44th Parl. 1st Sess.
February 2, 2024 10:00AM
- Feb/2/24 11:33:17 a.m.
- Watch
Madam Speaker, the member is an associate member of the finance committee. Yesterday, the Governor of the Bank of Canada appeared there and made it clear that carbon pricing is not a fundamental factor in inflation.
What is important is the fact that we have to get behind the idea of competition. The Liberal government has put forward a measure that would advance competition in the grocery sector. We know why Conservatives do not support it. Their chief adviser is on the side of Loblaws, that party is in the pocket of Loblaws and they are in the pocket of Walmart, it seems. Their deputy leader has been a lobbyist for them. They do not believe in competition in the grocery sector. They do not believe in Canadians.
128 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, today I rise to address the chamber with respect to Bill C-352, which would amend the Competition Act.
I think we all agree in the chamber that a stronger competition enforcement regime would be good for all Canadians. The bill proposed by the New Democratic Party, while receptive to the need for change in competition law, and generally aligned with the government's overall direction to date, must, however, be examined in light of the vast number of changes that overlap with and have already been introduced by Bill C-56 and Bill C-59.
Bill C-56 became law in December 2023, while Bill C-59 remains under consideration by Parliament at the present time. Bill C-56 implements, and Bill C-59 would implement, an overhaul of the Competition Act following the extensive consultations undertaken in 2022 and in 2023. The government received a great deal of input throughout its consultations, bolstering the knowledge gained over the years of stewardship over this law. The amendment packages assembled in its two bills address most of the issues identified in the law that historically made it weaker than regimes of Canada's closest partners. That would no longer be the case.
Modernizing the Competition Act is a necessary step in making Canada's economy more affordable for consumers and more fair and accessible to business. The government's extensive commitment to competition law reform was led by Bill C-56, the Affordable Housing and Groceries Act, followed by Bill C-59, the fall economic statement implementation act, 2023. Both of these bills are directed at enhancing affordability and competition, and together they represent the most comprehensive reform package to the Competition Act in decades. They respond to the submissions of hundreds of very different stakeholders, including businesses, legal experts, academics, non-governmental organizations and the commissioner of competition himself.
Bill C-56 implemented a set of targeted but critical amendments, following especially from the Competitions Bureau's market study on Canada's retail grocery sector. As members already know, Bill C-56 brought much-needed changes such as allowing information to be compelled under court order in the course of a market study, helping to remove barriers when diagnosing potential competition issues.
Bill C-56 also repealed the efficiencies exceptions for anti-competitive mergers and collaborations, and in so doing eliminated what many observers consider to have been the single biggest contributor to corporate concentration in Canada. The bill further allowed for better prevention and remedy of the abuse by larger players of their dominant position by requiring only proof of anti-competitive intent or effects to prohibit certain forms of conduct. This more appropriately allocates the burden of proof, as compared to the previous test, which significantly limited the number of instances where the bureau could intervene.
Finally, Bill C-56 addressed harm from collaborations between non-competing parties that are designed to limit competition. Once this provision is in effect, the bureau would be able to review any type of collaboration whose purpose it is to restrain competition and seek a remedy, including an order to prevent the activity where competition is being substantially harmed or is likely to be. This would be especially impactful on restrictive covenants between grocers and landlords, allowing more grocers to set up shop near competitors.
Bill C-56 was, of course, amended in committee through a multi-party effort, incorporating several of the elements in Bill C-352 that now no longer require consideration.
Bill C-59 represents an even more substantial overhaul in our competition enforcement regime, addressing a large variety of aspects of the Competition Act. The amendments would give the Competition Bureau a longer period to detect and address anti-competitive mergers that are not notified in advance, helping to address “killer acquisitions” in the digital market. The bill would broaden the bureau's review of competitor collaborations to include those that harmed competition in the past, and would allow for financial penalties to be sought when necessary.
Importantly, Bill C-59 would facilitate private actions against a broader range of anti-competitive or harmful practices and empower those affected to seek financial compensation in many cases. This improvement would complement the bureau's work in protecting the marketplace. The bill would also ensure that costs awards would not be ordered against the commissioner of competition in the vast majority of circumstances, another element addressed by Bill C-352.
