THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, April 9, 2024
The Standing Senate Committee on National Finance met with videoconference this day at 9 a.m. [ET] to study the subject matter of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Honourable senators, I wish to welcome all senators, as well as viewers across the country who are watching us on sencanada.ca.
[Translation]
My name is Percy Mockler. I am a senator from New Brunswick and I am the chair of the Standing Senate Committee on National Finance.
I will now ask my colleagues to introduce themselves, starting with the senator to my left.
Senator Gignac: Good morning and welcome everyone. My name is Clément Gignac, and I am from Quebec.
Senator Galvez: Good morning. I am Rosa Galvez from Quebec.
[English]
Senator MacAdam: Jane MacAdam, Prince Edward Island.
[Translation]
Senator Carignan: Good morning. I am Senator Carignan from Quebec.
Senator Loffreda: Good morning. I am Tony Loffreda from Montreal, Quebec.
Senator Moncion: Good morning. I am Lucie Moncion, the sponsor of Bill C-59.
[English]
Senator Ross: Krista Ross, New Brunswick.
Senator Kingston: Joan Kingston, New Brunswick.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Senator Smith: Larry Smith, Quebec.
The Chair: Today we continue our study matter on the subject matter of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023. Please note that today we will focus only on Part 5 of the bill.
[Translation]
Honourable senators, we are pleased to welcome officials from ten different Canadian departments, who will speak to different measures included in the bill.
[English]
Welcome and thank you for accepting our invitation to appear in front of the Senate National Finance Committee. I understand there will be no opening remarks from officials and that we’ll immediately move to questions.
[Translation]
I would like to ask the witnesses to introduce themselves before answering the senators’ questions.
[English]
Honourable senators, for the first round, we will have five minutes for each senator. On the second round, it will be three minutes. We will now move to Part 5 of Bill C-59. As chair, I will recognize Senator Marshall, to be followed by Senator Moncion.
[Translation]
The senator is the sponsor of the bill, by the way.
[English]
Senator Marshall: My question is on Division 11, the housing legislation. Is there anybody here that can speak to that?
First, I was expecting something a little more robust in the legislation because it was announced in the Fall Economic Statement, and I noticed that there is no requirement for an accountability mechanism. There is no requirement for a report to Parliament. I’m wondering why that was left out, because in the Guide to Making Federal Acts and Regulations — which is a 200-page guide — there’s a reference to accountability and reporting to Parliament. There’s nothing in the legislation.
Mr. Peets, I notice that you’re the assistant deputy minister responsible for results and delivery. Why is there nothing in the legislation requiring some information to go back to Parliament?
Gerard Peets, Assistant Deputy Minister, Policy and Results Branch, Infrastructure Canada: Thank you very much for the question. I am the Assistant Deputy Minister, Policy Results Branch, at Infrastructure Canada, which this legislation would rename “the Department of Housing, Infrastructure and Communities.” I’m here with Tim Angus, Director General, Policy and Results, Strategic and Sectoral Policy at Infrastructure Canada.
I’m going to turn to Mr. Angus to give an overview of this legislation. There are overall mechanisms for accountability that exist for all federal departments. What this legislation does is —
Senator Marshall: I’m going to cut you off right there, because I have only five minutes and a lot of questions. What legislation requires an annual accountability report? Is there legislation?
Mr. Peets: Tim, do you have a comment on this in terms of how departments report to Parliament?
Tim Angus, Director General, Policy and Results, Strategic and Sectoral Policy, Infrastructure Canada: The legislation is modelled on various acts. Various provisions of it draw on various acts, like the Department of Employment and Social Development Act, or DESDA, and the Global Affairs act with respect to the model for two ministers, and we are accountable to Parliament.
Senator Marshall: I would have thought that because housing is such a major problem at this time — probably the biggest problem the government is confronting — the legislation would have accountability mechanisms in it. The act is only three pages when you take out the transitional provisions.
The act is supposed to clarify the departments’ powers, duties and functions, but I’m still a bit confused with regard to the financial aspect of it. There is a reference to Infrastructure Canada, so can you confirm that all the money and the entirety of Infrastructure Canada are going to be absorbed by the new department?
Mr. Angus: Yes, that’s correct. There are transitional provisions within the bill that ensure that upon the day of enactment and Royal Assent, the finances and associated funding appropriated by Parliament will transfer over to ensure a seamless transition.
Senator Marshall: They will all go over. Okay.
Is there funding coming over from other government departments or agencies like the Canada Mortgage and Housing Corporation, or CMHC?
Mr. Angus: CMHC will be under the remit for the portfolio once the bill is established, but this bill will have no incremental fiscal impact. There are transitional provisions within the bill that ensure that, whether it’s Infrastructure Canada or CMHC, on the day that this receives Royal Assent, they’re essentially functioning and their public servants —
Senator Marshall: What other departments will be affected by this legislation? I got the impression that there is money coming over from Environment and Climate Change Canada. How many departments are going to be affected? I’m trying to get a handle on what the financial implications are.
Mr. Peets: Thank you for the question. There is no money coming from Environment and Climate Change Canada, and there is no money related specifically to this legislation. Separate from this legislation, in order to equip Infrastructure Canada to absorb housing, two things have happened. First, Employment and Social Development Canada, or ESDC, has moved its Homelessness Policy Directorate to our department, both its people and resources. Second, CMHC has provided some resources and people in order to support housing policy at Infrastructure Canada.
Senator Marshall: What is the total budget of the department going to be?
Mr. Peets: I’ll have to get back to you in terms of our total budget for this year.
Senator Marshall: My other question is about whether there will be additional financial requirements. You’re going to take all of Infrastructure Canada, something from CMHC and something from ESDC, but will there be additional funding required?
Mr. Peets: Not to enact or support this legislation.
Senator Moncion: My question is not about housing, and I will do a little bit in French.
[Translation]
You are taking the same provision relating to Infrastructure Canada and giving it a new name, a new structure, so it’s a seamless transition, as you said. You are doing the same thing with Environment and Climate Change Canada by creating the new agency in Division 3. A new agency is being created in Division 3 of the bill, namely the Canada Water Agency.
Mr. Peets: I think that another official...
[English]
Senator Moncion: You’re creating the Canada Water Agency and taking these responsibilities from Environment and Climate Change Canada. My question is this: I understand that there are going to be transitional issues, but will it be seamless when we’re talking about monies and anything else that is involved?
[Translation]
Daniel Wolfish, Assistant Deputy Minister, Canada Water Agency, Environment and Climate Change Canada: Thank you for your question. I’m Daniel Wolfish, Acting Assistant Deputy Minister of the Canada Water Agency. As you said, we are creating a new agency that currently exists as a general section within the department.
[English]
We’re simply moving that into a stand-alone entity reporting directly to the minister. There will be no implications with respect to the finances. Budget 2023 provided finances for the Canada Water Agency, including funds to implement the Freshwater Action Plan.
Senator Moncion: Thank you. It was just a clarification, because there are similarities to what is being done with Infrastructure Canada.
My two questions are on clause 6, Part 5, and clause 7, Part 5, so they may not be for you.
[Translation]
My next question concerns the Competition Act, and the following one will be on the Bankruptcy and Insolvency Act.
Currently, the Competition Act allows people to sue for damages for violations of criminal provisions in the Competition Act, often by means of class action lawsuits with a strong procedural framework. Certain amendments, notably to sections 75, 76, 77 and 79 of the Competition Act, would enable the tribunal to make restitution orders in the case of private cases, and compensation would be jointly awarded to the applicant and any other person affected by the conduct.
Could you see suits being brought on behalf of consumers who had paid higher fees, for example? What safeguards and procedural requirements are there for these class action—type lawsuits? Could you also explain the rationale behind these amendments?
Martin Simard, Senior Director, Corporate, Insolvency and Competition Directorate, Innovation, Science and Economic Development Canada: Good morning. My name is Martin Simard, and I’m the Senior Director of Corporate, Insolvency and Competition.
It’s a bit complicated, but I think I know where the question is coming from. It’s about how the bill contains more provisions on competition. In fact, it encourages people to bring suit privately with the Competition Tribunal in the hope of obtaining the restitution orders you mentioned. It is not, however… Some observers see this as the creation of a new class action regime. That’s not the case. It’s not a remedy for damages; it’s a kind of penalty — not a penalty, but an incentive for businesses to comply with the Competition Act based on the revenue they’ve earned. It’s not the same concept as a class action.
You mentioned the reason for that: There are already class action regimes in the provinces with a whole classification system for classes and safeguards, so it’s something different. Here, the purpose is really to… Up until now, private parties could access to the tribunal directly, but they didn’t because of the legal fees and because there was no money in it. That’s where the remedy comes in, to encourage groups to file complaints and assist in the implementation of the Competition Act.
