Affordable Housing and Groceries Bill
Bill to Amend--Third Reading
December 14, 2023
Moved third reading of Bill C-56, An Act to amend the Excise Tax Act and the Competition Act.
Colleagues, “Capitalism without competition isn’t capitalism; it’s exploitation.”
This statement describes a central pillar of President Joe Biden’s economic policy. He goes on to say, “. . . Without healthy competition, big players can change and charge whatever they want and treat you however they want.”
Those of us who fly each week live the effects of that reality.
Conversely, competitive markets force companies to innovate so that they can deliver greater value and attract more customers. Robustly contested markets cause increases in business investment, efficiency, innovation and productivity. Competition creates better products and lower prices for customers. As a consequence, competitive markets drive companies to become stronger global competitors.
Business investment and productivity in Canada have been declining steadily over 20 years. The emerging consensus is that our outdated competition laws and policies shoulder much of the blame.
Colleagues, this is why I’m thrilled to rise to speak today at third reading in support of Bill C-56, the affordable housing and groceries act. I’m pleased to see the government follow through on Budget 2022’s “down payment” on competition policy reform. Bill C-56 introduces the most meaningful reforms to Canada’s competition laws since the 1980s. It will implement measures intended to increase the affordability of housing and increase competition across our economy, including in the grocery sector.
But, first, let me step back and give you some insight as to why I’m so passionate about competition law and policy reform in Canada.
When first introduced in 1985, the purpose of the Competition Act was to:
. . . maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices.
That purpose remains relevant today. The challenge, however, is that market realities have fundamentally changed in the ensuing 38 years, rendering many parts of the bill no longer fit for purpose. Our Competition Act dates from an era when it was assumed that fostering big, homegrown companies was a national economic priority.
This belief has been completely discredited by evidence, yet it lives on in our Competition Act.
For example, as a result of how we manage competition in the telecom sector, the 85% of Canadians who have smartphones pay some of the highest telecom bills in the world. Let me walk you through a few of the resulting inequities.
I use my Senate smartphone a lot. I am probably not alone. It only costs $30 a month thanks to the deal that the federal organizations have with Bell Canada.
Conversely, the cost of my personal phone is about $90 a month, about three times the cost of my Senate phone. I’m absolutely certain of one thing: Bell would never offer this $30-a-month deal unless it was profitable to do so.
So those who can pay the most pay the least, and those who can pay the least pay the most. Bell has the luxury of engaging in price discrimination amongst its customers because our competition laws and policies protect oligopolies from robust competition, even made-in-Canada competition. If you think it is bad here in Canada’s South, I suggest you speak to one of our three senators from the territories.
I now want to cite a recent industry and merger example to further make my point. Over the last 18 months, we’ve seen large-scale corporate consolidation in real time with Rogers acquiring Shaw for $26 billion.
When Rogers’ proposed $26‑billion acquisition of Shaw threatened to further consolidate the market, Canada’s Commissioner of Competition, Matthew Boswell, dared to challenge the merger and defend the interests of Canadian consumers. Suddenly, in the midst of tribunal preparation at the bureau, Rogers and Shaw, Rogers committed to sell the wireless division of Shaw called Freedom Mobile. Rogers gambled that it could unilaterally predetermine its own remedy to the merger’s anti-competitive effects. It ended up working.
Rogers had received two credible bids for Freedom Mobile and, remarkably, the Rogers board accepted the offer that was a billion dollars less than an unsolicited offer from a more robust and completely independent competitor. The Rogers board would never have accepted a billion dollars less in that asset sale unless they were confident that the discounted sale price would ultimately deliver much higher returns well into the future because the asset was being sold to a weaker competitor.
Whatever their rationale, Canada’s weak competition laws were exploited by Rogers, allowing it to boldly and publicly choose its own competitor as a remedy to what many felt was an anti-competitive merger.
Ultimately, in January of this year, the tribunal ruled in favour of letting the merger proceed. Then, in August, the tribunal went so far as to determine that Canadian taxpayers pay Rogers and Shaw about $13 million because, under our competition law, as it currently stands, Canada’s Commissioner of Competition, in their opinion, had been too aggressive in his challenge of the merger.
Colleagues, our oligopolies have consistently benefited from legacy legislation policies across the whole of government. This problem is not limited to groceries or telecom — far from it.
