Bill C-19

Budget Implementation Act, 2022, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures

Part 1 implements certain income tax measures by
(a) providing a Labour Mobility Deduction for the temporary relocation of tradespeople to a work location;
(b) allowing for the immediate expensing of eligible property by certain Canadian businesses;
(c) allowing the Children’s Special Allowance to be paid in respect of a child who is maintained by an Indigenous governing body and providing consistent tax treatment of kinship care providers and foster parents receiving financial assistance from an Indigenous governing body and those receiving such assistance from a provincial government;
(d) doubling the allowable qualifying expense limit under the Home Accessibility Tax Credit;
(e) expanding the criteria for the mental functions impairment eligibility as well as the life-sustaining therapy category eligibility for the Disability Tax Credit;
(f) providing clarity in respect of the determination of the one-time additional payment under the GST/HST tax credit for the period 2019-2020;
(g) changing the delivery of Climate Action Incentive payments from a refundable credit claimed annually to a credit that is paid quarterly;
(h) temporarily extending the period for incurring eligible expenses and other deadlines under film or video production tax credits;
(i) providing a tax incentive for specified zero-emission technology manufacturing activities;
(j) providing the Canada Revenue Agency (CRA) the discretion to accept late applications for the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and the Canada Recovery Hiring Program;
(k) including postdoctoral fellowship income in the definition of “earned income” for RRSP purposes;
(l) enabling registered charities to enter into charitable partnerships with organizations other than qualified donees under certain conditions;
(m) allowing automatic and immediate revocation of the registration of an organization as a charity where that organization is listed as a terrorist entity under the Criminal Code ;
(n) enabling the CRA to use taxpayer information to assist in the collection of Canada Emergency Business Account loans; and
(o) expanding capital cost allowance deductions to include new clean energy equipment.
It also makes related and consequential amendments to the Excise Tax Act , the Children’s Special Allowances Act , the Excise Act, 2001 , the Income Tax Regulations and the Children’s Special Allowance Regulations .
Part 2 implements certain Goods and Services Tax/Harmonized Sales Tax (GST/HST) measures by
(a) ensuring that all assignment sales in respect of newly constructed or substantially renovated residential housing are taxable supplies for GST/HST purposes; and
(b) extending eligibility for the expanded hospital rebate to health care services supplied by charities or non-profit organizations with the active involvement of, or on the recommendation of, either a physician or a nurse practitioner, irrespective of their geographic location.
Part 3 amends the Excise Act, 2001 , the Excise Act and other related texts in order to implement three measures.
Division 1 of Part 3 implements a new federal excise duty framework for vaping products by, among other things,
(a) requiring that manufacturers of vaping products obtain a vaping licence from the CRA;
(b) requiring that all vaping products that are removed from the premises of a vaping licensee to be entered into the Canadian market for retail sale be affixed with an excise stamp;
(c) imposing excise duties on vaping products to be paid by vaping product licensees;
(d) providing for administration and enforcement rules related to the excise duty framework on vaping products;
(e) providing the Governor in Council with authority to provide for an additional excise duty in respect of provinces and territories that enter into a coordinated vaping product taxation agreement with Canada; and
(f) making related amendments to other legislative texts, including to allow for a coordinated federal/provincial-territorial vaping product taxation system and to ensure that the excise duty framework applies properly to imported vaping products.
Division 2 of Part 3 amends the excise duty exemption under the Excise Act, 2001 for wine produced in Canada and composed wholly of agricultural or plant product grown in Canada.
Division 3 of Part 3 amends the Excise Act to eliminate excise duty for beer containing no more than 0.5% alcohol by volume.
Part 4 enacts the Select Luxury Items Tax Act . That Act creates a new taxation regime for domestic sales, and importations into Canada, of certain new motor vehicles and aircraft priced over $100,000 and certain new boats priced over $250,000. It provides that the tax applies if the total price or value of the subject select luxury item at the time of sale or importation exceeds the relevant price threshold. It provides that the tax is to be calculated at the lesser of 10% of the total price of the item and 20% of the total price of the item that exceeds the relevant price threshold. To promote compliance with the new taxation regime, that Act includes modern elements of administration and enforcement aligned with those found in other taxation statutes. Finally, this Part also makes related and consequential amendments to other texts to ensure proper implementation of the new tax and to ensure a cohesive and efficient administration by the CRA.
