Evidence of meeting #127 for Industry, Science and Technology in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was merger.
A recording is available from Parliament.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you, Mr. Chair.
Thank you to the witnesses.
Mr. Boswell, earlier, you talked about a generational upgrade. What did you mean by that?
That said, before you answer that question, I would like you to answer this one. Earlier, my colleague Mr. Vis asked the killer question, if I may put it that way. He asked whether a bill like this was really going to have an effect on the cost of groceries tomorrow morning.
Commissioner of Competition, Competition Bureau Canada
I thank the member for his question, Mr. Chair.
If Mr. Généreux agrees, I will answer in English, because there are technical details.
The combination of the bills that have come in front of this committee, the House finance committee and the Senate over the last several years will, I believe, have an impact in the long term on aspects of competition throughout our economy. It's not going to happen overnight. There's no doubt about that. Also, we don't want to be in the business of over-promising.
However, this country has not paid attention to the importance of competition in the organization of its economic affairs for decades—literally decades. We're a country where we have multiple oligopolies and very significant competitive intensity problems.
This is one important piece to drive competition, which drives down prices, increases consumer choice, drives innovation and drives productivity. Those are the important, long-term benefits of having a country that places importance on competition.
Can it, overnight, fix the affordability crisis we're experiencing? No, and we're not promising that.
However, these are important reforms that turn the ship around. It's a ship that's been sailing since at least 1986.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
If a government chose, tomorrow morning, to eliminate the carbon tax, would that have a direct effect?
The people who produce the food we eat in the grocery stores are taxed in various ways, including, now, by a carbon tax. The people who transport that food are also taxed. The people who process it are as well, by the carbon tax. Obviously, the carbon tax is then passed on by corporations directly to consumers.
If a government abolished the carbon tax, would that have a direct effect, tomorrow morning, on consumer prices?
Commissioner of Competition, Competition Bureau Canada
Generally speaking, as a matter of economics, if you remove costs in the supply chain, you're going to end up being able to offer products at a lower price.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
So the answer is yes.
Earlier, you used the word “productivity”. In Canada, to my knowledge, an hour worked represents approximately $55 for the country, while it represents $75 in the United States and $80 in Europe.
What is the problem that explains our lack of productivity in Canada, and what is the connection between that and the bill we have in front of us?
Commissioner of Competition, Competition Bureau Canada
I would say that it goes beyond the bill before us today, Bill C-352. It goes to the point that I was making that competition drives productivity. There are innumerable studies that point to that very clearly. Competition drives productivity in an economy, and it is a key pillar of a capitalist economy for that very point.
As I was saying, we have not placed significant emphasis on competition in this country for decades. This was pointed out. The government put together a blue-ribbon panel in 2008 to look at competition in the economy. That panel—in 2008—pointed out how competition has been neglected in Canada and how competition is a key driver of productivity.
We're at the point now where the senior deputy governor of the Bank of Canada said a month ago that “it's time to break the glass”. There's an emergency. There's urgency. We need to address these. In a speech, she pointed clearly to competition as vital to address this productivity problem in our country.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you.
I would like to leave my colleague Mr. Williams a few seconds so he can ask a question.
Conservative
Ryan Williams Conservative Bay of Quinte, ON
Thank you. It's a brief question.
Commissioner, thank you for coming today. I know you're starting an airline industry study. The public submission deadline is June 17. These are the new powers by Bill C-56, so we're just testing those out.
One concern we have is that there's a letter written by the industry minister that says “to focus on domestic...airline services”, not airports. Obviously, we think you should be looking at the whole thing. Airport competition is just as important as the domestic side.
If that comes back, do the powers through Bill C-56 allow the minister to change the course of the study after we've reviewed it or after you've gotten the public consultation on the 17th, yes or no?
Commissioner of Competition, Competition Bureau Canada
My understanding is that, with the changes to the law from Bill C-56, we consult on the terms of reference, which we have out there now, as you rightly point out. Once we hear input from Canadians—and I can tell you that we're getting a lot of input—we then may amend the terms of reference, depending on points that people have made in our consultation. We then provide the terms of reference of the study to the minister
Conservative
Liberal
The Chair Liberal Joël Lightbound
Thank you, Mr. Williams, but that wasn't a short question you asked.