Many of our oligopolies have become so dominant that they can just focus on serving the interests of their shareholders, without having to first concern themselves with the interests of customers. Indeed, the general state of competition in Canada is such that it has resulted in our country having accumulated one of the greatest regulatory burdens in the OECD. Ironically, the cost of adhering to Canada’s federal, provincial and municipal regulatory burdens are so great that regulations initially intended to protect citizens now do a much better job of protecting the interests of incumbent oligopolies. Our complex and cumbersome regulatory burdens can’t be afforded by innovative new entrants.
In our Banking Committee, I like to ask economists at our big banks about the importance of competition. They reliably and ironically describe robust competition as being central to improving innovation, productivity and prosperity in Canada. And Bank of Canada Governor Tiff Macklem consistently describes robust competition as being a crucial ally in the long‑term fight against inflation.
Colleagues, you have likely heard me say before that you can never regulate a company into becoming customer-centric. Only competition makes that happen. We desperately need to change course if we want to protect our future prosperity.
Now I would like to climb off my soapbox and speak directly to the competition-related elements in Bill C-56.
In November 2022, ISED initiated a consultation on the future of Canada’s competition policy. The public consultation garnered considerable interest with over 130 submissions from identified stakeholders and over 400 members of the general public. Collectively, these submissions proposed over 100 possible policy reforms. There were also round tables and one-on-one meetings held with stakeholders.
In September, the results of this consultation were published in a What We Heard report, and the amendments to the Competition Act in Bill C-56 all flow from that consultation. The amendments incorporate additional measures through an agreement with the NDP, but all of these align with the consultation report.
The amendments are as follows: First, the Competition Bureau will now have the power to initiate market studies that examine inefficiencies that may be due to weak competition. Importantly, the bureau has also been provided the authority to compel the production of information from the related businesses. Prior to this amendment, when conducting a market study, the bureau could only politely ask the related businesses to hand over non-public evidence.
We wonder how that might work in police investigations, for example.
This lack of authority was illogical and completely out of line with practices in our peer nations.
Indeed, in their submission to the Canadian consultation, Assistant Attorney General Jonathan Kanter, responsible for enforcement of antitrust law in the United States, and Federal Trade Commissioner Lina Khan wrote:
The Competition Bureau, like the FTC, has the authority to conduct market studies. Unlike the Competition Bureau, however, the FTC has the authority to use compulsory process in the aid of such studies.
They continued, writing:
These studies allow the FTC to gather information and documents outside the enforcement context and can play a key role in identifying and analyzing emerging competition trends and issues. . . .
An amendment in the House’s Finance Committee broadened the power of the Commissioner of Competition to initiate market studies without a directive from the minister — this was an important change — although the terms of reference will have to be coordinated and approved by the minister.
Second, the efficiencies defence will be eliminated. Canada has been an outlier with this clause. It prevents an anti‑competitive merger from being legally challenged if the merging parties can hypothetically demonstrate that the merger could produce economic efficiencies, yet they are under no obligation to deliver on these efficiencies. No other peer jurisdiction has allowed this.
Third, the amendments expand the competitor collaboration provisions to include collaborations among parties that are not direct competitors. An example of this relates directly to groceries.
Under current rules, a grocer who owns a mall can prevent a competitor from opening a rival store nearby. Even worse, the contractual obligations can outlive the closing down of that grocery, creating a food desert. These amendments would allow the Competition Bureau to prosecute this practice.
Fourth, the Competition Bureau will be enabled to go after big corporate players who abuse their dominance to engage in anti-competitive acts, such as squeezing out small players. The amendment adds “. . . directly or indirectly imposing excessive and unfair selling prices” to a list of acts:
. . . intended to have a predatory, exclusionary or disciplinary negative effect on a competitor, or to have an adverse effect on competition . . . .
Some have interpreted this amendment as putting the Competition Bureau in an uncomfortable position of enforcing price controls, but the preamble prevents that risk.
Lastly, the administrative monetary penalties, or AMPs, for anti-competitive acts are increased from $10 million to $25 million — and from $15 million to $35 million for subsequent orders. It has generally been understood that the current penalties amount to a business expense for large players. The most troubling recent example relates to Facebook’s penalty for its commercial deception in the Cambridge Analytica affair. In Canada, the maximum penalty could only be $10 million, while in the United States, the same infraction garnered a $5‑billion penalty from the U.S. government.
