44th Parl. 1st Sess.
December 11, 2023 11:00AM
Madam Speaker, I appreciate the opportunity to present updates to Bill C-56, as they are timely and are required to better tackle the increasing cost of living by strengthening Canada's competition law. Two months ago, the government introduced Bill C-56, the affordable housing and groceries act. As members may recall, it was presented as a down payment of sorts on broader reform efforts with respect to Canada's competition law, with more comprehensive amendments to follow pursuant to the fall economic statement.
There has already been considerable debate in the chamber on this important piece of legislation, so let us talk about market studies, which are a key part of the legislation. Bill C-56 would provide the Competition Bureau with much-needed market study powers. It is important to ensure that the bureau would retain its independence while it does this. This is why we have supported an update that expressly confirms that the commissioner would be able to initiate a market study. This would remove any possible ambiguity over the market study process and would ensure that the bureau retains its discretion as an independent law enforcement agency. The update would ensure that the bureau would be able to look into specific market issues that it identifies as warranting scrutiny. The modification reflects the existing inquiry structure under the act, where it is already the case that either the commissioner or the minister may initiate an inquiry into potential anti-competitive activity, at which point the commissioner assumes full control of the investigation.
The government's proposal has taken these concerns into account by creating a framework that would balance the need for independence, the benefit of collecting information and the safeguards required to protect businesses and public funds. This is why both the commissioner and the minister would be required to consult before any study is undertaken. Requiring consultation would ensure that Canadians would benefit from a market study that has been thoroughly considered and appropriately tailored. The proposal made by the government to update Bill C-56's market study provisions would also keep the framework aligned with international precedents, with countries such as the United States, the United Kingdom and Australia all offering various forms of oversight to ensure appropriate use of market study power. Central to this is a test of the abuse of dominance.
In order to effectively address increasing prices, we need to enhance more than just the bureau's ability to conduct market studies. It is also important that the law be able to hold today's well-resourced and sophisticated businesses to account. In particular, we need to better address large players who, many believe, abuse their market power to shut out competition, especially given the clear concerns raised throughout our consultation about protecting competition in and contestability of these markets.
There are all different kinds of competition. We could talk about the fact that the big grocery chains have been recording record profits. One would think that if companies are posting record profits, they would be in a position to lower prices in order to attract more market share, but we did not see that, which suggests that something in the free market system is not working as we would normally expect it to work. There are other forms of potential anti-competitive behaviour. The ability to get shelf space in a major grocery store is a real competition, and the grocery stores have the hammer, to use a curling term, to find out who gets the market space. More and more, in my own personal observations when I go into grocery stores, I see the in-store brands taking more and more shelf space, with the other brands effectively being crowded out.
We believe there has been an unnecessarily high burden to prove behaviours clearly damaging to the public interest. This is out of line with our international partners, by the way, including the United States, the European Union and Australia. These jurisdictions better allocate the burden of proof and allow the agencies to act more easily where harm is apparent. This can include by requiring proof of intent or effects, but not necessarily both. The government's update to Bill C-56 would allow abuse of dominance to be established on the basis of either intent or effects, following the actions of a dominant firm. This would allow for more effective enforcement of the act where there is harmful conduct by large players. It would accomplish what the act is meant to do: stop big businesses from abusing their position to the detriment of competition. The detriment of competition is a detriment to the citizens of Canada.
As I noted before, the purpose of remedial orders is to protect competition in the market, not to punish its actors. Recognizing the lower burden involved in securing a remedial order that this change would bring about, the law would limit the remedy in these cases to a prohibition order. More serious remedies, such as monetary penalties and divestiture orders, would continue to require that both anti-competitive intent and effect be proven. This two-tiered approach would help guard against chilling, aggressive competition on the merits.
The government already took an important first step to address this concern by positioning penalties to serve as more effective compliance measures against abuse of dominance. We did this through the 2022 amendments to the Competition Act that removed an ineffective and outdated cap on monetary penalties. We introduced a more principled approach that could better accommodate larger volumes of commerce. Firms engaged in anti-competitive conduct can now face a penalty set at up to three times the benefit obtained for their anti-competitive conduct, to ensure that it is not profitable to them. While this was an important update to move away from the outdated and ineffective fixed penalty system, the old fixed amounts of $10 million, or $15 million for a second order, still remain in the law. This is in the event that they are still higher than the new proportionate maximum. However, it is possible that these fallback numbers could still be too low to act as a deterrent in certain cases where abuse by a big business is significant but caught early, and thus benefit derived from it is still modest.