The tribunal has a new tool in its tool box: It can still order a practice to cease and it can now impose administrative monetary penalties more often. It has another new tool: It can see the revenue that the offending company brought in as a result of its actions and give that to the person who led the action. The remedy goes not just to the person who led the action, but also to others. It’s really at the tribunal’s discretion.
Senator Moncion: So, there’s a portion of a remedy if it’s a —
Mr. Simard: Yes, if the tribunal deems it to be appropriate.
Senator Moncion: Thank you.
Senator Gignac: I’ll keep discussing competition with Mr. Simard.
If I understand correctly, right now — I’m referring to clause 249, which amends the current section of the Act, the court cannot conclude that a merger is detrimental to the competition based only on market share. However, you’re proposing amendments. We know how concentrated some sectors are. Grocery stores and banks come to mind. How would notice make a difference? Would that give you more tools? Can you tell us a little more about that, please?
Mr. Simard: Yes, that’s right. Unlike other countries’ legislation, the Competition Act is unique in that it doesn’t allow the tribunal to rely solely on market share, even though that’s intuitive. As an extreme example, if a merger were to give a company 100% of the market share, making it a monopoly, the tribunal couldn’t decide based on that alone. It would have to analyze the effects. Obviously, at 100% concentration, the analysis of those effects would be relevant, but the tribunal’s hands are tied. It can’t just look at market share.
The government’s bill is consistent with what’s done around the world in that it removes this artificial constraint. The tribunal will be able to rely solely on market share when it makes sense to do so. We wouldn’t expect that to happen often, because there are all kinds of criteria to assess whether a merger is detrimental to competition, but it can help in some cases. It will also help develop case law.
For example, in the United States, tribunals have started developing basic rules. For example, they’ve said that, when a merger would result in a 30% market share, they’re going to change the burden of proof. That has happened in case law over time. By eliminating that constraint, we create the possibility here for the courts to develop the rules over time in order to take the most practical approach to handling cases.
Senator Gignac: How many competition cases are dealt with every year for mergers and acquisitions? What percentage of cases are rejected? Some of these cases are very public and in the news, but they must be a minority of the cases. How many are analyzed and how many are rejected each year?
Mr. Simard: I don’t have exact numbers, but it’s actually less than you’d think. It’s a pyramid. First you have all the mergers that happen in the market. Then there are the mergers of a certain size, say $96 million, where there’s notice. People have to be proactive and notify the Competition Bureau that they want to merge. That triggers a process whereby the Competition Bureau can call for documents proactively. There are lots of those, hundreds every year.
Most of the time, there’s an agreement. The Competition Bureau meets with the parties that want to merge and says, “Look, you’re going to have all the grocery stores in this market.” There’s an agreement to sell those grocery stores to a third party. Most of the time, it’s dealt with. Only cases that are disputed go before the Competition Bureau, and that’s just a few every year. It’s happening even less often because amicable agreements can be reached during the process. I think the tribunal itself has prevented mergers only a few times in Canadian history.
Senator Gignac: I have one last question. There are publicly traded companies and private companies. Is there a mandatory pre-filing request? For public companies in particular, the board of directors meets and it’s very confidential. I’m trying to understand the mechanism. Does this happen once the two boards have reached an agreement? This is obviously a very sensitive matter in terms of publicly traded stock, so at what point are they required to inform you? Is it before the information is released, when it’s still highly confidential, or is it after it’s made public?
Mr. Simard: I’m not an expert in financial markets regulation, but I believe the concept is that these agreements are conditional on approval from the regulatory authorities. I believe the merger is announced subject to regulatory approval. The notification process starts with the Competition Bureau of Canada. I said “notification” in French earlier, but that’s an anglicism. I meant “avis”, which is notice.
Senator Gignac: Thank you.
[English]
Senator Smith: The first question is about Subdivision B of Division 1 of Part 5, which deals with virtual meetings. Is someone from the Department of Finance Canada available?
I want to ask questions about the Insurance Companies Act allowing financial institutions to hold shareholder meetings virtually and allowing for electronic voting. Can you give us some background? First, can you expand on why this change was included in the bill and what sort of consultations the government had with banks and investors on this issue?
Barbara Russell, Director, Competition and Strategic Initiatives, Financial Institutions Division, Department of Finance Canada: It’s helpful to note that just generally, in the federally regulated financial institutions statutes, the corporate governance provisions generally track the Canada Business Corporations Act, or CBCA, with amendments to deal with the fact that financial institutions are, by their nature, different. The CBCA made these amendments several years ago, so this amendment sort of keeps in step with the modernization of the framework.
We did public consultations in 2022. We heard from a variety of shareholder advocacy groups as well as financial institutions and then decided to proceed with the amendment.
Senator Smith: Were there real consultations, or was it sort of a unilateral act by government to put these changes in?
Ms. Russell: We did do public consultations and received a lot of feedback.
Senator Smith: Okay. There have been concerns that the increase in virtual shareholder meetings has led to decreased participation by retail investors and diminishes their rights with respect to scrutinizing a company. What assurances will there be that this move will not diminish the rights of shareholders?
Ms. Russell: Yes, we’re aware of those concerns. One thing we’re doing here that is not in the Canada Business Corporations Act model is adding regulations that will deal with participation of shareholders as well as accessibility issues. Also, the amendments require a change in bylaws that the shareholders would have to accept — that there be permission to have the virtual shareholder meetings.
Senator Smith: Will this increase the administrative burden of dealing with the banks and financial institutions?
Ms. Russell: That’s a good question. We heard from both sides in terms of our consultations. There were some concerns; however, from financial institutions, we heard that it would be less of a burden because they wouldn’t have to organize the physical space to have a meeting.
Senator Smith: Subdivision B in Division 1 of Part 5 sets out language that would allow federal financial institutions to use electronic voting that is in accordance with regulations. Can you please expand on the regulation concept? What sort of regulations will be in place to ensure that electronic voting is secure and fair, and what sorts of consultations will be had in this regard?
Ms. Russell: There are already regulations that deal with electronic voting at meetings, so there are no changes dealing with the voting aspect. This is only in terms of holding the meetings.
Senator Smith: Let’s move on.
Senator Kingston: I’m looking again at Division 11, so that’s Infrastructure Canada, I believe.
Good morning. I think my questions will be for both of you, or either of you. I’m not sure.
My concerns and questions revolve around moving some of the employees and the actual policy expertise from Employment and Social Development Canada to Infrastructure Canada. Specifically, I’m thinking about the impact on Reaching Home and Housing First, and the pieces that deal with social infrastructure around housing for the most vulnerable. So there are two things that seem to have happened. The first is that move that I just talked about. The second one is that there is now no Minister of Housing as a unique individual. You’re dealing with both under one ministry — is that correct?
Mr. Peets: Perhaps I can first comment on Reaching Home. What happened early on, pursuant to a machinery decision by the Prime Minister, was that the entire group, in toto, that does Reaching Home and administers the Reaching Home program and conducts homelessness policy was moved from ESDC to Infrastructure Canada. So that group remains resourced and intact. Now, as part of Infrastructure Canada, with the addition of housing policy, housing policy resources and responsibilities have shifted from CMHC to Infrastructure Canada and homelessness policy has shifted from ESDC to Infrastructure Canada, with the result being that homelessness, housing and infrastructure and communities are now all in the same department.
Senator Kingston: Okay. Just to follow up — that is my concern. Infrastructure Canada has traditionally been looking at bricks and mortar. I’m more concerned about the social infrastructure that needs to be integrated into that in order to have successful housing for the most vulnerable. I am talking about the 5% to 15% of people that are homeless and require supports. What I saw start to happen, because I am involved in that sector in my home province, was a variety of supports — from a policy perspective, at least — being supported and pushed, if you will, by the federal level, and I have just, in the last year or so, seen a bit of a shift. I’m wondering if it’s because the people who have been moved over are not in a position to make decisions to create a focus on that particular issue. So I’m wondering: Has there been a dilution of the impact of Reaching Home and the homelessness strategy because of the move to Infrastructure Canada?
Mr. Peets: I certainly appreciate the question, and I would say absolutely not. The homeless policy continues. There continue to be improvements in those programs, and they are a continued area of focus for the government.
In terms of not only homelessness but housing issues and deeply affordable housing, affordable housing is situated as a priority in government programs. What we have seen is an expansion of those objectives and having housing conditionality put on infrastructure funding. There is an added focus tying them together, which has made, I think, a sum that is greater than its parts.
