Industry Committee on June 12th, 2024

[Pierre Karl Péladeau]

Given the decision that had been taken by the government, and considering that the Competition Bureau was strongly against the transaction between Rogers and Shaw for competition reasons—but the main aspect of it was the wireless asset....

Since Videotron/Quebecor took over Freedom Mobile, we can conclude.... Again, those numbers are not coming from us, but from Statistics Canada. We had the opportunity to discuss that in previous meetings in this chamber. We are seeing the wireless prices going down 26%. When you introduce new entrants and new competition, the result is, as we've been seeing with wireless, that Canadians are benefiting from this move. Again, there's been a 26% reduction in prices and more choices and more innovation, and then incumbent players are forced to react and to be better. This is, again, for the sake of all Canadians.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Considering the global perspectives of markets generally, there's huge capital required to be able to respond to the broader markets. Would you say, first, that the Competition Bureau would have a role in this? Also, how would you say that we could change that?

I share your concerns. On consolidation in telecom, finance, insurance and in some cases real estate, how can the government, through the Competition Bureau, influence the direction of deconsolidation?

[Pierre Karl Péladeau]

I'm not a member of Parliament, so it would be tough for me to answer this, but certainly on the action of the government, they've been doing it for at least 15 years. It started with the late Jim Prentice, when he was the industry minister, imposing proper conditions on the auction for spectrum. From there, competition started in Quebec. I guess the government took note of this situation, but in Quebec we've been seeing prices for telecom services much lower than anywhere else in Canada.

It's a government policy and, on top of that, a Competition Bureau that will investigate and give their green light—or not—concerning large transactions. This is to avoid measures that concentrate the market, as the one that we're talking about today. It will not be good for the industry if retail concentrates too much and the providers or the vendors get together to control this very important retail channel.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Your concern seems to be around the restrictive covenants and property controls of retail space. Is there, in your mind, sufficient authority within the Competition Bureau to challenge some of those restrictive contracts and restrictive arrangements similar to what you're facing today?

[Pierre Karl Péladeau]

I did my law degree, but I can tell you that my competition course is really far behind, so I'm not going to consider myself an expert there, but my recollection is that the law gives a lot of power to the bureau. If they want to intervene, they have the capacity to do so. We've been seeing their intervening more and more, which at the end of the day, from my perspective, is good for Canadians because they're giving them more choices and therefore better prices and better products.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Mr. Charlebois, I understand that you've done an awful lot of research and you're referring to your organization as having a global perspective. What are the similarities between Bill C-352 and the European competition policy?

[Dr. Sylvain Charlebois]

To keep my answer short, I would say that I actually agree with Mr. Péladeau in that I do believe that the government currently has the tools to intervene and play a forceful role, which is what we see elsewhere in the United States or even in Europe.

I just don't believe that we have seen the bureau act and use these tools. We've worked with the bureau in the past on a few investigations when some grocers were acquiring others, and it became quite clear that the scope of their analysis was incredibly narrow. For example, we worked with the bureau on the Sobeys acquisition of Farm Boy a few years ago, and they never actually looked at how that transaction would impact independents, independent grocers in the GTA area, as an example, or southern Ontario. That became a signal for us that the scope of analysis needed to be adjusted appropriately, depending on what situation you look at.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Are there any specific items within this bill that are areas of concern for you, and how would you suggest they be improved?

[Dr. Sylvain Charlebois]

I think the spirit of the bill is very appropriate. I think the bureau needs to be empowered as much as possible by parliamentarians, and I think that's what the bill is doing.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

I believe that the government has committed $98 million towards adding capacity to the Competition Bureau, and I think that's a significant step forward.

Those are all of my questions, Mr. Chair.

[The Vice-Chair, Conservative, Rick Perkins]

Thank you. We went a little over time, but it was a good round.

[Pierre Karl Péladeau]

Mr. Chair—

[The Vice-Chair, Conservative, Rick Perkins]

For the next round, for six minutes, we have Monsieur Garon.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Mr. Chair.

First, let me extend my greetings to our witnesses, Professor Charlebois, Mr. Péladeau, Mr. Péladeau and Mr. Lescadres, and welcome them to the committee.

I'll start with you, Mr. Péladeau. Let's talk about Glentel. The latest amendments to the Competition Act, which were long awaited and put forward by Minister Champagne, address anti-competitive practices in the real estate sector and in contracts. For example, the minister has defined a grocery store renting space in a mall, and requiring in its lease that no other grocery store open in or around the same mall, as an anti-competitive practice.

We see the same kind of behaviour in the Glentel joint venture model. For some reason, the law still seems to allow that kind of practice, yet it's of the same nature. Furthermore, it seems to me that there's an additional layer in this case. It's not a standard joint venture, but rather a joint venture including the two biggest players in the market. This joint venture will slow the entry of emerging players, including Quebecor, particularly in western Canada.

Did we leave anything out when we made the latest amendments to the Competition Act?

I'd like to hear your thoughts on that, because I'm sure you have many.

[Pierre Karl Péladeau]

Your predecessor asked that question, and it gave me a chance to think about it.