Some have expressed concern that these amendments are occurring on a piecemeal basis. That’s fair. Regardless, I’m fully supportive of these meaningful changes, but I look forward to examining much more closely those included in Bill C-59.
Colleagues, competition is about much more than just low prices. It is about a free, fair and democratic society. As monopolies emerge, governments are forced to create regulations to combat the harms from those monopolies. These regulations get embedded, making it more difficult for new entrants to disrupt a market, and entrenching that monopoly.
Remember one truth if you remember nothing else: You can never regulate a company into becoming customer-centric. Only robust competition can do that.
If we want Canada to emerge from the pervasive slump of low productivity and command-and-control regulations, we must reform our competition laws. Bill C-56 is an important first step. These amendments are crucial and widely supported by thought leaders and the Competition Bureau alike. This truly is the beginning of a generational change.
Thank you, colleagues.
Would Senator Deacon answer a question?
Absolutely. Thank you.
Yesterday, I asked the Commissioner of Competition this question: Will Bill C-56 and the amendments to the Competition Act result in a reduction in grocery prices in the next few months or the next year? He said no, but that in the long term, the changes to the competition law will bring some good things.
The other side of the question is that they have known that grocery stores have been amalgamating for the last decade, and so competition was being reduced — they put out different reports. They did not do anything.
I wonder about the relationship with the Lobbying Act. Can you comment on the impact of the Lobbying Act and the fact that oligopolies keep growing in Canada? Thank you.
Senator Deacon, you are out of time to answer the question. Are you requesting leave to answer this question?
Five more minutes, if the chamber is so agreeable. I do not think that I will need it all.
Is leave granted, senators?
My goodness. Thank you, Senator Plett, for your graciousness.
Senator Galvez, that is an important question. It is a question of who has the ability to gain access, and the costs of getting lobbyists, putting forward good arguments, using high-priced lawyers to help you make your case and so on are quite significant. Emerging businesses that are disruptive do not have the time, resources or experience to fight that battle.
The loudest, most connected and most powerful voice can often be the one that is heard; others are not heard as clearly.
What is really important is that there are some changes in Bill C-56 to the Competition Act that start to make it harder for the rules to work automatically for oligopolies. My hope is that we are going to see continued change and that oligopolies will have to compete for customers; they will not get to build a protective moat around their business, which is this big regulatory burden. Big companies like regulations because they protect them from innovative entrants. They can spread the cost of those regulations across a much larger revenue base.
From my standpoint, this is a great beginning. It is far from the end to ensure that Canada has more robust competition.
With respect to what the commissioner said around the effect on prices specifically, the Governor of the Bank of Canada, Tiff Macklem, has been very clear: This is a really important ally in the long-term fight to keep prices down and against inflation. It is not an overnight issue by any means, but it will certainly help us all in the long run. I hope that helps. Thank you.
Colleagues, today, I would like to speak to Bill C-56, An Act to amend the Excise Tax Act and the Competition Act.
I want to begin by making it clear that I do not intend to make any amendments to this bill and by saying that I will keep my remarks brief, because I am in favour the initiatives set out in the bill. You are therefore no doubt wondering why I am rising. The reason is that I want to speak out in this chamber, loud and clear, against the very little time that was allocated to studying this bill.
It’s nothing personal against the Government Representative in the Senate or the chair of the National Finance Committee, the Honourable Senator Mockler. On the contrary, as a member of the steering committee, Senator Mockler informed me on Monday at noon that we would have a hard time analyzing and passing this bill before we rise for the holidays, unless we were to take exceptional measures, such as holding a meeting in Committee of the Whole. According to my research, this was the first time in 10 years that the Senate has resolved into Committee of the Whole to debate an economic bill.
Honourable senators, I must admit that I was not familiar with that exceptional procedure. Like my two colleagues from the Canadian Senators Group, I was left wanting more, since each of us were allotted only three and a half minutes to ask questions of the two ministers with responsibilities in the economic sector.
Allow me to publicly thank the leader of the Canadian Senators Group for insisting earlier this week that the Standing Senate Committee on National Finance hold a special session immediately after the Committee of the Whole to hear a few witnesses on this bill.
Hats off to our clerk, Mireille Aubé, and her two analysts, who, with less than 24 hours’ notice, managed to secure the attendance of four witnesses at our committee yesterday afternoon.
