Industry Committee on April 15th, 2021

[Vass Bednar]

I think so. This is something I'm learning more about. My appreciation and understanding of it is not sophisticated, but I think you're quite savvy to link that up. Such a conversation should be part and parcel of moving ahead with reviewing the Competition Act.

[Brian Masse, NDP, Windsor West, ON]

With that, Madam Chair, I want to thank you, my colleagues and all the witnesses here today for allowing that.

Have a nice day.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Masse.

I will next go to MP Généreux.

You have the floor for five minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you very much, Madam Chair.

I'd like to give a warm welcome to Mr. Jules. We met in 2010 on your reserve when we visited. I think it was the finance committee. You surprise me. I'd like to know your secret. You seem to be younger and younger instead of older. Anyway, it's good to see you.

I was really stunned when I went to your reserve to see everything there that you have done, and everything you're still doing for your friends and people. It's quite amazing.

You said before that you think we should do more for first nations. I agree with you. Economically, we need you. Actually, we need your young people.

Talk to us about your young generation. Even if they might still be working with the telegraph—I think they're more ahead than that—we could still improve everything they need to be a part of the economy of today.

[C.T. (Manny) Jules]

I believe that our youth are going to be an incredibly important part of the rebuilding after COVID-19 here in Canada. They're the future. Whenever I look into their eyes, that's what I see. I see their potential. I see their willingness to think outside the box. That's what needs to be nurtured from a very young age. That starts with the child in the womb, right through to kindergarten and through to grade 12. They have to have good role models.

Schooling is critically important, not just learning who we are, but also learning the maths and sciences so that we can prepare first nations for a trip to Mars one day. It's these kinds of innovations that our future will be able to offer to this country and to us. I believe wholeheartedly in our future generations through our youth.

We need the institutional support, the fiscal wherewithal to be able to make the changes within our communities, without dependence on the federal and provincial governments, because that has hampered our development.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

It's music to my ears.

Mr. Kotak, you talked a lot about the new technologies and big data. For small businesses, it's really costly to have those tools. What do you suggest we should do to improve the new economy for young businesses and even start-up businesses?

[Ritesh Kotak]

Absolutely. Thank you for your question.

First of all, connectivity is going to be absolutely essential. If you're not connected and if you don't have access to high-speed Internet, there's not much you can do to participate in the new digital economy or the hybrid economy, for that matter.

The second thing that would really be beneficial when you speak about data or big data in general is that it doesn't need to be super expensive. With technology now—with software as a service—there are a lot of ways that technology can become accessible to the masses. For example, if we ensure that platforms, if they want to operate in Canada, must have at the very minimum the ability to conduct transactions in English and French and must have accessibility plug-ins as a built-in feature, which is not necessarily the current case.... You might have small or local businesses that want to operate, but are unable to communicate with the demographic, whether it be through a lack of tools or a lack of a user experience.

It doesn't need to be expensive. A lot of these tools are becoming a lot cheaper. They're becoming a lot simpler to use. I think the pandemic has accelerated innovation in the software space. We could actually leverage that to create a much more competitive environment.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you very much.

Ms. Bednar, we have been told that the Competition Bureau's approach was not archaic, but is still outdated in the current context.

Do you agree with that?

[Vass Bednar]

Yes, I would agree with that characterization. I would also offer that it has to operate that way because (a), we're not empowering our bureau and (b), we're not really being thoughtful about the legislation that governs the competition environment and what the bureau can do, such as what it can elevate in terms of cause of concern and what enforcement power and policy expertise it can call its own.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will now go to MP Erskine-Smith for five minutes.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much, Chair.

I want to start with Ms. Bednar.

You mentioned in your opening testimony the issue around wage fixing. It's a small issue when we look at the overall structural inadequacies of the current act, but do you think we ought to update the wage fixing provision to at least keep us in line with our American partners?

[Vass Bednar]

I do think we should.

That case is interesting when you think about the very high burden of proof that we have under the Competition Act for abusive dominance. A challenge in our digital age is establishing that proof. What was interesting about those conversations, from what I read about them in the newspaper and online, is the use of telephones to just have conversations—just pick up a phone. How can we expect...

