Industry Committee on May 17th, 2022

[Edward Iacobucci]

I'm not an expert on tax law. It's one of those things that.... Even as we heard today, for competition policy it's certainly true. This would also be true in other contexts. The particular industry might have certain needs that could be attended to. There are certain practices that would have cross-market effects, like tax law. The other practice is things like improving infrastructure in national parks, which might have other impacts on SMEs in the RV business.

It's a very broad range of things that you can imagine affecting the financial health of small and medium-sized enterprises. Labour laws are going to affect it. Health and safety regulations and the quantity of regulation generally are going to affect it, as are conditions at the border and all kinds of things.

I think that there is a wide range of tools that are available to think about promoting the health of SMEs and other aspects of our markets.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you, Dean. It's always a pleasure.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Go ahead, Mr. Généreux. You have five minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

I'd like to thank all the witnesses. The discussion has been very informative.

Mr. Iacobucci, why exactly do you not want to talk about the Rogers–Shaw deal?

[Edward Iacobucci]

No. As I said earlier about the banking question and even to Mr. Erskine-Smith, I think it's very difficult, unless you're immersed in a particular case, to comment on it. I steer clear because these are very fact-driven exercises, and should be. I'm steering well clear.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Okay. That's fine.

You talked about other tools the government might have related to the Competition Act. If you were suddenly to become the industry minister and it was your job to amend the act, what would be the first changes you would make? What tools would you use to improve the current situation?

[Edward Iacobucci]

Is that to improve the situation for SMEs in particular? This is probably outside my very narrow areas of expertise. What I would think would be the easiest priority but probably harder to discover in practice is looking at the kinds of obstacles to the health of SMEs that have other problems with them.

If there is—and it's an if—overregulation of certain elements of the housing market, if approvals are too difficult for small contractors to make inroads, those are the kinds of things that probably make sense in their own right but will also promote the health of SMEs.

Discovering those sorts of things would be the ideal, but that's easy to say and it's probably harder to cover things that don't serve a useful purpose and are easily changed.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you.

Ms. Kothawala, you said that credit card fees in Australia and England, I believe, were between 0.3% and 0.5%, but that in Canada, they ranged from 1% to 4%. Do you know whether the governments in those countries brought in legislation to cap the rates, as opposed to introducing a code of conduct, for example?

I would note that, in Canada, back when Mr. Flaherty was minister, he introduced a voluntary code of conduct.

[Anne Kothawala]

It's a very good question. We do work with the associations that represent convenience store retailers in both Australia and the U.K., because we're obviously very interested to see how their experiment has gone. They are starting to run into problems similar to ours. This is why we're saying that, in our view, it's not enough to just cap the fees. Again, the banks, the processors and all the members of the payment ecosystem will find another way to make up the difference. All of a sudden, there is a hidden fee or some new fee. That eventually gets passed on the retailer to deal with. I think the question is good, and it does flag the fact that we can't look at just solely capping fees.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

At this time, you don't know whether Australia's or Britain's Parliament passed legislation to cap the rates.

[Anne Kothawala]

I'm not entirely sure.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

All right.

If we start playing that game, other sectors could come calling on the government to cap various fees. Could that help or potentially hurt other types of industries, as well as your own?

[Anne Kothawala]

Again, I think the fundamental issue is that our industry is very impacted and, as I said, disproportionately impacted by these high credit card fees. Again, I think we need to be creative. As industries, as government, we need to work together, and we need to find ultimately a solution that will be helpful to industries like ours, for us to be able to remain competitive. I just pick up on some of the other questions around the impact of the price of gas and the impact on the RV industry. Again, these things are very much interconnected.

The point that I tried to make in my presentation is that when convenience stores can't compete...and because those convenience stores are often in those rural communities, if you're going on a road trip with your family, it's going to become problematic if there's no convenience store or gas station to stop at.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

It's already the case in lots of municipalities. It's the small ones in the regions.

[Anne Kothawala]

Exactly.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

That's the case all over Quebec, especially in the regions.

Would you mind providing the committee with your research on other countries that have passed similar legislation? It could inform our discussion and perhaps change how we view this important legislation.

It's a piece of legislation that we could eventually implement, or government could implement as well.

[Anne Kothawala]

Absolutely. I would be happy to share all the information we have.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you.

Do I have any time left, Mr. Chair?

[The Chair, Liberal, Joël Lightbound]

You still have some time. You can ask one last question.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I have a question for Mr. Lee.

We talked about housing affordability. You said the government planned to build 3.5 million homes for Canadians. You didn't talk about

social housing. Is there a difference, for you? Do you see that as different, or is housing any kind of housing?

[Kevin Lee]

We need both, and we need more of both. Social housing, though, requires different solutions than housing affordability.

Housing affordability is really about whether Canadians can afford to buy a house that they want to live in. Can they afford to rent without any kind of subsidy? When we look at what's happened to house prices across the country and housing affordability in general over the past decade, we see it's gotten worse and worse.

One of the biggest drivers is supply. Development taxes are another huge one, but a the 3.5 million target is really about helping to get demand and supply in balance. That also helps avoid more and more people needing social housing, because if you don't fix housing affordability, you have more and more people lining up all the time.

We can't build our way out of the social housing dilemma. We have to fix housing affordability at the same time, and then we also have to find the best ways to support people who are in core housing need and need some sort of government assistance, not-for-profit assistance, to help them get the housing they need. Hopefully, one day, they'll also get to a better place over time where they don't need that. There's an affordable place to move into, to rent, or there's a rent-to-buy program or something like that that can help them move up and out. Even shared appreciation mortgages from not-for-profit organizations have been a great way of helping people who are stuck in social housing. Once they have a more steady income, they can get into home ownership.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Généreux and Mr. Lee.

Go ahead, Mr. Erskine‑Smith. You have five minutes.

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

Thanks very much.

Mr. Iacobucci, I'm sure you're tired of talking about the efficiencies defence.

I want to turn to Tervita, because you indicated you had some concerns about the interpretation. We've had some evidence before this committee that the court unnecessarily emphasized a quantitative approach versus a qualitative approach, and there's the streetlight effect that suggests that it may not be the best approach.

Is that a concern you share?

[Edward Iacobucci]

I completely share it.

When you look at Tervita itself and the outcome in that case, where there was a merger with a proven price increase, there was a predictable price increase with negligible efficiencies, yet somehow it succeeded on the efficiencies defence as a result of this requirement. The bureau didn't quantify quantifiable evidence.

I'm not sure what “quantifiable” means, for one thing. Everything is quantifiable, in theory. That's a problem. It puts this unnecessary enforcement burden on the bureau. I completely agree with them about that. If they have shown there's a substantial lessening of competition, I think the onus should shift to the parties to prove that they realize efficiencies that would offset those anticompetitive effects. I agree with those expressing concerns about Tervita.