Industry Committee on May 13th, 2022

[Dr. Jennifer Quaid]

It would be my pleasure.

Before I start going through this, because it can sound very lawyerly and picky, I think it's important to preface it by saying that I think we do need to address the protection of workers and we do need to think about the impacts of the ways the new economy plays out for them, particularly some structural effects that are affecting workers. I just believe that creating a wage-fixing provision is not going to contribute to that.

What worries me is that wage-fixing is being offered and being explained and justified as a way to protect workers, and the subtext, I believe, comes from the removal of the hero pay that was coordinated between the large grocery players back in 2020. That's a situation that's pretty unusual in terms of the typical kinds of cases that are looked at as wage-fixing in the United States, which is pretty much the only place that does treat wage-fixing criminally, and it's very recent, actually.

I guess my concern is that the criminal law was not designed to deal with unequal bargaining power or unfairness, and what is being criminalized is agreements among employers—not a term that is defined—with regard to fixing wages and with regard to the “no poaches”, which is limiting mobility. The way it does this is that it simply says that those practices in and of themselves are not a problem—so having low wages or restricting mobility is not really the problem—but it's just agreeing about it.

The difficulty, even if you accept that we want to go after employers who agree to do things together, is that the criminal law is not a remedial type of statute, so victims of criminal behaviour have a very small stature in the criminal law process. I have done a lot of research in corporate criminal liability, which is likely the area of law that will be brought into play, because many employers are “organizations” within the meaning of the criminal law. There, in terms of crafting restitution orders or corrective measures, there is very little evidence that there's going to be creativity, even though those powers exist, and if it's just a matter of imposing a big fine, I'm not sure that achieves much for workers.

I will tell you what my primary concern is for small businesses, however: It's that these criminal provisions look like they're there for big companies, but the reality of criminal law enforcement against companies in Canada under the Competition Act—except for large international cartels, which are led by the United States, by and large, and then we come in and tag along at the end—is that they're brought against smaller enterprises. I worry that in fact the practical impact of this provision is that the most likely cases that might be brought are against small and medium-sized enterprises, because it won't be possible or it will be a lot harder to bring cases against larger enterprises.

There are also a host of technical problems with this provision, but I think my central concern is that this should be dealt with by labour law. I don't understand why we think criminalizing a tiny bit of conduct is going to do much to help workers. Rather, it injects substantial uncertainty into section 45. In the unlikely event that prosecutors actually apply it—because I think they will have all kinds of good reasons to stay away from this provision, largely because there are so many undefined terms and so many weird things about it—I worry that it's not going to be applied against the types of employers that maybe the public has in their imagination.

I'm happy to go on, but I think that's probably enough.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you. I have limited time and I would like to ask some questions about the digital markets.

Through this study, we've heard from stakeholders that small and medium-sized businesses cannot take on adaptation to digital markets alone. They've said that any further regulations are overwhelming and burdensome and are greatly affecting their revenue. Some may not have the knowledge to join the digital economy, while others don't have the available labour.

How can SMEs be protected through the Competition Act from larger global organizations that have entire teams dedicated to their expansion in digital markets? How can we make it a level playing field for SMEs?

[Dr. Jennifer Quaid]

The first thing I'd have to say is that competition law hasn't necessarily always had as a vocation to make a level playing field among all sizes of enterprise. I do think that's a legitimate question to ask. I'm not sure that's going to be solved in small amendments to the act; that's going to be part of a larger consultation.

On the question of what we can do now, I would flip the question around and say that perhaps a lot of regulation about participation in the digital economy is not appropriate for smaller enterprises, or needs to be rethought or adapted or simplified. That may very well be the case.

I think the greater problem facing small and medium-sized enterprises is that the large players, those who control what we call the digital ecosystem, control the actual marketplace. They are subject to less regulation and governance than they should be. Part of the problem might be reining in...the fact that most of the evolution of digital markets has happened in a way that is oriented towards private economic interest, and that's because governments haven't been present, putting out the guideposts and saying there are limits to what you can do out here.

It's not true that regulation or governance is anti-innovation or anti-competitive. The evidence is very, very clear that you cannot draw a straight line there between regulating.... However, we need to think about whom we are regulating and for what purpose.

[Viviane LaPointe, Liberal, Sudbury, ON]

Do I have time?

[The Chair, Liberal, Joël Lightbound]

I'm sorry, Ms. Lapointe. That's all the time you had.

Mr. Lemire, you now have the floor for six minutes.

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

Thank you, Mr. Chair.

First allow me to take the floor to celebrate an important anniversary among the members of this committee. Today marks the 20th year that my colleague Brian Masse has been a member of the House of Commons. I was interested to learn that news.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

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

That means he has been sitting on the Standing Committee on Industry and Technology for about 20 years, which obviously makes him a formidable and very useful veteran. As I previously noted in the House of Commons, he has been a mentor to this young MP, and I want to thank him for his work and for his discipline.

[Brian Masse, NDP, Windsor West, ON]

That's very kind. Thank you.

