Industry Committee on Dec. 3rd, 2020

[Matthew Boswell]

Back in May 2019, in an open letter to me, Minister Bains asked me to start a team here at the bureau to work with his team at ISED to make sure the Competition Act was fit for purpose in terms of tools, legal framework, resources and all those issues.

We have been working with Minister Bains' team since that letter was received, and we're continuing to work with them going forward.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that.

[The Chair, Liberal, Sherry Romanado]

MP Ehsassi, my apologies. Could you move your microphone a little bit further away from your mouth? I'm getting a popping sound, so I assume translation is as well.

Thank you.

[Ali Ehsassi, Liberal, Willowdale, ON]

My apologies for that.

Mr. Boswell, I just want to go back to a question that was posed to you earlier by Mr. Dreeshen. You talked about the Global Competition Review. Assessing the resources and the tool kits that the Competition Bureau has vis-à-vis other authorities around the world, how are we doing as a country? How is the Competition Bureau doing in the grand pecking order of things, if you will?

[Matthew Boswell]

We work with partners all around the world. We work very closely with our Five Eyes partners, our European partners and many others. What I can say is that our assessment from inside the bureau is that Canada's competition enforcement agency.... We are it for Canada. There are no provincial competition enforcement agencies, unlike in the United States, where each state has an attorney general who deals with competition. Of course, as I said, Europe has the European Commission, plus every European member state has competition powers.

It's likely that we're one of the least-funded competition enforcement agencies, certainly among our peers.

[Ali Ehsassi, Liberal, Willowdale, ON]

What about in terms of resources? You have alluded to that on several occasions, especially the cutbacks that happened approximately a decade ago, as I understand.

In terms of performance, how are we viewed around the world?

[Matthew Boswell]

Well, I will try to be objective because, obviously, I'm extremely proud of the Competition Bureau and the amazing people who work here.

The number of times I have heard from colleagues around the world, including colleagues at the OECD competition committee and the International Competition Network.... The expression that is said repeatedly in terms of international convergence and working together is that the Competition Bureau routinely punches above its weight. That's the expression I hear over and over from colleagues around the world.

As I said, we are working as hard as we can to serve the public interests with the resources we have.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for answering these questions and for the great work you're doing at the Competition Bureau.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Mr. Lemire, you have the floor for two and a half minutes.

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

Thank you, Madam Chair.

I thank the witnesses for their answers and our colleagues for their in-depth questions.

I would like to mention some information on public-private partnerships that I found on the Internet. I have a huge fear about the federal government's agenda. I am particularly concerned that my region, Abitibi-Témiscamingue, which is sparsely populated, will be one of the remaining 2% that will not be able to connect to the Internet in 2026 as part of the government's strategy.

When I asked Minister Bains, he told me that the Competition Tribunal and the Competition Bureau were independent and that they would look into the matter as they saw fit. I am passing this information on to you with an invitation to reflect on it.

Mr. Boswell, I would like to ask you a question about your analysis of the Air Canada/Air Transat transaction.

Since much of the research work has already been done, do you think an update on your study of competition in air transportation, particularly in regional transportation, would be possible?

Does the negative effect of the pandemic still justify the absence of competitors in this context to ensure coverage of a market, since the pandemic is a temporary situation and the effects of the sale of Air Transat could be permanent?

[Matthew Boswell]

Madam Chair, perhaps I'll start and my colleague Mr. Durocher can supplement.

On Monsieur Lemire's question, in terms of Air Canada's proposed acquisition of Air Transat, that's a situation where the Canada Transportation Act allows the Minister of Transport to make a decision that there will be a public interest review of that matter. That decision was taken, and when that decision takes place in terms of transportation undertakings, my role is to provide information to the Minister of Transport with respect to the transaction, more specifically any concerns regarding potential prevention or lessening of competition that may occur as a result of the transaction.

That input was provided back on March 27, 2020. At the time, we took note of the pandemic in the March 27 report we provided to the minister. This matter is continuing, so I can't comment further. The next stage is to provide information to the minister on proposed undertakings by the parties to resolve competition concerns.

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

By not offering an assistance program for small airlines, the government could create a monopoly situation similar to what resulted from Air Canada's purchase of Air Transat.

Do you think you can act when there is a monopoly situation that derives from a government policy rather than a commercial transaction?

[Anthony Durocher]

In situations where federal government decisions are involved, we can offer our advice to ensure the promotion of government policies that promote competition.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Masse.