As for Infrastructure Canada, this department has always invested in social outcomes and in social infrastructure that supports social access. Even with something like transit, you can think about it like that, but certainly with community buildings. The Smart Cities Challenge supported important projects, including in Bridgewater, Nova Scotia, where they were working on heating cost affordability, which is very much housing related, before we even had this shift. So, yes, our department is focused on social, environmental and economic matters, and how all of that comes together in communities.
Senator Ross: Good morning. I have a question related to the changes to the Canadian Payments Act.
Nicolas Marion, Senior Director, Payments Policy Department of Finance Canada: Good morning.
Senator Ross: Good morning. I noted that the Canadian Payments Association itself was advocating changes to expand the membership in their association or in the ability to participate, and that is being recognized in Division 5. How does expanding the membership create a better situation for the small businesses that will be under the Canadian Payments Act as well as their clients?
Mr. Marion: Thank you for the question. There is broad support among various stakeholders for expanding membership eligibility for Payments Canada. There was a joint letter, for instance, that was submitted to the Minister of Finance, with consumer organizations, small business organizations, various fintech organizations and the Canadian Bankers Association supporting broadening membership eligibility for Payments Canada, which is a more familiar name for the Canadian Payments Association referred to under the legislation in question.
In terms of the expansion of membership eligibility, and to your question on how merchants in particular will benefit from it, you can appreciate that by increasing access to the core payments clearing and settlement systems operated by Payments Canada, you increase competition. You increase access to other regulated entities that will be able to provide services at a lower cost or innovative services to merchants by directly accessing those payment systems.
One of the payment systems that is of particular interest, both for the targeted membership expansion community as well as the merchant community and consumer groups, is the system called the Real-Time Rail. It hasn’t been launched yet, but it is in full development and will enable the instantaneous exchange of payments between individuals and businesses, and it will support the exchange of data-rich payments, which brings all sorts of new services and benefits to both merchants and consumers.
Senator Ross: Where do you think these changes position Canada in terms of global competitiveness? Where are we on the scale of modernization?
Mr. Marion: The payments development journey is an interesting one. I say that because when we look at other countries around the world, some of them have fast-payment systems. Payments Canada is currently developing one but it hasn’t launched yet.
On the other side, if we look at the Retail Payment Activities Act, which was enacted by the government with the final regulations released last November, Canada is quite advanced in terms of the regulation of payment service providers, or at least the development of the regime for the regulation of payment service providers. But if we look at several other G7 countries, a number of them have these fast-payment systems. Some of them allow payment service providers, for instance, to access those, though very few of them. The way that Canada is approaching its payments modernization program is sound, prudent, responsible and respects the principles of greater competition and supporting innovation.
Senator Ross: If you were to predict the next steps, what do you think they would be?
Mr. Marion: I have mentioned different pieces of the payments modernization program. It is essentially comprised of three elements. First is expanding membership eligibility in Payments Canada to other regulated entities. Second, it’s standing up the retail payments supervisory framework, which is well advanced and on track, with registration for payment service providers being required in November of this year and the substantive elements in the regulations, which were released in November, coming into force in September 2025. The third pillar is the development and launch of the Real-Time Rail system. When you look at the next steps, each of these three components is advancing on its own track, but there are certainly some symbiotic relationships between all three efforts.
Specific to the amendments before the committee today and with respect to Payments Canada’s membership expansion, we are and will be working with Payments Canada to look at their bylaws and rules to ensure that they will be able to accommodate these new members. I’ll leave it at that. I’m passionate about payment systems.
Senator Galvez: Thank you. I will direct my questions to Mr. Simard on the competition and with respect to greenwashing.
Clause 236 proposes requiring companies making claims about products’ environmental benefits to support those claims with adequate and proper tests. However, as I just mentioned, it will apply only to products. As such, it would not cover environmental claims promoting activities, brands or entities, or making related scientific assertions. For example, it would not require firms making claims about their net-zero targets or their contributions to climate change to back these claims with sufficient tests.
We all know that climate change is a competition issue. Can the government explain why the bill focuses primarily on product-based claims rather than encompassing broader environmental claims?
Samir Chhabra, Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada: Good morning. Thank you very much for the question.
First, it is important to understand the basis of the act today, which currently includes a requirement for vendors to ensure that representations regarding the performance, efficacy or length of life of their products are based on an adequate and proper test. The modification being proposed in Bill C-59 is to extend that application to ensure that environmental claims are also being covered with respect to claims being made about the performance of a product.
The challenge we would face if we were to try to enforce this type of requirement against much broader claims, such as those about brands, is that it’s very difficult to require an adequate or appropriate test in all circumstances that would align with brand quality — you know, “the top vehicle in Canada” or “Canada’s favourite coffee.” These things are really challenging to adequately test. From a brand perspective, it’s far more likely that the bureau will be able to enforce a proper test to validate a claim about a specific product.
Senator Galvez: I listened with attention to the answers you and Mr. Simard provided to my colleague Senator Gignac. You mentioned something that really struck me. You said that you know that most of the legislation is in the end changed to jurisprudence, and that it’s jurisprudence that makes the case and makes progress in the practical world. Doesn’t that mean that these legislations are not complete and are not based on the legislations that are best practice elsewhere? So, as you said, it is a Canadian model that unfortunately doesn’t cover everything that it should.
Mr. Simard: Thank you for the question. I was referring specifically to a constraint that is currently in the act: that the tribunal cannot consider market share. The government is removing this constraint, so it’s freeing space for jurisprudence. We have a common law system in Canada. These are marketplace framework laws that apply across sectors, so they are principle-based. Law is always a combination of statutes — some more specific, some less — and then jurisprudence. In the Competition Act, I think we have one of the most detailed statutes in the world, actually.
Senator Galvez: It reminds me of the issue with the Royal Bank of Canada, or RBC, buying HSBC. We all know that HSBC had a much better affordability housing program because their mortgage rates were between 20 and 80 points less in fixed mortgages than the rest of the banks. Also, HSBC had the best plan on sustainability and climate change. By allowing this merger without much study — despite you saying that you are supposed to look at many other things — the first thing that was done was to remove these things from HSBC.
Are these changes proposed in this bill going to improve the situation and allow for more competition, not less, so that Canadians will have not only a variety and diversity of mortgages but also more climate and environmental choices?
Mr. Chhabra: Thank you for the question. The purpose of the competition law reform review that was undertaken starting at the end of 2022 and lasting six months was, in fact, to have a broad consultation with Canadians about what could be done to improve the state of competition in Canada. We received over 500 inputs and had a number of round tables as well. The proposals that you see before you and the ones that were previously advanced through Bill C-56 were the result of those pieces of feedback in terms of how we could best enable the Competition Bureau to enforce competition effectively.
You’ll notice a number of changes to merger reviews and enforcement provisions in this legislation as well as in Bill C-56, which passed in December. All of these are intended to make it easier for the Competition Bureau to identify and be notified of cases, and then be able to take cases and bring them forward in a way that will actually result in effective remediation where there are significant effects to competition.
Senator Galvez: I have one last question. The proposed amendment 236 does not require companies to disclose any negative environmental information about their product or company when advertising their positive attributes. This allows companies to cherry-pick what information they provide to the public. For example, a company may promote its emission reductions without disclosing that these reductions led to severe biodiversity loss. You know that in the environment, everything is connected. Climate change, pollution and biodiversity are parts of a whole.
What measures will the government take to ensure that companies do not selectively disclose positive environmental attributes while concealing the negative impacts of the whole of their activity?
Mr. Chhabra: Thank you for the question. It’s important to remember that the Competition Act is about enforcing competition in the marketplace. While there may be a number of important issues that surround that — including environmental claims — the Competition Act has to be grounded in competition issues.
What the government has proposed in this piece of legislation is to introduce additional requirements on environmental collaborations — to permit them when they are positive for the environment and to take steps to push back against greenwashing, which is something that has been noticed across the economy. The points you’re raising may be better addressed in other statutes or environmental legislation. The challenge in this specific case is that it has to be something that would be seen to be negatively affecting competition.
The other piece proposed in this piece of legislation, which could be helpful in addressing some of the issues you’re concerned with, is about allowing better private access to the tribunal and allowing organizations, including non-governmental organizations, to engage on these issues when they notice a problem in the marketplace — including environmental organizations.
[Translation]
Senator Dalphond: My questions are about subdivisions A and B of division 8.
[English]
Erin Hunt, Director General, Financial Crimes and Security Division, Department of Finance Canada: Good morning. I’m Erin Hunt, Director General of Financial Crimes and Security at the Department of Finance. I’m joined by colleagues from the Department of Finance, whom I’ll turn to first, followed by the Department of Justice.