The bill also includes anti-reprisal provisions, which would ensure that co-operation with the bureau or participation in legal proceedings could not be punished by stronger businesses. Additionally, it is worth mentioning that Bill C-59 would strengthen the law's testament of greenwashing the false advertising of sustainability claims while also facilitating environmentally beneficial collaborations that would not harm competition. Moreover, it would ensure that a means of diagnosis for repair could not be denied in a way that would harm competition.
All in all, little remains in Bill C-352 that has not already been addressed. On the contrary, Bill C-59 includes several elements missing from this private member's bill. The government's consultation saw over 130 stakeholders raise over 100 reform proposals. All submissions made by identified groups are publicly available, and the government published a “what we heard” report synthesizing them. This public process has been a key source of input to help us develop reform proposals. We are confident that the measures included in government bills comprehensively address the needs expressed by Canadians.
In conclusion, I think it is fair to say that the ambition of Bill C-352 correctly reflects the importance Canadians place on having a strengthened competition law framework. However, all of the major issues it raises have been or are being substantially dealt with through Bill C-56 and Bill C-59. As such, I would encourage members of the House interested in advancing competition reform to prioritize the rapid passage of Bill C-59.
1004 words
- Hear!
- Rabble!
- add
- star_border
- share
- Feb/2/24 12:21:09 p.m.
- Watch
Mr. Speaker, I rise today to continue debate on this very important private member's bill that deals with amending the Competition Act to address the woeful lack of competition in our country, particularly a growing lack of competition that has occurred after eight years under the Liberal government.
I was very disappointed to hear the previous Liberal speaker talk about how the Liberals intend to not support this legislation. They expect Canadians to trust them and trust that their legislation has all the solutions needed to solve the competition problems, but many of the competition problems, as I will show in my speech, have been caused by the amount of consolidation that has happened in the Canadian marketplace under eight years of the Liberal government.
For example, Canadians pay the highest cellphone bills in the developed world, three times more than Australians pay and twice as much as our neighbours in the United States. I remember how hard the previous Conservative government worked to bring new wireless players into the Canadian market to help bring down prices for Canadian consumers. All of this hard work was unravelled under the Liberal government with the merger of Rogers and Shaw, which eliminated a major new entrant into the market that was providing much-needed competition.
We can also look at our banking sector, which is extraordinarily controlled by six large banking firms, and we have seen yet another takeover in the banking sector that has further consolidated Canadians' mortgages under a relatively few number of very large companies. Finally, we can look at the amount of consolidation happening in our airline sector, with Canada being dominated by just two large airlines representing 85% of the market, and there are more mergers coming. The government is even going after some of the new players with tax bills that are threatening to take new players out of our airline market.
When the Liberal government came to power nearly a decade ago, Canadians had a choice of eight Canadian grocery chains and now, after eight years of the Liberal government, the market is dominated by just three Canadian companies and two American multinational corporations. These are not signs of a healthy, dynamic and competitive marketplace. They are signs of a country that has an outdated approach to competition. The reality is that this is a Canadian problem. While the Liberal government blames international trends for the increasing prices we are seeing at the grocery stores and on our cellphone bills, the fundamental problem is the lack of choice that Canadians have and it is forcing Canadians to pay more.
The Competition Act is in desperate need of reform. It is rooted in a history of an industrial policy that sought to protect large Canadian companies from foreign competition, but it does nothing to promote competition domestically. In fact, I am not sure if the goal of having these companies protected so that they can grow is being achieved in this country because they are so protected that we are not seeing the innovation we need in this country to really develop the next level of technologies and practices.
Canada's weak competition laws allow a very few cartels to dominate whole industries. They shut out competitors, they drive up profits and, in this process, consumers are the obvious victims. They pay more for goods and services, which are not always of the best quality. This lack of choice leaves Canadians with no other options.
This does not just affect consumers. Indeed, the impact of this failing Competition Act has immense consequences on small and medium-sized producers. I come from an area that has a lot of farmers. We know that these big companies dictate prices to these farmers, and that really has an impact on them as well.
My riding is also home to one of Canada's largest family-owned grocery chains, Freson Bros., which was founded in 1955. I am very proud that Freson Bros. is in my riding. It has a number of locations across Alberta. I believe it is the largest grocery store chain that is not part of the major grocery store chains in Canada. It is really known for its high-quality products. It has excellent butcher shops. It has its own brand of sourdough, which is listed in one of the bread museums in the world, I believe in Belgium. It has developed a made-in-Alberta sourdough bread. I am very proud of that. People can walk into any Freson Bros. location in Alberta and they will immediately sense the high standard of care and quality that it puts into all of its products. This is a great example of a made-in-Canada business that promotes excellence and craftsmanship in its field.
