Industry Committee on June 17th, 2022

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Deltell. Your time is up. You may have time to come back to this later, if you want.

I will now give the floor to Mr. Dong.

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

Thank you very much, Chair.

I want to thank our witnesses for coming today.

The focus of this study, or the main piece, is around enhancing the competitiveness of SMEs. I have some questions for the Competition Bureau as well as IRCC and StatsCan.

First, to the Competition Bureau, we've heard reports of international shipping companies gouging shipping costs or prices in the last two years. We've seen a sharp increase of anywhere between $3,000 to $4,000 U.S. all the way to $20,000 U.S. Are you aware of this phenomenon? What's your understanding of the situation and the cause of these sharp increases?

[Anthony Durocher]

Thank you very much for the question.

We are very much aware of some of the issues globally relating to supply chains and with respect to shipping costs as well. I can tell you that we are working with our international partners to coordinate and share information related to supply chain issues that cross borders. We are hard at work in that respect.

I will let my colleague Ms. McWhinnie complement my response with the enforcement perspective.

[Krista McWhinnie, Deputy Commissioner, Monopolistic Pratices Directorate, Competition Bureau]

Thank you.

I would just reiterate that, on the enforcement side, we are very much aware of the issue of high and rising shipping fees. There may be a number of factors driving these up, but to the extent that they are higher than they should be as a result of anti-competitive behaviour, whether that's an agreement between competitors that would be an issue under the Competition Act or some other form of abuse of market power, those are very much the issues that we would be digging into.

Unfortunately, I can't speak further about the investigative side—

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

I don't mean to be rude, but I have limited time here.

I also heard that there have been sharp increases for docking fees and for storage as well. The federal government has put forward quite a bit of money, I think in excess of $80 million, to help with this issue. Do you feel there are adequate regulations for your enforcement or your investigation into this matter?

[Anthony Durocher]

Mr. Chair, we are certainly working to modernize the Competition Bureau in respect of our intelligence capabilities and our enforcement capabilities. We are very mindful of the current stresses on the economy as well. From our perspective, as I mentioned in my opening statement, there is a very important exercise currently ongoing to modernize the Competition Act and consult broadly going forward to make sure we have a Competition Act that has the necessary tools to enable the bureau to investigate and take appropriate action to protect competition in the economy.

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

This problem is a big piece in the supply chain and it is happening right now. The challenges are felt every day by constituents when they go to supermarkets and local department stores. I look forward to a speedy resolution, especially coming from your department.

My second question is for StatsCan.

I heard a question about the labour market. You said that SMEs employ over 10 million across the country, accounting for two-thirds. To my recollection, the Canadian labour force is in excess of 20 million people, which should be one-half. Can you correct the record or reassure us?

Secondly, do you have any studies or reports on the under-the-table job numbers or jobs that are not being reported? Do you have any stats on that?

[Greg Peterson]

To respond to your first question, yes, if we take a look at the employment of SMEs, small businesses account for about 10.3 million employees and medium-sized business account for about 3.4 million employees. That's the data we have.

In terms of underground work, doing statistics requires data. Counting the number of employees and the number of people really depends on the way in which you're capturing that information and the source of that data. For information we're getting from employers, work that's under the table will be missing. However, we have other sources of data when we're asking households what's happening.

Perhaps I can turn to—

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

This is directly impacting the competitiveness of small businesses. They are losing talent and losing workers to those who are going to pay cash. In today's economy, very little cash is being used at the store, from the customer end.

I wonder if there is any way StatsCan can capture some of this information and if there's any way the Competition Bureau can look into that matter.

[Greg Peterson]

I'll turn to my colleague, Madam Bégin.

[Josée Bégin]

Thank you for the question.

When we conduct the labour force survey among the population, we ask questions like whether the person is employed or currently not employed, and we ask questions about whether they are away from work and why that is, or how long they've been unemployed. We don't have questions about whether or not this is a job that is under the table. We don't have that kind of question.

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

I hope there's an effort put toward gathering that information going forward.

Thank you, Chair.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Mr. Lemire, the floor is now yours for two and a half minutes.

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

Thank you, Mr. Chair.

I'd like to turn to the officials from the Department of Citizenship and Immigration. Perhaps Mr. Somogyvari can answer my question.

Let's look at some statistics, specifically with regard to applications for study permits at Quebec's French-language universities. In 2015, the refusal rate for study permits at Quebec universities was around 30%. Today, it's 52% for francophone universities, compared to 33% elsewhere in Canada. There is a 20% gap between Quebec and the rest of Canada.

For Quebec universities in the regions, the refusal rate is between 60% and 80%, depending on the country of origin of applicants. As for English-language universities in Quebec, McGill University has a rate of only 9%, versus 23% at Concordia University and 27% at Bishop's University.

At Cégep de l'Abitibi-Témiscamingue, the refusal rate is 75%. In the field of vocational training, it can be as high as 95% for foreign students that are not from France.

Can you reassure me and say that there is no deliberate discrimination against Quebec or French-speaking countries in the case processing measures announced?

[Philip Somogyvari]

Thank you, Chair, for the question. I'll turn to my colleague, Matthew Graham.