Jeremy Weil, Senior Director, Financial Crimes Governance and Operations, Department of Finance Canada: Good morning. I’m Jeremy Weil. I’m the Senior Director of International Financial Crime Policy and Sanctions at the Department of Finance.
Matt Shannon, Senior Economist, Financial Crimes and Security Division, Department of Finance: I’m Matthew Shannon, Senior Economist with the Department of Finance.
Erin Cassidy, Counsel, Criminal Law Policy Section, Department of Justice Canada: I’m Erin Cassidy, Counsel, Criminal Law Policy Section at the Department of Justice.
[Translation]
Senator Dalphond: My first question is about subdivision B. Clause 308 amends subsection 462.31 of the Criminal Code.
My question is about why the government added the amendment on page 495, which states that, in a prosecution for an offence under subsection (1):
… it is not necessary for the prosecutor to prove that the accused knew, believed they knew or was reckless as to the specific nature of the designated offence.
This removes the element of complicity or voluntary ignorance. Why did the government feel the need to remove that? Also, I see that it’s not removed if the person is also charged with another designated offence.
Ms. Cassidy: Thank you for the question, senator.
The reason this amendment was proposed is to address money laundering by third parties, professionals and other individuals who engage solely in money laundering.
Over the past few years, what we’ve heard a lot during consultations is that it’s very difficult to prove, in the case of a third party, that the individual was aware of the specific offence that resulted in the proceeds of crime. The purpose of the amendment is to give prosecutors a little more flexibility in how they establish the fact that the individual knew they were dealing with property obtained from the commission of an offence.
Senator Dalphond: As I understand it, this means that, for the individual charged, the Crown will not have to prove criminal intent; it’s a strict offence. If the facts are established, the onus is reversed and the individual will have to defend themselves?
Ms. Cassidy: No, not at all. The prosecutor will always have the burden of proving that the accused had the knowledge or knew that the property was obtained from crime.
That’s why there’s the reference to the particulars of the offence. It doesn’t eliminate the obligation to establish the mental aspect of the offence, but it gives the prosecutor a little more flexibility in order to prove the mental aspect of the offence.
Senator Dalphond: My next question is about clause 39.39, which is part of the long clause 285. It’s on page 481 of the bill and starts on page 480.
This clause authorizes the Governor-in-Council to designate as a violation the contravention of specified provisions of this part of the act. I understand that the Governor-in-Council can decide what constitutes a violation. Then, with respect to the penalty that may be imposed, specifically the amount of such a penalty, I understand that the Governor-in-Council can define the proceedings. This is on page 481, paragraph (e): “respecting the proceedings in respect of a violation”. The Governor-in-Council can therefore establish what constitutes a violation. It goes on to say: “respecting the proceedings in respect of a violation, including in relation to … the proceedings”, and, most importantly, the second point, which bugs me a bit, says: “the defences that may be available in respect of a violation”. So this means the Governor-in-Council defines the violation and excludes the possibility of certain defences.
What are the limits? What is the maximum penalty that can be imposed? What defences can be excluded? Are there limits?
Ms. Hunt: Thank you for the question. We’re going to have to go to someone else because we don’t have our Canada Border Services Agency colleagues here, so we have to make a little change so they can answer you.
[English]
Senator Dalphond: I know it’s technical. It can be in English if you’d prefer.
Joel Gibbons, Senior Program Advisor, Canada Border Services Agency: Good morning. Senator Dalphond, thank you for the question. My understanding is that you are referring to the administrative monetary penalties provisions within Part 2.1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, or PCMLTFA, the proposed amendments.
Sir, if I could just ask you to repeat the last portion of your question.
Senator Dalphond: My question is about the broad discretion that seems to be conferred upon the Governors-in-Council to create and designate a violation, and then to specify the procedures to be followed and even limit the defence that might be available to the person being charged or accused. Is there any limit to what the penalty can be? Is there any limit to what can be removed as a defence?
Mr. Gibbons: Thank you for the question. With this particular component of the legislation, it’s important to understand that any suspicion of proceeds of crime would not be the threshold under which we review and assess administrative monetary penalties. The grounds are at a higher level, so the Border Services officer would have the requirement to establish the grounds to believe that the goods in question are the proceeds of crime or represent money laundering, terrorist financing or sanctions evasion activity.
Based on a multiplicity of indicators and further scrutiny and analysis, the Border Services officer would make a determination on a prudent course of action in consultation with other members of the Enforcement and Intelligence Operations Directorate at the Canada Border Services Agency and, through that regulatory process, arrive at a conclusion on a penalty that is prudent based on the circumstances at hand.
The threshold is quite high. It requires the grounds to suspect, so this is not mere suspicion that we are speaking about in this case. There are regulations under development at this moment to quantify the particular administrative sanction, the administrative penalty, that would be most appropriate to the circumstances at hand.
The Chair: Thank you, Mr. Gibbons.
Senator Loffreda: Good morning. Thank you for being here. My question is on Division 6 and amendments to the Competition Act and the Competition Tribunal Act.
The lack of competition in various Canadian industries persists and is concerning. What are the potential challenges or limitations in implementing the additional factors proposed in Bill C-59 for assessing merger impacts? Also, what considerations are being given to ensure that the merger review process remains adaptable and responsive to evolving market dynamics and technological advancements? The market is changing so quickly. It’s so dynamic, and things are evolving quicker than we can assess at times. Has all of that been taken into consideration, or how are you meeting those challenges or intending to meet them?
Mr. Chhabra: Thank you for the question. It’s an interesting one and, obviously, one that we have given a lot of thought to, including through the consultation. In fact, the consultation posed some questions regarding whether there is broad interest across Canada in engaging in a number of specific actions, including specific regulatory actions on digital markets given the nature of how quickly they evolve.
The consultation found there was not a strong interest in moving in that direction, but, rather, in better supporting the Competition Bureau and the commissioner in enforcing the act, in ensuring that there was better market intelligence, including through, for example, ensuring that more mergers would be notified, including those that are based on sales into Canada rather than just organizations based solely in Canada, that there be a better opportunity for the commissioner to bring evidence and cases before the tribunal in a way that would allow the tribunal to move efficiently through those cases, including by allowing, for example, the tribunal to take into account market shares when assessing mergers and their impact on competition, and to adjust the thresholds for remedies in certain cases.
There were a number of changes made. I would say the overall emphasis has been on ensuring that there is a greater emphasis on competition issues, that there is a more efficient mechanism for dealing with those issues once they are found, including, for example, by enhancing private access to the tribunal, which allows for competition issues that may be more regionally based or more challenging for the commissioner to prioritize given there are limited resources in every organization. Enabling and better supporting private actors to take action on competition issues when they are found is another manner in which we are ensuring that there is a better and broader approach to addressing competition impacts when they occur.
Senator Loffreda: Thank you. Are there any concerns regarding the potential subjectivity in interpreting and applying the new factors outlined in Bill C-59 during merger reviews?
Mr. Chhabra: Thank you for the question. We took significant pains to not just have consultation within Canada domestically, but also to engage broadly internationally to ensure that the approaches that we were taking were aligned with international best practices. In a number of instances, what we found was that Canada’s competition law was, in fact, out of step with international best practices across the OECD or across the G7.
In many cases, we have taken incremental approaches to making targeted amendments to the Competition Act in a manner that would not unduly disrupt the business and investment environments in the country but would better enable engagement against anti-competitive behaviour when it was found across the economy. From an implementation perspective, we believe it’s well calibrated to be implementable on the part of the Competition Bureau as well as the tribunal, with an eye to not unduly disrupting the business environment in Canada.
Senator MacAdam: My question is for Environment and Climate Change Canada. Good morning. Part 5, Division 3 looks to enact the Canada Water Agency Act, to coordinate a whole‑of-government view of fresh water in Canada. First, I would like to get a better appreciation of the current threats to Canada’s fresh water and how this agency will be better suited to tackle these problems than the current system and policies in place.
Mr. Wolfish: Thank you, all. I’ll start the answer and then turn to my colleague Gemma Boag, Director General, Freshwater Policy and Engagement, Environment and Climate Change Canada, to continue.
There are a few things to note. The first important point is that currently, the management of water is dispersed across many departments and agencies across the federal government. The role of the Canada Water Agency will be to bring a conversation together across the federal government, coordinate with provinces and territories, engage with Indigenous partners — First Nations, Métis and Inuit — and other partners at the local level on the implementation of the Freshwater Action Plan and on the development of policy and programs for fresh water. I think it’s the first time that we would be able to do that with a focal point in the federal government to bring together that conversation.