Sadly, many smaller companies like Freson Bros. face immense hurdles to participate in the market. This high concentration of control among the very large companies has entrenched players that have become price setters in the market. When the Loblaws and the Walmarts of the world dictate what the prices will be for the products on the shelves, it is the smaller players that end up holding the bag and paying higher prices.
Let us take Coca-Cola, for example. Loblaws controls 62% of the Canadian market for Coca-Cola. That means that Loblaws effectively determines what the price is, not only for consumers, but for what all the other smaller players and distributors are paying as well.
How can smaller companies compete with these tactics? The answer is that they cannot. In any grocery store aisle, we can be sure that the amount smaller grocery stores pay for items like soda and other products is higher than that paid by the major players. It is a huge competitive edge, and while it may save consumers a couple of cents at the stores, it comes at the cost of eliminating real competition that would create long-term better prices for consumers.
I would ask my colleagues in the government what happened to their concerns over the middle class and those working hard to join it. After eight years of the government's reckless spending and fiscal incompetence, we know for a fact that hard-working Canadians are worse off. They are taxed more than ever, and they are paying more for these basic goods and services that they need to live their lives. As we have seen, Canada's weak competition laws continue to serve the interests of the large, established players, to the detriment of new players.
I want to talk about one very specific aspect of the competition rules that I do not think has been talked about enough. One of those aspects is the term “restrictive covenant” in real estate development. My colleagues may ask, what is a restrictive covenant? It refers to a situation in which a developer buys land, intending to build a grocery store and other businesses, such as a strip mall, for example. They will often be approached by one of the big players, saying they want to put their location in the area and that it will attract all these other ancillary business people who want to be involved. Attracting a big store like a Walmart is a big draw for a lot of small business owners who want to build in these big parking lots and these well-attended locations.
The operators of the Walmarts and the Superstores of the world do not want to enter a development if they think they are going to face competition. Therefore, on the one hand it is completely fair that a grocery store operator does not want to have another grocery store right next to them in the same parking lot, but it is not fair when they have restrictive covenants that say nobody can start a small butcher shop or a small boutique bakery because there is a bakery or a butcher shop in the grocery store; they pass these restrictive covenants that say that no other business can engage in any business that the grocery store is engaged in.
What we are doing is sterilizing the business sectors in our communities, and it is because of these restrictive covenants. That is really preventing a lot of small and medium-sized butchers and bakers and other business owners who compete with the grocery stores from getting into these developments and producing their superior boutique products. This is an area of the Competition Act that we need to look at much more deeply, because it is not only giving a huge advantage to these big incumbent players but also really hurting our small and medium-sized enterprises and our consumers.
As members can see, our current competition laws are seriously lacking in sophistication and are a major contributor to the problem. Far from creating competition, the current regime allows for the proliferation of monopolies all across our economy.
The Competition Bureau has said that we need to encourage foreign companies to enter the Canadian market. I am not necessarily against foreign companies, but I am wondering why the minister is spending so much time burning up the phones to try to bring a big new foreign player into the Canadian market, when we have not even addressed the rules and the barriers that are preventing great Canadian companies, like the Freson Brothers of the world and other companies, from being able to compete in the Canadian market. Why can we not remove the barriers so that we can allow a small or medium-sized Canadian business to become a big grocery player, rather than always having to look abroad to bring in another grocery player? As the Freson brothers told me in a text message, innovation is at the heart of small and medium-sized businesses. Survival is the driver, and community is the beneficiary.
I would like to support this update to the law. There are a lot of things in here that could help. I look forward to its passing and being studied at committee, because it is companies like Freson Brothers and other small grocery stores and boutique bakeries and butchers that are the real fabric of our community and that make our communities so special and unique. We need to do everything we can as parliamentarians to create a business climate that promotes Canadian innovators, Canadian investment and Canadian jobs, and that creates the competition we need in this country to ensure that we have a dynamic marketplace that will provide the benefits this country so sorely needs in this troubling economy.
1771 words
- Hear!
- Rabble!
- add
- star_border
- share
- menumenu
- notificationsnotifications
- home
- mailmail
- searchsearch