As everyone here knows, competition is a driving force behind innovation and efficiency in our economy. It ensures a healthy, fair and vibrant marketplace. This is what the free market system is supposed to nurture and protect. Of course, competition is instrumental in bringing down prices. The fact that we have not seen prices fall in spite of the dominant profits being recorded by big grocery and some of the producers but that we see things like shrinkflation and skimpflation creeping in, where we are paying more for a smaller or inferior product, means that something is not working. When something is not working between what the market price is and what Canadians value, then we think it is the job of government to come in and close that gap.
For Canadians, the updates to Bill C-56 would mean more choice and better affordability. When someone needs to pay their bills, the exact motivations or mechanisms behind anti-competitive conduct do not matter. The effect of paying higher prices remains the same. What does matter is that businesses can be held to account. It matters that the law can impose meaningful penalties to ensure compliance. It matters that the Competition Bureau has the information it needs to study problems in the market.
The updates to Bill C-56 have been prioritized because they are the most directly related to addressing the issues identified in the grocery retail sectors. In fact, if we look at the whole landscape, particularly the concerns about inflation, the two big players to this point, at least in the retail market, have been gas, oil and diesel, and grocery. We have seen the market handle gas and oil, because the prices have been dropping at the pumps, which is a welcome sign for most Canadians, and probably one of the main reasons inflation in Canada has dropped to well less than half of what it was about a year ago. However, the thing to remember is that the provisions in Bill C-56 now, and what is coming, would apply to all sectors of the economy. As such, they would have a broad and, we hope, positive impact.
These changes would also be just the first steps in responding to the issues that have been identified by the stakeholders and the public in our comprehensive consultation on Canada's competition law. As the government announced in its fall economic statement, it intends to introduce significant additional amendments for the consideration of Parliamentarians in the coming weeks. Perhaps in the question period to come, some of the hon. members here in the chamber can suggest some additional amendments that we should consider in the coming weeks.
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Madam Speaker, competition is at the front and centre of everyone's minds right now, especially when Canadians are paying the highest grocery bills ever in the history of this nation. Even the report that came out last week said that grocery bills in 2024 are going to go up still another $700 per family, and they are struggling now just to buy the basic necessities.
Could the member please tell the House what exactly this bill would do to lower that $700 bill per family next year?
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Madam Speaker, to be honest, the hon. member's question is key. The first thing we have to do is really get a firm grasp about what is causing prices to be so high. Hon. members would point to the carbon tax, but there was a report out of the University of Calgary that said, no, that was not really it.
We would point to the war between Ukraine and Russia, with Ukraine's exports of grains being greatly reduced because of the conflict, which has had a chilling effect on the availability of food around the world that then had an effect on prices. However, it is anti-competitive behaviour at a time when all of the major grocery chains are recording record profits that suggests there is something not working properly in the free market system. That, I think, is the purpose of the Competition Act amendments.
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Madam Speaker, I hope my colleagues in the House are having a good start to their week.
The Bloc Québécois supports Bill C-56, which would refund the GST to builders. What bothers me, however, is that Bill C-56 extends over seven years, so that means the rebate will be spread over seven years. In 2023, it is hard to foresee what is going to happen in a month or six months.
How can we be sure that a bill like this will be effective when it is going to extend over seven years and plenty of questions remain about the criteria for housing affordability and the desired potential reduction in rent?
I would like my colleague to comment on that.
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Madam Speaker, the fact is that two years ago we would not have foreseen the situation we face today. The fact is that this is going to be long term. It will intentionally be a forever measure to deal with anti-competitive behaviour in whatever sector it arrives. It is necessary right now to deal with groceries. It will certainly be fundamental in dealing with some of the issues on housing, which the hon. member presented, but it is also going to have to be nimble.
Over the course of the years to come, the House will have to sit down and consider what is going on in the day, look at the Competition Act and make the changes necessary to ensure that basically everybody in the market is getting a fair shake. That means not only the producers, the grocery stores and the farmers, but also the consumers.
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Madam Speaker, very much related to Bill C-56 is the degree to which corporations are making record profits these days while everyone else seems to be suffering.
We recently had Galen Weston, chairman of Loblaw, appear before the Standing Committee on Agriculture and Agri-Food. His profits continue to rise while everyone else, all Canadian families, especially in my riding, are having to struggle and make do without. We see the same thing in the oil and gas sector. Over the last three years, its profits have gone up by over 1,000%. Mr. Weston thought that his executive compensation, which is 431 times the average salary of one of his workers, is a reasonable amount, and he could not tell the committee how many of his full-time workers have had to access a food bank to get by.
