THE STANDING SENATE COMMITTEE ON BANKING, TRADE AND COMMERCE
EVIDENCE
OTTAWA, Tuesday, May 10, 2022
The Standing Senate Committee on Banking, Trade and Commerce met with videoconference this day at 6:32 p.m. [ET] to study the subject matter of those elements contained in Divisions 5, 10, 11, 15, 16, 17 and 30 of Part 5 of Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures.
Senator Pamela Wallin (Chair) in the chair.
[English]
The Chair: Good evening to everyone and welcome to this meeting of the Standing Senate Committee on Banking, Trade and Commerce. I am Pamela Wallin, and I am the chair of this committee.
Before we begin, just a reminder to all senators and witnesses to keep your microphones muted at all times unless recognized by the chair, and, of course, I’m going to ask everyone to keep interventions brief and pointed to ensure we can cover as much material as possible.
With that, let us begin. I would like to introduce the members of the committee participating in today’s meeting starting with the deputy chair, Senator Deacon. We have with us as well Senator Bellemare, Senator Gignac, Senator Loffreda, Senator Marshall, Senator Massicotte, Senator Ringuette, Senator Smith, Senator Woo and Senator Yussuff.
Today we begin our examination of the subject matter of certain elements contained in Divisions 5, 10, 11, 15, 16, 17 and 30 of Part 5 of Bill C-19, the budget implementation act.
For those in the public who may be watching us online, this is part of our work to examine budgets and other related documents, but it means we must pause our own regular studies; and as is too often the case, we have been allowed very limited time to study these complex budgetary measures. We will look at these specific sections of the bill. It may seem a little out of context from time to time, so please bear with us and we will try to explain as we look at budgetary provisions, emergency business accounts, sales tax and income tax changes.
Fortunately, we have some experts to help us tonight from the Department of Finance Canada; the Canada Deposit Insurance Corporation; the Office of the Superintendent of Financial Institutions; Innovation, Science and Economic Development Canada; and the Competition Bureau.
I should note that we invited representatives from Canadian Heritage to speak on matters within their purview and registered in the budget; they have declined, and representatives of ISED — Innovation, Science and Economic Development — will take questions on the elements that relate to the Canadian Heritage file.
Officials from each department will deliver brief remarks on their respective divisions of the bill. We will start with Jean-François Girard of the Department of Finance Canada, on Division 5, to be followed by Chantal Richer, Stefania Bartucci, Manuel Dussault, Stéphane Fournier, Jennifer Miller and Anthony Durocher.
[Translation]
Jean-François Girard, Senior Director, Markets Policy, Financial Stability and Capital Markets Division, Financial Sector Policy Branch, Department of Finance Canada: My name is Jean-François Girard, and I am the Senior Director at the Financial Sector Policy Branch of the Department of Finance Canada. As you mentioned, I am accompanied by Chantal Richer and Sarah Govan-Sisk from the Canada Deposit Insurance Corporation.
Division 5 proposes an amendment to the Canada Deposit Insurance Corporation Act to add the President and Chief Executive Officer as a member on that Corporation’s Board of Directors and to increase the number of independent directors from six to seven, including the chair.
This concludes my summary of Part 5, and I will turn things over to Chantal Richer.
[English]
Chantal Richer, Chief Operating Officer, Canada Deposit Insurance Corporation: Good evening, everyone. I’m pleased to be here to provide some details on the proposed amendments to the Canada Deposit Insurance Corporation Act. By way of background, this year marks CDIC’s fifty-fifth anniversary. We currently protect more than $1 trillion in deposits at over 80 federal financial institutions. We are also the resolution authority for our members, which means we are responsible for handling their failure in the rare event this should occur.
Regarding the proposed amendments, CDIC supports these measures, which are intended to further strengthen the corporation’s governance structure.
The proposed measure to include the CDIC’s president and chief executive officer as director on the corporation’s board aligns with best practices and with boards of other financial Crown corporations. This would ensure that the highest-ranking corporate officer in our organization participates in meetings of the board as a full voting member. The CEO’s inclusion on the board would reinforce informed and effective decision making and facilitate the reflection of the board’s objectives and perspectives in the execution of the corporate strategy and operations.
Adding the CEO to the board would also see the government benefit from consistent representation from heads of agencies across key financial sector boards and committees. This would promote effective decision making among our financial safety net partners, which is critical in crisis situations where departments and agencies need to work together quickly and effectively to protect Canadian depositors.
Following the inclusion of the CEO on the board, the addition of another private sector member would maintain the current balance between public and private sector directors and continued board independence. This would be at no cost to taxpayers, as CDIC is funded by member premiums.
This concludes my remarks, and I and my colleagues, François and Sarah who were introduced earlier, would be pleased to take your questions. Thank you.
The Chair: Thank you very much.
We’ll go next to Division 10, Part 5 of the budget implementation act, and witnesses from the Department of Finance Canada.
Stefania Bartucci, Senior Project Leader, Financial Institutions Division, Department of Finance Canada: Thank you, senators. Good evening. I’ll present on Division 10, modernizing corporate governance provisions.
In Budgets 2018 and 2019, the government announced its intention to modernize corporate governance provisions in the federal financial institutions statutes to align them with changes made to the Canada Business Corporations Act, which generally serves as the foundation for the corporate governance framework for federal financial institutions.
Budget Implementation Act 2019 updated certain proxy solicitation provisions in the Bank Act but did not make similar changes to the Insurance Companies Act and the Trust and Loan Companies Act. As such, budget implementation act 2022 includes parallel revisions to the Insurance Companies Act and the Trust and Loan Companies Act to ensure that all three financial institutions statutes are aligned.
In general, certain federal financial institutions are required to solicit or request proxies by sending a form of proxy and a proxy circular to shareholders in advance of shareholder meetings. This allows shareholders to appoint another person to attend and act on behalf at the meeting and ensures that shareholders are provided with adequate information about the financial institution so they can exercise their voting rights in an informed manner.
In that context, these particular amendments clarify the Minister of Finance’s authority to make regulations pertaining to the format and content of proxy forms and circulars. These amendments also introduce limited exceptions to certain proxy solicitation rules for dissidents, make narrow changes to the definition of solicitation and otherwise make technical changes to update some of the terms in the existing provisions.
Thank you very much.
The Chair: We are moving on, then, to Division 11 of Part 5 of Bill C-19. Our witnesses in this section are Manuel Dussault, Senior Director, Framework Policy; and Tracy Laufer, Senior Advisor, Framework Policy, both of whom are with Department of Finance Canada; and from the Office of the Superintendent of Financial Institutions, we have Stéphane Fournier and Joanne Lucas.
[Translation]
Manuel Dussault, Senior Director, Framework Policy, Department of Finance Canada: The Insurance Companies Act includes a borrowing limit for property and casualty insurance companies and marine insurance companies. Division 11 of Part 5 amends the act to facilitate access to capital for these companies by exempting debt obligations, which are part of the regulatory capital from this borrowing limit. When the Insurance Companies Act was enacted in 1992, capital requirements did not contemplate using debt obligations to substantially meet regulatory capital requirements. Since then, borrowing instruments have evolved and capital frameworks have become more sophisticated.
