Industry Committee on Dec. 3rd, 2020

[Leila Wright, Associate Deputy Commissioner, Competition Promotion Branch, Competition Bureau]

Madam Chair, there are a number of different aspects to the telecommunications regime in Canada, and there are areas where the Competition Bureau can be involved. The CRTC is the organization that oversees the wholesale regime in Canada. Questions regarding that regime would be best placed with the CRTC.

The Competition Bureau recognizes the importance of ensuring that the wholesale regime allows competition in the marketplace. We've been very active with the CRTC in providing our views. Most recently, we spoke with the CRTC and provided a submission in their recent proceeding on rate setting. There we were looking at the different ways in which rates can be set in the wholesale regime and what the impact on competition would be with those different rate-setting methodologies.

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

To follow up on that, it sounds like your opinion is that the Competition Bureau does not have any direct ability to enforce any competitive practices in that sphere. It's more a CRTC regulatory jurisdiction. Is that what you're saying?

[Leila Wright]

We do have the ability to take action when potential abuse of dominance is happening, exclusionary conduct in the marketplace. There is a very specific test we need to use in order to use our abuse of dominance provision, and it also includes a requirement to show that there's been an adverse effect on competition.

Therefore, we try to take a multipronged approach to these issues, where we have our enforcement ability under the Competition Act as well as our work with the CRTC to look at the whole framework.

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

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Mr. Boswell, if you can make sure the information that was requested by MP Sloan gets sent to the clerk, he'll make sure to circulate it among all the members. Thank you.

We now go to MP Lambropoulos. You have the floor for five minutes.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you very much, Madam Chair.

I would like to thank our witnesses for being here today to answer our questions.

Mr. Boswell, you mentioned in your testimony that global competition can help us with our economic recovery from the COVID-19 pandemic. Do you think changes to the act could help the economy recover? If so, what would you suggest?

[Matthew Boswell]

As I alluded to in the opening remarks, we believe that a focus on competition in Canada will assist in the economic recovery. Competition has multiple different benefits. Of course, competition drives lower prices for consumers, so affordability, more choice and better-quality products.

In terms of the macro picture, competition drives productivity increases and innovation. There's been a long-standing productivity lag in Canada, and if we can increase productivity and GDP, that will assist in the economic recovery.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you very much.

I completely agree with you that we needed this during this difficult time.

We have to make sure that we're really encouraging productivity and that we're encouraging people through jobs being created. However, in regular times—and this is not a COVID-related question—I've had many companies in my riding, which is a very industrial riding, come to me and complain that they don't feel like they have equal opportunities with regard to bigger players, bigger global players.

I was wondering if there's anything in the act that protects Canadian companies or gives them some kind of an advantage with regard to this type of competition.

[Matthew Boswell]

I'm interpreting the question as whether there's anything in the act that helps Canadian companies compete versus large global players. There isn't anything specifically in the act in that regard.

What there is in the act is the ability of the bureau to bring enforcement action if we discover—if the evidence shows—that large global players are behaving in an anti-competitive manner inside Canada. That is the subject of much of our work here at the bureau. We rely on complaints and we rely on our marketplace intelligence to see if there's anti-competitive conduct by big players, and then we pursue that investigation to obtain the evidence that we believe is necessary and to determine if we should bring a case.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you.

With regard to enforcing competition rules on big companies, we've heard a lot from telecom companies recently, and we know the case is the same for companies like Google and Amazon. Does the Competition Bureau have enough resources and legal powers to effectively enforce competition rules? Why is Europe more effective than Canada in doing so?

[Matthew Boswell]

What I can say is that—as I think I've said several times—we're focused on doing as much as we can with the resources we have, and I'm proud of the bureau's track record. We have a wide mandate in terms of enforcement. We bring a lot of enforcement actions, and we have done so for very many years.

Obviously, in a more complex environment, more resources would be extremely helpful. The world is very complex for these types of digital investigations. You need special skill sets; you need data scientists, data analysts. You need to really understand what's going on under the covers, the opacity of the visual economy, with algorithms and those things.

Those are issues and challenges that we're tackling every single day.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

My Internet connection got unstable at one point, so I'm not sure how much time I have left, and I also don't know if you answered my next question. My next question is, what is the difference between Europe and Canada that makes it easier to actually enforce these rules?

[Matthew Boswell]

It's quite a lengthy answer. There's certainly a different regime in the European Union with respect to competition that allows for initial prosecutions or findings of wrongdoing in a different manner from that in Canada, and of course, there is much more emphasis on competition in Europe. There's the European Commission's directorate-general for competition for the whole European Union, and then each state—

[The Chair, Liberal, Sherry Romanado]

Unfortunately, we are out of time.

I'm going to start the next round of questions. We go to MP Cumming.

You have the floor for five minutes.

