Industry Committee on April 15th, 2021

[Brian Masse, NDP, Windsor West, ON]

Thank you.

[Dr. Dwayne Winseck]

I'm going to hand this off to Ben as well.

I think there are four things I'd say in response to your earlier question.

I would say that the Competition Bureau seems to be handcuffed by a lack of a mandate and resources to look at what's happened after a deal has already been approved, so we need to have a retrospective assessment.

Second, we need to be able to understand the cumulative effects over time so that we're not just treating deals like the Rogers-Shaw deal as a one-off; but we need to see it as the second shoe falling after Bell MTS in 2017, and look forward from that.

There are also some problems with information disclosure powers that the Competition Bureau has, I understand, relative to the U.S. Those should be beefed up.

I really think a great big consideration is that we need to open up the Competition Bureau's review processes to much higher levels of public disclosure and participation, with support for the latter. There's an opportunity for us to participate, but it's all on our own dime, and that's a big ask.

Ben.

[Ben Klass]

Yes. I'll just add that when the CRTC commissioner was here last week, he correctly pointed out that the telecommunications regulator really has no input into a change in ownership or a merger in this case, which strikes me as being pretty strange. We have the Competition Bureau saying they don't have the resources to assess after the fact. We have the CRTC saying that we check to make sure that the merging parties come out as Canadian, but beyond that we just look at TV licences.

You have the industry saying let's go, go, go. This is hear no evil, see no evil, do no evil. But consumers know that there is something wrong with this, and I think it's Parliament's place to look at this particular issue. I think one place to start would be with this presumption. If I could just quickly read from this, the Competition Bureau's page on mergers, it says, “Mergers are generally viewed as a positive way to increase competitiveness, allowing Canadians to benefit from lower prices, better product choice and higher quality services.” It says further, “All parties contemplating business mergers are strongly encouraged to contact the Bureau at the earliest opportunity, or before submitting a notification filing.”

The idea that we have a CRTC that does not look at this, a Competition Bureau that cannot assess whether its policies are successful or not, and an industry that's gung-ho on mergers, just reeks to high heaven to me.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions will go to MP Baldinelli.

You have five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair. I'd like to thank all of the witnesses for being with us today. As a McMaster alum, I think I'll start with Ms. Bednar and follow up on some of her comments. I look forward to her paper with regard to the Competition Bureau being shared.

Over the past couple of hearings, we've had a number of individuals come forward and talk about section 96 and the efficiency defence, the abuse of dominance, private right of action, and today we're hearing about anticipatory regulations. We've heard from the commissioner of competition about the lack of resources. As part of your paper, are you going to be coming forward with ideas on amendments that you would like to see or proposing be put into the act to improve Canada's competitiveness and ultimately the economic recovery?

[Vass Bednar]

Yes, the paper does conclude by identifying about 10 or 11 areas of opportunity for us to start to reconsider. We're hoping it's a catalyst to more conversations. We don't want to be too prescriptive in proposing something as distinct as an amendment quite yet, but we do look forward to being, hopefully, an active and productive part of a more rigorous process going forward. Certainly, we'll be looking at considering dropping that efficiency defence, which may have served Canada quite well in a historic context, but again, I think is dated and not serving the public interest any longer and often confusing people, unfortunately.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

As well, there's the notion—I think it was indicated earlier—about not having the power to go back and examine. Is that something to consider as well?

[Vass Bednar]

Yes, like thinking of the legislation as a time machine.... Right now, the Competition Bureau has this ability to issue something called an “advance ruling certificate”. It's an ARC for mergers. This commits the bureau to never reviewing a merger again after it's already been reviewed, so we could consider whether that's truly useful and helps us. But again, unless we also take another look at the thresholds that prompt a merger review, I think we are probably missing a lot of really thoughtful interrogation that we could have in Canada, which, once again, no one else is going to do for us. It's truly up to us to be thoughtful about what's occurring in our own backyard.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you.

I'd like to go on now to Mr. Jules and thank him for his presentation.

It's interesting and I was taking notes when you mentioned the First Nations Fiscal Management Act. You indicated that it has been the most successful first nation initiative in Canadian history. I'd like to see if you could elaborate on that and why you feel that.

[C.T. (Manny) Jules]

It's optional, first of all, I think, which is really critical. There were very few communities that initially started to be involved in the optional legislation, and now we have over 300 communities right across the country that we work with. Through the real property tax system, we've seen our properties increase in value some $3 billion over the last 15 years, an incredible amount of growth. We see annual growth of about 13%. Of course, this is going to be impacted by COVID-19, so we have to be able not to go back to normal, but build back better to ensure that our economies will continue to be successful.