[Matthew Graham, Director, Levels Planning and Migration Analysis, Department of Citizenship and Immigration]

Thank you, Mr. Chair.

I'd like to thank the honourable member for the question.

With respect to the approval rates for international students destined to Quebec versus destined to the rest of Canada, our department is always reviewing ways to address Quebec's concerns about approval rates for international students. In 2021, of all students who declared English or French as an official language, 57% of those destined to Quebec declared French.

When comparing the approval rates for students with French as a declared language, they're very similar: 41% to Quebec and 40% to the rest of Canada. This also holds true for the approval rate between the declared language for French and English students destined to Quebec. The overall approval rate for students destined to Quebec is 41%, and it's about 62% for the rest of Canada.

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

So, there is discrimination based on the country of origin.

Let's talk about the Quebec Acceptance Certificate, or CAQ. In 2019, 12,182 certificates were issued to students of Algerian origin. Of these, only 2,679 students were granted a study permit. For Tunisian students, the refusal rate rose from 33% in 2016 to 50% in 2020.

Why is this? There are statistics for France, but there are many other countries as well. Francophone universities in the regions clearly count on the influx of foreign students, especially as a strategy to address labour shortages there.

[Matthew Graham]

Mr. Chair, I'd like to thank the honourable member for the question.

Our department is committed to addressing low visa issuance and study permit approval rates for those from French-speaking countries in Africa and elsewhere to support Quebec's immigration plan and Canada's competitive edge.

As the minister said, we are taking measures to address unconscious bias and to ensure consistency in decision-making. All decision-makers processing applications from Africa have completed Government of Canada training to recognize and counter unconscious bias. We're reviewing immigration program outcomes to identify all institutional mechanisms that contribute to any inequitable outcomes for clients to further mitigate against bias.

We've also made efforts to attract eligible students in Africa and to increase acceptance rates by engaging in outreach to those partners as well as at public events. Our IRCC offices located in Africa participate in events, such as EduCanada and ÉduQuébec, and regularly host webinars to help explain the study permit application process and requirements.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

We'll now go to Mr. Masse for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'm going to ask this of the Competition Bureau. One of the larger complaints we get from smaller SMEs is in regard to the fees for transactions for credit cards and Interac, as well as the inability to negotiate good rates. There have been high-profile disturbances in the system in the United States involving Costco and credit cards and Walmart and so forth, using their kind of purchasing power.

What needs to change in Canada? Has there been a review of this on our side? The rates seem to be.... I guess, for lack of a better analysis, if you don't have competition, you really are just going to have collusion by default. I'm wondering whether there's been any review of that. That's one large thing.

I actually asked the BDC whether they've considered credit card processing fees. They said they did 10 years ago, but they didn't really give us much of a robust answer. They followed up with the same kind of response—that they did look at that but that was all. They didn't even give us any details, so I'll have to see if we can get those.

[Krista McWhinnie]

I'm happy to respond to that. Thank you very much for the question.

The high credit card fees and the challenge those pose to merchants, particularly small and medium-sized enterprises, are something the bureau has very much been live to for a quite a number of years now. Our focus under the act is looking at allegations of anti-competitive conduct that are driving those higher fees. We don't have anything under the act that prohibits the high prices or fees from being high. It's really looking at whether conduct prohibited by the act is driving that.

The Competition Bureau did bring a case forward to the Competition Tribunal some years back, alleging that conduct by Visa and Mastercard was responsible for inflating those fees. We ultimately lost. The tribunal found that the statutory tests were not made out in that application. They actually went further and said that this sounds, perhaps, more suited to a regulatory fix. On that front the Competition Bureau is actively engaged with others in government to lend advice on how policy options around this could benefit from a pro-competitive lens.

[Brian Masse, NDP, Windsor West, ON]

After that, Mastercard was rewarded with $50 million of taxpayers' money for their security program. However, I'm glad to hear that.

For the record, I believe the Competition Bureau does an excellent job of what they can do within the law. In a nutshell, the laws really are not sufficient for the Competition Bureau to be able to do a full, robust protection of consumers compared to what other countries can do. Is that correct?

[Anthony Durocher]

From our perspective, we're undergoing a very important review of the Competition Act at this time. The amendments being proposed in the budget implementation act represent a very important start, from our perspective.

However, this phase two, this further review to have a robust discussion and to hear from all quarters of the economy—because competition impacts everyone—and to make sure we have effective competition legislation, is certainly critical from our perspective to protect consumers, SMEs and the economy.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Durocher and Mr. Masse.

Mr. Kram, you have the floor for five minutes.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you very much, Mr. Chair.

Thank you to all the witnesses for joining us today.

I would like to start with Statistics Canada.

Last month, the committee heard testimony from the Canadian Federation of Independent Business. We had Ms. Corinne Pohlmann from the CFIB join us. She noted that almost 90% of small business owners surveyed said, “excessive regulations add significant stress to their lives, and almost two-thirds would not advise their children to start a business given the burden of regulations.”

I was wondering. Does Statistics Canada have a way to measure the cost of regulation and over-regulation on small businesses? If so, what were your findings?