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

I would also like to take this opportunity to respond to Ms. Quaid's comments. As you know, the Standing Committee on Finance has proposed that our committee consider divisions 15, 16 and 17 of part 5 of Bill C‑19. As we say in the House, upon verification with all the parties, I think you will find unanimous consent once again so that we may indeed reflect on the matter put before us.

Consequently, Ms. Quaid, you may be receiving an invitation, worded in the manner we choose, to appear and expand on those points. I believe our committee has a responsibility to consider them, at the invitation of the Standing Committee on Finance.

Mr. Chair, do you wish to handle this or would you prefer that I ask my questions?

[The Chair, Liberal, Joël Lightbound]

You may ask your questions, Mr. Lemire. I think the consensus appears to be that we should look into the matter next Friday. I will confirm that by the end of today's meeting. You may be sure of that.

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

Thank you very much for that, Mr. Chair.

Then I will direct my question to the representative of Canadian Manufacturers and Exporters.

An association of manufacturing businesses has lamented the fact that SMEs in the manufacturing sector are suffering such a labour shortage that they're transferring contracts and subcontractors outside Quebec, for example, resulting in a net loss for Quebec's economy, particularly in the context of the Buy American Act.

In addition to this development, there is a new trend toward opening offices in the United States to comply with the requirements of that act. A business like Marmen, for example, has opened a subsidiary in Albany, New York, to build wind turbines. When Lion Electric appeared before the committee, a representative of that business said it intended to do the same thing to support access to the American market. AddÉnergie also told us something similar.

Do you at Canadian Manufacturers and Exporters see any signs that the government is addressing this situation?

We know that, in Quebec, this may represent about $18 billion that our economy is losing, which may have a growing impact on our exporting manufacturing businesses.

[Matt Poirier]

I'm going to speak English so I can answer your question more effectively.

The government is doing all it can on the buy America front. The challenge is that as the smaller country and the smaller economy, it's very hard to negotiate with a larger partner that holds all the cards.

We are big supporters of reciprocity in government procurement, and we've armed ourselves with that tool recently—two budgets ago. That is something we take very seriously, because if the U.S. is not going to grant us access to their procurement markets, we have to be ready to deny them the same access.

It's a frustrating situation to be in for manufacturers. We would love to have just a free market. In fact, we're an integrated market. We don't really trade with the U.S. anymore; we build stuff together. Unfortunately, if you don't retaliate, you run into the situation, as you mentioned in your statement, where there's an incentive for a Canadian company to locate in the U.S. just so it can have access to both markets, and not vice versa. That's why it's important to have that reciprocity.

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

Thank you.

In a recent press release, Véronique Proulx, the CEO of Manufacturiers et Exportateurs du Québec, issued the following call:

How much money is the government ready to lose in the next few years? How many companies will have to refuse contracts, relocate part of their activities abroad, reduce their growth or close before the labour shortage in the manufacturing sector is solved with measures that have an impact?

Are you also calling on the government to take immediate action, Mr. Poirier?

[Matt Poirier]

Yes, the crisis of labour shortages in manufacturing is very acute, particularly in Quebec. We have 80,000 vacancies in our industry right now and we're one of the highest-paying industries out there. This is a problem we need to fix. We think we can do it through immigration, but we have to be a lot more aggressive. Kudos to the government for increasing numbers, but it's nowhere near what we need.

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

As we all know, businesses need more predictability in their operations. This labour shortage is like a typical picture of my region, which is beautiful with all its lakes and rivers. You'd think it's impossible to catch a fish in a lake that hasn't been overfished or stocked. Right now, you'd even say the lake is empty.

Referring to her once again, Ms. Proulx, who is very critical of the government on the labour shortage issue, contends that manufacturers feel left alone with their labour recruitment problem. She notes that manufacturers also hire many temporary foreign workers and that agriculture isn't the only sector doing it.

As regards the temporary foreign worker situation, what measures should the government establish immediately to remedy the labour shortage?

Would you also please tell us about the regulatory challenges you're facing, particularly with regard to labour market impact assessments, LMIAs?

[Matt Poirier]

The temporary foreign worker program is being relied on a lot more out of necessity by manufacturers, because there's simply no other recourse to get the workers they need. On that front, sure, there's always streamlining that needs to be done to the program. They're currently trying to introduce a trusted employer stream. We need that yesterday.

Our call is for that trusted employer stream to come online sooner rather than later and for it to be a true trusted employer stream. If an employer has a demonstrated track record of not abusing the system and not displacing Canadian workers and they absolutely need this, they should be able to access those workers really quickly to help meet their labour needs.

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

Thank you, Mr. Poirier.

My time is up.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Mr. Lemire, thank you very much for having the discipline to monitor your own time.

I now give the floor to Mr. Masse.

Mr. Masse, you have six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, Mr. Lemire, for such kind comments. This is a great committee to spend a lot of time on. It's very good. It's also in really good hands right now. For all of the time I've been here, the last number of years we've had in this committee, this has been a lot of fun. I just wanted to say that, because there are times when Parliament doesn't seem to be working, but it's really working well here. My thanks to Mr. Lemire and the rest of the committee here.