The change will give these companies greater access to predictable, longer-term debt financing to invest and grow, while improving protection for other policyholders and creditors. The implementation date is January 1, 2023. This gives the Office of the Superintendent of Financial Institutions, the OSFI, time to update its capital expectations specific to this legislative change. The implementation date is also consistent with the implementation of OSFI’s 2023 capital expectations, which will take into account international financial reporting standards IFRS-17.
I’ll now give the floor to the OSFI, if I may.
Stéphane Fournier, Senior Manager, Legislative Policy, Interpretations and Compliance Unit, Regulatory Affairs Division, Office of the Superintendent of Financial Institutions: Good evening, Madam Chair and honourable senators. My name is Stéphane Fournier, and I am a Senior Manager in the Legislative Policy, Interpretations and Compliance Division of the Office of the Superintendent of Financial Institutions. I am here today to answer technical questions on Division 11 relating to proposed amendments to the Insurance Companies Act.
In brief, the Office of the Superintendent of Financial Institutions was consulted on the proposed changes and has no prudential concerns.
I will be happy to answer the committee’s questions. This concludes my opening remarks. Thank you.
[English]
The Chair: Thank you very much.
We will move on now to Division 15 of Part 5. Our witnesses from Innovation, Science and Economic Development Canada are Jennifer Miller, Director General, Marketplace Framework Policy Branch; and Ian Disend, Expert Advisor, Policy, Research and Analysis; and from the Competition Bureau, we are joined by Anthony Durocher.
Please go ahead, Ms. Miller.
[Translation]
Jennifer Miller, Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada: Thank you for the opportunity to address this committee this evening. My name is Jennifer Miller, and I am the Director General for the Marketplace Framework Policy Branch at the Department of Innovation, Science and Economic Development. My branch’s responsibilities include a number of key economic framework statutes that touch upon a wide assortment of areas such as intellectual property, corporate governance, competition law, insolvency and the handling of personal information.
Part 5 of Bill C-19 contains legislative amendments affecting a number of laws overseen by my branch, which I will quickly summarize now.
[English]
Madam Chair, with your permission, since I will also be speaking to the following three parts, I would like to proceed with a brief summary of all four sections before I turn to my colleague at the Competition Bureau.
Division 5 contains amendments to the Competition Act providing targeted amendments to the law that, among other things, will criminalize wage-fixing and no-poaching agreements between employers, reform how maximum fines and administrative monetary penalties are calculated, clarify the practice of drip pricing as false or misleading, expand the definition of anti-competitive conduct and allow private access to the Competition Tribunal to remedy abuse of the dominant firm’s position in the market.
The government has announced an intention to undertake a broad review of competition legislation. These changes constitute a down payment on that process. They represent early movement in areas identified by the government as clear shortcomings in the law with readily identifiable solutions that would bring Canada into better alignment with international norms.
The proposals are informed by numerous exchanges the department has had with stakeholders in the Competition Bureau since the launch of the government’s Digital Charter in 2019, submissions to and recommendations of several parliamentary committees, as well as the consultation process conducted over the past few months by your honourable colleague Senator Howard Wetston.
While my department serves as the lead on competition policy, including these specific amendments to the Competition Act, I am also joined by Anthony Durocher from the Competition Bureau who will be able to offer some opening remarks as well and present the bureau’s point of view as the independent agency responsible for the act’s enforcement.
[Translation]
Division 16 amends the Copyright Act to fulfill a commitment made by Canada under the Canada-United States-Mexico Agreement, or CUSMA. Specifically, Canada agreed to extend its general copyright term of protection from 50 to 70 years after the life of the author by the end of 2022. The amendments to the Copyright Act will be brought into force at a date determined by the government.
[English]
Division 17 amends the College of Patent Agents and Trademark Agents Act, the enabling law for the body that regulates the patent and trademark agent professions in the public interest.
The proposed amendments would better enable directors, officers and employees of the college to prioritize the public interest by protecting them from personal financial liability for actions taken in their official capacity. Additional amendments will clarify certain terms, streamline processes and provide greater flexibility to the college to improve the efficiency of its operations.
Finally, Division 30 amends the Canada Business Corporations Act as part of the government’s commitment to accelerate, by two years, the implementation of a public and searchable beneficial ownership registry. Specifically, these changes will require private federal corporations to send information on their beneficial owners to Corporations Canada on an annual basis, or when a change in control occurs. Corporations Canada will be authorized to provide all or a part of that information to an investigative body or an authorized entity.
A future series of amendments, notably with regards to public dissemination of the beneficial ownership information, will be required to fully meet the budget commitments. This two-phased approach is being pursued to allow for necessary consultations with stakeholders.
I would now like to pass the floor to my colleague Anthony Durocher from the Competition Bureau.
[Translation]
Anthony Durocher, Deputy Commissioner, Competition Promotion Branch, Competition Bureau of Canada: Good evening, Madam Chair and members of the committee. My name is Anthony Durocher. I am Deputy Commissioner of the Competition Bureau’s Competition Promotion Branch, or CPG.
[English]
The bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses. We do this because competition drives lower prices and innovation while fuelling economic growth.
[Translation]
We investigate and take action to address anti-competitive business practices that harm consumers and our economy. These include price fixing, deceptive marketing and abusive business conduct. We also review mergers and acquisitions to ensure that they do not substantially harm competition. Finally, we work to promote pro-competitive government policies and regulations.
It is important to note that it is Innovation, Science and Economic Development that develops and co-ordinates government policies, laws and regulations respecting competition.
[English]
It is ISED and not the bureau that has the mandate for amendments to the Competition Act. In this context, the bureau is an independent agency that enforces the laws it is given. Nevertheless, the bureau has more than 35 years of experience in enforcing the Competition Act. This experience gives us an important voice in identifying the real-world frictions in applying the act on a day-to-day basis.
In February of this year, we made a public submission to Senator Wetston’s consultation on modernizing the Competition Act. In that submission, we identified a number of competition topics that are ripe for discussion and debate, and made over 30 recommendations. We are very pleased that some of our suggestions would be implemented through the budget implementation act process.
If and when these proposed amendments become law, the bureau is keenly aware of the importance of clarity and predictability for businesses and other stakeholders. To that end, we are committed to transparency and communicating our approach to the application of these amendments.
Importantly, Budget 2022 refers to these changes as just “. . . a preliminary phase in modernizing the competition regime.” It commits that “. . . the government will consult broadly on the role and functioning of the Competition Act and its enforcement regime” in the future.
We look forward to participating actively in that consultation. We will continue to push for reform that ensures public interest in competition, which is more important than ever, is protected.
I look forward to your questions. Thank you.
