THE STANDING SENATE COMMITTEE ON BANKING, COMMERCE AND THE ECONOMY
EVIDENCE
OTTAWA, Wednesday, October 7, 2026
The Standing Senate Committee on Banking, Commerce and the Economy met with videoconference this day at 4:17 p.m. [ET] to study Bill S-239, An Act to amend the Competition Act.
Senator Clément Gignac (Chair) in the chair.
[Translation]
The Chair: Honourable senators, I would like to welcome all those who are listening to us today on CPAC or online.
My name is Clément Gignac. I’m a senator from Quebec and chair of the Standing Senate Committee on Banking, Commerce and the Economy. Before we continue, I’d like to ask my colleagues to introduce themselves.
[English]
Senator Varone: Toni Varone, senator from Ontario.
Senator Pupatello: Sandra Pupatello, senator from Ontario.
Senator Fridhandler: Senator Daryl Fridhandler from Alberta.
Senator Loffreda: Senator Tony Loffreda, Montreal, Quebec.
[Translation]
Senator Ringuette: Pierrette Ringuette from New Brunswick.
[English]
Senator Yussuff: Hassan Yussuf, Ontario.
Senator C. Deacon: Colin Deacon, Nova Scotia.
Senator Wallin: Pamela Wallin, province of Saskatchewan.
Senator Manning: Fabian Manning, Newfoundland and Labrador.
[Translation]
The Chair: Senators, our committee received from the Senate an order of reference on June 9, 2026, requesting that this committee examine and report back to the chamber on Bill S-239, An Act to amend the Competition Act and the Competition Tribunal Act.
This bill is sponsored by our colleague, the Honourable Senator Marty Klyne, who we have the pleasure of having among us today to present the bill and answer our questions.
Senator Klyne, welcome to the Standing Senate Committee on Banking, Commerce and the Economy. I would also like to welcome with us Marty McKendry, Director of Parliamentary Affairs from the office of Senator Klyne. Senator Klyne, I will invite you to make your opening statement, followed by a round of questions from committee members.
[English]
The Honourable Senator Marty Klyne, sponsor of the bill: Thank you, chair, and thank you to the committee for the invitation to open your study of Bill S-239, An Act to amend the Competition Act, of which I’m proud to be the sponsor.
Through modest changes to the Competition Act, this bill will empower the Competition Bureau to make recommendations to reduce barriers to internal trade in Canada, with accountability from regulators.
This change aims to support efforts to build one Canadian economy. The bureau’s recommendations can also help foster more competitive regulations aimed at lowering prices and improving the quality and selection of goods and services for Canadian consumers. Examples of regulated sectors in various jurisdictions in Canada include professional services, alcohol sales, government procurement, telecommunications and aviation.
Specifically, the bill makes three proposals. First, an enhanced policy mandate for the independent and expert Competition Bureau to make recommendations to improve internal trade as well as competition within regulated sectors. The bureau has already made recommendations to federal, provincial and other regulators to promote competition and its benefits to consumers. However, this change would invite the bureau to be bold, particularly around interprovincial barriers, and it would give their work a greater profile. It would also make the work towards internal trade more independent of political actors and circumstances.
Second, the bill would require federal regulators to publicly respond to the bureau’s recommendations within 120 days. For example, this would have required a timely response from the federal government around the Competition Bureau’s 2025 report on improving passenger aviation, which recommended reducing limits on foreign ownership.
Third, the bill would encourage provincial, territorial and municipal governments to respond to the bureau’s recommendations within 120 days. The Commissioner of Competition would publish the response, if received, and if not, would publish a notice to that effect. For example, this could enhance government accountability around removing interprovincial barriers to the retail sale of alcohol, such as B.C. wine.
These last two proposals would answer a 2023 request of the Competition Bureau that, wherever possible, regulators be required to respond to their recommendations within a reasonable time.
In these three ways, the bill aims to support first ministers’ joint leadership and cooperative efforts to reduce barriers to interprovincial trade, a shared priority across our federation for the last two years. Of importance, the bill would support these efforts in a way that respects cooperative federalism without forcing any changes on any jurisdiction.
In the big picture, Bill S-239 is pro-consumer, pro-business legislation that will help boost innovation. Amidst the affordability crisis, the bill aims to benefit Canadians by helping to drive lower prices, better-quality goods and services, more choices for consumers and greater productivity across many sectors.
To quote Senator Harder, the best argument for this bill bears repeating: lower prices, lower prices, lower prices.
In addition, a 2022 Macdonald-Laurier Institute paper by Trevor Tombe and Ryan Manucha found that the long-term gain to GDP from removing interprovincial barriers could be up to 7.9%, meaning up to $200 billion per year. As well, as former commissioner of competition Matthew Boswell has noted, Australia achieved 2.5% GDP growth over a decade by applying a competitive lens to regulated sectors across the economy.
Colleagues, this bill can help build prosperity for Canadians without any additional cost to taxpayers.
I am inspired that this bill has received endorsements from two former commissioners of competition, Lawson Hunter and Sheridan Scott, Ryan Manucha of the C.D. Howe Institute, Vass Bednar of the Canadian Shield Institute, Keldon Bester of the Canadian Anti-Monopoly Project and the Canadian Federation of Independent Business. I don’t see Mr. Kelly here.
I note as well that this bill was inspired by the work of Senator Harder’s Senate Prosperity Action Group, which included two members of this committee, Senators Deacon and Ringuette. Two key recommendations of our 2021 report were to remove barriers to internal trade and to improve competition in regulated sectors.
I trust that this committee will view this bill as a chance for the Senate to contribute to Canada’s economic mission at this critical time. I have confidence in this committee and look forward to your study. Together, I believe we can help make a positive difference for the prosperity of our fellow Canadians and our great country.
Thank you. Hiy kitatamihin.
The Chair: Thank you, honourable colleague.
Senator Varone: Senator Klyne, I don’t think there is going to be any issue in the fact that we all believe in one Canada. In fact, we all want transparency and accountability, and it is what you’re striving for through this bill. I accept the fact that interprovincial trade barriers are silent to most Canadians. They don’t see them. They’re not clearly evident. But I want you to tell us if these changes aren’t just a paper tiger in terms of changes to the act.
I’m going to hearken back to a few years ago, when the hospitality industry was faced with criticism that it wasn’t changing, adapting and being transparent, so the municipalities created a scorecard where green means you’re good to go, and red means that you want to close. They’ve adopted that now between landlords and tenants. Every landlord needs to post that scorecard as to how well they are doing in the face of landlord-tenant communications.
Is there room to translate this into some form of published scorecard with the metrics of all the trade irritants that we face in Canada amongst ourselves in the provinces, which gets published? It’s making Canadians aware of the barriers that help to resolve the barriers in the first place. I see no such mechanism that takes your amendments and gives more teeth in what the law allows you to do. I put that out there, and I want to hear your comments on that.
Senator Klyne: Thank you for the question. This paper tiger has some teeth to it. I think that the scorecard is built in with this. I’ll explain that.
When the Competition Bureau makes a recommendation to a sector, the sector has 120 days to respond. If they do respond with their reference, the Competition Bureau would post that they responded. If they don’t respond, then they will post that.
If I were a customer, between those two, I would want the one who responded because he or she, as the leader of that sector, is saying that we are going to be following the recommendations of the Competition Bureau. We’re going to enact these things that they have recommended because it’s going to lead to innovation. Innovation will lead to productivity. Innovation and productivity will lead to more quality goods, and more quality goods at a lower price will help flood the tills.
I have to think that most sectors have an association. Within that association, there would be a go-to executive committee. That’s the committee that would say, “Let’s get busy here and do something. Let’s be competitive and let’s jump on the tables like Albertans do to celebrate our excellence in terms of innovation, quality and productivity.” I think there is room for that, and scorecards are a good way to begin.
Senator Fridhandler: I have a general question. My initial reaction to this is that you’re overpoliticizing the Competition Bureau. You’re pushing them into areas that require them to get involved in determinations that might be political in nature. Where do you draw the line on what the role of the Competition Bureau is versus what the role of policymakers and politicians is on this?