Honourable senators, this bill passed first reading in the other place on September 21 and was received here in the Senate on Monday evening of this week. Allow me to point out that the finance committee of the other place was able to devote over eight hours of its time to this bill and heard from nine witnesses. At first glance, you will probably find that reassuring.
However, you should know that the Canadian Bar Association wasn’t able to testify, but it did submit a brief, which I have here. It is 30 pages long and contains 19 recommendations.
Moreover, during the clause-by-clause consideration in the other place’s committee, four amendments were presented and adopted. To me, that’s clear proof that this bill, the first reform of the Competition Act in 35 years, undoubtedly deserved a much more sober second look here.
Honourable Senators, you can no doubt sense a little anger, or at least a little intellectual frustration, in this speech I’m giving as a senator and member of this upper chamber, which is known as the place of sober second thought.
This week, I didn’t feel as though we were part of a bicameral system of Parliament with two chambers. Instead, I felt like I was sitting in the basement of the lower chamber, being treated like a second-class parliamentarian. It’s as if someone had forgotten that we are senators, no doubt of different political persuasions, but all with one common denominator: the desire to do the right thing in a transparent way for the good of Canadians.
I would like to thank my colleagues on the steering committee of National Finance, who agreed to raise the tone a little in the commentary presented last night. Usually, at National Finance, we use gentle, polite and courteous words. This time, we raised our voices a little, pointing out that we found it contemptuous that the committee had so little time to analyze the bill.
Honourable senators, I will close with that. Unfortunately, I think I’ve caught Senator Carignan’s nasty sore throat, so I will end here and probably won’t be able to answer your questions. Thank you.
I do have a question. Can I ask you, colleague, to reconsider?
That’s the only question I’ll answer, and only out of respect for Senator Gold.
Thank you, senator. It’s very important that we here in the Senate have enough time to give bills the attention they deserve. That is the best way to proceed, and it’s always my hope, even though bills sometimes show up on our legislative agenda very late.
Senator, my question is this: Did you know that my office recommended that the National Finance Committee do a pre‑study of this bill, which would have included the participation of — Excuse me, I’ll restart.
The bill was in the other place, and we didn’t know exactly when the Senate would get it, but since it’s a priority for the government and Canadians, did you know that my office suggested doing a pre-study that both ministers would have been a part of? The Finance Committee was ready to receive them Tuesday morning, but certain leaders refused. Not all of them, but enough of them that we didn’t get the consensus we needed to do the pre-study, given the calendar. Are you aware that it’s—
Senator Gold, please ask your question.
Are you aware that the Government Representative Office suggested that the committee conduct a pre-study, which would have allowed for more time to study and debate this bill if the proposal had been agreed to? Unfortunately, it was not.
Honourable senators, I was not aware of all of these dealings or negotiations between the leaders. With all due respect, thank you for sharing that information with us. We often see this in connection with budget implementation bills: the National Finance Committee frequently conducts pre-studies because it can sit almost whenever it wants.
I was therefore very surprised that the approach normally followed for budget implementation bills was not being used. Naturally, I was frustrated, at an intellectual level. We are talking about the Competition Act, which is no laughing matter. It is a very serious issue. Senator Deacon, our expert, who unfortunately does not sit on the National Finance Committee or on the Banking Committee . . . We were unable to split the bill in two to send the competition provisions to the Banking and Economy Committee, which would have studied them carefully, and the excise tax provisions to the National Finance Committee. We sometimes divide things up when we examine budget implementation bills. This time, we did not even have the opportunity to do that.
This is the first time that I’ve encountered a situation like this. I don’t think I was the only one feeling frustrated. At the same time, Canadians understandably need relief. I just wanted to mention it, all partisanship aside, because I think that we are all here to improve the lives of Canadians, regardless of our convictions.
You know, I have only one commitment outside the Senate, and it’s a voluntary one. I chair the board of directors of the Collège des administrateurs de sociétés. Good corporate governance is very important to me. What we’ve seen this week is not good practice, it is bad practice.
I wasn’t aware of that, but I appeal to all four leaders. Please, next time, during your negotiations — I understand, I was in politics for three and a half years and I know what that can entail — when it comes to bills like this, work together to authorize a pre-study. It’s necessary.