The Chair: Thank you. I’m assuming you were consulted along the way here, Mr. Durocher.
Mr. Durocher: That is correct.
The Chair: We’ll come back to that issue.
Now we will move to Divisions 16, 17, and 30 of Part 5. That is Jennifer Miller — you’re spending a lot of time with us; I’m hoping you’re feeling comfortable here — and Ian Disend, Expert Advisor, Policy, Research and Analysis.
Ms. Miller: I will be speaking to this, Madam Chair. I did include a brief overview of those parts in my previous remarks, so I would be happy to answer any questions that arise. When it comes to Competition Bureau questions, I understand that it may sometimes be difficult to distinguish between the policy side and the enforcement side, but my colleague Mr. Durocher and I have coordinated and will be happy to help get the right answer to the right question as it arises.
The Chair: We hope so, too. Thank you very much.
We have covered the bases. If your head is confused, well, then just join the club, everyone. We have a lot of different parts of the budget that have been raised and that we’re looking at.
I’m going turn to my colleague Senator Deacon to see if he would like to throw a dart at the board and pick a topic area.
Senator C. Deacon: Thank you, chair.
Thank you to all of our witnesses. I think you’ll find that each of us will choose different parts that we will examine in our questions.
I would like to start by thanking Ms. Miller. It is nice to see you again. I can’t believe the amount of the Canadian economy that rests on your shoulders right now. I thank you for your diligent work on behalf of Canadians.
My question is going to focus more, if I could, to Mr. Durocher. I like the fact, Ms. Miller, that you said this is a down payment on a broader consultation.
But what really resonated with me, Mr. Durocher, is that there is a need to give voice to the experience of the bureau, so I’m going to focus in on that.
I want to thank you both for the recognition of Senator Wetston’s leadership in getting this conversation going. We’re all grateful to our colleague, who, sadly, we are going to see retire on June 3. He really helped kick-start this process.
The amendments relating to the Competition Act in the budget really relate to the budget’s title: A Plan to Grow Our Economy and Make Life More Affordable. This is exactly the space — the Competition Act and the Competition Bureau — where you spend your time.
Mr. Durocher, I want to look forward, past the specific amendments we’re seeing in Bill C-19, and hear your recommendations as they relate to ensuring that there is a robust debate on future reforms. What recommendations would you provide us on how future consultations might be shaped to include, for example, non-traditional actors like consumers so that the process is not dominated by voices of large incumbents or traditional spokespersons and that there is a balance to that?
The other is the OECD’s perpetual recommendation to Canada that we implement a robust and ongoing competition impact assessment of our legislation and regulations.
Those are two examples, but could you please give us some recommendations about where you would like to see us focus, given your experience?
Mr. Durocher: Thank you for the question.
Madam Chair, from the bureau’s perspective, these amendments are certainly very positive steps. It is a very important first step to modernizing our competition laws and enabling the bureau to better protect competition for Canadians.
As Senator Deacon alluded to, competition is critical to affordability for consumers, but we also look at growing the economy through productivity growth innovation. This is a fundamentally important conversation that I think we’re having as a country.
As I alluded to in my opening remarks, we’re very excited about the prospect of this next phase of the process that would really open up the conversation and consultation about broad reform to the Competition Act and how we look at competition in the country.
From our perspective, we have always benefited immensely, as a law enforcement agency, from a diversity of views when we do our reviews and investigate matters, but also consult on guidelines.
One recommendation we would respectfully put forward is the importance of a broad consultation and to hear from many different voices. Competition impacts everyone. It impacts consumers, entrepreneurs, companies of all sizes, the investment community, Indigenous communities and labour movements. From our perspective, it’s very important that we hear from all these different sectors to better understand how competition impacts them and how the Competition Bureau’s work impacts them as well.
It is a very important step to hear a diversity of voices in respect of this conversation. It makes for a much richer public policy dialogue.
In respect to Senator Deacon’s reference to OECD recommendations, I can touch on this quickly.
The Competition Bureau’s role is to enforce the law and look at private restraints on competition in the economy, but equally importantly, we also advocate for competition at all levels. We try and advocate to remove restrictions on competition in the form of policies or regulations that can hamper our economic performance as a country and the ability of entrepreneurs in small- and medium-sized enterprises to take root.
Generally speaking, we do this on an ad hoc basis. As the senator knows, we very recently published a tool kit to provide a guide to policy-makers to explain, first, why competition is important; and second, how they can take competition principles into account.
When we looked at what the OECD has said about Canada, looking at how we use competition in the regulatory process, it basically suggested, with an objective view of our rankings, that there is a lot of room for improvement, quite frankly. We ranked before last in their assessment of OECD countries of a metric called the Product Market Regulation, which really looks at the extent to which our regulations are pro-competitive as a country.
The flip side to this, obviously, is the opportunity that lies in bringing a competition lens to our regulations. From our perspective, the evidence is clear that there is a real opportunity to move the needle in terms of Canada’s economic performance by looking at competition in the regulatory process at all levels.
One very quick example, if I may, is looking at Australia. In the 1990s, Australia enacted a number of pro-competitive reforms. In 2005, the Australian Productivity Commission measured that the impact of these pro-competitive reforms resulted in a 2.5% increase in Australia’s GDP, which was the equivalent of AUS$7,000 for every Australian household.
This really moves the needle. There are a lot of other metrics looking at the competitive impact in sectors in several countries where the quantified benefits of the approach are very material and enable us to move the needle.
We view competition as an important opportunity for our economic performance as a country.
Senator Loffreda: Thank you to the panellists for being here.
First, I would like to congratulate our colleague Senator Wetston on his excellent work on the independent consultation he carried out on the Competition Act. My question is on Division 15 of Part 5 of Bill C-19, which amends the Competition Act to enhance the Commissioner of Competition’s investigative powers, expand the definition of anti-competitive conduct and much more. I have noted that the proposed amendments are the product of ongoing policy dialogue with stakeholders and the Competition Bureau dating back to 2019, which was pre-COVID. My question is more general.
To what extent has the pandemic, or, may we say, the current situation or current economic challenges, affected these amendments? To what extent have they been considered? We all want to be more competitive, obviously. Do you feel these amendments will meet their initial objectives despite the current challenges we are all aware of with scarce resources, supply chain interruptions, inflation and much more? You did say it was a down payment, and we want to increase Canadian investment and foreign investment. To what extent can we expect more changes in the future, and what would those changes look like in order to enhance our competitiveness globally?
Ms. Miller: Madam Chair, with your permission, I’ll respond to that question on behalf of Innovation, Science and Economic Development Canada.
Thank you very much for that question. It points to one of our key challenges in providing advice on potential policy changes or potential legislative changes to the government, and that is precisely to take stock not only of trends possibly in the environment — I mentioned international comparators; my colleague from the Competition Bureau has mentioned some as well — but also emerging issues and circumstances that are having an immediate impact on the economy and on the environment into which those amendments would be introduced. Certainly, the pandemic was one of them.