In fact, Mr. Généreux got me. I thought it was his speaking time he was sharing with you.
Colleagues, it is 1:00, but we started at 12:08. If you agree, just to be fair to everyone, I propose that we go a few minutes longer.
Mr. Van Bynen, the floor is yours for five minutes.
Liberal
Tony Van Bynen Liberal Newmarket—Aurora, ON
Thank you, Mr. Chair. This has been very interesting.
We heard an earlier reference to a report from the Competition Bureau, and the bureau underlined the need to modernize Canada's competition laws to respect the realities of today's economy. We know that some of those elements have been introduced, and we've heard that regulatory barriers are one of the major items, specifically interprovincial trade.
Are there any other elements that should be considered as we go forward in relation to improving the competitive intensity?
Commissioner of Competition, Competition Bureau Canada
In terms of improving—
Liberal
Tony Van Bynen Liberal Newmarket—Aurora, ON
I have a point of order, Mr. Chair.
I'm getting the French translation.
Liberal
The Chair Liberal Joël Lightbound
There seems to be a technical problem.
Can we try again?
Are you still on [Inaudible—Editor]?
Liberal
The Chair Liberal Joël Lightbound
That was the wrong channel. Okay, it should probably work now, Mr. Van Bynen.
Commissioner of Competition, Competition Bureau Canada
I do think that this whole-of-government approach I spoke of earlier is something that we as a nation should undertake, with leadership from the federal government. When I talk about that, and when we talk about that at the bureau, it's not like we've created this out of thin air. This is what other countries have done and are doing.
In the 1990s, the Australians had a productivity commission where they examined 1,800 laws and regulations with a view to enhancing competition throughout the Australian economy at the federal level, and the Australian states also participated. It resulted in a significant increase in the Australian GDP of 2.5% as a result of that work. It was worth about 5,000 Australian dollars per household, which was a significant amount of money in the 1990s. There's the Australian example.
The United States currently has a whole-of-government approach to competition in the American economy. There's a White House competition council where all of the secretaries of the various departments in the U.S. government are tasked with identifying competition problems within their areas of remit and fixing them.
We're not talking about something that hasn't been done elsewhere in the world, but it's something we desperately need to get to work on in Canada if we want to solve the problems we have.
Liberal
Tony Van Bynen Liberal Newmarket—Aurora, ON
It's good for us to hear about other examples that are happening outside of Canada. That might be a good starting point for us to go forward from.
We've heard the price on carbon being referred to as an issue in terms of the cost of food. I heard earlier a statement about how we would measure the effectiveness of competition and the value, and how the value of these efficiency arguments was translated into value for the consumer.
How could we accomplish that? If we're looking at efficiencies, how do we ensure that those efficiencies are realized by the consumer?
Perhaps Mr. Larouche could address that.
Professor, Law and Innovation, Faculty of Law, Université de Montréal, As an Individual
In terms of legislative texts or guidelines, typically you add language to the efficiencies defence to say that the party invoking the efficiencies defence must show that the efficiencies flow through to the consumers—at least in a reasonable part. Then the authority has the tools to ask, “You're going to save 10% on your costs with this merger. How much of this is going to be passed through to the consumer?” That's the type of provision that you need.
Liberal
Tony Van Bynen Liberal Newmarket—Aurora, ON
Are there any examples that could be used as a reference point?
Professor, Law and Innovation, Faculty of Law, Université de Montréal, As an Individual
Yes. It's standard in EU legislation. I believe it's in the guidelines in the U.S. as well.
Liberal
Tony Van Bynen Liberal Newmarket—Aurora, ON
Could you forward that to us so it can be part of the record here, as well?
The other item I was looking at was the clauses that you felt weren't as effective. You referenced clauses 3, 8 and 9. Do we have all of the details of your reasons for the need to change clauses 3, 8 and 9, Professor Larouche?