Let me make a prediction. When I look at the Canadian Bar Association’s brief, which is about 30 pages long and contains 19 recommendations, it’s quite clear that there will be amendments to this bill over the next few months. Things are going to happen. This legislation has not been examined properly. We really weren’t treated like parliamentarians in the upper chamber. We were mistreated.
As I said in my preamble, Senator Gold, this is nothing personal against you or the chair of the National Finance Committee. It was damage control, and we had to deal with the decisions that were made.
Honourable senators, never in my 12 years as a senator have I felt so belittled, insulted and victimized by such a total lack of respect for my office and the job we all do here.
Yesterday, we held a committee meeting for a few hours and heard from six witnesses who provided very little information — and that is all the time we got to study a bill that I would describe as half-baked.
Some will say that this bill is important for Canadians, and I agree.
Why then did this government drag its feet for so long? Why did we only get this bill on December 13, just hours before we rise for the holidays? Just because the government is saying that this is urgent does not mean that we should shirk our responsibilities as senators, including the responsibility to rigorously examine legislation, amend it if necessary and, most importantly, properly represent the interests of Canadians in our respective regions.
I want to draw a comparison with Bill C-21. For a month, the committee met three times a week and heard from two, three, or even four groups of witnesses per meeting. Then, it just so happened that all of the amendments that we proposed to better protect our fellow citizens, even the most useful ones, were defeated in committee and in this chamber.
I’m going to take this a step further. This government does not have a very good track record when it comes to the quality of its legislation. I’m not the one saying that. That’s something the Supreme Court pointed out with the bill on medical assistance in dying. The Senate amendments to that legislation would have saved Canadians time and money.
The Senate is called the upper chamber. I fear that this haste to obey the government’s political commands lowers us to a dangerous degree when that same government prevents us from being diligent about the work we were appointed to do. I’ve often heard us called a chamber of reflection. Not a lot of reflection happened with Bill C-56, which we spent less than 90 minutes on.
People call the Senate the chamber of sober second thought. I can tell you we didn’t think about this one for very long. People also say that the Senate is an independent chamber. Let me just say that this use of the word forces me to reconsider its meaning. I sincerely believe that a number of my colleagues should do likewise.
The past three weeks in Parliament haven’t been easy. For all these reasons, I won’t vote in favour of Bill C-56, but I won’t vote against it either. I will abstain. I will do better than that, actually. I’m going to take a coffee break so that I don’t have to witness what I don’t want to endorse.
Thank you.
Honourable senators, for the edification of everyone here, there was mention of a pre-study and a rejection of that notion. Just so that everybody is clear, the bill arrived here on Monday; the suggestion of a pre-study was raised on Tuesday; it’s now Thursday. In that time frame, we had the ministers here and the agreement of everybody. We asked the National Finance Committee to hold a hearing and bring as many witnesses as they could, to listen to concerns and to provide us with a report, of which they have done yeoman’s work.
The answer to this problem was not to do a pre-study on Tuesday and Wednesday. The answer to this problem, in my humble opinion, is for us, through the government leader, to provide guidance to the House of Commons on when it is they need to get bills here if they expect them to pass within a certain amount of time.
It was done before quite smoothly. We have heard in various conversations about Senator Carstairs, who stood up to her masters in the House of Commons and said, “If you don’t have a bill here by X date, don’t lean on us to rush through it.” That is the kind of thing that will solve this problem, not a pre-study notion on a Tuesday and some different result than what we have here on a Thursday. Thank you.
Honourable senators, against that backdrop, I’m going to start my speech on Bill C-56, but I will go back to Part 1 of the bill and talk about the substance of the bill.
This bill has two parts: Part 1 and 2. I’m going to talk about both parts separately. They are distinct but not unrelated because both parts are intended to address affordability issues that are being experienced by Canadians. I’m going to address each part separately.
The first part amends the Excise Tax Act in order to implement a temporary enhancement to the GST. It’s called the “GST New Residential Rental Property Rebate in respect of new purpose‑built rental housing.” Effectively, Part 1 of Bill C-56 enhances the GST rental rebate by increasing the rebate from 36% to 100% and removing the existing GST rental rebate phase‑out thresholds for new rental housing projects, such as apartment buildings, student housing and senior residences.
Government officials have said that because the bill is very short with very scanty information, the details will be provided in regulations at a later date. However, they did provide the following information, and although it’s not in the legislation or regulations, it was provided.