I would say that in terms of these particular amendments, the effect I would point to is not so much a specific change or different language that would have been required when you look at these amendments, because the Competition Act is a law of general application, so it’s intended to apply to all types of businesses in all types of industries across Canada equally. So it has to be responsive to things that are happening in the environment but also resistant to transitory changes or changes of the moment.
I would say that the amendments themselves take on added importance in a time when people are looking at ways to make sure the economy is strong and resilient. Competition, as my colleague Mr. Durocher noted, is a huge part of making sure that you have the correct conditions for businesses to grow, for economic growth to take place more generally and to attract foreign investment into a predictable and competitive economic environment. In a post-pandemic context, all of those factors mean a well-functioning Competition Act is very important.
You asked about looking ahead and what types of changes could be expected and what impact they would have on that environment. I would point you to Senator Wetston’s consultation again, just as a point of reference since I think we’re all fairly familiar with it, and say there were certain topics where he concluded that there was a fairly reasonable consensus about what should be done. There were other topics where he noted that stakeholder input did not result in an easy consensus, or that more fundamental questions were raised that probably deserved more detailed consideration or a chance for, again, as Mr. Durocher noted, more voices to be brought to the table. That’s things like the purpose of the act, and whether some of its major tests still function in the way they’re intended. All of those things would be matters that could be considered as part of a future consultation.
The Chair: Thank you very much. I did see Mr. Dussault’s hand up at one point. I don’t know if that was an accident or not. It’s a little odd for the chair to be hosting online here. I can’t see all of the activity at once. So if you feel strongly about something and want to add your thoughts, please put your hand up and we’ll try to incorporate that.
[Translation]
Senator Bellemare: My question is for Mr. Dussault and concerns insurance and mutual fund programs. I would like to better understand more about the nature of the changes being proposed to facilitate their access to capital. Insurance companies and mutual companies are two slightly different systems that target different clients. I also wanted to know whether, in the context of these changes, there was an issue related to climate change and the increased risks associated with flooding and fire problems.
Mr. Dussault: Thank you for that question. I am pleased to answer it. The Office of the Superintendent of Financial Institutions can answer more technical questions.
This change was requested by the property and casualty insurance industry, in other words, the general insurance companies. It does not apply to life insurance companies.
The act and regulations on P&C insurance companies limit their ability or the amount of borrowing they can do relative to their assets. Now, since the whole prudential capital analysis has evolved since 1992, the proposal would have the effect of exempting debt obligations that are part of the regulatory capital, so what is recognized as the regulatory capital, from this borrowing limit for insurance companies.
These regulations apply to both corporations and mutual companies.
According to our analysis, this will benefit mutual companies more, because corporations have the possibility to borrow through their parent companies. So this is a more pressing limit for mutual insurance companies. It’s an important part of the economic environment and the general insurance industry.
This will allow them to borrow money to make investments. These investments can be in IT, they can be in the area where they think they can benefit from growth, and that can include, if there is a need, areas where they need to adapt to climate change.
Senator Bellemare: Can you repeat that?
Mr. Dussault: By increasing their borrowing capacity, this will allow them to borrow to make investments in IT, human resources and climate change. If they need more resources to deal with climate change, it would also be an opportunity for them to use this new power.
Senator Bellemare: I see.
[English]
Senator Woo: Thank you to the witnesses. I have three questions. We may not get to all of them, so I may take some to the second round.
The first has to do with the Competition Act. Will the wage-fixing prohibitions have a bearing on non-compete agreements and non-compete deals that are reached by employees who leave certain companies where, of course, their skills are in rare supply and where they have some special knowledge of that company’s operations?
The second question is more general. It’s on the broader issue of whether the Competition Act is general purpose and is suitable for all kinds of industries, including new industries that have cropped up in recent years, and whether it is fit for purpose for these new businesses.
I think Ms. Miller gave the answer that, in general, that’s the case and that’s the approach the department is taking. But I do notice that you are proposing some modernization of language, particularly to deal with network effects, which are very important in a digital economy and potential sources of market power abuse. Can you say a little bit about the way in which the change in language will, in fact, help you identify market power abuse and therefore improve the effectiveness of the Competition Act?
Ms. Miller: Thank you very much for the question. I’m going to invite my colleague Ian Disend to join me for the answer, as he is one of the foremost technical experts on the act and would be pleased to respond to the first half of the question.
Ian Disend, Expert Advisor, Policy, Research and Analysis, Innovation, Science and Economic Development Canada: Thank you very much for the question. On the question of non-competes, the provision is phrased such that it only applies between employers. So if the clause were to purport, for example, to limit any future salary that the departed employee might pay to an employee of their own, it would potentially apply. But in terms of the substance of merely competing against the former employer, that would be covered by a different provision of the act, not one that’s being substantively amended as part of this package. Anything that’s specifically between employer and employee, for example, is not part of this amendment.
Ms. Miller: With respect to the second part of your question about the extent to which this activity will help the act remain fit for purpose and the fact that it accommodates new industries while still remaining in the context of a law of general application, in spite of what I said about laws of general application, which are the foundation for how we regulate the economy, and giving that certainty and predictability to businesses, consumers and anyone else who’s participating in the economy or the marketplace, that doesn’t release us from the obligation of making sure that we are looking at different behaviours that are present in the marketplace, that we make sure there are, for example, no loopholes or no new practices that might unintentionally fall outside the scope of the act.
To give you one illustrative example, one of the provisions you’ll have noticed relates to the concept of drip pricing, which is basically when you, as a consumer, don’t know the final price you will pay. You think you are paying an advertised price and then a company adds on different fees and charges within its control such that you have invested yourself in the transaction by the time you come to complete it and you therefore tend to go through with it. That’s a practice that is greatly enabled by the digital sphere, because it’s very easy to present you with successive screens of information and then a final price with that tempting “buy now” button. That’s one example. Will it apply across different types of industries that do business online? Absolutely. Is it a practice that is definitely made much easier and therefore needs to be addressed in the digital sphere? That is also true. That’s how the two abilities of the act work together in that way and would function in this case.
Senator Woo: On network effects, I think it gets to the question of what the purpose of the act is. Because some would argue a network effect could be beneficial for consumers, right? I’m not sure how you are interpreting network effects. Network effects could be very anti-competitive, but they could be beneficial for consumers if they lower prices and increase welfare and so on. I know this is not tackled in the amendments, and that’s one of the questions Senator Wetston has rightly said we need to debate some more. But are you nudging to a conclusion? Are you nudging to a way of thinking about network effects that you need to tell us about and help us understand?
Ms. Miller: Certainly. I’ll answer part of this, and I will also call on my colleague Mr. Disend to answer as well. On network effects, certainly there is language in the amendments that speaks to that. To me, what your question points to is the fact that you have to consider all these elements in their context, particularly around things like some of the dominant digital platforms. There can be benefits to users from some of these services that they have chosen to employ. It’s the anti-competitive and harmful practices that the act is intended to address, no matter what industry they would be in.