We have put in place a number of mechanisms to coordinate the federal government, including the creation of a fresh water coordinating committee for assistant deputy ministers, and we have brought in analysts to participate in a policy hub. We’re creating a single window system for access to information on water for Canadians, and a few of those other activities with provinces and territories. We continue to work through the Canadian Council of Ministers of the Environment, or CCME, and to work bilaterally with provinces and territories through our Freshwater Ecosystem Initiative. Those are a few activities that are taking place now in the Canada Water Agency.
Senator MacAdam: Can you tell us about the budgetary requirements for this new agency?
Mr. Wolfish: Thank you for the question. There are three elements to our budget implementation. The government has invested $650 million over 10 years to support eight freshwater ecosystems across the country: the Wolastoq/Saint John River in New Brunswick, the St. Lawrence Action Plan in Quebec, the Great Lakes, Lake Simcoe, Lake of the Woods in Ontario, the Lake Winnipeg Basin, Fraser River and the Mackenzie River Basin in the North. The majority of the day-to-day program funding is for those freshwater ecosystems. In addition, we have five policy pillars to support the work of the Canada Water Agency, work on creating a national data strategy, a science strategy, which has some funding going to Environment and Climate Change Canada, and work for coordinating Indigenous, federal-provincial and federal relations. We have about $20 million a year ongoing to support that funding. A third part of our funding is around the administrative work for the agency to implement the Freshwater Action Plan and our ongoing activities.
Senator MacAdam: Are all the funds coming from the current department and going to the agency? Are there other sources of funds?
Mr. Wolfish: No. The funds were allocated in Budget 2023. We have recently gone through the Treasury Board process, and that funding has now been allocated through the Main Estimates.
Senator MacAdam: I’m wondering about the governance structure of the new agency. I see there’s a chief executive officer and some advisory committees, but is there a governing board for oversight?
Mr. Wolfish: At this stage, there’s not a governing board. The legislation does provide authority for the minister to create advisory bodies. At this stage, we’re focusing more on getting the agency running and putting in place the Freshwater Action Plan. We did have a three-year period during which we consulted Canadians, provinces, territories, First Nations, Métis and Inuit on the various aspects of the mandate and the work plan, and we’ll continue to work through those various networks to continue seeking advice.
Senator MacAdam: Will there be annual reporting to Parliament from the agency on your goals and results achieved?
Gemma Boag, Director General, Freshwater Policy and Engagement, Environment and Climate Change Canada: The form the agency will take will be subject to all reporting requirements that you would see from a department in the core public service: results reporting and reporting under all applicable legislation.
Senator MacAdam: Thank you.
[Translation]
Senator Carignan: My questions will be about leave available when a child is born. I want to make sure I understand the leave provisions for pregnancy. There’s a leave associated with miscarriage, and here we have a definition, a new concept. Okay, so the concept exists, but the bill uses the word “stillbirth”. So this is leave for babies who are born after 20 weeks but are not born alive or viable. Is that right?
Douglas Wolfe, Senior Director, Strategic Policy and Legislative Reform, Labour Program, Employment and Social Development Canada: Good morning, and thank you for the question. My name is Douglas Wolfe, and I’m a senior director at Employment and Social Development Canada. I’ll ask my colleague to answer the question.
Sebastien St. Arnaud, Manager, Strategic Policy and Legislative Reform, Labour Program, Employment and Social Development Canada: Good morning. In answer to your question, this is a new type of leave. As soon as the pregnancy ends, no matter what stage it’s at, the employee is entitled to three days’ leave. If the employee has completed three months of employment, those three days are paid. If the pregnancy loss occurs after 20 weeks, that’s called “stillbirth”. The person is then entitled to eight weeks’ leave. These provisions are in a bill that was passed by the House and the Senate in 2021, which also provided for 10 days of paid sick leave. That provision was replaced with our new three-day leave. The definition of stillbirth is the same as the one used in Bill C-3.
Senator Carignan: It says there has to be no heartbeat before the child is born, before it is expelled. I’m sorry to put it that way, but that’s what’s in the bill. When the child is born alive but is not viable, meaning the child dies a few hours later, is it stillbirth leave or maternity leave that applies?
Mr. St. Arnaud: As soon as the child is born, seconds after the birth, the parents are entitled to bereavement leave. Bereavement leave is actually 10 days of unpaid leave. In this case, if the employee has completed three months of employment, they get three days of paid leave. Bill C-3, which I mentioned, had eight weeks in the case of a stillbirth. There were also provisions authorizing eight weeks of leave for the death of a child. Once those provisions came into effect, anyone who lost a child after a few hours or minutes of life was entitled to eight weeks of leave.
Senator Carignan: People won’t get fewer weeks in the case of a stillbirth?
Mr. St. Arnaud: Exactly.
Senator Carignan: I wanted to make sure people wouldn’t lose that right because the child breathed for five seconds after birth.
Mr. St. Arnaud: No.
Senator Carignan: But there wouldn’t be any maternity leave because the child died? It would be bereavement leave?
Mr. St. Arnaud: The person who was pregnant is entitled to 17 weeks of leave.
Senator Carignan: Either way.
Mr. St. Arnaud: Either way. They get maternity leave by default, people are entitled to it.
Senator Carignan: Perfect; that’s clearer, thank you. I have a question about employment insurance, which provides leave benefits as well. There’s a section that says benefits can be reduced or eliminated if the claimant is also receiving provincial benefits for the same reasons.
I will let you introduce yourself.
Soojin Yu, Director, Employment Insurance Policy, Special Benefits, Employment and Social Development Canada: Good morning. My name is Soojin Yu and I’m Director of Employment Insurance Policy and Special Benefits. With me are my colleagues from Service Canada and Employment and Social Development Canada, as well as Magalie Brochu, a manager in my group.
Senator Carignan: So my question is about benefits when they are reduced or eliminated if provincial benefits are provided for the same reasons. Does that mean the federal government sends the money to the province? Is there an agreement — Quebec-Canada, for example — to ensure that benefits are not paid out twice? If Quebec pays the benefits and the federal government stops paying the benefits to an individual, does it send the cheque to Quebec in that case?
Ms. Yu: I will let my colleague Magalie Brochu answer you.
Senator Carignan: I used Quebec as an example, but —
Ms. Yu: Only Quebec has that arrangement.
Magalie Brochu, Manager, Employment Insurance Policy, Special Benefits, Employment and Social Development Canada: Thank you for your question. As you said, if we use Quebec as an example, there is an agreement whereby Quebec provides maternity or adoption benefits to parents. At that point, since Quebec is more generous or at least as generous as employment insurance, Quebec residents enjoy a reduced employment insurance premium because they pay their premiums to the Quebec Parental Insurance Plan, or QPIP, rather than to employment insurance. What happens is, if an individual ever receives benefits under a provincial program, such as QPIP, that program becomes first payer. That’s why the employment insurance benefits are considered to be reduced or eliminated.
Senator Carignan: Has this agreement with Quebec been around for a while?
Ms. Brochu: It was signed in 2005 and the QPIP came into effect in 2006.
Senator Carignan: Why didn’t we already have this provision? Have you had cases of fraud where the individual was no longer entitled to benefits? Did you have cases of double dipping?
Ms. Brochu: The provision exists for parental and maternity benefits, but the benefit for adoptive parents and surrogate parents is being introduced in the bill; that’s why we included a similar provision.
Senator Carignan: Perfect; thank you. I’ll come back to you in the second round.
The Chair: We will now begin part two of our meeting.
[English]
Senator Marshall: Mr. Peets and Mr. Angus, please.
The government carries out ongoing research in the Privy Council Office, and according to the most recent information I’ve seen — this is the government’s own research — participants said that until tangible, measurable progress has been made toward making housing more affordable for a greater number of Canadians, these participants would continue to feel that the federal government was on the wrong track for housing.
So after reflecting on our earlier discussions, I’m not interested in knowing all of the requirements for any reporting. I would like to know: Is there a legislative requirement for the Minister of Housing to report annually on the condition of the housing sector and its impact on Canadians, and if so, what legislation is it contained in? I know that witnesses, in response to Senator MacAdam, referred to the results reports, but those aren’t legislated. Is it embodied in some legislation that the minister will come back annually and report to Parliament?
Mr. Peets: Thank you very much for the question. There are a number of ways that reporting takes place at a departmental level into Parliament, and the first is pursuant to the Financial Administration Act, which has requirements for every core public service department to report on financial statements and on results and to present its Departmental Plan and Departmental Results Report.
Senator Marshall: That is in the Financial Administration Act?
Mr. Peets: I’m not an expert in this, but my understanding is it’s part of the framework.
Senator Marshall: It’s your understanding. Okay. Can you give us something —
Mr. Peets: Beyond that, there’s also reporting on individual major initiatives of the government, for example, the National Housing Strategy. There is annual reporting on that as well.
