Moved second reading of Bill C-56, An Act to amend the Excise Tax Act and the Competition Act.

He said: Honourable senators, I rise this evening as sponsor of Bill C-56, the affordable housing and groceries act, which is now at second reading.

It has been an honour to be asked to sponsor this bill in the Senate.

In her recent speech before the Standing Committee on Finance in the other place, the Deputy Prime Minister summed up why Bill C-56 is so important. In short, it would address two of the most pressing challenges facing Canadians today, namely access to housing and the cost of living.

When it comes to housing, the challenge is clear. Canada simply doesn’t have enough housing, so we need to build more, and fast. In fact, the Canada Mortgage and Housing Corporation estimates that Canada needs to build an additional 3.5 million housing units by 2030, on top of the current construction rate, to finally restore access to affordable housing and to rebalance the market for Canadians.

And while this problem seems simple, the solutions are not. Building the homes that Canada needs will clearly require a great national effort.

Federal, provincial, territorial and municipal governments will need to work together, in partnership with home builders, business people, community housing providers, post-secondary institutions, and Indigenous organizations and governments, to achieve this goal.

The Government of Canada has gone the extra mile in its recent budgets and economic statements. Federal investments in housing are $9 billion higher than they were in 2013-14.

Since 2015, the federal government has more than doubled its average annual investment in housing, but it is clear that much remains to be done, as CMHC has indicated.

So let’s take a moment to consider in more detail what the measure in Bill C-56 will do.

First of all, they will remove the GST on the new purpose-built rental housing with the goal of helping get more homes built faster and creating more housing supply across the country.

The support available through this measure is as follows: a two-bedroom rental unit valued at $500,000 would qualify for $25,000 in tax relief. It seems reasonable to assume that such significant support would give developers more options to move forward with projects.

In fact, the housing sector is already showing signs of this. For example, a Toronto real estate company has already announced plans to build 5,000 new rental units across the country thanks to this measure. To quote the Deputy Prime Minister:

This is about making the math work for builders, giving them an incentive to build more homes that would otherwise not move forward due to construction costs.

There is already proof that this measure will have a positive effect.

In announcing this measure, the government asked provinces that currently apply a provincial sales tax, or the provincial part of the HST, to rental housing to join it by matching the federal rebate on new rental housing units. To date, Ontario, Nova Scotia, Prince Edward Island and Newfoundland and Labrador have announced their intention of offering similar tax relief. This kind of concerted effort will be essential for achieving the desired results and building more homes faster.

When we talk about speeding up construction, it is also important to mention that the support for new rental housing construction in Bill C-56 specifically seeks to speed up housing construction in the short term.

The GST rebate proposed in the bill would apply only to projects where construction starts between September 14, 2023, and the end of 2030 and is completed by 2036.

At the same time, this GST relief will be carefully targeted to protect Canadian renters from what is referred to as “renoviction,” the practice of evicting renters from their homes so that renovations can be done. The government has made it clear that the GST rebate would not apply to substantial renovations of buildings that are already occupied.

The housing measures in this bill also form the basis for some of the measures that the government recently announced in the 2023 Fall Economic Statement to support housing construction.

They include the proposal to expand eligibility for GST relief to include purpose-built, long-term rental housing co-ops, provided the required conditions are met. Using this measure to expand the relief provided in Bill C-56 would be fitting, and it is something that members of the Standing Committee on Finance have specifically called for.

Clearly, the government will not be able to provide this new support for co-op construction before Bill C-56 comes into force. It is apparent that these measures to support the construction of new rental housing are deliberately focused to avoid unintended consequences.

It is also clear that they underpin other measures to support housing construction, which are sorely needed given the current situation.

On another note, in order to make groceries more affordable for Canadians, we now need to consider how this bill would also help stabilize food prices for Canadians. We know that, although inflation has dropped to 3.1%, many Canadians, particularly the most vulnerable, are still feeling the pressure of rising food prices, so to help them, Bill C-56 includes measures designed to bring prices down by strengthening competition throughout the economy, particularly in the grocery sector.

Specifically, the bill would achieve this by amending the Competition Act to give the Competition Bureau the power to compel the production of information to conduct effective and comprehensive market studies, and to crack down on abuses by large, dominant chains. It would also abolish the efficiencies defence, which currently allows companies to use efficiency gains as an argument in favour of potentially anti-competitive mergers.

These changes would enable the bureau to take action against collaborative ventures that impede competition and consumer choice, particularly in situations where large grocers prevent smaller competitors from setting up shop in the vicinity of their stores. Increased competition means lower prices and more choice for consumers.

While strengthening competition and cracking down on unfair and anti-competitive practices, this bill would help stabilize prices for Canadians. This initiative would supplement other measures taken by the federal government to support competition in the grocery sector.

These include getting Canada’s five largest grocery chains, which represent 76% of the grocery sector, to make commitments to stabilize prices for Canadians.

Another measure involves establishing a grocery task force to oversee the work of the big grocers so as to stabilize prices and investigate and control other practices in the grocery sector, like shrinkflation.

Again, the proposed amendments to the Competition Act in Bill C-56 are essential to move other more recent measures forward.

For example, the 2023 Fall Economic Statement proposes additional amendments to the Competition Act in order to further modernize the review of mergers, particularly by giving the Competition Bureau the means to better detect and counter anti‑competitive acquisitions and other anti-competitive mergers. It proposes to strengthen protections for consumers, workers and the environment, specifically by prohibiting misleading greenwashing claims and by placing greater emphasis on the impact on workers in competition analyses.

It proposes to empower the Commissioner of Competition to review a wider selection of collaborations and seek meaningful remedies to ensure that harmful conduct is not repeated. It proposes to broaden the reach of the law by enabling more private parties to bring cases before the Competition Tribunal and receive payment if they are successful.

In the 2023 Fall Economic Statement, the government also proposes to amend the Competition Tribunal Act to ensure that legal cost awards during case adjudication do not prohibit a robust defence of competition.

I believe that the changes proposed in Bill C-56 that seek to strengthen the Competition Tribunal constitute a solid foundation for progress on all these fronts. Taken together, these measures would enable Canada to align with best international practices to ensure that domestic markets encourage fairness, affordability and innovation.

Moreover, I will underscore that these are not just among the highest priorities of Canadians but they are among the most immediate. People are feeling pressure on this front right now, so the action to be taken to address them must be undertaken right now.

Honourable senators, I hope that we keep that important factor in mind as we assess the merits of Bill C-56.

Thank you, honourable colleagues, for this opportunity to make my case today. Meegwetch.