Senator Klyne: The Competition Bureau and the people who are leading it are quite astute. They are studying the various sectors and are looking for opportunities to make recommendations. If it’s short-line manufacturing, maybe there is another line you could add to this short-line manufacturing that will pick up 20% more volume, and the quality is above any other quality you’ll see on short-line manufacturing.
They will deal with the sectors and industries in that sector. Sometimes, governments — provincially and territorially — need a little boost to engage and help the industries in their communities, which creates jobs, and which creates revenue. I don’t think it will push up against the government. The government has its jurisdiction on certain things, and the Competition Bureau knows where those are.
Senator Fridhandler: I have a specific follow-up question on subsections 10 and 11. You vaguely refer to the publication of the response on a publicly available website as opposed to perhaps the Competition Bureau’s website. If you don’t like it, you put it on Facebook or some place that nobody goes to, but if you like it, you put it on the bureau’s website. Why can’t you be more specific about that?
Senator Klyne: I’ll have to ask my director.
Marty McKendry, Director of Parliamentary Affairs, Senate of Canada: Certainly, it’s contemplated that it would be the Competition Bureau’s website where they currently post, for example, their market studies. I suppose greater specificity wouldn’t have any downsides. The Competition Bureau might have thoughts on that during the next panel.
Senator Fridhandler: I have nothing more right now.
Senator C. Deacon: Senator Klyne, I’m a fan of this change. We’ll find out from the bureau, but I think it gives the bureau additional armament, as it is looking to see consistency across Canada. We have now been trying to fight interprovincial trade barriers for — How many years has Canada been a country? — 159 years.
There is the concern — and I don’t share it, but I would like you just to dive in a little more clearly with you or Mr. McKendry — over the Royal Recommendation. I see this as just being a new tool in the toolbox that the bureau can use to amplify its recommendations that it discovers from studies it does in various sectors. I see this as being helpful because if there are specific things that a province could do, or a territory could be doing to increase competition, they could be quite specific about that and ask the province for a response.
Do you have evidence or have you had conversations with the bureau about the concerns around Royal Recommendation and the fact that some people think there will be increased resource requirements at the bureau?
Senator Klyne: I can tell you that those who are in the Competition Bureau are quite excited. It’s kind of like, “Let’s go; let’s do something here.” This gives them the opportunity.
With regard to the Royal Recommendation and provincial governments, one thing I do know is that provincial governments don’t like regulators. You can call yourself whatever you are, but being a regulator, they are not going to push back too far. Provinces don’t like regulators coming in and telling them what to do. So the people within the Competition Bureau can take the approach that they’re here to help and make recommendations. Let’s take it tried and tested in terms of this sector in your province and opportunities to expand and open up into other jurisdictions to sell and to buy.
Senator C. Deacon: What about the resource side of things?
Mr. McKendry: If I can add, having done many of the consultations at the staff level, the indication we have heard is that additional resources would not be required. The Competition Bureau — and perhaps former commissioners, I would imagine — could expand on this, but my understanding is that the Competition Bureau already conducts a public policy advocacy function. This is sort of a minor change to that, and existing staff could use that additional latitude and mandate to choose their studies as much as they already do, and function with their existing resources. Perhaps a helpful analogy would be if a Senate committee had a minor adjustment to its own mandate, and existing analysts and engaged office holders could choose to pursue that mandate, but it wouldn’t necessarily require hiring.
Senator C. Deacon: That’s great. It’s a communications-related venue versus another additional piece of work to be doing. It’s just a way to get the work they are already doing out. Is that the way you see it?
Mr. McKendry: Yes. With the first ministers having identified interprovincial trade barriers as a priority, it would be something of an invitation to them to take a greater role in that, though the current Competition Act, I don’t think, would preclude them from planning on that.
Senator C. Deacon: Thank you very much.
Senator Loffreda: Welcome, both of you. My question is about broadening the scope of the bill. The Competition Bureau recommends broadening the bill to clearly cover all recommendations to improve competition, including new measures such as open banking. Do you support that amendment? Obviously, as sponsors are of the bill, you don’t support an amendment. I would like to have your thoughts on that. Was the narrower reference to barriers to trade a deliberate choice or would the bureau’s proposal better reflect and better serve Canadians in making it broader and bringing in specific competition measures?
Senator Klyne: If making it broader is good for Canadians and the sector, I don’t think we would want to hold back on that. We would find a way to accommodate it. If it has a good business case behind it, and if it’s going to give them — maybe not a quantum leap, but — another leap forward, then maybe the next one would be the next quantum leap.
We should do what we can do because if they are servicing a province by providing whatever it is there is within their sector, they would want to be the best, I would assume. If it takes tweaking some legislation to allow them to be able to apply more innovation, more productivity, more quality, more sales, more jobs and more homes, then it’s part of an economic development puzzle.
Mr. McKendry: I could perhaps add a comment that is helpful with the technical language of the bill. In section 8, on the first page, where it would say “respecting any barrier to trade within Canada,” that would be intended in a broad fashion. That could refer to interprovincial trade barriers, but it could also refer to regulations that were excessively restricting competition, so it’s meant to mean both. I imagine the Competition Bureau might have comments in terms of how they might want to use this and how it could be adjusted if they see more opportunity.
Senator Loffreda: They will be here after you. We’re looking forward to it. Thank you.
Senator Henkel: Welcome, Senator Klyne.
[Translation]
My question is specifically about the potential economic benefits you’re referring to.
You talk about productivity and lower prices. You say that this bill will lead to economic benefits, greater productivity, lower prices and more choice, as well as increased productivity. Those are the expected benefits.
What are you basing your assessment of the economic impact of this bill on?
[English]
Senator Klyne: I expect that the Competition Bureau will be keeping track of what they’ve achieved in terms of benchmarking or baselining. Probably within the sector, there are benchmarks. So when they adopt a recommendation, they’ll set up a baseline and see how that tracks forward or above the others in the competition. They can monitor from a benchmark situation.
If there’s no benchmark in there, one of the companies can step forward and be the benchmark. While they keep the baseline, they’ll know what it’s attributed to. That was the recommendation that they provided, so it was a score. It’s a win.
[Translation]
Senator Henkel: Senator Klyne, some rules may have an effect on trade or impose additional costs on businesses without necessarily being barriers we want to eliminate. I’m thinking in particular of requirements aimed at protecting and promoting the French language.
How does your bill ensure that the protection of French isn’t viewed by the Competition Bureau as an impediment to trade or competition simply because it imposes compliance costs?
[English]
Senator Klyne: I’ll give you my perspective on the idea about French. I don’t find that to be a barrier. If you have a business, and you’re in a community where a good margin of your companies speak French, and they want to be served in French, and if you have employees who speak French, I would say that you should invest in that. Put your training manuals in French, get a supervisor who can supervise these people, and that will build more customers through word of mouth. If you want to go there, you have to go there.
If Porter comes in, and they have all these French-speaking people in the Regina airport, Air Canada and WestJet better pick it up because they’re getting all the employees. They’re getting them from Lafleche and other French-speaking communities.
[Translation]
Senator Henkel: Perhaps Mr. McKendry could answer my question.
[English]
Senator Klyne: I just don’t think that adds costs. It creates revenue.
[Translation]
Senator Henkel: In your bill, how will the Competition Bureau specify that language could be a barrier to competition? That’s what I’m concerned about.
[English]
Mr. McKendry: I could add a few comments that might be helpful.
For one, you would expect the Competition Bureau or any federal entity to respect official languages fully. Another key point that Senator Klyne discussed in his second reading speech is not to suggest the bureau would question the purpose of regulations, for example, or some trade barrier. In the case of regulations, it would be about how it is being regulated, and whether there is openness for constructive suggestions on how to improve any regulation. The suggestion is not to question the underlying purpose of any provincial or federal regulation.
Another key point is that these are still only recommendations, so they absolutely cannot force changes on federal, provincial or municipal jurisdictions.
Senator Ringuette: It’s interesting because whether we’re looking at labelling, whether you’re within Canada or you want to export to Canada, you need both official languages, so it’s not an internal trade issue. It’s not a barrier issue, as far as I’m concerned.