First of all, the rental rebate is directed at buildings with at least four private apartment units or residences with at least 10 private rooms. Of the residential units in the buildings, 90% have to be designated for long-term rental. The GST rental rebate will not apply to luxury condominiums or rental units to be converted afterwards into short-term vacation rentals, and the GST rental rebate also applies to substantial renovations that would transform an existing building into new rental units.
While these conditions have been relayed by government officials, regulations have yet to be authorized and gazetted. We just had the discussion about how little time was spent at the National Finance Committee on this. This is information we had to find by researching; it didn’t come from officials directly.
Bill C-56 indicates that the rental rebate program will run to 2035; that’s 12 years. Specifically, the GST rental rebate will apply to projects that begin on or after September 14 of this year, which is when the measure was first announced, until December 31, 2030, but the projects must be completed by the end of 2035.
The fall fiscal update indicates that the estimated cost of this program will be $4.5 billion over the next six years, beginning with $5 million this year and increasing to about $1.5 billion in 2028-29, which is the sixth year of the program. But there have been no further estimates provided for the following seven years of the program, which would run from 2029-30 through to 2036.
Bill C-56 indicates that the program will continue to December 31, 2035, so the estimated cost for those seven years is not disclosed. In fact, it’s not even mentioned anywhere.
At a recent meeting of the Standing Senate Committee on National Finance, Ms. Lisa Williams, Senior Vice-President of Housing Programs at the Canada Mortgage and Housing Corporation, or CMHC, told us that Canada will need to build 5.8 million homes by 2030 to reach affordability. She emphasized that this would be an additional 3.5 million homes on top of what the country is already expected to produce. However, Mr. Bob Dugan, Chief Economist at the CMHC, told us that the corporation had not had time to estimate the specific impact that the GST rental rebate program will have on the building of new rental units. In other words, the government has no estimate on the number of housing units to be built with the $4.5 billion.
Minister Freeland told us yesterday at the Committee of the Whole that one of Canada’s top housing experts has estimated that 200,000 to 300,000 homes will be built with the $4.5 billion. However, it is notable that the minister is quoting an estimate provided by an individual outside the government. It is not the government’s estimate, because the government has not yet estimated or assessed the impact of this housing program.
At the November 23 meeting of the Standing Senate Committee on Banking, Minister of Housing Sean Fraser said that there was not a specific housing strategy outlined in the Fall Economic Statement, which is amazing, because this program is $4.5 billion, and there are already billions of dollars going into housing by the CMHC and other government departments, yet there’s no housing strategy.
He further said:
We’re working on developing a comprehensive plan that will have a suite of federal measures designed to address the national housing crisis. . . .
Honourable senators, the rental property rebate program is estimated to cost $4.5 billion over the next six years, and, as I’ve already indicated, there’s been no assessment as to the impact this will have on the housing supply, including the number of homes to be constructed.
In addition, the program is to continue for 7 additional years after the initial 6 years — for 13 years in total — with no cost estimates provided by the government for the second round of 7 years.
In addition, the regulations governing the details of the rental property rebate program have yet to be released. How can private sector partners be expected to step up and participate in a program for which the program details are not yet available?
Before I speak to Part 2 of the bill, I just want to summarize the issues with the GST rental rebate program, from my perspective, which I feel has not been addressed.
First of all, there’s been no impact assessment of the GST rental rebate program, which would indicate how the program will impact housing, nor is there an estimate of the number of units to be constructed. Only a partial cost of the program has been estimated. It’s the first 6 years of the 13-year program, and it’s $4.5 billion. There’s no estimate on the costs of the program in the following seven years.
The government has no housing plan, despite spending billions of dollars on housing initiatives. Regulations required to define the details of this program have yet to be released.
Finally, the government has yet to indicate whether housing initiatives — which commenced prior to the announcement of the program, but otherwise meet program requirements — would qualify for the GST rental rebate.
I’m going to move on now to Part 2 of the bill, and Senator Deacon went through that part of the bill fairly thoroughly, so I may not repeat some of the items that he covered. Part 2 is going to amend the Competition Act. I feel very comfortable reviewing the first part of the bill, because finance is my background. When delving into the Competition Act, I’ve had some experience, being on the Banking Committee, but the Competition Act is not what I call my cup of tea; I find it very complex.
