Industry Committee on Dec. 3rd, 2020

[The Chair, Liberal, Sherry Romanado]

Please answer briefly, Mr. Durocher.

[Anthony Durocher]

This question should really be put to the CRTC. We could investigate if the facts and evidence suggested that there might be an abuse of dominance in a particular case.

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

Thank you, Mr. Durocher.

[The Chair, Liberal, Sherry Romanado]

Our next round of questions goes to MP Masse.

You have the floor for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

I thank our witnesses for being here.

As NDP critic for consumer issues for a number of years, I want to thank the Competition Bureau, the women and men who have ably served our country for a long time. In fact, I've been calling for reformation of the Competition Act. Quite frankly, it's time we took the training wheels off and provided more empowerment. Corporations have often treated Canada as a colony with regard to the treatment of Canadian consumers and competition. When you compare, even the United States....

I had a private member's bill back in 2009 that went through the House of Commons. It was supported and actually went through this committee. It resulted in a voluntary agreement for the automotive aftermarket. The problem we have is that the voluntary agreement is now being abused. Has there been any investigation with regard to the complexity? The voluntary agreement for that particular issue was on the right for cars to be fixed and repaired in the aftermarket. It didn't include a digital chapter. I'm just wondering if you could indicate whether there's been any work or investigation with regard to that part of the bill.

Just so other members know, what was happening was that the United States was allowed to get aftermarket fixes to their vehicles, equipment, software and a series of different things that were denied in Canada. Ironically, in Windsor you could get your van in the aftermarket fixed over in Detroit, but you couldn't get it fixed over here in Windsor because the companies wouldn't provide that information. It resulted in a voluntary agreement.

I'm curious to know the state of that situation right now.

[Matthew Boswell]

Madam Chair, that's not something I'm familiar with and can provide any meaningful detailed response on today. I would be happy to follow up off-line with the honourable member on that issue.

[Brian Masse, NDP, Windsor West, ON]

Great. That's fine. It's just recently become more challenging with that voluntary agreement.

I guess from there, what type of benefit do you think consumers would enjoy if the Competition Bureau were allowed to actually do criminal proceedings? Can you comment on other countries that have the ability to have their competition laws enforced through criminal proceedings, and whether that modernization might empower the ability of the Competition Bureau to readily get results?

[Matthew Boswell]

I can tell you, Madam Chair, that under certain aspects of our law, we do have the ability to bring criminal prosecutions. In fact, we do bring those.

In terms of how it works, when we investigate, we're akin to a police force, conducting a thorough investigation and following the evidence where it leads. We then refer the results of our investigation to the Public Prosecution Service of Canada. Certain particular offences set out in the Competition Act are criminal. Perhaps the most well known are what we refer to as “cartel” offences, which are agreements between competitors to fix the price, restrict supply or allocate markets. We also have bid rigging, which is criminal.

Over approximately the last 10 years, as a result of our criminal prosecutions, companies have paid approximately $120 million or more in corporate fines. Dozens of individuals have been found guilty of criminal offences.

It's not the whole act, but there are certainly criminal offences within the act.

[Brian Masse, NDP, Windsor West, ON]

Well, that's the point, I guess; there may be a more modernized approach for encompassing the whole act.

Here's where I'm going with that. When you look at the most recent issues we've had related to the digital economy, there's Facebook, Amazon, CRTC, which involves a digital economy, Ticketmaster, the Apple battery scandal. All of those are relating to a new, modern economy.

Is it not time, perhaps, to review the act, to be more robust, or to at least have that discussion? If there were increased capabilities, do you think the people in the Competition Bureau would be up to new types of enforcement provisions or investigation provisions, if provided the proper supports legislatively?

[Matthew Boswell]

As the committee may know, the Competition Bureau is part of the broader Department of Innovation, Science and Economic Development. ISED itself has control over competition policy in Canada. Of course, elected officials are responsible for any amendments to our law.

That said, in our view, it's always useful to review a law to make sure it's fit for purpose. Minister Bains actually wrote me an open letter in May 2019 asking our team at the bureau to look into all aspects of our law to make sure they were fit for purpose. We've been working hard on that. We've done work on that and hope to see progress on that.

[Brian Masse, NDP, Windsor West, ON]

So perhaps we can expect, hopefully by the end of this year, something that would be publicly disclosed with regard to some type of potential change.

[Matthew Boswell]

I can't comment on that. We're working with officials at ISED as hard as we can.

