Good afternoon, everyone.
My name is Kaylie Tiessen. I'm an economist and a policy analyst in the research department at Unifor. I'm here to discuss the long-awaited initial changes to Canada's competition policy that are inside the budget implementation bill.
This is the third time in just under two years that Unifor has appeared before this committee to discuss Canada's wage-fixing problem. The first was in 2020, when our president, along with two local union leaders in the grocery store sector, appeared to ask this committee to investigate the blatant wage-fixing that occurred in the sector when the major grocery stores all cancelled pandemic pay on the same day. The second was in the spring of 2021, when I appeared here to discuss our recommendations for strengthening the Competition Act. We want to improve outcomes for workers and consumers in Canada through a Competition Act that actually accomplishes creating the conditions for healthy competition in this country.
I'm here before you for the third time to remind you of four things. One, making wage-fixing and no-poach agreements a criminal offence is the bare minimum that must be done to foster fair competition in Canada in the labour markets. Two, wage-fixing and no-poach agreements used to be considered criminal offences in the Competition Act. Three, two egregious cases of anti-competitive behaviour in labour markets have recently been rejected by competition investigators—this is in the last 18 months—because of the high threshold required by civil law, not because any competition officer thought that the actions were not anti-competitive. Four, administrative monetary penalties are supposed to be high enough to deter the behaviour, instead of low enough to become a cost of doing business.
I'll address each of these in more detail individually.
First is doing the bare minimum. Moving wage-fixing and no-poach agreements back to the realm of a criminal offence is just one of several changes that are needed in order to improve outcomes for workers and consumers through the elimination of anti-competitive behaviour.
As it currently stands, the Competition Act doesn’t specifically consider the effects of anti-competitive behaviour on workers at all. The bureau can pursue anti-competitive behaviours that impact workers through its merger reviews and potentially through other civil provisions, like section 90.1—which we've heard about already today—which deals with competitor collaborations. However, to date, we find no evidence that the bureau has actually done a serious investigation. Some of that is because that threshold is too high; they would have liked to pursue that, but they couldn't. This means that Canada might be allowing actions that artificially suppress wages and working conditions, decreasing the well-being of workers across the economy, and we don't even have the tools to find out if that's happening. Recent research from the Department of the Treasury found that anti-competitive behaviours in American labour markets have depressed wages by 20%, so they're 20% lower than would have been the case if no anti-competitive behaviour existed.
Number two, wage-fixing and no-poach agreements used to be criminal offences under the Competition Act. It wasn’t until a change in 2009 that these actions were relegated to the realm of civil law, where the law has languished and remained ineffective at dealing with the anti-competitive behaviour I have just mentioned. We're a laggard when it comes to workers' rights under competition law, and the opportunity to change that is right here in front of you today.
My third reminder is that there are two recent cases that were rejected by competition officers because of this high evidentiary threshold in civil law. The first was the grocery company same-day pandemic pay cancellation I mentioned earlier, which we've spoken about on multiple occasions here already. The second was a class action lawsuit accusing Tim Hortons franchises in B.C. of artificially lowering wages and working conditions of workers in the industry through no-poach agreements. Both of those cases have been rejected under competition law in the last 18 months because of this high threshold of evidence required, not because any competition official thought the actions weren't anti-competitive.
Number four, administrative penalties are at risk of becoming a cost of doing business. This is a situation the Competition Bureau has stated it wants to avoid. It's my opinion that administrative penalties must be high enough to deter the behaviour the law is trying to prohibit, not so low that companies can just absorb the cost of breaking the law.
I have more recommendations to make to the Competition Act review that's coming later this year, and I look forward to coming back here to talk to this committee about them all.
Canada's workers are directly and indirectly affected by Canada's competition policy every day. In my experience, the bureau lacks the power it needs to ensure that anti-competitive behaviour does not negatively affect wages or working conditions in Canada.
Thank you, and I look forward to taking your questions.