Industry Committee on Dec. 3rd, 2020

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

[The Chair, Liberal, Sherry Romanado]

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

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

Mr. Durocher or Mr. Lemire, where do you see the line between the need to foster competition in the markets and the need for government intervention?

For example, in the case of an essential service, is it really a good thing for citizens to be left in the hands of free market actors?

[Anthony Durocher]

That is a very good question. Our role is to ensure that there is healthy competition in the markets and that there is no abuse of dominance or anti-competitive practices.

We sometimes note, for example in the telecommunications market, that there are no business plans for certain regions because it is simply not profitable to offer services there. Hence the importance of government's role in encouraging the deployment of broadband Internet service. In this context, the bureau's role is to provide the CRTC with evidence of the benefits of competition to ensure that their decisions and actions are based in part on competitive concerns.

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

This partly answers my second question, but I'm going to ask it again anyway.

Where do you see the line between the need to foster competition in the markets and the need for government intervention?

Let me point, for example, to the cases of Bell Canada and Air Canada, which were investigated by the bureau. When it comes to providing essential services to the population or the economic development of a region, is it really a good thing for citizens to be left entirely in the hands of free market players?

[Anthony Durocher]

I would say that the Competition Bureau favours free markets so that businesses can take advantage of the benefits of competition, such as low prices and the opportunity for innovation.

In some cases, the market does not work. When it reaches a certain limit, we take action that may help strengthen regulation or enforcement to correct the situation, while promoting our views on competition.

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

Thank you very much for your answer.

[The Chair, Liberal, Sherry Romanado]

Thank you.

Our next round of questions goes to MP Masse.

You have two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

I mentioned the Investment Canada Act and foreign takeovers of iconic Canadian companies, most recently Rona by Lowe's, leaving us with a false competition nationally, basically, between Lowe's and Home Depot, which is a joke. On top of that, we've had in the past Future Shop being sold to Best Buy. That has resulted in a loss of competition, no doubt, in the electronics industry, especially when you look at where other electronic industries are owned. Another good example is the loss of Zellers to Target. With that foreign takeover, we saw that Zellers actually paid above industry average wages and had benefits and also had a profit.

Does the Competition Bureau provide insight on the Investment Canada Act when takeovers are actually brought forth, in terms of commentary for the minister? Is that something that takes place?

[Matthew Boswell]

Madam Chair, I'm back and hopefully this microphone is working for everyone, including the translator. It's amazing how many microphones we have in this building.

What I can say is that obviously for the Investment Canada Act, there's a team at Innovation, Science and Economic Development that deals with those foreign investment issues. The bureau examines these situations through our merger review lens, which is set out in the Competition Act.

[Brian Masse, NDP, Windsor West, ON]

In your opinion, has any of the three episodes I just mentioned in terms of takeovers benefited Canadian consumers? Now that we can look in the rear-view mirror, have Canadians benefited from those takeovers and the closure of competitors?

[Matthew Boswell]

That's not something I can comment on at this time. I haven't specifically looked back at those particular transactions.

[Brian Masse, NDP, Windsor West, ON]

If we continue, though, to allow takeovers of competitors in the same industry, especially Canadian ones that we can control, doesn't that seem self-defeating for consumers, having fewer choices? Also, the current laws that you're under require multiple competitors in the same field to actually do comparisons. Isn't that a disadvantage?

[Matthew Boswell]

Madam Chair, as I said, these are questions perhaps more appropriately put to the individuals who deal with the Investment Canada Act.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We now turn to MP Sloan.

You have the floor for five minutes.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Thank you, Madam Chair.

I want to ask a question about section 32 of the Competition Act, which authorizes the Federal Court to restrict any competitive exercise of intellectual property rights, but only in proceedings initiated by the Attorney General of Canada. I'm just wondering if you think it would be a good idea to grant the Competition Bureau itself the power to initiate proceedings under section 32 of the act.

[Matthew Boswell]

Perhaps my colleague Mr. Durocher could address that issue at a general level.

[Anthony Durocher]

Intellectual property considerations come up quite often in competition law, and we have published detailed guidelines on the issue, the intellectual property enforcement guidelines, with numerous examples.

I can't really comment on section 32 itself, but I would note recent examples of action we've taken on IP issues that have come up in our litigation against the Toronto Real Estate Board. Oftentimes we see similar issues of a company not sharing data and claiming to have intellectual property or an IP right to that data. Whether or not that is exclusionary depends on the facts and circumstances of a given matter, but our Competition Tribunal has opined on these issues, which really informs the enforcement approach we've tried to clarify through our guidelines.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

I'm wondering why you can't comment on section 32. My basic question is whether or not the Competition Bureau should have the power to initiate proceedings. Isn't that a question you could have an opinion on?

[Matthew Boswell]

Certainly it's not something I've turned my mind to of late. I'd be happy to provide the committee with a more fulsome answer in writing after today's hearing.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Okay.

Given that, would you have an opinion on the advantages and disadvantages of allowing private parties to initiate a similar proceeding under section 32 of the act?

[Matthew Boswell]

I think that would be the same answer, sir.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Thank you for that.

I wanted to switch over to talking about the Internet. There have been a lot of concerns about anti-competitive practices that are being engaged in by the big Internet service providers, for example delaying or avoiding payment of wholesale access rates by the CRTC. Is there any way that the Competition Bureau can ensure that these incumbent telecommunication service providers do not engage in any competitive practices against the smaller ISPs? If you can make any further comments on that, I'd appreciate it.

[Matthew Boswell]

Madam Chair, my colleague Ms. Wright would be well placed to address this particular telecom issue.