Senator Marshall: The problem I have — I have spent a lot of time looking at the housing reports and it’s very difficult to find information. For example, if you want to know the number of houses that have actually been built by the government programs, you can’t find it anywhere. I’ve looked at a number of websites — the CMHC president referred me to a couple — but you can’t find the information. With all of these billion-dollar programs being spent on housing, is there going to be a report required that will show what kind of progress is being made on housing? Because, right now, I don’t think there is a good report — first of all, there’s no plan, but I’d like to see something that must be sent to Parliament on an annual basis which lays out all of this information, including how the money is being spent and exactly how many houses are being built. That’s the issue for me, but I can’t seem to find where there’s a requirement for this, and if there is a legislative requirement, I can’t find the report.
Mr. Peets: It’s a very important issue that you raise, senator. There are a number of ways that the government does report on housing, and there are also a number of new measures that have very recently been announced, but I’ll touch on the National Housing Strategy, and I’ll just consult my notes here. We have targets of a 50% reduction of chronic homelessness; 540,000 households being raised out of core housing need; 300,000 units repaired and 100,000 units built; and then, subsequently, the Housing Accelerator Fund associated with unlocking permitting for 100,000 units. More recently, there’s been an announcement of a $15-billion Apartment Construction Loan Program top-up or increase, and a number of other initiatives, and those initiatives will be included in the upcoming federal budget, where we can look for a greater level of detail.
Senator Marshall: Yes, but the numbers always show committed and built. So they don’t break out the committed and the built. If you can provide websites that would provide some good information, that would be appreciated.
I have one more quick question on Division 8, Subdivision A, regarding money laundering.
The Chair: Absolutely.
Senator Marshall: Thank you, Mr. Peets and Mr. Angus.
I will direct my question to Ms. Hunt. Regarding the legislation on money laundering, with almost every budget we see amendments that focus on money laundering, because it’s a big issue. With Budget 2022 — and this was discussed at our Banking Committee — there was a commitment by the government that there would be a public and searchable beneficial ownership registry that would be accessible before the end of 2023. Is that running now?
Ms. Hunt: It is, and my colleagues from Innovation, Science and Economic Development Canada, or ISED, are responsible for leading and developing —
Senator Marshall: Okay. I just needed to know that it is running.
Ms. Hunt: Yes.
Senator Marshall: Also, because IT systems are a big issue now within government, what was the cost of that system?
Ms. Hunt: I was just consulting our colleagues, and we will —
Senator Marshall: If you can send that to the clerk, that would be fine.
Ms. Hunt: Yes. Great.
Senator Marshall: Thank you very much.
[Translation]
Senator Moncion: My question is about the Competition Act, specifically deceptive marketing practices.
The information we’ve been given says that subsection 234(1) and section 237 of the bill add new subsections 52.01(4.1) and 74.01(3.1), which specify the indication of drip pricing. Drip pricing is illegal unless the federal or provincial government charges a fee, such as sales tax. Could you give us an example?
Mr. Simard: This is a correlative provision to a change that the government made two years ago to the 2022 budget. It has to do with drip pricing; perhaps it’s more intuitive. It’s the foot in the door principle: These are sellers who try to manipulate competition by not indicating the full price at the outset and bringing out a surprise price only at the end. Imagine that, on the internet, you see a posted price but there are unexpected handling charges at the end.
The provision does two things: It authorizes legitimate prices that are not mandatory, that is to say prices that people don’t know about, which can vary. For example, delivery fees may vary based on distance. That’s allowed. On the other hand, if they’re standard fees that the seller already knows they’re going to charge, such as handling fees, they must indicate this in their price so that it’s not a surprise at the end of the process.
The other thing that’s allowed are prices set by law, like taxes. Consumers expect taxes to be added at the end. The provision allows it.
This bill contains another section that deals with spam and online fraud. The changes had only been made to one section of the act, so we’re copying and pasting that section into the other section so it’s the same everywhere.
Senator Moncion: Thank you very much. My next question is about Division 7 of Part 5 of the bill, which deals with the Bankruptcy and Insolvency Act.
I understand that the definitions of post-secondary educational institutions for the purposes of the act will be established in future regulations. Based on the consultations you’ve already held with educational institutions, could you provide us with indicators that will help determine a definition for the purposes of the act?
My second question is, what is the usual timeline for this type of regulation? Why could it take up to two years for the measure to come into effect, knowing that time is of the essence if we want to keep a precedent like Laurentian University from reoccurring?
Mr. Simard: Thank you; that’s a good question. The reason regulations are required is that there was no legal outlet to determine exactly what everyone agrees on when it comes to defining what public post-secondary institutions are. For example, public post-secondary institutions are not the only establishments eligible for the loans and bursaries system. Public post-secondary institutions are not the only establishments authorized by the provinces to award diplomas. These are the kinds of criteria that would be subject to regulation.
It can’t just be the fact that the establishment receives public funds either, because a lot of private establishments receive public funds. It’s not what we all collectively conceive of as public universities. We can imagine a series of criteria based mainly on provincial designation, because education is a provincial jurisdiction. Therefore, it’s what the provinces consider to be their public universities, based either on their provincial laws by reference, or on a series of objective criteria that could be included in the regulations: awarding diplomas, receiving a good portion of public funding, having regulated tuition fees and being eligible for loans and bursaries. You can imagine a framework that would be submitted.
The regulatory process takes one to two years; I think we’re all familiar with it. It starts with initial publication in the official gazette. There is a minimum 30-day consultation period. Comments are then incorporated. Two successive submissions are made to Treasury Board; that’s why when you go to the Treasury Board website, they say it can take up to two years. In my experience, that’s what happens. It can go faster if the regulations are less complicated and well understood, and the consultations go well, that is to say that everyone agrees on the first draft within 30 or 60 days. It can go faster, but they have to warn people that it can take up to two years because that’s the standard at the Treasury Board for making regulations.
Senator Moncion: Right now, with the changes being made to immigration for foreign students, we know that universities across Canada are finding themselves in quite a difficult situation and that this can create a significant financial burden for each of them. I understand the time required, but I think two years is a long time with everything that’s happening within educational institutions right now.
Senator Gignac: I’d like to talk about something that hasn’t been addressed yet, which is Section 3 of the Canada Water Agency Act. While we’re waiting for the witnesses to get settled, Mr. Chair, I’d like to point out that Canada holds 20% of the world’s freshwater reserves. That’s pretty significant. The Canada Water Agency is being established based on commitments made in the 2020 and 2021 speeches from the Throne and the 2023 budget. I will let our witnesses introduce themselves.
Mr. Wolfish: My name is Daniel Wolfish, and I’m the Acting Assistant Deputy Minister for the Canada Water Agency.
Ms. Boag: My name is Gemma Boag, and I am Director General, Freshwater Policy and Engagement, Environment and Climate Change Canada.
Senator Gignac: Thank you. I’m going to ask my question in French.
[English]
Feel free to answer in English. We have interpreters.
[Translation]
Last year, the Prime Minister’s press release talked about a budget of $85 million over five years to support the creation of the Canada Water Agency. I am trying to understand why the government needs to create a separate agency, because when I look at the departmental organization chart, we already have an Assistant Deputy Minister responsible for the Canada Water Act. Why do we need to set up a separate agency? I am trying to understand the reason for that. You have to work with the provinces because there are federal-provincial tables that already exist. Why do we need legislation to create a Canada water agency?
Mr. Wolfish: I will begin and then I will pass it over to my colleague, Ms. Boag, for her comments.
Before a general division was created within the department, there was no focal point to coordinate the implementation of freshwater programs and policies at the federal level. The creation of an agency makes it possible for us to coordinate the federal government’s actions with those of the provincial and territorial governments and to establish relationships and partnerships with First Nations, Métis and Inuit communities. This will help to improve coordination and research when it comes to threats to freshwater management across the country.
Senator Gignac: Many departments have to work with Indigenous communities and the provinces. Do we really need a law, a separate agency? Even when it comes to the salary of the future agency head, the government is saying that the minister is the one who will be making the decisions and that the head of the agency will not necessarily be making the same salary as a deputy minister or an assistant deputy minister. I am trying to understand.
Also, could you explain something? This will be my second and final question. In the documentation that I read, it says that the functions related to science and water monitoring will not be transferred to the agency and will continue to be looked after by the department. I do not understand. Why is the government not transferring all of that to the agency? Can you explain that nuance to me? Thank you.
Mr. Wolfish: Thank you for your question. There are over 20 government departments that have water management responsibilities, including regulatory functions, science, monitoring and so on. It is difficult to coordinate an integrated approach to all of those functions. That is why the government wanted to create a focal point for coordinating policies and implementing a freshwater action plan.