Part 2 — the second part of Bill C-56 — is going to amend the Competition Act, and it proposes a number of amendments. There were already some amendments included last year in the budget. I know there’s going to be more coming. Amendments to the Competition Act have been under consideration by the government for some time.
Last November, the Minister of Innovation, Science and Industry launched a consultation on the future of Canada’s competition policy, which was seen as a major step in the government’s efforts to modernize the Competition Act. The public consultation period concluded on March 31 of this year, and there was significant interest in the consultation.
The government indicated they had received over 130 submissions from identified stakeholders, as well as more than 400 responses from members of the general public. Submissions raised, as Senator Deacon said, over 100 potential reform proposals, and stakeholders included academic experts, law practitioners, labour unions, consumer groups, businesses and their associations and so on.
Included on the government’s website is a 48-page summary of what the government heard during the consultation period, so it’s evident that there is significant interest in the government’s competition policy.
The amendments to the Competition Act included in Bill C-56 appear to be another group of amendments that were anticipated. We received some in the budget bill, and some here now, and I think there are some more in Bill C-59, so we’re receiving it in stages. Hopefully, we’ll be able to see an overall picture.
Honourable senators, we’re all familiar with the challenges faced by business investment in Canada. Numerous studies have been carried out, including a study last year by the Senate Banking Committee. A group of senators, under the leadership of Senator Harder, issued the prosperity report, and we looked at that issue when we were preparing the prosperity report.
The Competition Policy Council of the C.D. Howe Institute released a report last month on Canada’s Competition Act. In that report, the majority of members on the council supported the 2018 view of the Competition Bureau that competition enforcement:
. . . must strike the right balance between taking steps to prevent behaviour that truly harms competition and over-enforcement that chills innovation and dynamic competition. . . .
In other words, there’s pressure on the government to get it right.
Last month, the Finance Committee in the other place held several meetings to discuss Bill C-56. I knew that we were going to receive the bill, so I was listening to what they were saying. That committee had the opportunity to hear from numerous witnesses, including the Minister of Finance and the Minister of Innovation, Science and Industry. Their meeting actually lasted two hours. They heard from numerous government officials, as well as witnesses from outside the government.
That committee over in the other place had the opportunity to study the bill at length, discuss it, debate it and suggest amendments, and there was a lot of debate. There were pages and pages of debates that I read. In fact, there were several amendments to the bill made in the other place. They had amendments in the other place.
Meanwhile, in the Senate, we received the benefit of a one-hour Committee of the Whole and one panel of witnesses at a National Finance Committee meeting, which was quickly arranged at the last minute. We did not have the time or the opportunity to study the bill in detail, nor to discuss it as the members did in the other place. I felt like we had become a rubber stamp.
Members of our Standing Senate Committee on National Finance discussed this matter in detail yesterday while in camera, and we have provided an observation to our report on this bill. Specifically, the Standing Senate Committee on National Finance, in its report on Bill C-56, states the following:
Your committee supports the measures included in Bill C-56 regarding the enhancement to the goods and services tax rebate for new residential rental property and modifications to the Competition Act. However, it is contemptuous that your committee was afforded a very limited time to conduct its study of the bill. As a result, it was prevented from thoroughly studying the bill and properly performing its duties.
I’m going to move briefly into some of the amendments. Senator Deacon went through a number of them, but I want to mention a couple of the proposed amendments that are in Bill C-56.
According to the government’s website, the Competition Bureau is an independent law enforcement agency which protects and promotes competition for the benefit of Canadian consumers and businesses. Headed by the Commissioner of Competition, the Competition Bureau administers and enforces the Competition Act.
Clause 3 of the bill, prior to its amendment in the other place, proposed to amend section 10 of the Competition Act by adding a new section. This clause would have allowed the Minister of Innovation, Science and Industry to direct the Commissioner of Competition to conduct an inquiry into the state of competition in a market or industry if it’s in the public interest.
That original clause in Bill C-56 was amended in the other place, and another subclause was added to also allow the Commissioner of Competition to conduct an inquiry into the state of competition in a market or industry. However, there was concern expressed by some members of our National Finance Committee — including myself, but not solely myself — that the clause permitting the minister to direct the Commissioner of Competition to conduct an inquiry into the state of competition in a market or industry would impair the independence of the Commissioner of Competition.