Moving away from that, we received a paper from the Competition Bureau with regard to your bill. It says, “We commend the committee . . .” — we haven’t done anything yet — “. . . and Senator Klyne for advancing this important initiative.” They say that Bill S-239 would provide a practical mechanism for ensuring that pro-competitive recommendations receive transparent consideration.
Furthermore, with regard to clause 8 of your bill, they are making a recommendation. I don’t know if you received a copy of the document. You did. Okay.
Their recommendation is that clause 8 should read as follows:
The commissioner may, in the report, make a recommendation to a responsible federal or provincial institution to improve the state of competition in the market or industry that is the subject of the inquiry or any related market or industry.
I guess what they’re saying is that this would have more overall application to what they study. Would you agree with a proposed amendment that would read as such?
Senator Klyne: They’re going to play in their own lane if there needs to be a regulation adjustment, but the one word in there is “may.” Nobody is going to force them to do it. They may elect to do that, go forward, conduct their government relations with whomever and ask for the tweak in the regulation that they would like. I would like to think that somebody on the other side of the desk who is representing that province or the municipality would give that consideration and say, “That’s going to work for us too.”
Senator Ringuette: Both what you are proposing and what they are suggesting as a modification to clause 8, it’s “may.”
Mr. McKendry: I understand the language is very similar in terms of being very broad. I don’t want to speak for them, but I think they’re hoping that it’s not only focused on interprovincial trade barriers, but that it’s understood to be, as it is now, commenting on any regulations that might unduly restrict competition. The language, as it is now, would include that, but it might sound more like interprovincial trade barriers. In terms of the legal meaning, I would tend to see them as equivalents.
Just to add a brief comment because of all the interest in interprovincial trade barriers, part of the purpose of the bill would be to give an added profile to the Competition Bureau’s work. It might also help to retain a reference to that as being as general as the bureau would like. I’m sure they’ll expand. I recall one comment that they might also want it to apply informal studies, not only formal market studies.
Senator Ringuette: My final question is this: Do you agree with the proposed amendment from the Competition Bureau?
Senator Klyne: I don’t see the issue of concern in there.
Mr. McKendry: One would tend to give a lot of weight to their expert view. Speaking as a lawyer having worked on the bill, I would see it as both permitting the same types of activities.
Senator Ringuette: Is “either or” fine with you?
Mr. McKendry: References to barriers might generate some additional public interest.
The Chair: We’ll be hearing from the Competition Bureau later in this room.
Senator Yussuff: Thank you, Marty, for being here, and thank you for your good work.
One of the big challenges we have in this country, which is unique compared to other countries, is that we have a lot of monopolies, and we deliberately protect them through federal legislation. We have them in telecommunications, transport and banking. I can go through a list. It’s one thing to have competition, but if you have limited access to where Canadians can benefit from lower prices, if you don’t broaden the scope of competition among the industry, you’re still getting stuck with the same players doing the same thing and providing the same service. The end result is that not much is going to change. If you ask Canadians writ large, people would argue that grocery prices are far too high. The challenge that we’re faced with is that we know that the number of grocery major providers we have in this country is limited. How are we going to effectively improve that if we don’t have more players in the market competing for consumers to the large extent?
I laud you for this incredible opportunity to get the bureau to be more active and agile, and highlighting what they can push both provincially and federally to try to make this happen, but we still need more players in the marketplace to do the things that are going to benefit the consumer in this country. How do we address that? Again, this is an area that the bill obviously can’t fix because we don’t actually control who operates in the marketplace.
Senator Klyne: In the sectors you mentioned there, there are definitely some monopolies. They probably have a floor of government relations that are very actively lobbying, but there has to be a point where the government and the sectors need to start thinking about it from the perspective of the problem you just laid out there. It’s good to have healthy competition, and I hope and believe that the Competition Bureau can come in there and start working on what this future could look like by making a few tweaks and adjustments. I’m sure Mr. McKendry can add more to what I’m trying to say here.
Mr. McKendry: The bureau’s recommendations probably address monopolies or oligopolies that are, if not set up, protected by law or encouraged by law in a few ways. One would be with respect to interprovincial trade barriers. Some are monopoly-like entities, like self-regulating professions, such as the legal profession. If, for example, more competition were allowed between provinces, more mobility in terms of the ability to offer services and so forth, that could have an effect of having a greater market force within provincial jurisdictions. Weakening or relaxing some interprovincial barriers would be one. Another one would be recommendations to reduce anti-competitive regulations, which, in some cases, would protect oligopolies. A good example of that would be the Competition Bureau’s report last year on passenger aviation. The bureau recommended reducing the restrictions on foreign ownership.
If that occurs, it would allow considerably greater foreign investment, which could bring down costs, improve service, cause innovation and allow greater choices, but only if the recommendation were implemented. In the case of the aviation report, it was released, received a lot of public interest and media attention, and that dissipated over time. If there were a requirement for a public response, it would keep the momentum going, and the response could be assessed, and the public would be able to form its own view.
Senator Pupatello: I was trying to find a local example for people in my hometown that highlights why a change like this to the act would make a difference for them. For example, if there were a piece of property that had housed a grocery store that had closed down, and the owners of that grocery chain still managed to control the property and had clauses in the contracts that stipulate that competition cannot move into a site. How does this act change the opportunity for proper competition in a neighbourhood with grocery stores? Is it the 120-day window that obligates a response so you get an answer instead of waiting? Is it posting it publicly so the public response to the posting has more influence? Or is it that you can determine that the federal institution in this instance might be the Attorney General, which has to then have a law that says contractual language cannot include that kind of language that prohibits what types of rental could then come on to the same site? Explain that.
Senator Klyne: It would be whoever is responsible for the civic governing in legislation there. Picture a small town that has tools within their municipality codes and other codes that people have to adhere to in the business and commerce side of things. They could probably come up with something if it’s owned by a larger conglomerate that moved and is not letting any other grocer on the site. If you had the foresight, you would make sure that nobody could do that on that piece of property or any other property.
Senator Pupatello: So this bill doesn’t change that?
Senator Klyne: The Competition Bureau can come up with some good innovation on how to resolve that. It’s up to somebody to enact it.
Mr. McKendry: If I could add on the grocery discussion, I’m sure the bureau will have more to say, but I believe they did do a study on the grocery sector, and its recommendations were only taken up by Manitoba. If that were the case, there was encouragement to respond, and only Manitoba responded. So that would naturally garner public attention, and many Canadians would wonder why, if this could lower the cost of their groceries, that would not be taken up more broadly. Consider Ontario’s restrictions on the retail sale of wine or beer. You can buy wine from all over the world but not from B.C. That’s odd, on the face of it, to many people.
Senator Pupatello: In summary, though, it really is the 120‑day limit response that’s important, and it’s the publication and publicity of the responses that you’re changing in this act that you think will be really influencing the public to be more engaged. Is that correct?
Senator Klyne: Most business people are entrepreneurial, so when they have this and are going to move on it, they would want to promote that. It’s not going to come through with the 120-day recommendation. It’s going to be what the proponents or principles of that property are: They do the promotion around it, create some hype about it and get people lathered up and ready for their new little grocery store that’s going to come along. Fred says to Martha, “We don’t have to move, Martha; it’s coming.”
Sometimes the Competition Bureau may be called upon, or they might say, “We can help these people.” They study many sectors and many business opportunities, as well as solutions to problems. They can call on them. I’m sure that their network is a good network that they can rely on. They might say, “We’ve got this issue going on in this town. What have you done? How did you get around it?”
Senator Wallin: We had some discussion from Senator Ringuette about the meaning of “may,” so I’m going to ask about the meaning of “must.” I think you just raised that, Senator Pupatello.
We have seen in the approvals process and a whole lot of other different industries that, despite a rule like this, it says that the head of a federal institution must respond to a recommendation made to that institution within 120 days, after which the report is published, et cetera. At day 118, there is another question that they have to go back to one side or the other and say, “But we just want to follow up on what that means.”
Are there any protections in “must” that stop that ongoing delay process?
Senator Klyne: If people are going to think about that issue within the Competition Bureau, they’d probably have a way you could appeal. If it’s a reasonable appeal, it can probably be followed up on.
