Hon. Elizabeth Marshall: 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.