Thank you very much for the invitation to speak to this committee today.
Your study contains many issues the C.D. Howe Institute has covered over recent years. There are many topics I can cover in the Q and A, such as tangible steps to solve interprovincial trade and support Canadian supply chains, what can be done on regulatory requirements, as well as labour shortages and inflationary pressure.
It's no surprise that these limitations on the productive capacity of the Canadian economy are all tied together, so your study linking these themes and how they affect SMEs in particular will be really important, and I look forward to that.
However, I want to focus my remarks today on an element of your study on the Competition Act that is particularly on the federal agenda. The last time I was here, I discussed the issues with proposed amendments to the Competition Act via the budget implementation act or BIA. The BIA appears to be rushing towards passage, so my comments on that a month ago stand for your study.
Now, though, I want to look forward. The government has committed to bringing in more Competition Act reforms, so here's what I suggest it do and your study can and should advocate for with respect to how competition reform can help small business.
First of all, with respect to process, we need a proper panel and publicly discussed paper, unlike the reforms to the Competition Act and the BIA, which just landed on people at the last second. We need to fix that process.
Moving on to substance, here are a few ideas that you should be thinking about.
As authors David Rosner and Julie Rosenthal have argued in a C.D. Howe memo, we need to further develop case law to improve enforcement of the Competition Act against abuse of dominance. This underdevelopment stems from two restrictions in the act. First is that the act gives the commissioner of competition a near monopoly on enforcing action against monopolies. The BIA expands private access as a way of fixing this irony.
However, much further action is going to be needed in regard to a few things to make this change work, in particular for small businesses. What this committee should be recommending is to remove the competition tribunal's exclusive jurisdiction to hear cases on abuse of dominance.
There are many reasons that I can briefly list here or that I can get to, if we have time in the Q and A, if you are interested. One is to speed up the courts, which will especially improve access for small firms and make competition law more inclusive of other voices.
The BIA also gave a new power, such that, if a claimant business successfully establishes the elements of abuse of dominance, the competition tribunal can order the firm abusing its competition to cease its unlawful behaviour but also to pay an administrative money penalty, or AMP.
As I mentioned in the last meeting, the new AMP amount, as created by the BIA, is potentially unconstitutional. On top of that, in a very perverse set-up, the AMP would go to the government and not the business that successfully demonstrated that it had suffered competitive injury. There is no provision for the government to transfer any of that AMP to the damaged business as compensation.
What's important is that, especially for small businesses, this may not be sufficient incentive to commence proceedings, and without the ability to obtain damages, a victimized firm is left less than whole.
In a memo to the competition law community released today by the C.D. Howe Institute, author Peter Glossop argues that we need to adopt the practice of damages going right to plaintiffs. We need to have a balance between including safeguards to protect small firms so they can afford the litigation they need to take against dominant competitors, and preventing vexatious litigation. Australia has a model in section 82 of its Competition and Consumer Act, which I can elaborate on if that would be of interest.
Finally, notably absent from reform discussions so far, as the former head of the Competition Bureau George Addy has argued in a C.D. Howe Institute memo, is any mention of a major unaddressed legislative gap—the absence of oversight, accountability and transparency with respect to the use of resources provided to the commissioner of competition.
Police forces across Canada are subject to some form of civilian oversight, such as by non-serving members of police commissions, who review budgetary decisions and priorities. There is no equivalent body for the Competition Bureau.
It's time for such a body, with more input from Parliament on the bureau's priorities but, importantly, not on specific enforcement decisions. Again, I can go into detail if there's interest.
I could go much further into Competition Act reforms that are needed and that this committee could be looking at, such as middle-ground suggestions on amendments to the efficiencies defence, why Canada should consider adopting something akin to the U.K.'s Digital Regulation Cooperation Forum as its approach to digital economy regulation, and what the right purpose of competition policy is.
I'll stop there. I look forward to questions, if we have time.