Mr. McKendry: I note that the measure is based on other similar measures in other statutes, so it’s not uncommon. It would be similar, in fact, to the way e-petitions work in the House of Commons, where the government is obligated to respond within a certain time frame.
Senator Wallin: There isn’t any protection? I’m trying to look at the process.
Mr. McKendry: I don’t think there would be a punishment, per se, if they didn’t, but it would be odd.
Senator Wallin: Pretty soon it will become a year and a half.
Mr. McKendry: I don’t know this, but I suppose somebody could get a declaration from a court that they have not complied.
Senator Wallin: I’ll save that for the Competition Bureau. Thank you.
The Chair: Before going to the second round, I would like to express my reaction when I saw your bill. I raised my hat when you mentioned that the head of federal institutions must respond. I totally agree. I am a bit surprised when you go to the provinces and this kind of thing. I’ll explain.
Each province has different procurement policies — for example, Quebec and Ontario — to encourage their provincial suppliers. They have monopolies. In Quebec, we have the Société des alcools. If the Competition Bureau goes there first, I think the size of the Competition Bureau would have to increase fivefold because they will have a lot of work to do, including local municipalities.
As you point out, in federal cases, they must respond; in provincial cases, it’s a wish. Have you talked with the federal minister responsible for the Competition Bureau, or have you not tested the waters with her yet? I’m just curious if you can share, or maybe it’s confidential.
Senator Klyne: I’ll let Mr. McKendry answer that.
In terms of the “must” and “may,” I’m not sure why there is a “must” and “may” on that. If you want to get that published, you have to apply within 120 days. If you decide not to, then you have decided not to.
The only point of wanting to do it is because it heralds you as somebody who would get more competitive and employ more innovation. On the other hand, if you don’t do it, why would we shop there? They are not innovative.
The Chair: I have no problem with that. I am 100% behind you on the federal level, but you referred to inviting the Competition Bureau to analyze provincial policies. Of course, they will not because provinces have different policies. Take procurement, for example. Each province has their own procurement to encourage their local suppliers, or they have a Crown corporation like Société des alcools, which limits the competition.
I understand the idea, but I’m just a bit surprised that you invited the minister to amend the Canada Competition Bureau and go to the provincial side. It’s a federation, and I was curious whether you had any exchanges with the current minister regarding that idea.
Mr. McKendry: My experience is primarily with experts in competition law. Competition law is not hugely familiar to everyone as a long-standing federal domain.
In terms of the aspects regarding federal, provincial, territorial and municipal, I don’t think it’s necessarily widely known that the bureau has been making recommendations, including to the provinces, for many years. I recall that, at the time of Senator Klyne’s speech, they had done 90 recommendations, including to the provinces, but they have not always received a lot of attention. Since it is a federal act, the idea was to require federal regulators to respond to the bureau’s request, saying, “You are required to respond insofar as that’s possible with the provinces,” which is a lighter approach.
Senator Varone: I want to thank Senator Yussuff and Senator Pupatello for stealing part of this question that I wanted to ask previously. It probably deals with the most anti-competitive legal instrument used in leases, which is called an “exclusive use” clause. That’s what you were getting at, with respect to banks and grocery stores. To give oversight to it is like playing Three Card Monte because the provinces control the official plans, and the municipalities control the zoning bylaws. It’s through the zoning bylaws that you create the lease instrument that governs the relationship between the landlord and the tenant.
These “exclusive use” clauses have proliferated across the country, and they limit competition in the worst possible way. Sobeys contains them in all their leases, as does Loblaws, Royal Bank and TD Bank. That means that — to your point, Senator Pupatello — if one leaves, and they are still paying the rent, they will not allow competition to come in.
The question I have with respect to this bill is this: Are you looking at clamping down on the proliferation of “exclusive use” clauses that govern just about everything we trade for at the retail level?
Mr. McKendry: The bill is not specific to any sector or practice, so it would leave the Competition Bureau wide discretion as to what practices to focus on.
Senator Varone: Years ago, when Minister Champagne was the trade minister, he went south of the border, promising he was going to bring up a U.S. grocery store. Remember, he disappeared for a month because he was trying to negotiate this deal.
Senator Ringuette: He couldn’t find any property.
Senator Varone: Ultimately, he couldn’t find property to bring in the tenant. I think it does fall within the jurisdiction of the Competition Bureau to have oversight.
Senator Fridhandler: I’m going to nitpick at some drafting issues. The report is required to be delivered to the head of that institution in item 9, but the timeline for the response is in sections 10 and 11 from the day the report is published. I think it should be from the date of delivery to the head of the institution. You could publish it, not tell anybody and then deliver it 60 days later to the head of the institution. There is no reason that should be different. That’s a drafting bust here, and there should be a change.
The other drafting bust that I’m not quite sure about is the timeline for requirements for a response. Things happen with governments and agencies. While it was alluded to, some of these things could be extremely complex, and there is no latitude for an extension of that timeline. We have prorogation, elections and things that actually bring governments down, and they don’t exist to be around to respond. I don’t think this is contemplated within the legislation. Those are just a couple of more drafting comments.
Mr. McKendry: In terms of the 120 days, my recollection from the Senate’s Office of the Law Clerk is that it is based on similar provisions in the National Housing Strategy Act, the Canadian Sustainable Jobs Act and the Canadian Net-Zero Emissions Accountability Act. I don’t recall offhand, but it might be a shorter period for e-petitions, which would apply to any government department.
Senator Fridhandler: There is an issue, but I don’t know if it’s in those statutes. Perhaps it’s in the Interpretation Act that timelines are extended where there is prorogation of governments or whatnot. Regardless of the precedents, what is wrong is wrong if it’s not corrected.
Senator Klyne: We’ll see if we can find something here that we can put as a “Fridhandler amendment.”
[Translation]
Senator Henkel: My question is about the place of SMEs, small- and medium-sized enterprises. Which organizational or economic stakeholders did you consult for the bill? What place do you give SMEs in the discussions and based on their experience? Have they had the opportunity to participate in these discussions, and share their thoughts and recommendations?
[English]
Mr. McKendry: Having been involved in the consultations, I can tell you that the Canadian Federation of Independent Business has endorsed the bill. I believe they are appearing tomorrow. They would have over 100,000 members across Canada, including from small- and medium-sized enterprises. My understanding is that they are enthusiastic. They put out a public statement.
[Translation]
Senator Henkel: I just wanted to know if you consulted SMEs for this bill you’re proposing. Thank you.
[English]
Senator C. Deacon: I would just like a clarification. Is the proposed amendment from the Competition Bureau — just to be clear — something that you would see as a friendly amendment?
Senator Klyne: Are you referring to the earlier reference?
Senator C. Deacon: The Competition Bureau sent in a draft with a small amendment to make sure that this is not just focused on trade barriers but broader policies and other issues that are challenges. It’s broadening out to make sure that the principle behind the bill in section 8 is met. Maybe you have not seen it. It was submitted to the bureau, signed by Jeanne Pratt.
Mr. McKendry: To pick up on the exchange with Senator Ringuette, my understanding is that it would be legally very similar.
Senator C. Deacon: Okay. I’ll leave that. Had you considered anything in terms of the retroactive application of this? They could perhaps look at past studies and ask for a response rather than just do future work.
Mr. McKendry: An interesting question for the bureau could be whether they would like this power to apply only to their market studies, which, I believe, was formalized.
Senator C. Deacon: They have done those in the past.
Mr. McKendry: If this could also apply to their more informal recommendations, then I suppose they could simply write a letter saying, “We would like a response to this.”
Senator C. Deacon: You wouldn’t be against that at this point in time? That’s not something you would be concerned with?
Senator Klyne: If it were coming from the Competition Bureau?
Senator C. Deacon: If that was a recommendation from the bureau.
Senator Klyne: Yes, I think I have a lot of confidence in the Competition Bureau.
Senator C. Deacon: Super. Thank you.
Senator Yussuff: The bill says that the federal institution must respond, but it doesn’t say what the response has to include. Should it say that they accept it, they partially accept it, they reject it and give some explanation as to why?