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you, Madam Chair.

I want to follow up on a question from my colleague Mr. Jeneroux that you didn't get a chance to answer. The relationship between the Competition Bureau.... He was on the path with distillers, hand sanitizers, just this flood into the market of product priced all over the place, with effectiveness probably all over the place. How closely do you work with Health Canada on some of these issues?

[Matthew Boswell]

Madam Chair, thanks to the honourable member for that question and for following up.

I did want to respond to Mr. Jeneroux that in fact the bureau has been working quite closely with Health Canada throughout the pandemic. Our emphasis in that work has been on what I talked about earlier: false or misleading representations of products that prevent, treat or cure COVID. That's been our focus. We've been in touch with Health Canada. We already have an established relationship with Health Canada on other enforcement matters, so we're able to build upon that.

I should also point out that we created a specific portal on our website that connects Canadians not just to the competition issues but to Health Canada and the Public Health Agency of Canada, as these issues are all intertwined.

[James Cumming, Conservative, Edmonton Centre, AB]

I'm finding this very informative. Thank you for being here today.

I want to come back to the discussion related to the dominant tech players, particularly the giants—we're seeing organizations like Amazon, particularly, coming into the market—and the use of data. I know you said you will be reviewing Bill C-11, but I wonder, with that kind of dominance and that control and use of data, if we should be concerned that there aren't enough teeth in your act or in Bill C-11 to deal with things like customer lists. This is stuff that's proprietary and that could really put at risk smaller Canadian companies, small businesses that are using what they think is a service provider but actually could quite likely be a competitor.

[Matthew Boswell]

I'm not too familiar with the connection to Bill C-11 in that regard, but what I can tell you is that it's very clear, with these large platforms, that data is a huge factor in controlling the market. If you control the data and it's very difficult for entrants to come in and acquire the necessary data to have the scope and the scale to compete, those are very significant issues in terms of competitive intensity and new entrants coming into a market.

We're paying very close attention to the competition issues related to the control of data and the prevention of access to data, which is why I pointed out earlier that the data mobility provision in Bill C-11 is certainly interesting. It ties to something that the bureau has been talking about for some time, which is data portability. This ties into things like open banking, which could provide more competition in the Canadian marketplace.

I'm not sure I answered Mr. Cumming's question.

[James Cumming, Conservative, Edmonton Centre, AB]

It was close enough. It was headed in the right direction.

The change in the marketplace is a significant change for your department. My colleague also talked about your budget. Trust me, I'm never one to spend more money. It's how I run my budget. Do you have adequate resources to be able to deal with the new digital age and some of the things that are in front of you? Do you have the talent on your team to be able to deal with what has really changed the entire competitive marketplace?

[Matthew Boswell]

Thank you, Madam Chair. I see the warning sign, so I'll be as succinct as I can be.

These are pressing issues for the bureau. We are working as hard as we can to do the most we can with what we have, but the world is incredibly complex in terms of competition law enforcement. It's getting more complex and more demanding every day. We literally have mountains of electronic records to deal with on cases. Those are the challenges we're facing.

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We'll now go to MP Ehsassi.

You have the floor for five minutes.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you very much, Madam Chair.

Mr. Boswell, I'd like to return to the first issue that was raised. You said that your bureau is following developments in jurisdictions around the world in terms of dealing with the big, dominant grocers in the Canadian market. First of all, insofar as the Competition Act is concerned, what would your recommendations be?

As you can imagine, during difficult periods such as this, a lot of Canadians are very concerned about these practices. Would you be good enough to provide suggestions not only as to how the Competition Act can be improved, but also as to any other remedies, other than the fact that the federal and provincial governments work on this together, that we could look to in terms of federal legislation?

Thank you.

[Matthew Boswell]

Madam Chair, I thank the honourable member for that question.

An interesting aspect of this, when one looks at the international landscape, and specifically the United Kingdom.... The United Kingdom's code of conduct in terms of grocery-supplier relationship developed as a result of an in-depth market study undertaken by our counterparts in the United Kingdom, the Competition and Markets Authority, which is the U.K. competition enforcer. They have a market study power that allows them to really examine if a market is working in terms of competition by compelling information from market participants, analyzing that information and then providing evidence-based recommendations to their government.

In Canada, we conduct market studies, as you have heard about today, but we don't have the market study power to compel information and to provide recommendations to government. Just to go back to the United Kingdom, that's how their code of conduct came to be, and it has been well received because it was based on evidence.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that.

Now I'll switch to a very different topic, if I could. You recently appeared before the Canadian Club Toronto. One of the issues you highlighted for attention was the need for the bureau to have better powers to ensure that we are fostering competition in the digital space.

We had an opportunity to highlight some of the changes that have been made. Are there any other recommendations you would like to share with the members of this committee?