Clause 3 also requires the minister and the commissioner to consult with each other on the feasibility and the cost of the inquiry, as well as the process for the preparation and publication of, and the public commentary on, the terms of reference, but there is a risk that the independence of the Competition Bureau and the Commissioner of Competition may be impaired.
There are also clauses 4, 5, 6, 7 and 11 of the bill that will amend several sections of the existing Competition Act to include proposed section 10.1. It’s important to recognize that these amendments extend the commissioner’s investigative and enforcement powers, along with the increase in the minister’s participation in the Competition Bureau. I even wonder if maybe the Competition Bureau should just become a division of the department, since it seems like it’s being drawn closer to the department.
Many stakeholders who were consulted on the future of Canada’s competition policy felt that an act allowing anti‑competitive transactions undermines the central purpose of the competition policy. Section 92 of the Competition Act is against anti-competitive mergers if they have generated or are likely to generate efficiencies great enough to offset the effects of harm to competition and if such an order would impede the likelihood of those efficiencies. That section of the Competition Act was repealed.
One of the recurring complaints that we hear at the Senate standing committees when studying government bills is the inadequacy of consultations with stakeholders, and Bill C-56 is no exception. Between November 17 of last year and March 31 of this year, the government undertook public consultations with stakeholders and citizens on the future of Canada’s competition policy. On September 20, the government released a summary of the consultations on its website. Unfortunately, Bill C-56 received first reading the following day, on September 21. There were no consultations or discussions with stakeholders on the proposed amendments that would affect them. This is not consultation.
This issue was raised by several senators who attended the briefing by government officials on Bill C-56 on Tuesday. It was also raised by Matthew Holmes, Senior Vice President of Policy and Government Relations with the Canadian Chamber of Commerce, at our Finance Committee meeting yesterday.
Mr. Holmes said that the Canadian Chamber of Commerce was supportive of the need to enhance competition in Canada. However, he said that the chamber is:
. . . very concerned by the manner in which changes have been repeatedly introduced as parts of omnibus implementation bills, ways and means motions, or peppered throughout other legislation, such as Bill C-56, without . . . real consultation with the Canadian business community or academic experts in a very particular area of the law.
He said it is almost absurd to be speaking about a handful of changes in Bill C-56 when other changes are being proposed in Bill C-59, which is currently before the House of Commons. Intentionally or not, he said, this approach lacks transparency and obscures the actual plan for the future of competition law in Canada. He said that approach ultimately makes it more difficult, more expensive and riskier for business.
Regarding the market study powers now in the bill, Mr. Holmes said that the Chamber of Commerce would like to see due process and guidelines furthered and developed for the industry so that there is a clear sense of due process in how these market studies would be conducted.
The representative for the Canadian Chamber of Commerce further said that many members of the chamber in many sectors are silent on this because they feel that it is being politicized:
They feel that there is a whole group of sectors that are routinely brought before parliamentarians and admonished. . . . It’s an environment that can become quite toxic towards businesses, and our concern is that we don’t know how this information may be used, shared or provided in a public way in the future.
As there are new powers for market studies, the compelling information and release of that information, we do not know how that information will be monitored, by whom and under what parameters. What are the rules? What are the standards for the access to proprietary information that may be misused by other competitors in the future?
In summary, with respect to the amendments of the Competition Act, including Part 2 of the bill, the consultation process was not adequate.
In addition, the Senate, and specifically the Standing Senate Committee on National Finance, to which Bill C-56 was referred, was not given sufficient time to properly study the bill and assess the implications of the proposed amendments. With respect to Part 1 of the bill, the government is implementing the GST rental rebate program estimated to cost $4.5 billion without an adequate plan. Yesterday, the Minister of Finance held up a copy of the Fall Economic Statement and said it was the government’s housing plan. Honourable senators, the Fall Economic Statement is not a housing plan.
At a recent meeting of the Senate Banking Committee, the minister responsible for housing, in a response to a question from the chair of the committee on the housing crisis, clearly said, “. . . there was not a specific strategy outlined in the Fall Economic Statement . . . .”
He further said:
We’re working on developing a comprehensive plan that will have a suite of federal measures designed to address the national housing crisis. . . .
For a program that costs $4.5 billion, there is no plan.
In conclusion, although I have many concerns about this bill, I cannot vote against a bill intended to help Canadians during a deepening affordability crisis, and so I will support it.
Is it your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
(Motion agreed to and bill read third time and passed.)