Conservatives do not want to talk about gross corporate profits these days, but I would like to hear from my hon. colleague what the Liberals are going to do to tackle this corporate culture in which corporations are continuing to make profits while everyone else suffers. We have had 40 years of too much corporate deference in this country. What are they going to do to start turning that around to make sure that the pendulum swings back in favour of Canadian families?
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Madam Speaker, it is like an onion. There are layers upon layers of things that need to be considered. I would direct him and anybody witnessing this to the Roosevelt Institute in the United States, which is looking at a fundamental rebalancing of the wealth that comes out of the market. That rebalancing will be away from the CEOs, the boards and the executives and more towards the workers. We have seen this in the resurgence of union activity in the country, where unions are again having the opportunity and the ability to assert the rights of working people and skim maybe a little more off of the top of the executive compensation, which has really gone off the rails, I would say, in the last 20 to 30 years.
This Competition Act amendment is an iterative thing. It will be subject to amendments as we see opportunities to make things better for Canadians.
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Madam Speaker, my question to the member concerns both legislative and budgetary measures. On the issue of the affordability of groceries, the government, in the last budget, came forward with a grocery rebate, which literally put cash in the pockets of somewhere in the neighbourhood of 11 million Canadians. I wonder if my colleague can provide his thoughts as to why that was an important thing to do for Canadians.
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Madam Speaker, that question highlights two things. First of all, the strategy generally used by the government has been to ensure that the people who need the help get it. That is the reason, for instance, that we took the Canada child benefit away from millionaires and made it income tested so the people who actually needed the help got it.
In the case of the grocery rebate, that could not have come at a better time because things such as the Competition Act and this act are all meant to relieve the pressure on people and fix things that are wrong in the market system, and the grocery rebate was something that helped to bridge people earing very low incomes over the hump while all of these elements came together for Bill C-56. I would not discount, perhaps, the need to do that again at some point in the future. I would advocate for it as an individual MP. Of course, it is up to the government to assess the situation and move forward.
Bill C-56 is meant to solve the problem for which the grocery rebate was a band-aid on a wound that needs healing.
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Madam Speaker, part of the legislation deals with the purpose-built rentals in an attempt to see more rentals being constructed emphasize a good strong public policy. Now we are witnessing other provinces adopting the same approach where PST is also being exempted.
I wonder if my colleague could provide his thoughts on the federal government working along with the provincial government, with the federal government playing a leadership role, and on how it really makes a difference because we are going to see thousands of new units come on stream in the coming years. Could the member provide his thoughts on that aspect of the legislation and the impact it would have?
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Madam Speaker, my experience with metro Vancouver's transportation authority revealed a number of issues connected to the hon. member's question.
Municipalities are stressed because, if, for instance, we build new high rises, as we will through our riding of Fleetwood—Port Kells along the new SkyTrain line, which the government is supporting with funding, the municipalities have to keep up with the water, sewer, all of the other infrastructure, schools, parks, recreation centres etc.
The pattern until now in metro Vancouver has been for new growth to pay for new growth. The could easily erase the benefits of the removal of the GST and the PST on purpose-built rental units. Therefore, with respect to the support that we are offering and want to offer, and in addition to the partnerships that we have with the provinces, we need to factor in our municipalities as partners as well because they are left holding a pretty large bill that also needs to be satisfied if this is going to be a success.
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Madam Speaker, before I begin, I would like to ask for unanimous consent to share my time with the hon. member for Lévis—Lotbinière.
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- Dec/11/23 12:21:11 p.m.
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Does the hon. member have the unanimous consent of the House to split his time?
Hon. members Agreed.
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Madam Speaker, I can speak for 20, 30 or 40 minutes about this important topic. I am happy to stand in the House today on the report stage of Bill C-56.
We have been talking about competition quite a bit in the House, including the need for competition and the lack of competition. We know that Canada has a competition problem. We see it in every sector that Canadians are a part of, including cell phones, banking, groceries, wireless and Internet. There is not really any sector in the Canadian economy that is not dominated by oligopolies and monopolies.
When this bill came along, we looked at it favourably because certain aspects were going to be improved. Mostly we looked at it favourably because there were Conservative aspects that were part of it, including my private member's bill, which was read into the act. Of course, I have a new private member's bill. We are all happy for that, and we are moving on.
