs, but economic power. That is the biggest incentive for creating wealth and not managing poverty.

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

Thank you so very much.

But then, there are decisions that are made by government: let's stop moving our energy to the east; let's not allow northern gateway to proceed; let's put other barriers in place. In Bill C-69, there are additional regulations that, as far as they are concerned, seem to be barriers to the general industry, but they're barriers to your people as well.

Mr. Ross, you mentioned that there are concerns involving Chevron. They have thrown up their hands in despair and essentially walked away from this large job and wealth-creating projects, rather than take what we need to sell to the world to help where greenhouse gases are concerned and to sell our technology.

Can you explain how much the regulatory processes we put in place are damaging that opportunity?

You mentioned before, in talking about the U.S., how our stopping what we do is going to help supplement their markets. Yes, we know who it is that benefits from all of the eco-activists who stop investment in Canada.

Could you quickly comment on that?

[Ellis Ross]

Yes, that's all out there.

By the way, I was never a fan of self-governance for first nations. I was a fan of basically being involved in the economy. My band is not suffering under the Indian Act anymore. Back in 2003, we were. We have enough resources now, within the current system, that we're making our own decisions and developing our own program, without self-governance. We're actually buying private land.

In term of how we're actually—

[The Chair, Liberal, Sherry Romanado]

Unfortunately, Mr. Ross, the time is up in this round. I want to make sure everyone gets their time.

[Ellis Ross]

That's no problem.

[The Chair, Liberal, Sherry Romanado]

We'll now go to MP Lambropoulos. You have five minutes.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you, Madam Chair.

I'd like to thank all of our witnesses for being with us today. There have been lot of interesting discussions [Technical difficulty—Editor] comment, and say that obviously with COVID-19 our economy has taken a very big hit, but I believe that our government is trying to find ways to help us and businesses back on their feet. Obviously it's a good time to be looking into how we can allow for better competition and more companies to have some kind of stake in our economy.

That said, do you agree that one of the better and lower-cost ways forward is to eliminate or cut red tape? In what ways would you recommend doing this? What are the first steps you would take if we were to cut red tape?

I'll ask Ms. Bednar first.

[Vass Bednar]

I've focused my testimony on the Competition Act specifically. I don't view the act as a form of red tape. It's kind of the guidance and guardrail to protect against anti-competitive behaviour.

If I could, I'll pick up on something Mr. Kotak shared about the pandemic and going digital and bringing more companies online. I think that's another thing to consider as you look at red tape, for sure. Recognize the growing e-commerce competition for consumer data from a loyalty perspective and the loyalty programs trying to offer people hyperpersonalized ads. This is also worthy of scrutiny.

My point about being anticipatory and spotting harms on the horizon is about recognizing these patterns and trends and then making sure that our legislation properly captures them and isn't silent. The silence and the distance between what's happening in the economy and what our legislation thinks about is really concerning.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you.

Mr. Kotak, would you like to comment as well?

[Ritesh Kotak]

I'll be brief in my remarks.

I'll use the example of a small flower shop. The flower shop, because of COVID, has been forced to essentially rethink how they're going to do business so they've gone online. That's opened up a lot of opportunities but also challenges. Consider, for example, cybersecurity, privacy and all those things that a small business might not think about. I have some stats here: 38% of small businesses get breached and one in four doesn't even know they've been breached. It's a whole other area of issues that they might not have traditionally budgeted for or might not have thought of. They might not be aware of their obligations or all of the legislative requirements.

If we were able to aggregate and reduce the burden through red tape reduction, it would allow them to compete and stay secure, and that's good for Canada in general.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you very much.

My next question goes to Mr. Jules.

What are the main barriers you think stand in the way of indigenous communities when it comes to competitiveness?

[C.T. (Manny) Jules]

There are a myriad of barriers. I think they're some of the most important barriers this country has to deal with.

One of the fundamental changes that I believe would really address our economic well-being is a proper land title system, so that we can trade among ourselves. We have created about $170 billion worth of a credit gap.

The other thing that could be done is getting the federal and provincial governments to share the tax revenues they collect on reserve lands right now. According to our statistics, through real property tax, first nations—about 110 across the country—are collecting $110 million. The federal and provincial governments, for the same lands, are collecting $700 million. That imbalance should be fixed.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you very much.

I saw the yellow card waved and my next question would take too long to ask, so I'm done.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will begin our next round of questions and answers.

Mr. Lemire, go ahead for two and a half minutes.

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

Thank you, Madam Chair.

I will continue with Mr. Winseck and Mr. Klass, from the Canadian Media Concentration Research Project.

Tax evasion heavily favours major U.S. digital media such as Netflix, Disney, Facebook and other web giants, to the detriment of the prosperity of Quebec and Canadian media. This is a serious problem for the present and the future of Quebec's and Canada's media ecosystems. To address this, Australia adopted a code of conduct.

What measures do you think the federal government and the Government of Quebec should consider to ensure that Quebec's and Canada's media companies would decreasingly suffer from the negative effects of unfair competition from American big tech companies?

[Dr. Dwayne Winseck]

There seem to be a couple of questions there.

Regarding the idea of the tax question, I think that's pretty low-hanging fruit, and we can standardize the HST and GST across the like services. I think we're waiting on a developments agreement at the OECD on a digital services tax that would harmonize that across the OECD countries. I think that's fine.

I think once we get into the other questions about how we regulate Netflix, for example, or Facebook and Google, is the Australian model a good one, for example? I think there is much of interest in that model: the recognition of these companies' dominant market power; the idea that Google controls vertically integrated...with its own online ad exchange and all the data around which that ad exchange works, and that we need to open up the kimono to allow regulators and others to access that data to see how the algorithm works. I think these are good things.

The idea, though, that somehow this just ends up with transferring buckets of cash from the so-called web giants to domestic players, I think, is a real Achilles heel here that we need to avoid. We need to deal with the market power, black box technologies, and it cannot just go to delivering buckets of cash from foreign players to domestic ones.

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

Ms. Bednar, would you like to answer in 15 seconds?

[Vass Bednar]

My big observation for the competition environment with telecommunications is just recognizing that we allow providers to compete on both the infrastructure and the services, and this kind of structural function contributes to a lot of the challenges that have been documented. I hope that's helpful.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Masse for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Mr. Winseck, I had previous questions directed to Ms. Bednar. Could you provide some thoughts as to those questions, or do I need to repeat them? Are you comfortable just to go?

[Dr. Dwayne Winseck]

I think I'm just good to go here—