Industry Committee on May 20th, 2022

[Dominic Thérien]

If I may, I'd like to make a very brief comment.

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

You certainly may, Mr. Thérien.

The floor is yours.

[Dominic Thérien]

I agree that this issue may not be related to the bill and its amendments. However, I'd like to come back to a point I raised about the new proposed criminal offence related to non-poaching and wage fixing. It must be agreed that, currently, the processes for disqualification from public contracting will ensure that someone who's found guilty of those offences would lose the ability to obtain federal and provincial public contracts, here, in Quebec.

That ties in with the comment you made, but I don't think these issues were studied. Once again, this highlights the point raised by Ms. Quaid, who has the time to study these questions.

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

That is obviously one of the objectives.

Thank you Mr. Thérien.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Lemire.

Mr. Masse, you have the floor for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

To Ms. Tiessen, with regard to the corporations that are abusing Canadian industries, we don't have a good history. In fact, in the past you used to be able to write off as a business-related expense part of an AMP or even legal fines and penalties. You got up to 50%, and it was used as a loss leader, whether it was, you know, dumping oil down the drain for the environment, not cleaning up the shops properly and so forth. It stymies innovation and Canadian workforces and puts them at a disadvantage.

What do you see out there with regard to that? I'm worried that if we don't have the proper systems in place, companies will take fines and penalties and so forth as long as it makes good business sense and as long as they can clear their edges.

[Kaylie Tiessen]

I think that's a very important point. We need to make sure that any penalties that are in place deter the behaviour that we are trying to prevent. If we don't have those penalties in place, we see things exactly like what happened in the grocery industry with wage-fixing and cancelling pandemic pay, the examples that you've provided.

This goes to many different areas of Canadian law where, one, the law needs to be improved, and two, enforcement of that law needs to be improved as well, because the law in and of itself is one of many steps that have to be taken. We need to make sure that we are enforcing the law and trying the law and making sure that people are penalized and organizations are penalized when they interact and adopt that behaviour.

[Brian Masse, NDP, Windsor West, ON]

On the flip side of that, you do work with a lot of progressive employers who actually bring in workplace safety enhancements and other types of investments to make a better workforce for Canadian competitors. If we undermine them, then we undermine the businesses that are actually putting the money towards that. They're also putting money back into the workers and doing all those things. It's enough of a struggle for health and safety and other things, but if other companies are doing worse, then doesn't it just put more people at risk and also disadvantage those who are being more progressive?

[Kaylie Tiessen]

Yes, it absolutely does. It lowers the floor of competition for all sorts of organizations that are always trying to do the right thing in concert with their employees, with their unions, with environmental law, and the list goes on. If we allow this egregious behaviour to happen, that makes it more difficult for the good actors to compete in a marketplace and actually elevate Canada's economy and society overall.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

We'll move to Madame Gray for five minutes.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here today.

We've heard from some stakeholders their concerns that these comprehensive changes to the Competition Act need more consultation in order to ensure that they're doing what is intended. I have a question I'd like to ask the C.D. Howe Institute, and then the Canadian Bar Association and then Mr. Wu.

Do you believe there has been adequate consultation on these changes to the Competition Act that we are seeing in this budget?

I'll go first to the C.D. Howe Institute.

[Benjamin Dachis]

Oh, I don't think so.

Again, I go back to the only public consultation that I've really seen, which was run by Senator Wetston. The efforts of one senator should not make up the extent of our really delving into it, and the efforts of a senator over maybe six months, at most, should not be the extent of our conversation on some very serious changes.

I go back to some of the changes on wage-fixing, for which consultations, for example, need to include provinces with respect to their views on employee-employer relationships. That will be fundamental to the kinds of changes that can be very consequential to people's lives. That's just one example of a group that we didn't see weighing in on the existing consultation that probably needs to weigh in in the future.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you.

Next I'll go to the Canadian Bar Association.

[Elisa Kearney]

Sure, and thank you for that question.

We would agree with the response of Mr. Dachis. On consultation with respect to the specific provisions that are brought into this BIA, there was absolutely none. We think it's very important that consultation happen, not only at a higher level, on which there is broad public consultation, but also, as I think all the witnesses agree, by bringing in a variety of experts.

We've heard witnesses with us here today speak about trade law, franchise law and employment law, but there has been no consultation with the businesses themselves. Not only do we see a need to consult on the broader issues, but the devil is in the details with much of this legislation, so it's very important to also consult on the wording. As Ms. Bednar mentioned, it's also when you get into implementation that you need to ensure that you look at that quite closely.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you.

Mr. Wu, go ahead.

[William Wu]

Thanks for the question.

Yes, I would agree that the only consultation so far is Senator Wetston's consultation process. When you look at the submissions that were provided to that consultation, they are predominantly from observers and practitioners of competition law, so the range of views is coming from a fairly narrow set of stakeholders, and the larger, broader competition consultation that's supposed to come is intended to include broader stakeholders. I would hope that the amendments before us would enjoy the benefit of that broader consultation as well.