That is the purpose of the agency: to create an environment in which information can be exchanged and policies can be developed and to support or help the minister carry out their water-related responsibilities.
At the same time, it is important to implement a scientific approach for the Meteorological Service of Canada and for the general science and technology division. Their water-related functions include supporting many parts of the department and that is why those functions are being reduced to the same degree.
Senator Gignac: How many people are working in that division and how many employees will the agency have? How many public servants or employees will there be?
Mr. Wolfish: At the Canada Water Agency, there will be about 200 people to coordinate and implement the freshwater action plan. There will be a number of people at the Meteorological Service of Canada and at the general science and technology division because of its scientific role.
Senator Gignac: Thank you.
[English]
Senator Smith: I would like to ask you a few more questions. You might want to write back with answers to a couple of them.
I’m trying to understand, following up after Senator Gignac, the power of the minister versus the power of the agency. That is question number one. I’d like to have a better understanding. Question two is regarding the relationship with the Indigenous population. If I understand correctly, the Indigenous people were here long before governments and bureaucrats, et cetera. What types of targets will there be to improve the relationship or help relationship building with Indigenous folks.
The other thing, of course, is performance targets. From the interactions I’m listening to and the questions that have been presented, it seems that there are so many factors in motion right now. How do you bring those together in terms of the agency, the minister and the performance targets? With respect to what types of targets there will be, what would be the top three targets so that we can keep it simple?
We don’t have time because we have to go around the table to all of the other folks, but I think it’s important to have some written answers that would address some of these issues — the powers of the minister versus the powers of the agencies, as well as the Indigenous population and how you will work to build that relationship. Then there are the performance targets — examples of maybe three performance targets.
Mr. Wolfish: We are happy to provide more information in writing, but I can answer quickly for you.
The agency does not have powers beyond that of the minister. We are there to support the minister in exercising his or her duties that they have under the Department of the Environment Act, their responsibilities for water, as well as under other acts from Environment and Climate Change Canada, including the Canada Water Act. The powers of the agency are to support the minister in the exercising of their duties and obligations.
Senator Smith: The last point is about relationships with the provinces and other governments, because this could evolve into — I’m not going to say a fist fight, but different types of activity and reactions. Could you add that into the last part of the question?
Mr. Wolfish: We can provide written answers. It’s very important that we follow the federal framework in Canada. The Canada Water Act does provide an outline that has been in place since 1970 for how that federal framework should work. Everything we do is with collaborative relationships with the provinces and territories. We’re building relationships with First Nations, Métis and Inuit across the country. The minister recently wrote —
Senator Smith: I would like to see some tangible evidence of what specific actions would be taken as opposed to the general verbal information.
Mr. Wolfish: Absolutely. Under the freshwater ecosystem initiatives, we have concrete targets that we have set, particularly for the Great Lakes, Lake of the Woods and Lake Winnipeg, where we are working toward, for example, nutrient reduction. We can get that to you in writing.
Senator Smith: If you could give us that in writing, it would really be helpful.
The Chair: Mr. Wolfish, ensure your written answers are directed to the clerk of the committee.
Senator Ross: Good morning. My question is related to Division 6, restrictive trade practices and the Competition Act.
With regard to the restrictive trade practices and the changes to the Competition Act, how will these changes put safeguards in place and ensure that the technical protection measures, or TPMs — the digital locks that must be undone for access for the purpose of diagnosing, maintenance and repairs, so that manufacturers can’t refuse — are undone, it doesn’t inadvertently compromise the company’s IP or individual proprietary information? Given that it’s agreed that consumers need this protection so they can have that right, what best practices will be in place to ensure that those businesses are protected?
Mr. Simard: Thank you. There is another set of legislation going through Parliament — Mr. Chhabra is better placed than me to know where they are — about TPMs and repair. This is really about the Competition Act, and it’s a competition remedy to prevent dominant manufacturers from locking in the aftermarket for repair artificially. It’s a provision based on refusal to deal, which is already a concept in the Competition Act, and the notion is that you cannot play favourites just because you’re the dominant producer of a thing.
If someone is ready to offer repair services and to comply with your typical conditions, which can include training for security or other normal rules that you use for your other repair suppliers, then you cannot arbitrarily deny it and say this person cannot offer repair services as a way to control and make more money out of the market.
It’s a refusal to deal construct. If a repair business is ready to comply with the normal business terms of this manufacturer, they too can have access to, for example, the API. Most of the time, you don’t need to break a lock to repair; you need access to the diagnostics. For example, for a car, you need the key to be able to get the diagnostic and the API to be able to interface with the car. But that doesn’t necessarily mean breaking a TPM.
Mr. Chhabra: On the piece about the Competition Act, I will note that the way it structures it does not obligate any party to disclose any IP or trade secrets. That is built into this work. My colleague referred earlier to two private members’ bills that are moving toward consideration in the Senate, Bill C-244 and Bill C-294, both of which impact the Copyright Act and address issues around technological protection measures and ensuring that those are not used in a situation where someone is attempting to repair a device — essentially, ensuring that the TPMs will not be used as a barrier to allowing for repair.
Senator Galvez: On the same subject, clause 244 amends section 71 and intends to prevent manufacturers from refusing to provide a means of repair of devices of products in an anti‑competitive manner. This has been in a waiting period for a very long time. In 2021, or maybe earlier, the government put up a strategy for a circular economy. This is the first time I have seen something concrete or real. Thank you so much. This is good.
The tribunal will be allowed to compel suppliers to provide a means of diagnosis and repair, including diagnostic and information repair, technical updates, diagnostic software, et cetera. To what extent will these small changes that you’re making shift the current linear economy into a circular economy, which is much needed because of the high production of waste in natural resources and everything, especially in the high-tech field?
Mr. Chhabra: Thank you very much for your question. I would say that the government is taking steps across a number of different domains to achieve the objective or policy goal of a circular economy. Earlier, I mentioned Bill C-244 and Bill C-294, which speak directly to technological protection measures in the Copyright Act. In this case, it’s leveraging the Competition Act to make a move in that same direction. There have been a number of other changes that touch on the environment, et cetera.
Because the issue is so significant, when you’re talking about the circular economy, you’re talking about it across the board — it is not about a specific sector or product life cycle; it’s across the board. Generally, a number of discrete policy or legislative actions tend to be required to get at an objective that is so broad. This is one meaningful step, one action to be taken, that suggests companies need to be very careful about restricting trade and restricting access and choice for consumers at the end of the cycle, and to be open to working with multiple partners to ensure that repair services are available and there is competition in those services.
Senator Galvez: Which type of sector do you think will initiate the shift? The automotive sector? The electronics sector? Which one will start?
Mr. Chhabra: The Competition Act applies broadly across the Canadian economy. It’s sector-neutral in its application. It would most likely apply in a situation where there are dominant firms or sellers of goods and a secondary repair market has already been established. You gave a couple of very good references of markets that exist like that today, including the automotive market, which is one that most Canadians are familiar with. In effect, what this would do is open up opportunities for Canadians to go to various other repair shops rather than just a chosen dealer or a small network of repair shops that are certified by the manufacturer. This would allow for or encourage making a broader range of options available.
Senator Galvez: Thank you.
[Translation]
Senator Dalphond: Could I ask the witnesses who answered the question about the agency’s regulatory power to send a note to explain to us what the existing powers are and why more powers are needed?
My question has to do with the new housing department. I understand the department’s mission, but does this mean that the new department will rejig and centralize all of the federal housing initiatives, including the Canada Mortgage and Housing Corporation, the programs for Indigenous people and the homelessness programs that fall under the responsibility of the Minister of Mental Health? Will this department replace the Office of Infrastructure? How many employees will this department have, what will its budget look like and how will it be organized?
As I recall, the government did away with a housing department in the 1980s, but now it wants to set up a new one. I would like to know what the government is doing and the reason for this infrastructure and so on. How will this be structured? Will there be any overlap? It is unclear to me. What is the benefit of creating a new department?
Mr. Peets: Thank you for the question. First of all, regarding consolidation, there isn’t really any total consolidation in this bill. As things now stand, the CMHC falls under Infrastructure Canada and that will continue to be the case. The CMHC will remain an independent Crown corporation with its own legislation.
You also mentioned housing for Indigenous communities. Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada, or CIRNAC, will continue to play their role on behalf of Infrastructure Canada when it comes to on-reserve housing. CIRNAC will take care of broader issues relating to Inuit, Métis and other Indigenous peoples.
This is not a consolidation. What the legislation does is to bring the housing minister and the infrastructure and communities minister together in one department. The deputy minister for that department will answer to both ministers. That will make it possible to address the issues of housing, infrastructure and homelessness together.