Senator Klyne: They come under the federal regulations. That is a challenge for the Competition Bureau. Again, back to government relations, if the government is going to stand hard on something, it’s a tough row.
Senator Yussuff: Should the bill say that we accept the recommendation, disagree partially or reject it?
Senator Klyne: Do you mean an opinion on whether the feds should have that right?
Senator Yussuff: Yes, because otherwise, they will say, thank you for your report, and it goes into file 13. We want a little more than that in a response. That’s my only point. I’m trying to understand if we can strengthen that.
Mr. McKendry: I suppose the fact that, because it would be public, if their response was inadequate, then it could receive criticism, but I don’t think there would be anything precluding a requirement that they include a few key pieces of information.
Senator Loffreda: Senator Klyne, reducing internal trade barriers, we all know by now, is essential to helping Canadian businesses grow and improve productivity, which is a key issue in Canada. Yet, many of these barriers involve provincial jurisdiction, and your bill leaves provincial responses voluntary, as we discussed. How confident are you that transparency alone will encourage provinces to address the barriers identified by the Competition Bureau? What additional mechanisms could encourage action while respecting provincial jurisdiction?
Senator Klyne: I’ll leave that to Mr. McKendry because I know he has looked into it, but if it lies within the provincial jurisdiction, then it lies within the provincial jurisdiction. As you know, some things are federal and some things are provincial. Sometimes, provincial ministries are well guarded in terms of how they allow them to operate.
Senator Loffreda: Do you want the provinces to knock off the interprovincial barriers? That’s the key.
Senator Klyne: Right. The Competition Bureau could coach the minister responsible for the agriculture ministry and get them to have something that would be more innovative and allow them to be a better competitor and find new markets. I’m just making that up, but Mr. McKendry probably has the right answer.
Mr. McKendry: Part of the intent of the bill would be to give additional profile to the issue of interprovincial trade barriers — to Senator Gignac’s point about why an accountability mechanism is included for provinces, territories and municipalities. It would be because if you don’t engage the provinces at all on interprovincial trade barriers, it wouldn’t get very far. Most of the barriers are within provincial jurisdiction. But it would be soundly within federal jurisdiction to have a policy role in terms of making suggestions and having those considered.
A key point would probably be that, with accountability measure and public information getting out there, Canadians in all the provinces would stand to benefit.
Senator Ringuette: My understanding is that the current Competition Act has no enforcement provision and can make inquiries and studies on all. So, essentially, this bill brings transparency in regard to what the inquiry would reveal in regard to federal or provincial trade barriers? Yes or no?
Mr. McKendry: Yes.
Senator Ringuette: Okay. So it’s a yes.
The Chair: That question wraps it up. Thanks to our witnesses. For our second panel, representing the Competition Bureau of Canada, we have Mr. Bradley Callaghan, Associate Deputy Commissioner, Competition Promotion Branch; and Matthew Chiasson, Senior Policy Advisor, Competition Promotion Branch.
We want to welcome you. Mr. Chiasson, you have the floor for your opening remarks.
[Translation]
Matthew Chiasson, Senior Policy Advisor, Competition Promotion Branch, Competition Bureau Canada: Thank you, Mr. Chair. Honourable senators, thank you for having us here today.
My name is Matthew Chiasson. I am a Senior Policy Advisor at the Competition Bureau. I’m joined by my colleague Associate Deputy Commissioner Bradley Callaghan.
The bureau monitors and enforces the Competition Act. We also advocate for policies and regulations that support competition across the economy.
Our main message today is that we support Bill S-239.
[English]
The bill would require federal institutions to respond to recommendations arising from the Competition Bureau’s market studies. It would also encourage, but not require, provincial institutions to do the same.
We believe this would strengthen accountability for Pro‑Competitive Reforms in Canada by creating a more transparent process for considering bureau recommendations. In our written submission, we also suggest a modest amendment to clarify the bill’s application.
Before getting into the specifics, I would like to briefly situate this bill in the broader context. There is growing recognition that competition is key to building a more affordable, productive and resilient economy.
Recent reforms have substantially strengthened the Competition Act, and governments are now looking beyond competition law to the broader rules and policies that affect the competitiveness of our economy.
Across Canada, this is translating into efforts to reduce barriers to internal trade and labour mobility, modernize regulation and make it easier for businesses to enter and expand.
The federal government’s whole-of-government competition plan reinforces this direction by seeking to prioritize competition in the design of regulation, public procurement policies and industrial supports.
In our view, Bill S-239 complements these developments.
Market studies are one of the bureau’s key tools for bringing a competition lens to public policy. They allow us to examine competition broadly in a sector, identify the root causes of competition problems where they exist and recommend practical reforms.
Governments and regulators often engage constructively with our findings and recommendations. But that engagement is not always consistent or visible to the public. There is currently no requirement to publicly respond to recommendations that emerge from our studies. Bill S-239 would address that gap.
Importantly, the bill does not require governments or regulators to accept our recommendations. Policymakers would continue to weigh competition alongside other legitimate policy objectives. We are also mindful of those objectives when crafting recommendations. Even so, reasonable differences of view can remain.
This is where the bill’s public response requirement adds value. It provides greater certainty that recommendations have at least been considered. Where governments agree, it makes their intended next steps more transparent, and where they take a different view, it gives them an opportunity to explain. In either case, it helps Canadians understand what actions are being taken and why.
[Translation]
It also creates no new burdens or obligations for stakeholders who participate in our studies. Rather, it helps to ensure that the time, evidence and perspectives they contribute to our studies feed into a transparent public policy response. The Organisation for Economic Co-operation and Development, or OECD, has long recommended that Canada adopt this type of approach. Similar accountability mechanisms are in place in the United Kingdom and New Zealand.
[English]
We have suggested one potential improvement to the bill. We recommend clarifying that the response provisions apply to any type of recommendation the bureau may make to improve competition and not just recommendations concerning internal trade barriers. This would ensure that the bill captures the full range of pro-competitive recommendations that can emerge from our studies.
In closing, we commend the committee and Senator Klyne for advancing this work. We believe Bill S-239 would strengthen Canada’s competition policy framework and contribute to a more competitive and prosperous Canadian economy.
[Translation]
Thank you. We look forward to your questions.
The Chair: Thank you.
[English]
Senator Varone: I am going to ask the same question that I asked the previous panel.
Is there anything in Bill S-239 that helps you get control of “exclusive use” clauses that are proliferating throughout the landscape? It’s not an interprovincial barrier; it’s just a barrier to competition. I know you did come out with some recommendations against the use of “exclusive use” clauses. But does this give you the tools you need to bring that epidemic under control?
Mr. Chiasson: That is a great question, and I have good news for you. When we did our retail grocery study, we identified property controls as a barrier to entry in the retail grocery space. The government then amended the Competition Act to give us stronger tools to apply the act in those spheres, and Manitoba actually took the step of banning them in that province.
Since then, we’ve secured commitments, binding in the case of Empire, and voluntary in the case of Loblaws and Walmart, to not enforce those types of clauses, as it pertains to retail grocery stores. We’re already starting to see some progress as a result of this.
If we had had this bill at that time, other provinces other than Manitoba might have been required to respond to that recommendation and say whether or not they thought it was a good idea.
Senator Varone: Will this bill make that response retroactive?
Mr. Chiasson: The way we understand it, it would only apply to formal market studies, and we’ve now only had that since 2023. The previous study was done outside of that framework, so it would likely not apply retroactively.
Senator Varone: Thank you.
Senator Fridhandler: I have a question on the act more broadly.
Are there sanctions in the act relative to a non-response from a federal institution? I’m not quite concerned about provincial, but if the feds don’t respond, would you post, “No response from the institution head”?
Mr. Chiasson: That’s right. There’s no sanction contemplated here. In theory, somebody could bring a judicial review application, and maybe a court would order the response. That would be embarrassing.
I do think federal institutions don’t like to see statutory requirements lapse, so we would expect that we would typically get a response. Part of our role would be, when the deadline gets closer, to provide reminders that one is due, so we would do that.