You have the floor for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Back in 2003, the then competition commissioner came to this committee and said that they didn't have the proper supports necessary to investigate price gouging in the gasoline industry. From that, we had hearings from 2003 to 2005. We had a report that was commissioned, and eventually a petroleum monitoring agency was announced in the dying days of the Paul Martin government, and after that it wasn't funded by the following Harper administration.

As nothing has changed in that scenario, my question for you today is, do you have enough powers to successfully investigate potential price gouging for the petroleum industry, especially when it comes to retail in upstream and downstream investigations?

In the United States, they have some more robust laws with regard to disclosing market purchasing. Would that not protect Canadian consumers a little bit better than our current situation?

[Matthew Boswell]

Thanks for the question, Mr. Masse.

The bureau does not have specific price-gouging powers, and that issue has come to light once again during the pandemic as there have been complaints of different types of price gouging related to products that people were looking to buy on an urgent basis in terms of the pandemic.

The power we do have, as you know, sir, from your work in this area, is to investigate and refer for prosecution retail gas price-fixing cases. We have done so. We had a significant gas price-fixing case in the province of Quebec, where three separate rounds of charges were laid in 2008, 2010 and 2012, with over 20 convictions of individuals, multiple companies convicted, millions of dollars in fines. We also had a gas price-fixing case in Ontario.

That's where we're able to take action with regard to retail gas. It's where we find the evidence of agreements between gas stations to fix the price.

[Brian Masse, NDP, Windsor West, ON]

If the laws were modernized, would you feel confident that the Competition Bureau could do more work to protect Canadians on the gas price-fixing issue, if the laws were updated?

[Matthew Boswell]

I guess it would depend on what aspect of the law was updated. These are often tricky investigations that involve wiretaps and search warrants in getting to the truth.

[Brian Masse, NDP, Windsor West, ON]

Again, it's back to resources. What we pay for is what we get.

Thank you, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round goes to MP Dreeshen.

You have the floor for five minutes.

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

Thank you very much, Madam Chair.

It sounds as though in 2008, 2010 and 2012 there was some action taken with regard to price-fixing that seemed to be working at that particular point in time. I guess if we wanted to take a look at exactly how the petroleum prices are, we could talk with former Liberal Dan McTeague. He could easily tell folks just what we can expect as far as prices are concerned.

Mr. Boswell, I alluded earlier to the Global Competition Review. Just listening to your testimony, when we talk about transportation, as soon as it looked as though there was some kind of an issue, I believe Air Transat and Air Canada.... Once it gets to that stage where there's a lessening of competition, you would anticipate that it's in the public interest to review it.

I'm curious to know how robust the government is in taking the advice you have. I'll tie that into another point in a moment.

[Matthew Boswell]

I'm not in a position to comment on how much of my advice they take into account. My role is to provide that advice. I did so on March 27, 2020, in an extensive report that set out extensive competition concerns about the Air Canada acquisition of Air Transat.

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

Thank you.

My reason for asking this is that on transportation, you got to a stage where they were going to pay attention to what you were saying. When we talk about the Investment Canada Act and we see foreign actors coming in to pick up distressed companies, really, then, as far as competition is concerned, once that's done, the only time you have a chance to comment on it is once we start to see negative effects from the fact that these companies have come into Canada and are starting to change the landscape, so to speak. Similarly, in terms of companies such as Amazon and so on, you don't really know what they're going to do. It all sounds great to have them here, until you start to see how it affects other companies as far as competition is concerned.

How do you keep up to that? How do you keep up to Investment Canada decisions that allow companies to come in and do what they please, and then you're there to clean up the mess? The same thing happens with some of these other companies that are coming in and starting to displace Canadian companies.

[Matthew Boswell]

We go about our work in the parameters set out by the act and set out by case law in Canada. We review mergers to determine if they're going to result in a substantial lessening or prevention of competition in Canada. That's our focus when there are acquisitions. We do the work.

When it's a foreign competitor coming in and seeking to buy a Canadian competitor, we will do the analysis to determine if that's going to result in a substantial lessening or prevention of competition in Canada. We are vigilant for other foreign companies that are operating in Canada, to make sure they're not engaging in anti-competitive conduct and to make sure they're not engaging in false or misleading representations. We're paying attention, to the greatest extent we can, to these issues.

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

That takes me back, then, to what you said about our Five Eyes partners. We have a situation where, of course, Huawei certainly has been in the news. We've seen what all of the other Five Eyes partners have talked about and where they're going.

Would concerns about Huawei ever come to you prior to any decisions being made by the government, or again, does that simply come in after the decisions have been made?