Mr. Disend: Network effects are named as part of the amendments, as Ms. Miller noted. They are a consideration for the Competition Tribunal. The act doesn’t purport to take a position on what they mean for competition, merely that it is something for the tribunal to take notice of when evaluating whether or not competition has been harmed under any one of the three provisions where they’re named.
The Chair: Thank you very much.
Senator Marshall: Has somebody briefed us on Division 30? If they did, I must have missed it. Have we been briefed on Division 30?
The Chair: Who is responsible for Division 30 who can answer that question?
Ms. Miller: That would be me.
Senator Marshall: That’s a very complex issue. In last year’s budget, there was some money for this beneficial ownership registry, and it seemed like the government was going to do it at a very leisurely pace because they didn’t budget sufficient money. So now this year, we’re in a rush. We’re so rushed, we’re going to use a two-phased approach and we’re going to have some changes implemented this year. Why are we using a two-phased approach? Tell me, for the first phase, is it a requirement that some businesses have to provide some information as a result of the implementation of these amendments?
Ms. Miller: Thank you very much for the question. I’d be pleased to outline the two-phased approach in more detail.
In terms of the two-phased approach, the government did indeed, as you’ve pointed out, have a longer time frame initially identified for the implementation of the beneficial ownership registry. However, the decision was taken as part of Budget 2022 to accelerate that timeline, as you’ve noted again, by two years, which would have a beneficial ownership registry available by the end of the calendar year 2023.
Given that it is a significant acceleration, as you might imagine, there are the legislative provisions that we need to make progress on, as the opportunity arises, to do what is known and act on what is certain. However, there are other elements that will require some consultation in terms of implementation to make sure the businesses that are regulated will be in a position to comply, to be certain that privacy considerations have been taken into account, and things like that. Therefore, it was more prudent to save a second set of amendments that will fully implement the commitment until after that consultation had taken place. That’s the rationale for the two phases.
Senator Marshall: So you’re saying the beneficial ownership registry won’t be in place and won’t be accessible until the end of 2023, but businesses have to provide information in advance of the registry being completed? That’s my understanding reading the note. Is that correct?
Ms. Miller: Businesses are currently required to collect and hold that information. What will happen is, first, this set of amendments requires that the information be provided to Corporations Canada. It also clarifies that, until those considerations that I mentioned have been taken into account and consulted on to make sure the implementation approach is feasible for businesses, the director of Corporations Canada will not make that information public just yet. In the meantime, it does allow for authorized sharing, as I mentioned, with investigative bodies or law enforcement agencies, which is important in order to ensure that the anti-money laundering and the anti-terrorist financing objectives of these amendments are allowed to function in the meantime.
The goal is to ensure that all the legislative amendments are fully passed and have come into force by the time the registry needs to be available and publicly accessible at the end of 2023.
Senator Marshall: It just seems illogical that you’re doing this two-phased approach and that you haven’t had your consultation process yet, but you’ll have your first phase done. The impression I got from reading the note is that government wants to give the appearance that they’re doing something, but it’s almost like they’re getting ahead of themselves. I’ll read the note again, but thank you for the explanation.
The Chair: Thank you, Senator Marshall. I think you raised a fair point.
Senator Massicotte: In fact, I had the same question. It takes forever. It’s taken forever even to get here and now we’re going to give it one phase but not two phases. It’s not publicly available until phase two, I understand. Why the secrecy? Many other countries have done this. This should be public information. What’s the concern so much that we want to test it for a year or a year and a half before we make it publicly available? Could somebody help me out there?
Ms. Miller: It’s important to note at the outset that the objective of the beneficial ownership registry is to enable transparency around the beneficial owners of companies that are regulated under the Canada Business Corporations Act, or CBCA. The purpose itself is the transparency that you seek. Several elements go into making that registry fully accessible and searchable by the public. There’s obviously ensuring that the amendments in the legislation are in place, that they are in a format that businesses will be able to comply with and that guidance has been provided to businesses as to how to do that to make sure they are able to fulfill the objectives of the registry.
In parallel, because it’s a new product and a new service that would be offered to the public, we will also need to build it. Technological building will have to happen such that a registry exists that can receive the information from companies and then can be provided with a public-facing interface so that the public can search for that information. Together, those are the activities that need to take place between now and the date that the registry will become available.
Senator Massicotte: As you know, right now, Canada suffers from a reputation internationally that it is one of the most non-transparent. In fact, it attracts all kinds of money, sometimes not very clean money. Will this program finally resolve this issue and restore our good reputation?
Ms. Miller: In terms of your question, senator, this initiative will certainly contribute to a strong, well-regulated and transparent financial environment in Canada as it pertains to the corporations that are regulated under the CBCA. The intention is to ensure that there is that kind of positive, reliable and transparent environment for people doing business in Canada or seeking information about the beneficial owners of corporations incorporated under the CBCA.
[Translation]
Senator Gignac: My questions are for Ms. Miller or Mr. Disend from Innovation, Science and Economic Development Canada, and concern the Competition Act. I have two questions.
Were the provinces consulted before an amendment was proposed? Second, I want to go back to Senator Woo’s question so that I understand, perhaps with specific examples. For example, in the construction industry, each company must respect the construction decree so that a plumber in one company earns the same as a plumber in another company, since it is negotiated. Won’t this revision interfere with these labour-management negotiations, or will they be able to continue without any problems? Thank you.
Ms. Miller: Thank you for these questions. I will be happy to answer them with my colleague Mr. Disend.
[English]
In terms of the senator’s question about the provinces, as this is a federal statute that applies to the economy nationwide, the provinces were not directly consulted on the text of the amendments, which were confidential until introduced in Parliament. However, we follow developments in provincial economies closely and various provincial issues to inform our understanding of trends nationwide. Of course, that activity also took place. Certainly, in the context of various file-specific discussions, we would have occasion to discuss with our provincial colleagues as well as the case arises.
[Translation]
I’ll ask Mr. Disend to answer your second question.
Mr. Disend: Just for clarification, was the question about an agreement between employers in two different industries?
Senator Gignac: Yes, that’s it. I just want to check: We know that in some industries — the construction industry, for example — it is agreed that companies will agree that wages will be the same for a plumber, carpenter, the various trades. It’s negotiated between employers and unions. So could this reform of the act have an impact or unintended consequences, for example, in negotiations that might take place in an industry like the construction industry?
Mr. Disend: If a union is involved, there is already protection in the Competition Act for that process. There’s a very clear exception in the act. If, for example, it wasn’t in the context of such collective bargaining, any agreement between individual employers, that means that two different employers would be covered by these amendments.
[English]
Senator Smith: Thank you to the witnesses.