I'm going to move to Mr. Leal and Mr. Champagne, because we're talking about a lot of issues here, about shortages in labour and otherwise. Twelve years ago, I introduced a private member's bill on the right to repair. It eventually became a voluntary agreement. It did actually pass through Parliament to the final stages and then it was withdrawn. At that time Mr. Clement was working together with the industry and the association, and we created a voluntary agreement, but it's 12 years old. It also had the weakness in it that EVs and digital data were just emerging at that time. We kind of knew that the agreement would have to have some type of modernization and that there would be challenges with the digital work.

What gets lost a little bit in the discussion is that people view it as just personal vehicle fixing, which is obviously paramount to consumer choice and all of the labour you mentioned. However, it also involves other vehicles, like ambulances, police cars, fire trucks and other equipment that's necessary for our economy to function. If we lose some of the service providers we have, we're going to have massive gaps that will cause further labour instability and labour market inactivity, because there won't be those professionals around to work on those vehicles.

Perhaps you can touch on that, because I don't think it gets a lot of attention.

[Steve Leal, Board of Directors, Automotive Industries Association of Canada]

Hey, everyone. For me, I'm hoping that at some point in time you guys use one of our services or franchisees from Fix Auto, ProColor or Speedy Auto Service.

On the automotive perspective, for us, when I hear everyone talking about the competition and small business, we're a franchise system. We represent small and medium-sized businesses. I'm one of the big believers. For me, I started with one garage. Obviously, I've grown it now to the point where we have over 2,000 locations, but mainly franchises.

For us, on the right to repair, as you call it, from 12 years ago, we didn't have connected cars like we have today. If you can imagine, these cars are connected. It touches on more than just the right to repair the vehicle. Also, if everyone can imagine, the ecosystem touches so much more. On the collision side, if you get in a car accident, the data from when you were in the car accident, all the way back to the insurance company, the whole ecosystem's being digitized. The right to repair information of this vehicle becomes critical, not for just repairing the vehicle. It actually comes from the insurance companies on how they regulate for insurance premiums. Also, at that point, the OEs are the gatekeepers of all this data. If I can't fix the car, I don't own the data and the customer doesn't know what data we're capturing on him. You're turning over a lot of what I call knowledge and power of that data.

Data today is like the new oil in our industry. The data they want to capture is worth a lot of money. If we as a government leave it so open-ended, not just on the ability to fix a car.... You can imagine that everyone's familiar with some of these progressive OEs. The CASIS old agreement only involves the traditional manufacturers, but you have companies like Rivian or Tesla. They're connected cars. They're electric vehicles. If I have a Tesla up in Thunder Bay and I get into a car accident, for example, am I going to tow it all the way to Toronto to get it fixed? At the end, premiums go up and then that affects every single consumer paying for that non-ability to get the data. These cars are connected. You can't fix it. They can actually update software and do things without our even knowing.

I think the whole ecosystem on the connected vehicle, the mobility of a car, is something that created a new ecosystem that I think the Competition Act and certain things don't look at to make sure it's fair for everyone and that we have fair competition for everyone to access the ability to train to repair these vehicles. If we can't get access to the information, it's going to be hard for us to fix.

[Brian Masse, NDP, Windsor West, ON]

Yes. If I can just interject, it's critically important. I was also trying to reinforce that there are vehicles you're repairing other than personal vehicles in these shops. When those vehicles go down, other parts of the economy also go down. I actually have a digital bill of rights. I have reintroduced legislation on this to fix it and modernize it.

Can you highlight a few of the other types of vehicles you serve? Everybody understands there's the personal vehicle. When I travelled the country on this, I didn't realize how many other parts of the economy were tied to what's happening in your shops. Nobody else can fix those vehicles. If we lose those shops, other parts of the economy go down.

[Steve Leal]

One I'm familiar with is that we deal with Demers Ambulances, the ambulances that are across Canada. In these local communities they rely on our local garages to fix these ambulances. We need to have access to make sure we can keep those cars on the road. We have the available information. An ambulance touches every local community that we do business in.

[Brian Masse, NDP, Windsor West, ON]

Yes. That's important.

As well, are you still having some difficulties getting...? You raised a good point. With Tesla, it's an opt-in process, which is part of the failings of the current agreement. I have been talking with original manufacturers. They understand there are some challenges, so some activity is taking place.

Right now, without legislation, it's ironic. Point Pelee is in my area, and there are Tesla charging stations with the federal government that are allowed on site. Mind you, you can't charge other electric vehicles, because you need an adaptor. That's another ridiculous story. At any rate, meanwhile they're not even opting in to the current program that we have for right to repair. One arm of the government's doing a deal with Tesla in our parks system for the environment. Meanwhile, they're not even opting in to be a fair player with everyone else.

[Steve Leal]

Yes. Listen, there are going to be new entries of new OEs coming in. People have their own self-interests. These are big American firms, well capitalized. Our shops are small to medium-sized businesses. They rely on government to make sure it's fair and competitive for them to be able to fix these cars. We have no way to fight against big OEs on protecting the information. For us, as small independent operators underneath the franchise system, we look for the government to help and support us.