The Chair: Thank you, Mr. Peets.
[English]
Senator Loffreda: My question is once again about Division 6 and amendments to the Competition Act and Competition Tribunal Act. Thank you for coming back. You did a great job answering my previous questions, so why not continue with such an important issue and topic of national concern?
What mechanisms will be in place to ensure transparency and accountability in the Competition Bureau’s application of the new factors introduced by Bill C-59? Our chair often mentions that transparency, accountability, reliability and predictability are important values to this committee. He is a model for many to follow as a committee chair and will be retiring soon, so I want to congratulate him. I will use him as a model and reference in the future. So thank you for all that you have done.
Mr. Chhabra: Thank you very much for the question. I’ll start by noting some general considerations, and then I’ll turn to my colleague. The changes being contemplated in the Competition Act don’t modify the baseline tests and rules and certainties that need to be provided for. Specifically, having a tribunal process provides a transparency element immediately. It is about making a case for enforcement and then providing an opportunity for those targeted by the case to make their case before the tribunal as well.
There are published reports from the Competition Bureau as well, of course, regarding the cases once they are developed, so that fairness, transparency and the carriage of justice are a fundamental part of how the Competition Act is structured and will continue to be structured going forward.
Mr. Simard: Just to confirm, Canada has quite a unique tribunal system. It’s one of the most transparent systems in the world. All the hearings are public. You can go to the Competition Tribunal and follow all the affidavits of all parties. The decision of the tribunal is public, and it is reviewable as well.
All those safeguards, as Mr. Chhabra said, remain in place, and the tests have not really changed. They are well-known tests used worldwide.
There has been a big change in the previous bill. The efficiencies defence has been removed. But this is a concept that everybody understands, and we understand where the bar has shifted. So it is justiciable and predictable. The change can be readily understood by the marketplace because it relies on significantly lessening competition. It’s an age-old test that has not changed.
Senator Loffreda: And stakeholders could consult and will be consulted, and could easily access what is being proposed.
Mr. Simard: That’s a good point. We should have mentioned an intermediate step. Before the bureau enforces, they typically update their guidelines. As an enforcer, they interpret the new law and signal to the market how they intend to apply the rules. They typically consult on their guidelines, so that provides another layer of transparency to the markets. So we have the statute, updated guidelines and, as we’ve discussed before, decision after decision of the tribunal that fills the gap and creates jurisprudence, all to ensure that we have a system that is predictable and justiciable.
Mr. Chhabra: As I noted earlier, the Competition Act benefited from significant consultations in 2022-23. We also continue to hear from stakeholders on an ongoing basis through regular bilateral meetings and working groups, engagements with the Bar Association and others. That degree of openness and transparency, both in terms of feedback in the government and in terms of explaining rules and how they will work, is an ongoing process.
Senator Loffreda: Thank you.
Senator MacAdam: My question is for Finance Canada. It’s on Division 9 and the providing of information on equalization, territorial financing, et cetera, on the Department of Finance’s website.
Division 9 requires that the Minister of Finance publish all federal-provincial transfers related to equalization, territorial financing, fiscal stabilization payments, the Canada Health Transfer and the Canada Social Transfer on the Department of Finance’s website as soon as possible after payment.
It says that this measure will be applied retroactively from June 22, 2023. Why is it retroactive to that date?
Michelle Gouchie, Director, Federal-Provincial Taxation, Department of Finance Canada: That’s the date that the Budget Implementation Act, 2023, No. 1 was passed. They want it retroactive to when that was passed by Parliament.
Senator MacAdam: What level of detail can we expect regarding the breakdown of these payments as well as the details of each payment?
Ms. Gouchie: Previously, the bill didn’t specify what was going to be included as information, so now they will be putting the date of the payment and to which province or territory the payment was made as soon as possible after it is made.
Senator MacAdam: I’m wondering about the level of detail within those categories. For example, when I looked at the 2023 public accounts, it included major transfers — and included the Canada-wide early learning and child care transfers as a major transfer. Can we expect those types of breakdowns within the Canada Social Transfer or is it just going to be very summarized?
Ms. Gouchie: I’m not familiar with that particular example. It’s being published now, so we can provide you with the most recent link for the publication.
The Chair: Thank you. I think that’s appropriate. Please send your written answers to the clerk.
Ms. Gouchie: Okay.
Senator MacAdam: Could I add to that answer that will be sent in?
The Chair: Yes, please.
Senator MacAdam: How is the timing handled for the payments being disclosed where there are stipulations attached?
Ms. Gouchie: The bill said as soon as feasible. I believe that’s the course they have taken.
Senator MacAdam: Are there stipulations with regard to the actual transfer to the province?
Ms. Gouchie: I can find that out.
Senator MacAdam: How is that handled? That could affect the accounting for the transfers as well as the calculation of the deficit. I’m wondering about the timing.
The Chair: Absolutely. Thank you, Senator MacAdam.
Senator Kingston: Again, I will be looking at Division 11 and Infrastructure Canada.
You spoke to another senator about the fact that some other departments, such as Indigenous Services Canada, still maintain a certain responsibility in terms of housing and homelessness in particular. With respect to Health Canada and the Public Health Agency of Canada, or PHAC, I would like to know what you and, possibly, they are doing to incentivize provinces to integrate health services into the support needed for some people to be successfully housed, such as people with issues around mental health and addictions.
Mr. Peets: There are a number of important intersections between housing and other areas of policy. Public Health has programming to support, for example, services delivered to people who have specific health needs that are proximate to their housing. That is an area of programming that exists both at Health Canada and at PHAC, so it’s incumbent on us to work together and ensure that our programs are conscious of the full landscape and have those intersection points.
We do have mechanisms internally. The Deputy Minister of Infrastructure Canada has a forum where her colleagues from around town get together and have a regular agenda to ensure that we have that alignment. It’s an ongoing job for us to do that and ensure that we each have our respective roles, whether it’s Health Canada, Environment and Climate Change Canada, Indigenous Affairs or others, but that we need to be working together.
Senator Kingston: In these cases, I think that the Canada Health Transfers need to have some accountability within them as well with respect to that particular issue.
[Translation]
Senator Carignan: My question has to do with the Canada Water Agency.
From what I understand, there will be about 200 employees—
Mr. Wolfish: Yes, about 200 people.
Senator Carignan: I would imagine that they are located here in Ottawa.
Mr. Wolfish: No. The head office will be in Winnipeg. The 2023 budget indicates that the agency will be headquartered in Winnipeg.
Senator Carignan: What is happening with the employees? The employees are in Ottawa. Will they have to move to Winnipeg?
Mr. Wolfish: No. That is a very good question. The head office will be in Winnipeg by order of the Treasury Board and the Governor in Council.
The agency will have offices across the country, in every one of its regions, including one in Atlantic Canada and one in Quebec. There will be a small team here in Gatineau, one in Burlington, one in Toronto and another at the head office in Winnipeg. There will also be offices in Regina and Vancouver.
Senator Carignan: Is it the same thing that is happening right now at Environment Canada?
Mr. Wolfish: The goal is to share the office with Environment Canada. We will be sharing the same spaces.
The Chair: Do you have another question, Senator Carignan?
Senator Carignan: Coordination will be a challenge. Not only will you have to coordinate among your own offices, which will be spread out across Canada, but you will also have to coordinate with the provinces and partners. It will definitely be logistical challenge, but that is not the point of my question.
Why will the environment minister continue to have the power to create an advisory committee if the agency is there to advise the minister? Why does the minister also need the power to set up advisory committees?
Mr. Wolfish: The bill gives the minister the authority to set up a committee. We will provide guidance on the approach, the participants, the diversity, the goal, the role, and so on.
The Chair: Mr. Wolfish, could you answer Senator Carignan’s question in writing through our clerk, please?
Mr. Wolfish: Yes.
The Chair: Are we in agreement on that?
Mr. Wolfish: Yes.
Senator Carignan: Could you include details about the number of employees per region and the rent?
The Chair: Will you take into consideration what was just added to the question?
Mr. Wolfish: Yes.
The Chair: Thank you very much, Mr. Wolfish.
[English]
Honourable senators, this brings us to the end of our session, and I’d like to remind the public servants that, due to the time frame, written questions must be sent by the end of the day on Tuesday, April 23, 2024.
Before adjourning, honourable senators, I will tell you that our next meeting is tomorrow, April 10, at 6:45 p.m., to continue our study of Supplementary Estimates (C).
I would like to take this opportunity as Chair of the National Finance Committee, on behalf of all the senators, to express our appreciation for the efficiency and professionalism we have seen from our public servants this morning. You were very knowledgeable and informative — a job well done. Thank you.
(The committee adjourned.)