First, I'd like to mention to Mr. Williams that we're in contact with the Competition Bureau. We filed a complaint and bureau representatives will call us to discuss it with them. However, the outcome of each case depends on who is leading the bureau. That needs to be said. The bureau may show more leadership in one case than another, according to the people who run it.

It's also important to mention that, in a case like this, from a legal standpoint, as I understand it, only the Competition Bureau can bring a case before the Competition Tribunal. The bureau is not a civil party or a private party. If that were the case, perhaps measures should be considered to avoid clogging up the courts, but the fact that the bureau is the only one with the power to act also probably limits people's ability to file complaints about anti-competitive measures.

I'm not a lawyer in the strict sense of the word, but since members of Parliament take the lead on legislation, when it comes to retail sales, private citizens or parties should perhaps have the power to file a complaint before the Competition Tribunal rather than before the Competition Bureau, given the importance of this wireless distribution and marketing network, the importance of wireless in Canada and high prices. Measures have been taken to lower prices, but before that, Canada had the highest wireless prices—

[Jean-Denis Garon, Bloc, Mirabel, QC]

Of course.

Let me interrupt you, because I have another question to ask you and time is running out. You know that time is a rare commodity on this committee.

With respect to the bill before us, with all due respect to Professor Charlebois, all the other experts we have heard from before today have told us that, when strict rules are imposed like those in Mr. Singh's bill—which does things like prohibit any merger or acquisition that would result in a combined market share of more than 60%—the rules pile up and create more opportunities for litigation about market share than competitive situations themselves.

We're told that abroad, in places like Europe, but especially the United States, competition authorities have a well-defined framework, but their ability to act is also much more flexible, and they are also entitled to be biased in favour of the consumer without having to justify themselves as much as the Canadian competition commissioner does.

Despite the good intentions behind this bill, do you think the approach taken in it, which is to add more restrictions that can lead to litigation, is the right one?

[Pierre Karl Péladeau]

You got me, because I haven't had a chance to look closely at the bill.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Should the competition commissioner have more leeway? Should his work be simplified rather than made more complex, basically?

[Pierre Karl Péladeau]

Certainly. Moreover, since we're talking about competition, perhaps we could also create competition at the Competition Bureau by enabling the parties to go before the Competition Tribunal.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Professor Charlebois, you talked about a code of conduct. We've talked about that a lot over the past year and a half. Minister Champagne has started to move in that direction, and you mentioned it in your opening remarks. It's very interesting.

Would the code of conduct you have in mind be based on voluntary compliance, which would be tantamount to self-regulation, or would it be a framework established in an act and implemented by the minister through regulations? Can you clarify that, please?

[Dr. Sylvain Charlebois]

That's a good question, Mr. Chair.

What could work in this sector is a voluntary code of conduct that involves everybody, the big five: Costco, Walmart, Metro, Sobeys and Loblaws.

For a voluntary code of conduct to work, it's important that everyone comply with it. Otherwise, the committee and the minister will have to consider other options.

[The Vice-Chair, Conservative, Rick Perkins]

Thank you, Mr. Garon.

For the next round, MP Masse, you have six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

I'll start with Mr. Charlebois on the voluntary code.

I had legislation that went through the chamber and passed. It was on the right to repair in the automotive aftermarket. That was about 10 years ago, or maybe 12. What was happening was that Canadians couldn't get their vehicles fixed because the larger companies—not all of them but most of them—would not provide software and equipment tooling to the aftermarket industry, which ensured people had to go to the garage at their dealership versus others. It can even be just a flash update for the software, so a vehicle has to be towed. That's bad for the environment, public safety and competition, obviously.

That legislation passed the House of Commons and was going to the Senate, but the industry decided it could work with a voluntary code. The minister at the time was Tony Clement. Therefore, we have a voluntary code of conduct right now, but it's suffering. Now we have digitization in the industry that's different from before—something we predicted would take place. There continues to be problems. The competition element for voluntary...isn't working successfully. There are some good players in it, and some good operators, but there are some that continue to have problems.

Do you have something to suggest regarding the voluntary code of conduct for grocery stores versus something more mandatory? We're having to revisit this issue [Technical difficulty—Editor]. There are three private member's bills in the House of Commons right now that deal with competition in the aftermarket for fixing vehicles and so forth. Do you have any insight into that?

I'd hate to be back in that trap. That's where we are after 10 years. Maybe we can get a fix. Some of the companies are doing better, again, but others aren't. The bottom line is that it's voluntary, so we don't have any teeth.

[Dr. Sylvain Charlebois]

That's a great question, Mr. Masse.

I'm not familiar with the right to repair voluntary code. I don't know whether all players were asked to be part of it.

For the code of conduct in the grocery business, that is a key element to a success: We need all five to participate. We all know Walmart and Costco are not signing on, so far. The three others mentioned that they are willing to participate, as long as everyone else is part of the code. I agree with that vision.

If there is still hesitation coming from American players in Canada, I would suggest the committee recommend legislation. I said the same thing to the ag committee back in February.

[Brian Masse, NDP, Windsor West, ON]

Those are good points.

I'm glad you raised Walmart and Costco. Quite frankly, I think Costco is a little more transparent in their pricing.