We've had over a billion dollars' worth of bonds through the First Nations Finance Authority. We've helped the federal government enact its 10-year grant funding program for first nation communities through the first nations management board. We are currently developing the concept of our own infrastructure institute, which would allow the federal government to monetize capital contributions to first nations, which would really accelerate business-ready infrastructure within reserves right across the country.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Mr. Jules.

Madam Chair, I think I have less than 20 seconds, so I'll cede any further time.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Next we'll go to MP Ehsassi.

You have five minutes.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Madam Chair.

Thank you to all the witnesses.

If I could, I'll start off with Ms. Bednar.

Let me first acknowledge that I share your concern that the Competition Act over the decades hasn't really attracted the attention one would hope, especially considering that Canada has been a pioneer in this area—it was the first country to adopt antitrust legislation.

Given your deep understanding of the structural elements of the Competition Act, you did refer to decisions that were made in 2011 that stripped away at the policy capacity of the Competition Bureau. For the benefit of the members and the public, would you mind elaborating on that, on what happened in 2011 and what the implications were?

[Vass Bednar]

I'll do my best. I wish I had a little bit more detail. This is kind of a factoid that's come up in some of my background conversations with a range of experts and scholars. My understanding is that maybe I need to go back and take a look and go on LinkedIn and count how many policy analysts there are. There's fundamentally less public policy capacity at the bureau than there used to be, and I think coupling that with the funding over time.... If you just think about the exponential acceleration, the exponential growth of the digital economy and our increasingly digital society, of course that puts additional pressure on policy-makers and on the bureau.

I'll do my best to sleuth out a bit more detail, but that is my best understanding, and it's certainly worthy of fact-checking.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that explanation.

In your opening remarks, you expressed concern about the lack of independence that the Competition Bureau has. Could you, again, elaborate on that? It's a hugely significant issue, and it's something that, obviously, is of concern to everyone. If you could provide us with your insights on that issue, it would be greatly appreciated as well.

[Vass Bednar]

Sure.

It's a common thread. I also lamented that lack of scholarship, but of course, there is scholarship, and that's a common criticism of how we've structured our Competition Bureau. Other competition authorities have more independence. They have, of course, more power and more funding, but they also almost have a ministerial-like authority to pursue reviews, to publish papers.

If you look at our bureau, a lot of the publications are summaries of a meeting that took place. They're explanatory. You can get context on a decision that was made. However, it lacks that, perhaps, proactiveness or forward-looking view. Of course, yes, the criticism from potentially being conflicted.... You're in a ministry that's fundamentally concerned with competitiveness and innovation. That might lead some people to advocate for the comfort and inertia of the status quo, because for a lot of companies, maybe it's more productive if our competition policy is totally silent on the creative ways they're looking to establish, assert and preserve their market dominance.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that.

Now perhaps I will open it up to other witnesses.

Are there any other witnesses who believe that the Competition Bureau lacks independence?

[Dr. Dwayne Winseck]

I'll just say one thing on that. I think it's more about what we could call “regulatory hesitance”. I'm not so sure about the independence part. I don't have enough knowledge and experience with that.

A Harvard study back in 2009 pointed to something that it called “regulatory hesitance” among Canadian regulators. We have good legislation and regulatory measures on the books, but when it comes down to brass tacks, regulators seem to lose their spine. I think that's the big issue here.

[Ali Ehsassi, Liberal, Willowdale, ON]

We're talking about independence, Mr. Winseck, so do you have anything regarding the independence of the bureau?

[Dr. Dwayne Winseck]

I myself can't speak enough on that.

[Ali Ehsassi, Liberal, Willowdale, ON]

Okay.

Mr. Winseck, if I could follow up, you said there has to be greater transparency. One of the issues, obviously, is that much of the work that the Competition Bureau does has to do with business proprietary information. That's one thing.

I'm out of time. I apologize, Mr. Winseck.

[The Chair, Liberal, Sherry Romanado]

My apologies, MP Ehsassi.

With that, we have finished the second round.

As I mentioned, we'll go to 1:30. We'll be able to have a slot for each of the parties.

I want to ask the committee if they would indulge MP Masse and allow him to go first, as he needs to leave at 1:15. If you're all in agreement, he'll go quickly and then we'll go to the next three parties.

Is that okay with everyone?

[Some hon. members]

Agreed.

[The Chair, Liberal, Sherry Romanado]

I appreciate it.

Please, Mr. Masse, go ahead.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Thank you to my colleagues and to all the witnesses.

The analysts know that I'm like a dog with a bone when it comes to issues, so I'm going to ask my last question to Ms. Bednar again.

With regard to international investment, do you believe that our current laws with the Competition Bureau are also perhaps dragging our innovation domestically, because we're out of sync with the United States and Europe?