We had a group in — and I know, Ms. Miller, you were with us — about a week ago talking about regulations. As I look at the changes that we’ve been given to Divisions 5, 10 and 11 of Part 5, there are a lot of important changes, but they’re sort of one-ups in terms of putting the CEO on the board and modernizing corporate governance and communications, et cetera. This brings me back to what we were told by some representatives from the electricity and gas industries. Basically, they said that when we try to promote ourselves as entrepreneurs and we’re dealing with the government, there seems to be a disconnect between what we’re trying to achieve in building our businesses and what the government is trying to do in regulating, controlling and managing their portfolios and departments in dealing with us.
I’m wondering how you address the speed in which you work, especially when you’re trying to deal with entrepreneurs growing businesses. We know, as Senator Massicotte and Senator Woo both said, there is an issue with the whole idea of competition and investment in our country, and I guess it all ties into you doing these changes. I’m not sure if they’re strategic, but at the same time, how do you implement that into increasing your pace of doing business with third parties?
Ms. Miller: Senator, I believe you’re referring to some amendments that were within the ISED portfolio, and possibly also to others that were for my colleagues at the Department of Finance, but I can offer a partial answer to that from the ISED perspective.
I think our departments, because we are one of government’s primary interlocutors with industry, with companies of all sizes, we have to pay special attention to the relationship with those companies, to the ability to conduct, I would say, good outreach and consultations and do our best to understand their needs.
It has been a big priority for our department to be responsive to the pace at which they need to engage with us. That has been a particular priority throughout the pandemic period as well, and it applies, obviously, not only to things like regulations or legislation, which are the things that my group typically does, but also to incoming inquiries from businesses, who needed to understand information about government programming or what have you. That is just recognizing that responsiveness to what they’re telling us and to their needs is a very important part of our department’s work.
However, I would also offer the opportunity to my colleagues from the Department of Finance, since I know that you referred to some of their amendments as well.
Senator Smith: If I could add one thing; and I’m not trying to be critical, but I’m just trying to get a sense of how your dynamics work.
What was interesting, coming from these people who are dealing with regulations and trying to build their business, they said categorically that they’re at one speed, and you guys are at another speed. How do we bridge that gap, if that is actually true, in terms of coming closer together so your response time can be accelerated?
Mr. Dussault: Thank you, chair. I don’t know if the question was specifically asked to the Department of Finance.
The Chair: I think Ms. Miller was suggesting you might be able to respond in general about the government’s ability or willingness — mostly ability — to deal with a fast-moving sector and entrepreneurs and people who are impacted by regulation so directly.
Mr. Dussault: Thank you for the question.
In the financial sector, we definitely have a regular process of updating the legislation. We have a five-year review of financial sector legislation. As you can see from the budget, we’re very open to making changes in between that cycle.
The financial sector is changing rapidly, as has been underlined. There are many trends that need to be addressed, so that’s a way for us to be agile in the financial sector and keep our legislation up to date.
The Chair: I think the point was that we heard from these other witnesses last week that you put a rule in, and then you have a five-year time frame to change it. Meanwhile, their business has either lived, died, moved abroad or any number of things. It is that there is not a response time that’s realistic for their world.
Mr. Dussault: Thank you, senator. I can only speak about the financial sector and how we manage the framework.
The Chair: All right. I think it’s just an issue we see recurring.
I want to ask a broader question, because it was brought up by Senator Marshall and Senator Massicotte, and it was in the back of my mind. We hear a lot about these phased approaches — phase one and phase two — being triggered by the need for clarity and transparency, but it’s complicated if you’re having phase one and phase two.
I know you can’t speak directly to this, but in the news, most Canadians will have been watching what is going on with the Rogers-Shaw deal; everybody has been talking about that for the better part of a year. In the last few days, the government has responded to it and says it’s going to challenge that.
The businesses have spent millions of dollars in the process of putting this together. I don’t even want a judgment on whether you think that’s a good or a bad thing. Again, it’s about the process and the delay in the process. It’s not like this was a surprise. It’s kind of the same point: Is there a way to speed up government’s response and reaction to these things, particularly in cases like this where a legal challenge is now going to really change the game? Let’s take the case out of it but talk about what government can do.
Mr. Dussault and Ms. Miller, I’m going to turn to you on this.
Ms. Miller: Thank you very much, Madam Chair.
In this case, our department’s example would be around enforcement of the Competition Act. I would need to refer you to my colleague Mr. Durocher, who, I believe, is with us.
Mr. Durocher: Thank you very much for the question, Madam Chair.
With respect to the Rogers-Shaw transaction, as many are aware, the Competition Bureau filed an application with the Competition Tribunal, seeking an order to block the proposed acquisition and requesting an injunction to stop the parties from closing the proposed transaction until the matter is heard.
I would stress that the Competition Bureau conducted an extensive investigation of the matter. In competition law enforcement, the evidence is key, ultimately, in gathering the necessary evidence and reviewing it to make sure that we take the right action in furtherance of our mandate and to protect Canadian consumers and the economy.
This is a case where we’re challenging the proposed merger to, in our view, shield Canadians from higher prices, poorer service and fewer choices, which we believe are likely to occur as a result of the merger. The matter is now before the Competition Tribunal for adjudication.
The Chair: I’m not asking so much about whether you’re doing the right thing and whether it may be better for consumers in the end. I’m asking about the timing.
This takes a very long time, and a lot of money is invested before you then make this decision, and this is very costly to the economy, any way you look at it.
Mr. Durocher: Madam Chair, complex competition law matters often require very in-depth review of the evidence to make sure that we make an informed decision as to the impact on consumers and the economy. Ultimately, this is a case where we’re taking action to protect Canadian consumers and the economy.
The Chair: Thank you very much.
Senator Yussuff: Let me thank the witnesses for being here. I have two questions. They are very different.
On beneficial ownership, first, I would like to acknowledge that we finally see the government doing what has been asked of them for quite some time, and that is having a beneficial ownership registry that is available, public and searchable at the same time.
My question is in regard to the department now having the twofold approach. When this work is done, is this going to be a searchable website, and will it be broadly accessible for Canadians to go and investigate by themselves?
The second point I have in regards to the same question is: What is required for the provinces to participate in this? Because if the provinces are not participating, meaning they have a different registry for their own businesses at the provincial level, is this going to do the kinds of things recommended by the Organisation for Economic Co-operation and Development, or OECD, and how do we deal with money laundering across this country, which has been a black eye on Canada to a large extent?
Ms. Miller: Thank you very much for that question.
The answer to the first question is simple. Yes, when the registry is fully implemented and available by the end of 2023, it will have a public interface that will be accessible and searchable. I can’t speak right now — because it has not yet been built — to the exact specifics of what that will look like, but it is certainly the intention to completely fulfill the government’s commitment in that area. That is what you will see.
When it comes to the question of the provinces, you’re absolutely right to point to the fact that it is a complex landscape. For the information of the committee, obviously, it’s possible to incorporate at the federal level — that’s why we have the federal statute that governs incorporation — and at the provincial level. Companies decide where to incorporate based on a variety of factors, and there are some differences between jurisdictions that may impact their choices.