[Brian Masse, NDP, Windsor West, ON]

That's fair enough. Thank you.

Thank you, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We'll now move to the second round of questions.

MP Dreeshen, you have the floor for five minutes.

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

Thank you very much, Madam Chair.

I know that in recent years, the European Commission has been much more active in enforcing competition rules on big tech companies such as Amazon, Google and Facebook. Does the Competition Bureau have enough resources and legal powers to effectively enforce competition rules against big tech companies? More importantly, does the Competition Act provide high enough penalties to discourage big tech companies from engaging in anti-competitive practices?

[Matthew Boswell]

In terms of resources, the bureau strives every day to get the absolute most out of the resources we have, to be as efficient and effective as possible, always looking at our processes and how we can do better, and what tools we could use to do better.

That said, I've spoken publicly multiple times about some of the challenges the bureau faces with respect to administering and enforcing the Competition Act in the digital economy. We've had a veritable explosion of data in the world and, of course, law enforcement agencies have to deal with the data we receive on cases. The amount of data we've received has gone up six times. The cost of cases has increased dramatically.

Our budget has been about the same for 10 years, so in real dollars, it's down about 10%, and we have fewer resources now than we did 15 years ago in terms of people working on files. Outsiders have called on the bureau to get more resources, including the C.D. Howe Institute as well as the Global Competition Review in its annual review of competition enforcement agencies around the world.

We're doing the best work we can in the public interest to protect Canadians. We've brought cases. We've investigated Google. We brought a case against Amazon in 2017 with respect to some of the pricing practices. We obviously resolved the matter with Facebook earlier this year in terms of privacy representation. As some members of the committee may know, we have an active investigation into Amazon.

The good people at the bureau get up every morning and our mission is to serve the public interest, to do as much as we can to enforce and administer the law and to promote competition in Canada.

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

Thank you.

When you mentioned the Global Competition Review, it made me think about some of the other predatory practices that other countries are using. Primarily I think about China. If you take a look at what is happening in Africa, the way in which they embed themselves in the infrastructure projects that are there, environmentally and human rights-wise there are serious issues there.

I'm curious whether you have your finger on the pulse of what is happening in those issues, or would a different department look at those types of investments and predatory practices?

[Matthew Boswell]

Yes, absolutely. Our focus day in and day out is on competition issues in Canada, doing everything we can to make the Canadian economy as competitive, healthy, vibrant and fair as we can.

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

To that particular point, you mentioned during your address that you have aid in pro-competitive work, and you're trying to maximize that. Are these provincial initiatives or federal initiatives, when we're talking about pro-competitive work?

The reason I say that is that we continually hear how the government is saying they want to push forward into green technology and all that, whereas by doing that...and if that's where you have to concentrate provincial initiatives and things to try to get energy into the world to take care of the problems that China is doing in Africa and so on, it seems to be left on the back burner. I'm curious whose initiatives you will be pushing when you try to look at pro-competitive work.

[Matthew Boswell]

Our work, in terms of advocating for more competition in Canada and promoting competition, is at all levels of government, sir.

We work with municipalities on how their regulations could be more pro-competitive, as well as with provinces, territories and the federal government. We're trying to help at all levels of government.

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

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Erskine-Smith.

You have the floor.

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

Thanks very much.

Thanks, Commissioner, for joining us.

At a recent grocery innovation conference, you said, “In general, communications among competitors regarding employee wages would seem to be unrelated to an effective response to the pandemic” and “I heard of such discussions with concern”, in relation to our national grocers and their cutting of pandemic pay.

I've tried to wrap my head around what could have been the rationale for those discussions. I can't think of any rationale except for collaboration to reduce employee wages specifically. Could you think of another rationale?

[Matthew Boswell]

As I said when speaking to the Canadian Federation of Independent Grocers, the concern here is the slippery slope. When competitors, certainly at very senior levels, are having conversations, there is a slippery slope towards what I referred to earlier, when answering Mr. Masse's question, with respect to cartel conduct. That's why I flagged that issue, in particular, with respect—

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

I'm glad you did. I'm glad you flagged it to them directly. I would also say that I appreciate the November 27 statement on wage fixing.

When I compare our interpretation of our own laws out of Justice and out of your statement versus the FTC guidance, it does seem pretty straightforward to me that, if that same conduct that we saw among our national grocers had occurred in the United States, it would have amounted to negative wage fixing, and the FTC could have criminally investigated it. You don't have that power, though.