Senator Fridhandler: I’m assuming — but you can advise me from the department’s perspective — that the use of “may” in the provincial response requirement is simply because of a constitutional concern that you can’t impose that, or do you believe that you have the constitutional authority to otherwise put “shall” in there as well?
Mr. Chiasson: We’re not constitutional experts, but we understand that that is the spirit of “may” versus “must.” Writing a law that would require provincial institutions to respond may go beyond what we’re allowed to do.
Senator Fridhandler: What public website might you use?
Mr. Chiasson: Our own. We would have no interest in posting these on some other website.
Senator Fridhandler: So an amendment would be quite acceptable to you?
Mr. Chiasson: Suppose it said, “The Competition Bureau’s website,” and our name changed, we might have to change that over time, but I’m sure the drafters could find some way to do that.
Senator C. Deacon: Thank you very much, Mr. Callaghan and Mr. Chiasson, for being here. We are always glad to see you at the Banking Committee.
I wanted to drill into the retroactive element because I think it could be very useful for you to be able to go back and revisit past work and be able to bring it back to life. Have you contemplated a potential amendment that would change the language that would enable you to do this on a retroactive basis?
Bradley Callaghan, Associate Deputy Commissioner, Competition Promotion Branch, Competition Bureau Canada: It’s not something that we have really discussed in detail in advance of coming here today. We recognize it’s a question that the committee is interested in. Certainly, that consideration is not reflected in our submission.
As my colleague has pointed out, although the bureau has done market studies for a long time, they’ve only recently started under a formal power, section 10.1 of the Competition Act, which came out of these waves of amendments that improved and strengthened the Competition Act. One gave us more information-gathering power so that our findings had even more credibility to them, but it also introduced a more formal system, more procedures and a role for consultation with the minister.
We’re still living in a relatively recent history. We’ve only had one completed study — that’s our airlines market study — and we currently have one in terms of SMEs. There are a number of market studies that really go back to self-regulated professions and generic pharmaceuticals, so it could potentially stretch relatively far back.
Senator C. Deacon: Do you see benefit in that? I’m seeing it superficially as a non-expert. Do you see benefit in being able to bring those studies back to life and ask for a response?
Mr. Callaghan: Obviously, our interest is in more competition. We’re in favour of this bill because it would bring some transparency to the consideration of these recommendations. We make the recommendations so that, hopefully, they’ll be acted upon. There’s a selfish interest in the competition mandate for those kinds of things.
There are some hindsight questions in terms of how the bureau conducting that report may have framed the recommendations. Obviously, they were working under a different act at the time.
One thing we would be mindful of, if the bill were to move forward, is being very clear and targeted about whom the recommendations would apply to and who we are recommending would make changes. It was a different act at the time.
Senator C. Deacon: All I’m asking is that you consider that if there is value there to make sure that this is as inclusive as could be helpful. Who knows how long it will take for this bill to go through and what studies you may have completed by then? I would ask you, if you see an opportunity there, to please get back to the committee. Thank you.
[Translation]
Senator Henkel: Welcome.
In her letter dated September 2, 2026, to our committee, Ms. Pratte notes that in the U.K., the government is committed to making it clear why it is refusing a recommendation. Would you like Bill S-239 to be based on that same model so that, in the event of a refusal, you can also publish the justification for that refusal?
[English]
Mr. Chiasson: That’s a really good question.
The U.K. has had this requirement since 2001. They’ve progressively strengthened it over time. It contemplates providing a clear explanation. This bill doesn’t specify the nature of the recommendation; it leaves it open. It doesn’t have a presumption that it would follow the recommendation. That would certainly strengthen this. From our point of view, there would be some upsides to that, but if it made passing this bill more difficult because of the awkwardness that would produce, then that would not be great.
Mr. Callaghan: One other consideration is how. My colleague will correct me if I’m wrong, but my understanding is that the U.K. commitment is a voluntary one. It has been long‑standing. It has been in place for quite some time, and it has been re-upped under subsequent governments but is not codified in the law. Whereas the other example we give in our submission is New Zealand, where it’s actually placed right into their Commerce Act.
[Translation]
Senator Henkel: You were telling us a little earlier about the different provinces. When your studies identify a barrier to competition arising from rules that fall under the authority of multiple governments, how do you see the bureau’s role?
[English]
Mr. Chiasson: If we were doing a market study that spanned different levels of government, where different players had different roles, we would have to be clear in our recommendations who the actor is that we’re making the recommendation to.
If there were things that required coordination between those regulators, we’d have to think about things like whether we need a coordinated response or whether we are looking for individual responses. I can’t say that we’ve given a ton of thought to that. Maybe we can take that away. Often, we can craft our recommendations in a way that there’s one respondent and one answer that we’re looking for, but we take the point that there could be special circumstances. There’s nothing in the bill that would preclude coordination if the respondents chose to do so. Maybe we could suggest that when we make a recommendation.
Senator Loffreda: Thank you and welcome. My question is about balancing competition and financial stability. When examining barriers to entry and expansion in financial services, how do you distinguish unnecessary regulatory restrictions from prudential safeguards that protect financial stability? How would you assess whether the same protective objective could be achieved in a way that allows greater competition? We would all benefit from greater competition, as we saw in our study on SME financing.
Mr. Callaghan: We certainly agree. The balancing between a competing policy objective that another department may be carrying out in the role of competition is exactly what we are advocating for. We recognize that our studies are making recommendations focused on one outcome, and that is more competition. We know that that has to be weighed against something else.
In the finance space, obviously, one is financial stability. We know it’s something that Canada and Canada’s financial regulators have been particularly proud of coming out of the 2008 crisis. We have continued to push to understand whether there may be a cost to competition in terms of where that balance is struck. We have pushed for more thinking on that front. We’ve advocated for pro-competitive rules in terms of an open banking framework. We currently have a market study under way that you referenced, Senator Loffreda, in terms of loans that are given to small- and medium-sized enterprises and the financing that they can receive. We look forward to producing our report on that front.
It has been encouraging to hear some of the commentary coming out of the OSFI, which plays a significant role in this space. A lot of that discussion is about where that balance is being made and an understanding about whether there may be costs that had been taken on in terms of competition. We look forward to delivering our report before the holidays, and we certainly have a keen interest in making sure that competition is weighed fully when that balance is struck.
Senator Loffreda: I look forward to reading it. Thank you.
Senator Yussuff: Thank you again for being here. I have a couple of questions in a broader sense. Since the passage of Bill C-5, the provinces and federal government have been working extensively on breaking down interprovincial barriers. Have you started any work in trying to assess the progress and how it’s aiding and supporting competition, in the broad sense of Canadian consumers, Canadians writ large? Are we making progress? This has been a 150-year endeavour. Is it better today? This, obviously, will give you some new tools, but will the things that we’ve committed to do as a country and in the legislature make any difference?
Mr. Chiasson: That’s a great question. From our point of view, there has been a lot of progress. The federal government has removed all of the federal exceptions in the Canada Free Trade Agreement. It has also passed Bill C-5. The bureau supported that legislation. We provided a submission to the Senate as part of its study of that bill. All governments have now signed a Canadian Mutual Recognition Agreement on the Sale of Goods. There are some exceptions to that pertaining to food, alcohol, cannabis and tobacco, but those are being pursued on separate tracts.
There’s also a commitment to extend this mutual recognition agreement to services by the end of the year. As it relates to labour mobility, there’s now a 30-day service standard for a decision on credentialed recognition. If you’re a licensed professional and want to move to another province, you’re going to get a decision within 30 days. There’s work on alcohol direct to consumer and interprovincial trucking regulations. We’re seeing many announcements. Some of these things are commitments that still have to be ratified and brought into force. Part of our perspective is to continue urging provinces and territories to do that. We have done some discreet work with the CFIA on easing barriers to competition in the interprovincial trade of red meat. That’s where we tend to get involved: where there’s a particular issue where the bureau’s expertise is needed or helpful, and we provide that kind of expertise in that area.
Senator Yussuff: Procurement is a very sensitive matter depending where you are in the country and the role it plays. But it is also an important policy objective for local governments, jobs and development, and we’re still a country with very different economies depending on where you sit. Have you ever measured the benefit of procurement and how it helped the country foster better distribution of wealth and development in regions in the context of who we are and the largeness of this country?