The crux of the bill, the affordable housing and groceries act, is really anticlimactic in that, when this bill receives royal assent and becomes law, it will not really change the fact that Canadians are still paying the highest grocery fees and are in the worst housing crisis in this country's history. That is because the bill does promise to make some changes to the Competition Act. This bill would do some minor tinkering around the edges for what we need to have changed in the Competition Act. However, it does not do the real hard work. It does not have the courage to change the real things that need to happen to change competition in Canada.
The bill would enact Competition Act changes. It would certainly make some provisions and changes to the abuse of dominance. It looks at illuminating the efficiencies defence, which was in my private member's bill that came forward. It looks at how market studies should be handled by the Competition Bureau itself.
However, when it comes to the real aspects that are hurting consumers at the grocery store right now, where they are paying 20% more for groceries after eight years of the Liberal-NDP government, it does not tackle the biggest aspect, which is the carbon tax. The carbon tax is added to the farmer, to the trucker, to the manufacturer, to the cold storage facility, so it is added one, two, three, four times to the consumer bill and passed on to the consumer.
It certainly does not tackle the fact that, when it comes to housing in Canada, we are building fewer homes now than we did in 1972, when we have over 40 million Canadians in this country right now. It certainly does not tackle the fact that, because of high inflation after eight years, the costs of everything have gone up, including building materials and labour for homes. The fact is that over the years, we have built up a big barrier of what we call Nimbyism, protecting our backyards from others so that we cannot build homes.
Consumers are stretched. Mortgage renewals are coming due. Over 70% of Canadians with a fixed mortgage will have to renew their mortgage over the next two years, this during the fastest run-up of interest rates in the whole history of this country.
The carbon tax had unintended consequences, and consumers are screaming. They were promised that they would get more back in rebates than they put in. However, the unintended consequences have been that those carbon taxes have added costs to grocery bills. Those added costs are on the price of almost everything that Canadians are paying. They see the rebate in their hands, compared to the bills they are paying each and every day, and Canadians are smart. They now know that they are paying way more in those carbon taxes than they are getting in rebates. After eight years of the Liberal-NDP government, Canadians cannot afford any more.
We have looked at competition, and we have looked at the two parts of the act that we need to solidify. One is to put a stranglehold on how big the big, bossy, dominant conglomerates, oligopolies and monopolies can get in Canada. Canadians have had enough, whether it is cell phone bills, where we have three companies that control 90% of all cell phones in Canada, which are the most expensive three carriers out of 128 carries in 64 countries, or whether it is groceries, where we used to have competition in Canada. Eight grocery stores used to run and compete with one another, driving prices lower. It is now down to only three Canadian companies competing with two American conglomerates. They used to all be Canadian competitors. We used to be able to go to different stores. Now Canadians find that they oftentimes going to the same competitors.
Obviously, prices have not gone down, and this is only after the last eight years with a Competition Act that was outdated. It has certainly outlived its prime, since the Competition Act was created based on the 1960s industrial policy, which said, “We want Canadian companies to get as big as possible to compete internationally.” It is actually in the purpose clause of the Competition Act right now to make Canadian companies as big as possible so that they can compete internationally. This is what we deem as competition. When it comes to competition, we want more companies to compete, not internationally but to compete for Canadians' dollars. Canadian companies should not be able to make all of their money on the backs of hard-working Canadians; Canadian companies need to compete with one another for Canadians' hard-earn tax dollar.
The breadth of this Competition Act, which needs to be changed, is the premise and the purpose of the Competition Act. Number one, we need to ensure that big-box conglomerates and corporations cannot get bigger on the backs of hard-working Canadians. However, the second and most important aspect of the Competition Act is to ensure that we have competition or that we have start-ups in Canada.
Canada now, according to the BDC, has 100,000 fewer entrepreneurs compared to 20 years ago, despite our population increasing by over 10 million people. Canada has failed to create competition. We can look at one aspect to say that we would really love to make sure that we stifle the top monopolies and oligopolies and make sure that they cannot merge with one another, but the other big problem we have missed along the way is to have start-ups created to compete with one another. It used to be that Canada was the bastion for that, and we were able to find start-ups and have great Canadian companies start up and grow in scale, but for the first time in our history, we have fewer start-ups per capita than ever before, after eight years of this government.
When we talk about new jobs and creating wealth in this country, which is something I am afraid we are going to have to speak about a lot over the next year, we look to small business and start-ups to fulfill that role. Ninety-seven per cent of all new jobs in Canada are created by small business. When we look at the complexity and the value of these small businesses, the men and women who can take a risk and start something new in Canada, right now what we are missing most of all is to ensure that we create those jobs and businesses in this nation.