Federal, provincial and territorial ministers of finance have been engaged in and discussing this topic for several years. There is certainly a good understanding at the provincial level of what is required to collect this information on beneficial ownership. Then, of course, it is up to any province that wants to enact such an initiative to make sure that information is collected and held by the companies, provided to an incorporation authority and then potentially publicly disseminated. There are certainly provincial decisions to be made there. However, the federal government is moving quickly to ensure that information is available for the federally incorporated companies that are covered by the CBCA. Those are the goals of these amendments.
Senator Yussuff: In regard to the Competition Act, if most consumers are watching this tonight, provided they’ve got nothing better to do, one of the obvious questions on Canadians’ minds, of course, has been the gas prices they’re paying right across this country. With these changes coming, does this make it any easier to investigate the price collaboration that happens with the major oil refining companies in this country?
Other than going to, maybe, Costco, there is little difference in price that consumers can benefit from, and there is a degree of frustration that there is no competition in the marketplace. People want to know how it is possible that we live in a free market society and we can’t seek competition to give advantages as to where we make our purchases.
Ms. Miller: Thank you very much for that question, senator.
With respect to this specific set of amendments and their relation to gas prices, there is not a direct connection between the gas price issue and the specific set of amendments. However, I would point out that some of the provisions for higher penalties for anti-competitive practices, both fines and administrative monetary penalties, will help to increase the deterrent factor for any companies that would be considering an anti-competitive act in these areas.
When it comes to process, I would recall that the act, as a law of general application, does need to apply to oil companies and gas retailers in the same way it would apply to a company in any other line of business. The same process for investigations and that kind of thing would apply.
Senator Yussuff: Thank you.
The Chair: We’re going to move to a second round of questions now.
Senator C. Deacon: I’d like a quick round, if I could, with each of the witnesses, and I would like to finish with Mr. Durocher talking about best practices in the area. I’d like to know about the efforts that you undertook to make sure you were hearing not just from incumbents in a sector — the largest, best and most equipped lobbying incumbents in a sector — but also from new entrants who are perhaps more innovative and have different perspectives in the process that led to these amendments being included in the budget implementation act. If we could run through each of the sections, what efforts did you apply to ensure you heard a breadth of voices — the diversity that, as we heard from Mr. Durocher, is important for having robust policy?
Mr. Durocher: I will defer to my colleagues at ISED regarding the process that was followed this time around. On a forward-looking basis, that is where we are keen to hear a diversity of voices on some of the important issues that we hope will be considered under the Competition Act.
After hearing from different sets of communities, we are beginning to realize more and more at the Competition Bureau the importance of plain language. Competition law can be a very complex area of the law. For a long time, it was the legal community, big business and certain academics who were opining on competition law issues, and we’ve realized the importance of speaking in clear, plain and accessible terms about our work, because it really matters to people.
It matters for all consumers to be empowered by competition, and, likewise, entrepreneurs and others, to understand the issues at play so they can participate. That is certainly something we’re doing increasingly at the bureau in our communications work.
The Chair: On the larger point — and it is an important one — how do you reach out and incorporate the new players in the market, not just, as Senator Deacon says, the guys with the biggest lobby group?
Mr. Durocher: On that question, I will defer to Ms. Miller in respect to consultation processes.
Senator C. Deacon: Perhaps we could also hear from the Department of Finance and OSFI in that regard.
Ms. Miller: I’ll be pleased to provide a brief answer and also let my colleagues from the Department of Finance and OSFI respond.
Senators will likely be familiar with the typical means of consultation for various legislative projects. You have your open calls around papers, for example, like Senator Wetston did. We are fortunate to have a thriving community of interested stakeholders and practitioners in Canada who don’t hesitate to approach the department to discuss or to invite us to discussions where we can benefit from hearing their exchanges. We get a broad diversity that way.
What I would like to highlight, because it’s probably not as apparent, is that my department, ISED, is in constant contact with businesses of all sizes, not just big industry, even though that used to be the title of the department. We deal with start-ups, emergent technology businesses and associations of all different kinds that bring their members’ viewpoints to the table.
When we hear about practices or challenges that they are encountering in the marketplace, they may not recognize it as a competition issue, but we would. By that means, we are also able to get the views of people who might not, as my colleague Mr. Durocher says, have the expert language to be able to participate in a process to know what is relevant to them. Their views are still incorporated by that aspect of our work.
Mr. Dussault: Thank you. I’ll start by saying we do recognize that the range of stakeholders has increased, and we need to go beyond the traditional people we’ve consulted with, including fintech, and different types of consumers.
If I can speak to the change in Division 11 of Part 5, this is really a proposal that came from the mutual insurance companies, which aren’t necessarily the biggest players in the industry. They were looking for ways to compete and to level the playing field. From our perspective, it’s an important sector. They offer a different service. They have a different approach to it. The cap on their ability to borrow was a real constraint. Some of them have seen demutualization and feel they need to invest in technology and grow in the sector. It’s in response to that demand that the change is being proposed.
The Chair: Mr. Fournier, do you have any comments on this topic from OSFI’s perspective?
[Translation]
Mr. Fournier: Yes, Madam Chair. I would like to add to Mr. Dussault’s comments that the amendment in this case concerning the Insurance Companies Act is indeed the result of the industry’s request. From the perspective of the Office of the Superintendent of Financial Institutions, we have no concerns with respect to the capitalization of the industry, including mutual companies in general. As Mr. Dussault alluded to earlier, this is really an incentive to give mutual companies an opportunity, among other things, to raise quality financing of regulatory capital, to use it for growth and investment purposes, for example, in their information technology.
[English]
Senator C. Deacon: Madam Chair, if I could just offer one observation very quickly, it does appear on the surface at least that this is a pro-competitive change. The demutualization risks are real; it’s a growing trend. Those sorts of efforts — pro-competitive, getting new entrants and new voices — are important.
The Chair: Thank you.
Senator Loffreda: Thank you to our panellists.
My question was exactly on Division 11 of Part 5, which amends the Insurance Companies Act to permit property and casualty companies and marine companies to not include the value of certain debt obligations when calculating their borrowing limit. I have noted that the implementation date is now January 1, 2023. I know you have covered it, but it’s an important topic. Who was consulted and to what extent, and is the industry totally satisfied? Will there be a round two here also? In other words, is this also just a down payment? Did the industry express additional needs besides the amendments being made?
I note that the Insurance Companies Act was enacted in 1992, and capital requirements have changed. Debt instruments have evolved. But will this be it, or will we need more to really make us more globally competitive going forward? I mean, the financial industry, including our insurance companies, were in great financial condition and in great health before this. So what else will be needed?
Mr. Dussault: Thank you, chair, for the great question.