Mr. Chiasson: Procurement across all levels of government represents something like 15% of GDP. The OECD measures our procurement system, and we rank thirty-ninth in terms of competitiveness. The federal procurement ombud did a study that found that almost a third of federal contracts only receive one qualified bidder. I think there are some things we can do to improve the competitiveness of our procurement system and make it more accessible to SMEs.
Suppose were we to give advice on making a procurement framework more competition friendly. Would that be respecting a barrier to trade within Canada? If not, it might not require a response; so we might end up having to have a debate with the procurer about whether the response requirement is triggered. That’s one of the reasons why we’re seeking this clarification, just to avoid having to debate, technically, whether the response is triggered. Obviously, it’s something to improve competition, but is it an internal trade barrier, or is it something else? That’s why we’re seeking that.
Senator Ringuette: There are also bureaucratic trade barriers. You’ve heard our first panel with Senator Klyne, who is sponsoring this bill, the questions, the answers and the back and forth. You made a recommendation in regard to clause 8. Do you stand by that, or are there some modifications you’d like to make to your recommendation of clause 8?
Mr. Chiasson: We stand by it. After hearing the testimony, it’s now clear to us that what we’re seeking is a clarification. The bill was always intended to be interpreted broadly, not to just be limited to interprovincial trade barriers but to any barrier to competition. We think that this amendment — maybe it’s gilding the lily — might help avoid unnecessary debate with a recipient institution about whether a responsible is required, if we can just simplify it.
But I take it that was always the intent behind this reform to begin with.
Senator Wallin: I’m going to come back to my question, too, from the first round. Are you at all concerned about what appears to be the ability to circumvent a 120-day clause by just saying, “I have a question, sir”?
Mr. Chiasson: I don’t think we have a specific concern about that. I think governments will try to meet that. We went back and looked. The government has tabled something like 550 responses to House committee reports in the last 10 years. We’re doing one or two market studies a year, so it’s not a huge incremental ask for the government to do that.
Senator Wallin: Do you think there should be a sanction? That’s the other thing you said. You can phone them and embarrass them, but there’s no other sanction.
Mr. Chiasson: I don’t think we would be seeking to sanction the government for not responding. We would expect the government to respond.
I don’t want to get us off track, but when we’re formulating a recommendation in a sector, like with airlines, we are in constant communication with that department. They’re not surprised when we table a recommendation. It says 120 days, but in reality they have a lot longer to consider those types of things. They’re already generating their own advice internally. What this bill requires is to publish it and send it to us, and we put it on our website.
Senator Wallin: Thank you.
The Chair: I will share something that is not from the chair; it’s from a senator from Quebec. We appreciate very much what you’re doing to protect consumers. The concern I have — I expressed a little bit in the first panel and I will try to share more now — is that I don’t want the Competition Bureau to be involved in political games between provinces and Ottawa. We are in a federation with provinces, and some provinces are more protectionist than others. We understand your point that you will provide more transparency.
Fifteen years ago, we organized the first Canada-Ontario business forum, and our topic was to eliminate interprovincial trade barriers to promote trade. Here we are again. There are many aspects, including, for example, in construction, where we have more associations in Quebec than the others. I do not refer to language here; I just refer to the fact that drug pricing in Quebec is quite different. We encourage research and development in Quebec, and we have different pricing.
My concern is that, at some point, you would be in a political fight between Ottawa and some provinces, and at the end of the day, it’s about disinformation that some politicians could use against the Competition Bureau.
It’s more an assertion than a question, but this bill is a huge improvement when we limit it to the federal part. It’s important that ministers do not hide and that they provide answers. However, I have a huge concern about being involved with the provincial side. In addition, it is a “may” response, of course, but I was surprised because, in the first panel, they mentioned that we can provide more room with the same staff. I expressed some doubt if you are going into the provincial area with this kind of thing.
If you want to react, it’s good. Maybe you have some aspect that I’m missing, but this is more as a senator from Quebec than as a chair when I express this reaction to this bill.
Mr. Callaghan: Thank you, Mr. Chair, and to the senator from Quebec. One thing I would underline is that, whether it is a “must” or a “may,” what the bill is looking for is a response, and not necessarily to take up the action. So our interest in this is to try to bring it into public light and to get more transparency on the consideration for our recommendations. It’s not asking for it to be taken up. Obviously, our ultimate goal is that they will be taken up, but it’s not to remove any agency from provinces and territories from deciding what is best for them.
I recognize that, obviously, in practice, the transparency would have some effect. It’s the whole reason that it would be put there. But we recognize that governments are making important trade‑offs. This is maybe going back to Senator Loffreda’s question, and that was specific to the financial space. But we know that there are trade-offs made between the role of competition and some other public policy objectives, and it would be helpful, in our view, if those considerations are not just happening within departments and within individual governments, and it can be brought into public light as to how those decisions are made. That still respects some room for governments to decide what is right. But Canadians would be able to understand how those decisions are made and where those evaluations are made, and the role competition will play.
The Chair: You have many friends around the table, and many people who are watching us appreciate what you’re doing, but at some point, we want to protect not only your neutrality and credibility but your franchise as well.
We have time for a second round. We have 20 minutes. Maybe we can limit to two minutes each, if possible.
Senator Varone: My question doesn’t exactly relate to Bill S-239, but I’m wondering how your radar works. How do you find anti-competitive behaviour, whether it is between provinces or in industry? Where is your suggestion box? Do people actually email you about anti-competitive behaviour? How do you do your reconnaissance across the country?
Mr. Chiasson: It’s a great question. Yes, complaints come in. I think we get tens of thousands a year through our website. We also do proactive intelligence gathering. We also have an immunity and leniency program, which encourages conspirators that are part of a cartel to come forward and tell us about it, and they can benefit from our immunity program. We also have partnerships with other law enforcement agencies at the federal or provincial level internationally, so we have a funnel where we are taking in as much information as we can and making decisions about what things to investigate.
Senator Varone: Do you find that you are well served by what you have?
Mr. Chiasson: Yes.
Senator Varone: Okay. Thank you.
Senator Loffreda: My question is about turning responses into results. We always say that what you measure improves. Once government responses are published, how would you track whether accepted recommendations are implemented? Would you support an annual public progress report identifying overdue responses, outstanding commitments and measurable results, such as greater consumer choice or improved financing conditions for SMEs? Would you support reporting back on an annual basis? This would show who is not responding, who is responding and the measured results. We invest so much money, but we could improve on tracking results.
Mr. Chiasson: That’s a very good idea. What we would be looking at is sort of short-, medium- and long-term performance indicators. For one, we would be looking at whether our regulators are providing a response. Is that response clear and comprehensive? Is it timely? Then we would be looking at whether they are actually following through on the things they say in the response. If it’s a promise to introduce some law or make some amendment, has that been done? Then we would be looking at whether that actually had some effect on competition. Did it actually lower prices? Did it actually allow for more entry? Then you obtain a fuller picture of the benefits of a change like this. Yes, absolutely.
Senator Loffreda: So you would make a report?
Mr. Chiasson: We might not have annual reporting. We would have to think about that.
Senator Loffreda: Why not?
Mr. Chiasson: We’re doing one or two studies a year, so that may not be the right cadence.
Senator Loffreda: This is an important issue, isn’t it?
Mr. Chiasson: We certainly publish an annual report, and we have annual performance reporting on what we’re doing. So there is already some form of that, but maybe we can think about how to incorporate this tracking.
Senator Loffreda: Sure. It would be nice to increase competition and eliminate interprovincial trade barriers. They’ve been contemplating doing it for 10 years. Thank you for that.
[Translation]
Senator Henkel: Thank you for your work. I have a quick question: How many people are in your office?
[English]
Mr. Chiasson: We have about 500 people: some in headquarters in Ottawa and some in our Vancouver, Toronto and Montreal regional offices.
[Translation]
Senator Henkel: Going back to your neutrality and the work you want to accomplish through this bill, I’d like to return to the French language. We’re talking about costs, gains and productivity, but how are you going to be able to maintain your neutrality? For example, in Quebec, it is a legal obligation to have in both languages — in English and French — the instructions for use, labelling, and so on. However, in other provinces, businesses are not required to use both languages. They use only English in the majority of cases. There is already a difference in the costs imposed on small- and medium-sized businesses.