At the end of the day, we have to really look at what this bill would do and what it would not do. We are certainly going to vote for this legislation. At the end of the day, the Competition Bureau itself has been ignored for the last eight years. Coincidentally, the first time that this government starts talking about it is when the opposition leader names a competition shadow minister for the first time in government, which looks at the importance of what competition can do for the nation and what it means for Canadians. Of course, the first thing it means is prices, and the second thing is our jobs and paycheques. We can create new start-ups and new businesses.
For instance, when we look at the banking sector, the biggest thing we are trying to put forward is consumer-led or open banking. There is an opportunity, where this government has been dragging its feet, to create hundreds upon hundreds of financial tech institutions that can not only create jobs and paycheques for Canadians, but provide options for Canadians of where to put their hard-earned money when it comes to financial services in Canada. I would hope that through this, and we will be talking about it when we get back in January, the government introduces the legislation that it promised in 2018.
More importantly, as Bill C-56, the affordable housing and groceries act, comes forth, Canadians are going to be angry about how anti-climactic it will be. Grocery prices are not going to go down after the bill passes, nor will our housing crisis be solved. It would do something important for the Competition Act, but not nearly enough to undo what has already been done. Most importantly, it would not create the start-ups that have stopped, the start-ups that can drive housing starts and create more options and more food in the value chain.
We need boldness, and we need courage. We need a new government to present policy that would actually create homes and grow food without punishing our farmers in this country. It is time to bring it home for farmers, for our country and for Canadians looking for a home of their own.
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Madam Speaker, there is a certain amount of hypocrisy here. The member talked about, at the beginning of his speech, the idea of competition and said that the Conservatives want competition. Then he talked about the big five. The last time there was actually an amalgamation of grocery stores, when a grocery store was bought up, was with Shoppers under Stephen Harper. Stephen Harper and the member's current leader allowed Shoppers, through billions of dollars, to be consumed by Loblaws.
Then the member stands up and says that they want more competition. Where was the member when Stephen Harper was the prime minister, let alone today's leader of the Conservative Party? They were nowhere when it came to competition. Why should Canadians believe that anything has changed with the Conservative Party, when its members consistently vote against good, solid policy initiatives?
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Madam Speaker, let us talk about hypocrisy, then, for a minute. Here are the mergers that have been approved by the Competition Bureau since the Trudeau government has been in power: Air Canada was approved to buy—
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- Dec/11/23 12:32:37 p.m.
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I remind the hon. member that he is not to use the name of parliamentarians who sit in the House.
The hon. member for Bay of Quinte can continue.
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I am sorry, Madam Speaker. I did not even realize I did that.
Here are the mergers that have gone through: Air Canada and Air Transat in 2019, approved by the Competition Bureau; Rogers and Shaw in 2022; RBC approved to buy HSBC in 2023; WestJet buying Sunwing in 2022; Superior Propane buying Canexus in 2018; and Sobeys approved to buy Farm Boy in 2018. The hypocrisy knows no bounds.
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Madam Speaker, my colleague spoke at length about one of the two aspects of the current debate on Bill C-56, which amends the Competition Act, among other things. We agree; it is not going to solve every problem.
The other aspect this bill addresses is housing, in particular the GST on rental housing. It touches on this other problem that we have heard a lot about and that is a real scourge this year: housing.
What my colleague did not mention is that the only solution his party has proposed so far on the housing issue is a bill introduced by his leader, a bill that is essentially designed to show cities some tough love and tell them that funding will be cut if they do not meet their targets.
That is not what cities, particularly those in my riding, need to successfully address the housing issue. I would like to know what my colleague thinks about this.
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Madam Speaker, housing is very important. Speaking as a former municipal councillor, I know the buck really falls with the municipalities. There is a provincial act that oversees the municipal act itself, but it does come down to the municipalities to be able to push things forward, and that is the Nimbyism I have point out.
I am going to talk about some stats that came out today, and this is after eight years of the government. The Rentals.ca December rent report confirmed that while American rents are beginning to stabilize, Canadian rents remain at record highs. The average rent increased 8.4% this year. “One-bedroom apartment annual rent growth remained strongest”, with an average of $1,943. There are people in Toronto who are renting the other side of the bed; that is how bad it has become.
We believe we need to incentivize but also reward municipalities for pushing through rental and construction as a whole. We believe that as party, and I believe that as a former municipal politician.
There are so many times when it is easy for a municipal politician to vote down a rental agreement or a plan that comes forward. We need to find ways to incentivize municipalities that are getting things done, especially around high-density transit, especially where we need housing and especially where we need rental.
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