We have to expand what we take as evidence and what information we can compel, and also think about whether that threshold is just too high to be realistic and productive.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

My read of it is that it would also require an ongoing agreement and we couldn't look back to past agreements. That seems like it might be an unnecessary limitation as well.

[Vass Bednar]

Yes. I think preventing us from going back could hurt us, as we're seeing in the United States taking a second look at a merger with Facebook.

However, back to the point about being anticipatory, we're also seeing some evidence from other competition authorities.... The Google-Fitbit merger is an interesting case of just looking ahead to what the implications are of both those companies having the same data. In that instance, a data wall was proposed. I find that quite novel and I think it's something we should be thinking about as we look ahead to consider refreshing this act.

Thank you.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

As you look to finalize your policy paper—which I look forward to receiving—have you turned your mind to the question not only of resources for the commissioner and the commission's structural limitations, but also the question of thresholds in M and A transactions? They seem to be quite high in Canada in comparison with other countries. Especially as it relates to the digital economy, where really serious upstart competitors may not be of such a large size, we may still want to maintain that competition.

Have you turned your mind to the threshold question?

[Vass Bednar]

Yes. We're thinking about the threshold. Again, how has the digital economy changed and challenged what we think about when it comes to evaluating those mergers? It's specifically from a start-up perspective as well, the ability of larger incumbents to snatch up smaller companies that could be growing or have information that they need. So yes, it's absolutely on our radar.

I wish I had—I was actually texting with Robin about it last night—the beautiful chart that summarizes all of those differences. If we made a giant comparative legislative document together, we could be really clear in contextualizing where we are in Canada compared with other authorities. Absolutely, the threshold for merger review is something that would really be a sore thumb on that chart.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

It does seem that other competition authorities are looking beyond simply protecting consumers on price—though I wish we'd be protecting consumers better on price too—and are also looking at the digital economy and how we can protect consumers on privacy.

There's another interesting area when you look at the digital economy. The Facebook acquisition of Instagram is one example. You can imagine Shopify in the Canadian context could well do the same. They have an incredible amount of information about other companies that operate on their platforms. In Facebook's case, they're companies that in some ways become competitors to them. They can use the extensive amount of information they have about companies that operate on their platform to acquire competitors.

Do you see that as a challenge that ought to be addressed in some way?

[Vass Bednar]

I absolutely see it as a challenge. It's not just information to acquire competitors. It's also to develop products, to set prices and to understand audiences to advertise to, right? Companies don't just compete on price anymore. They also compete on privacy, on data. I wonder and sometimes worry that....

I did mention the company Loblaw. I kind of think that Loblaw knows more about me as an individual than the Government of Canada. What they can do with that information, when it comes to both owning a platform and advertising on that platform, is similar to something we see with Amazon. It's been suggested that Amazon uses information from what people are searching for and purchasing to inform their own product development. Perhaps that's anti-competitive behaviour.

Again, that could come up in our own backyard. We need to think about it now so that we're not playing catch-up. I find playing catch-up very embarrassing.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

My last question is....

I'm out of time, apparently.

[The Chair, Liberal, Sherry Romanado]

Unfortunately, MP Erskine-Smith, you're out of time.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much. I appreciate it.

[The Chair, Liberal, Sherry Romanado]

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

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

Thank you, Madam Chair.

My question is for Mr. Kotak.

Thank you for your presentation. I felt that it had some especially worthwhile elements.

I would like us to discuss innovation.

Would exempting small businesses with an income below a certain threshold, as set by Canadian authorities, be an effective measure to reduce the regulatory burden and foster innovation?

[Ritesh Kotak]

Yes. At the end of the day, anything that would make it easier for small businesses—to me, they are the backbone of our economy and where we're seeing a lot of innovation—and cheaper and that would reduce the red tape would be of great benefit to small businesses. But in order to actually see the benefit, we also have to, as I mentioned earlier, aggregate resources. If we're able to aggregate, if it's easier for that small business to spin up to essentially start conducting commerce, to understand the different tools that are available to them and to have point people within government to help them navigate the regulatory space, and we reduce that red tape, yes, it would increase competition, which in turn would also increase innovation in Canada as a whole.