Just briefly on the no-poach, wage-fixing issue, when you look at the consultation paper by Professor Iacobucci, his concern is that there is no financial consequence to potentially harmful wage-fixing and no-poaching conduct. He thinks that there ought to be some mechanism in the competition law to provide that financial deterrence.

I must admit that deterrence is provided not only through a criminal provision. There are ways to amend section 90.1 to strengthen it to also provide that deterrent effect, and that can be very much part of the consultation process.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Great. Thank you very much.

I have only one minute left here, and I have one more question.

Are you concerned that there would be unintended or unforeseen consequences that could arise from these changes to the Competition Act not going through a wholesome study?

I'll go to the C.D. Howe Institute, and then we'll see if we have time for a couple of others.

Perhaps you can be brief. Thank you.

[Benjamin Dachis]

Yes, and we've only just scratched the surface of some of the changes here. We haven't even talked about questions of an extraterritorial jurisdiction for a court order for the production of records for merger reviews. Is that enforceable? That's a whole other conversation that we have to have in terms of the implementation of some of these changes.

Again, I ask how implementable these changes are. Having them come into force right away without really thinking them through is problematic.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Am I out of time?

[The Chair, Liberal, Joël Lightbound]

Yes, unfortunately, you are out of time.

I'll remind witnesses that they can always submit in writing if they have additional information that they want the committee to be aware of.

I will now turn to Mr. Dong for our last round of questions, for five minutes.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much.

I, too, want to thank all the witnesses for coming today on short notice.

I want to go to Ms. Bednar, followed by Ms. Tiessen, for their comments on the consultation piece, because I would think that for anything to be in the BIA, the ministry would consult the industry and stakeholders before they make these suggestions.

What are your thoughts on whether or not enough consultation has been done, and what's the risk of not acting on these changes?

[Vass Bednar]

Thanks for the question.

I think there's a broader kind of idealized version that many of us hold about how policy change can be achieved and about the best fundamental practices. The reality is that we're so overdue for these changes, as I said in my opening remarks, that I think they should be welcome.

I say that because, over the past two years, as more people have been writing about competition, asking questions about how the Competition Act works and finding ways in which it doesn't quite work as well as we think it could, many stakeholders, broadly, have been met with arguments that say, “Actually, the Competition Act is perfectly up to the task. It's flexible. It can take on anything. It's ready to rock. It shouldn't have any changes at all.” These are now often the same voices in the public debate that are saying, “Whoa, we need to really tap the breaks again and talk more.” We do need to talk more, so there's a public appetite.

What would be the risk of not moving forward with these initial amendments? I think it's that we would be demonstrating again that we're not taking competition change seriously and that we're not ready to take these modest initial steps on consumer privacy that would put us in line with other actors internationally.

This isn't coming out of left field. It's not coming out of nowhere in the broader competition conversation. Have we deeply consulted on it and ticked all our boxes in terms of pounding the pavement and previewing it for everyone? Not quite yet, but again, that's what I think people are anticipating and what we need to do.

We're having two big conversations about competition right now, and they don't always go well together. One of those is mechanical, and that's the kind of conversation we're having now, but the other is philosophical, in terms of what the act is, what we expect of it and what Canadians expect of it. That's a bigger and broader conversation.

I'll give the rest of the time over to Kaylie.

[Kaylie Tiessen]

Thanks, Vass, and thank you very much for the question.

There have been some consultations on these, and the law has been tested and found to be insufficient to study wage-fixing, so that needs to be fixed, and it needs to be fixed now. Can we consult further after this change is made? I think that's really important, and I'm looking forward to participating in the additional consultations that are going to happen over the next year.

The risk, I think, of not implementing this wage-fixing change now is that it will languish for years, just like changes to hours of work rules have languished for years in that consultation. Should people get a break for lunch? When should they get a break for lunch? It means that we're having the same conversation over and over again about something we've already decided to change.

We need to make this change now, and then we can discuss the rest of them further afterwards. The risk of not making the change is that it doesn't happen.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much for that input.

I want to ask both of you for your thoughts on the 3% of worldwide gross revenue as the changes to AMP. What are your personal thoughts on this?

[Vass Bednar]

Kaylie, I'm going to jump in.

I also want to say, in case I wasn't clear on this, that I'm not trained as a lawyer, so I'm happy to defer to others overall. However, in terms of why we have AMPs, first, fundamentally, it's as a deterrent. Second, it's so that firms can be penalized proportionally to what's happening. Again, if this is a novel design in terms of the 3%—I think we've heard questions about whether it should be Canadian revenues versus international revenues—it's worth ironing out.

We could see an additional change or amendment through this future consultation, but I think it's important. I'd love to make a graph for you of our AMPs in Canada and benchmark them against our international peers, and then we can have another conversation about what our reputation means in that regard.

Kaylie, I'll turn it to you if you have something to add.