How will you determine whether competition is fair, unfair, legal or illegal? There’s already a cost difference for competition.
[English]
Mr. Chiasson: It’s a great question. We touched on it a little bit before. It’s broader than just language. There are differences between provinces that have to deal with geography or climate, highway infrastructure, resources or preferences. If those differences are the reason behind a trade barrier, that is not per se the issue for us. We are focused on where the trade barrier does not have a legitimate business justification, where there is no reason why the requirements can’t be harmonized or where the benefits to competition would out weigh those other considerations. But we are not trying to seek to promote competition at all costs, be it language or other values that provinces might have.
Part of what makes us neutral is that we’re not actually questioning the policy objective; we’re trying to find a competition-friendly way of still achieving it.
[Translation]
Senator Henkel: With respect to your neutrality, do you have a recommendation on how that should be managed, given that companies have already raised this issue in terms of competition? I understand that it may not be within your mandate, but whose responsibility is it? How can we address this kind of competition and competitive trade barriers across the country?
[English]
Mr. Callaghan: We can continue to think about that. My colleague explained it well. The only thing I would comment on is that we’re thinking about those aspects, both in terms of the trade-offs of different public policy objectives and, apart from that, competition. Where there is something that is changing costs, and that might change our analysis of how competition is working, then, obviously, it’s a relevant factor. That’s already part of our day-to-day work that we would do — evaluating how markets are working and what role aspects like that might play in terms of competition within a market.
Senator Pupatello: Do you receive requests by international companies outside of Canada or outside governmental jurisdictions for potential study by your office? How many of those would you get as a percentage of your work?
Mr. Callaghan: We do liaise with international counterparts. In most cases, they are probably very focused on doing their own studies in their own jurisdictions.
Senator Pupatello: What if there were an automaker that was trying to sell in Canada, and it wasn’t meeting our safety standards, for example? If they called your office and said, “We feel that we’re being unduly treated, and this is not fair competition.” Would you take on that kind of study?
Mr. Callaghan: We would consider all these things on a case-by-case basis. Certainly, it wouldn’t just trigger a study.
To separate a few things here, maybe your question is more along the lines of whether there might be conduct that could violate some of the conduct sections of our Competition Act rather than starting a market study. The two things are different. The conduct concerns are something that we would get all the evidence to see if we would bring a case before the courts to try to stop or change the conduct.
With regard to a market study that is really the focus of the discussion here today, our recommendations are really focused on policymakers, on that front. When international partners reach out with ideas about what is worthwhile to study, we think about what is in the public interest of competition in Canada, so we listen, but it certainly wouldn’t bind the Competition Bureau in any way.
Senator Yussuff: Our country is in a very precarious challenge right now. Our biggest trading partner is having a really horrible row with us. It’s not about to end anytime soon. The provincial and federal governments are making conscious decisions about the procurement of Canadian products because of jobs and trying to make the economy resilient. It’s going to have an effect on how consumers are experiencing prices.
This may not be permanent, but the reality is that we’re in it. We don’t know when it’s going to come to an end. Do you assess that in a way that says, “The value is about protecting the Canadian economy, but at the same time, it is a price to pay for it,” because, ultimately, you are the only people who can make a difference in your choices here? How do you assess that in the broader policy framework?
Mr. Chiasson: We would distinguish between some of the short-term things that governments are doing to shore up domestic industries and prevent scarring, which is absolutely, from our point of view, legitimate. They are not just doing that. They are also doing some long-term things to open up markets to greater competition.
Internal trade liberalization is just one aspect of that, but I also spoke about the federal government’s whole-of-government competition plan, and a big part of the thinking behind it is that this is a way to make our domestic industries more productive so that they are more able to compete on the global scale. Those objectives can work in tandem and need not conflict with one another. There are things we could be doing on procurement to open up to more domestic bidders, but there are also some things that we could be doing to support domestic industries. They need not be in conflict.
Senator Yussuff: Along the same lines, in the context of trying to assess all of this, at this particular moment, there is a cost, obviously. When you take certain aspects out of competition in the market with traditional players, somebody is going to pay for that. But in the context of Canadians understanding some of this, there has been a lot of hype about the cost for interprovincial trade barriers. Some people just inflate what the savings might be if you break it all down.
Would you assess, at some point, as we keep breaking the barriers down, that we are achieving the savings that supposedly come from this? Is the consumer better off today as a result of breaking down the barriers?
Mr. Chiasson: I don’t think we are, on an ongoing basis, doing that kind of modelling. Our perspective is that if we can open up markets to greater competition without sacrificing important policy objectives, then we should do so. Generally speaking, when you open up markets to more competition, there is a lot of evidence that that tends to lower prices, boost wages, increase innovation and increase productivity.
That’s why we support those types of efforts. We would expect to see those types of gains if we make these types of changes.
Senator Yussuff: I listen to the critics. I think they have a legitimate argument. But at some point, the consumers need to know supposedly the things that are going to make the economy more competitive. By the way, a can of Coke is still as expensive as it was three months ago, six months ago or three years ago. The consumers need to have some assurances that what we’re doing is making a difference in their lives.
Mr. Chiasson: We are encountering this all the time. There have been various forms of relief given on the price of gas, but the price of gas keeps going up. Obviously, we don’t see the counterfactual of what prices would be without this relief. It’s tough to do those types of studies. We try to reinforce the message that competition is good for consumers, workers and businesses.
We have commissioned a few studies that try to quantify the gains that could come from extending open banking to insurance or could come from bringing down barriers to competition in regulated sectors.
Mr. Callaghan: We know of the examples that Senator Klyne’s office mentioned in the testimony earlier. The example from Australia is not untested. There, they have had a dedicated pro-competitive review and upgrade to all of their rules to see what would happen. As was mentioned, the proof is in the pudding. There was an increase in 2.5% of GDP, which they said is really a conservative estimate. It’s real money. I think they estimate it to be about 5,000 Australian dollars for each family.
I certainly take your point, senator, that it can be hard when people are buying groceries that are expensive. We continue to work on that issue as well. But these kinds of bigger effects of a large-scale addressing of a problem like this have a payoff too.
The Chair: Talking about gasoline prices, the finance minister, last week, put his faith in you to monitor the situation to ensure that the tax rebate is going into the consumer’s pocket. I highlighted to him that in the petroleum industry, in the second quarter, the profit was up 70%, but if you go to refining, downstream petroleum, the profit is up 180%, compared to the same quarter a year ago. So I expressed some doubt about the 100% tax rebate.
I don’t know whether you go with your own incentive, whether parliamentarians have to give you a formal request or whether your conduct and market study are working. How is it working exactly?
Mr. Chiasson: With respect to gas prices, we are monitoring gas prices. If there were a conspiracy among producers not to pass through the excise tax savings, for example, that would be illegal. It would carry a very serious criminal sanction. It would be unwise for companies to do that.
We do look at patterns to see if there is suspicious behaviour.
The Chair: Based on what is going on in the field, do you have any concerns that there is a conspiracy?
Mr. Chiasson: There is nothing we can report right now.
Senator C. Deacon: I have one quick question. Sections 9 and 10 both refer to posting the response on the publicly available website. Is that in any way limiting you from posting on social media, and wherever else? We don’t need to worry about that. We have fax machines referred to in legislation, which means that we have to keep using fax machines. Is that an issue for you?
Mr. Chiasson: No. It would require us to do it on our website, but it wouldn’t stop us from doing it elsewhere.
Senator C. Deacon: I wonder if it should be written more broadly, saying, “post as needed,” or “as required.” So it’s not an issue. Thanks.
[Translation]
The Chair: Thank you for your testimony, Mr. Chiasson and Mr. Callaghan. It will be taken into consideration when we report back to the Senate.
Colleagues, our next meeting will be tomorrow at 10:30 a.m. However, I will take three minutes of your time for a short in camera meeting.
Thank you to our witnesses.
(The committee continued in camera.)