This is really a targeted amendment for general insurance companies and mutual insurance companies in particular. As I mentioned, we have a five-year review cycle of financial institutions statutes that allows the framework to be kept up to date. So there are digitization trends that will need to be addressed that include consumer protection, stability and integrity of the financial sector. That is one area the department is looking at.
About the implementation date, we have consulted the industry. They indicated that they need some time to start developing and issuing these debt instruments. So they were satisfied with the January 1, 2023 implementation date, which is not that far away in some senses. They recognized as well that there are some changes needed on OSFI’s side to make sure that there is proper implementation of this change.
Senator Loffreda: Thank you. Maybe we can also hear from OSFI as to their impressions or perceptions of this change going forward.
Mr. Fournier: I’m happy to take that on.
As it relates to this amendment, we don’t have any specific concerns with the capitalization of the property and casualty industry; we have no reservation about the change from a prudential standpoint.
In terms of looking to the future, I note that there is work going on as it relates to financial technology. As Mr. Dussault mentioned, the financial sector is evolving very quickly. From OSFI’s perspective, we have the benefit as well of issuing guidelines on our website. Guidelines are OSFI’s expectations as it relates to prudent practices that we expect to see in financial institutions. The guidelines are not law, and we therefore have an ability to update them so they’re evergreen documents. We update them when necessary, but we do that via a public consultation with, for example, drafts posted on the website and consultations with the relevant stakeholders.
We’re mindful that this is a very fast-changing industry, and we’ve certainly prepared ourselves for the future.
Senator Loffreda: Thank you, Mr. Fournier and Mr. Dussault, for that.
[Translation]
Senator Bellemare: My question is about copyright. Madam Chair, I know you are also interested in this issue.
The possibility of copyright on works that are generally artistic, is being extended from 50 to 70 years. It’s related to the entry into force of the free trade agreement between Canada, the United States, and Mexico. What are the benefits? We are told that we will be in compliance with about 80 countries. If there are so many benefits, why didn’t we do this sooner?
[English]
Ms. Miller: Thank you very much. I would be pleased to respond to that question on behalf of the Department of Innovation, Science and Economic Development Canada.
I would note that you mentioned at the outset that officials from the Department of Canadian Heritage are not with us. Just to clarify, that is because although our minister has certain responsibilities under the Copyright Act, the Minister of Canadian Heritage is also implicated as it pertains to cultural policy. But as these changes were being made, it’s all one act, so I’m speaking to both aspects of that issue.
In terms of the senator’s question, yes, the changes are being made in consequence of the agreement that was concluded between Canada, the United States and Mexico to extend the general term of protection from 50 years after the life of the author to 70 years after the life of the author.
The number one factor I would bring into play when it comes to copyright is that it’s a file where there are always very strongly divided opinions among stakeholders as to what’s to be done. There is, in the act, an attempt at a fundamental balance between the rights of creators to be able to benefit from their creations, sell them, market them and have the economic benefit of them, but then also to enable users to have access to them in not overly encumbered ways or in ways that prompt further innovation.
I would suggest that, although this agreement and this extension will certainly offer further opportunities for Canadian cultural industries and exports and will align us with many of the countries, as the senator has indicated, there would also be a corresponding consideration of when works do not enter the public domain, as it can then sometimes take longer for other creators to innovate on the basis of those works.
It’s always a balance, and it’s a balance that is certainly difficult to calibrate. The spirit of the act itself recognizes those two interests and those two very important forms of public good that can come from a single work. That’s the balance we attempt to achieve in all amendments to the Copyright Act.
The Chair: I had a couple of questions on that because that balance that you’ve talked about is very difficult. It denies access for another 20 years. That’s a lifetime in some parts of the cultural sector.
Views were expressed in the consultation process to directly mitigate the impact. Can you give us a couple of examples? Was there a response to the views expressed in the consultation?
Ms. Miller: Thank you very much for that question, Madam Chair. Yes, certainly, the consultation, for the benefit of those who may not have participated in it or read the discussion paper, really aimed to ask not whether the government should extend the term of general protection from 50 years to 70 years — since that decision had been made as part of the CUSMA process — but whether additional measures should be taken to accompany or mitigate the effects of such an extension.
In response to that consultation, many papers, submissions and commentaries came in. There were divided opinions as to whether those mitigation measures would be necessary or whether accompanying measures would be necessary and, if so, at what scale. Certainly, as you might imagine, the government does have to go through those submissions and consider them as part of the overall copyright review in this mandate.
The Chair: We’ll give you a bit of a break because we will have witnesses coming in the following sessions where we’ll dive into this much more deeply. We’ll let you grab your breath.
Senator Woo: Regarding beneficial ownership, this follows up on Senator Yussuff’s question, and it has to do with the interface between provincial and federal efforts at the beneficial ownership registry. B.C., of course, is ahead in this game.
Can you give us a sense of the landscape of provincial efforts when it comes to beneficial ownership registries, so we have some sense of whether the intention to harmonize, collate and bring together the various efforts is close or very, very distant?
The Chair: Do we have a volunteer who can bring us up to speed?
Senator Woo: If that’s Ms. Miller’s area, a written answer is fine.
The Chair: Why don’t we do that? That would be great if you could follow up. I am sorry about that, but Ms. Miller is coming back again. She’s a guest every time the Banking Committee meets, so we’ll give her a bit of a break right now. Thank you. Are there any final comments from any senators?
Senator C. Deacon: It is worth noting, chair, the breadth of issues that fall on Ms. Miller’s desk and their importance in our economy today. I certainly hope she benefits from a very large team supporting her leadership. It’s just astonishing what she’s working on and how important it is to our prosperity in the future. Thank you.
The Chair: Thank you so much. Thank you to all our witnesses tonight. We will await these written answers with bated breath. We appreciate you all showing up on short notice; it is for us, too. We get these pieces of legislation on our desks and, magically, we must have 100 witnesses by the next day. Thank you all for doing your best to enlighten us and, we hope, through us, the public. We very much appreciate your time.
I have some news now. I received a very sad note in the mail this week informing me that Andrew Barton will be leaving us for greener pastures. He has done yeoman’s work here at the Banking Committee. He is moving on to another job. Some of you may want to send Andrew a note before he leaves. It’s coming very quickly. He is working on one of our regular reports on business investment, and he has that well in hand. He won’t leave us high and dry there. Adriane is going to have a new partner in crime here, Édison Roy-César. He is senior manager of Economic, Fiscal and Monetary Policy for the Library of Parliament. He will start attending our meetings, and I think he’s already in the loop. There will be a new name and a new face, but our thanks to Andrew for his work.
Senator Yussuff: I know we could all write a wonderful note, but, Madam Chair, through your kind leadership, maybe your office could send a note on behalf of our entire committee thanking Andrew for his gracious service.
The Chair: Yes. I will absolutely do that because he’s been a joy to work with.
Tomorrow night, we will have a regular session again as we continue this work on the budget implementation act. It will be chaired capably by Senator Deacon.
(The committee adjourned.)