Division 1 of Part 5 retroactively renders a provision of the contract that is set out in the schedule to An Act respecting the Canadian Pacific Railway , chapter 1 of the Statutes of Canada, 1881, to be of no force or effect. It retroactively extinguishes any obligations and liabilities of Her Majesty in right of Canada and any rights and privileges of the Canadian Pacific Railway Company arising out of or acquired under that provision.
Division 2 of Part 5 amends the Nisga’a Final Agreement Act to give force of law to the entire Nisga’a Nation Taxation Agreement during the period that that Taxation Agreement is, by its terms, in force.
Division 3 of Part 5 repeals the Safe Drinking Water for First Nations Act .
It also amends the Income Tax Act to exempt from taxation under that Act any income earned by the Safe Drinking Water Trust in accordance with the Settlement Agreement entered into on September 15, 2021 relating to long-term drinking water quality for impacted First Nations.
Division 4 of Part 5 authorizes payments to be made out of the Consolidated Revenue Fund for the purpose of addressing transit shortfalls and needs and improving housing supply and affordability.
Division 5 of Part 5 amends the Canada Deposit Insurance Corporation Act by adding the President and Chief Executive Officer of the Canada Deposit Insurance Corporation and one other member to that Corporation’s Board of Directors.
Division 6 of Part 5 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to the provinces and territories.
Division 7 of Part 5 amends the Borrowing Authority Act to, among other things, count previously excluded borrowings made in the spring of 2021 in the calculation of the maximum amount that may be borrowed. It also amends the Financial Administration Act to change certain reporting requirements in relation to amounts borrowed under orders made under paragraph 46.1(c) of that Act.
Division 8 of Part 5 amends the Pension Benefits Standards Act, 1985 to, among other things, permit the establishment of a solvency reserve account in the pension fund of certain defined benefit plans and require the establishment of governance policies for all pension plans.
Division 9 of Part 5 amends the Special Import Measures Act to, among other things,
(a) provide that assessments of injury are to take into account impacts on workers;
(b) require the Canadian International Trade Tribunal to make inquiries with respect to massive importations when it is acting under section 42 of that Act;
(c) require that Tribunal to initiate expiry reviews of certain orders and findings;
(d) modify the deadline for notifying the government of the country of export of properly documented complaints;
(e) modify the criteria for imposing duties in cases of massive importations;
(f) modify the criteria for initiating anti-circumvention investigations; and
(g) remove the requirement that, in order to find circumvention, the principal cause of the change in a pattern of trade must be the imposition of anti-dumping or countervailing duties.
It also amends the Canadian International Trade Tribunal Act to provide that trade unions may, with the support of domestic producers, file global safeguard complaints.
Division 10 of Part 5 amends the Trust and Loan Companies Act and the Insurance Companies Act to, among other things, modernize corporate governance communications of financial institutions.
Division 11 of Part 5 amends the Insurance Companies Act to permit property and casualty companies and marine companies to not include the value of certain debt obligations when calculating their borrowing limit.
Division 12 of Part 5 enacts the Prohibition on the Purchase of Residential Property by Non-Canadians Act . The Act prohibits the purchase of residential property in Canada by non-Canadians unless they are exempted by the Act or its regulations or the purchase is made in certain circumstances specified in the regulations.
Division 13 of Part 5 amends the Parliament of Canada Act and makes consequential and related amendments to other Acts to, among other things,
(a) change the additional annual allowances that are paid to senators who occupy certain positions so that the government’s representatives and the Opposition in the Senate are eligible for the allowances for five positions each and the three other recognized parties or parliamentary groups in the Senate with the greatest number of members are eligible for the allowances for four positions each;
(b) provide that the Leader of the Government in the Senate or Government Representative in the Senate, the Leader of the Opposition in the Senate and the Leader or Facilitator of every other recognized party or parliamentary group in the Senate are to be consulted on the appointment of certain officers and agents of Parliament; and
(c) provide that the Leader of the Government in the Senate or Government Representative in the Senate, the Leader of the Opposition in the Senate and the Leader or Facilitator of every other recognized party or parliamentary group in the Senate may change the membership of the Standing Senate Committee on Internal Economy, Budgets and Administration.
Division 14 of Part 5 amends the Financial Administration Act in order to, among other things, allow the Treasury Board to provide certain services to certain entities.
Division 15 of Part 5 amends the Competition Act to enhance the Commissioner of Competition’s investigative powers, criminalize wage fixing and related agreements, increase maximum fines and administrative monetary penalties, clarify that incomplete price disclosure is a false or misleading representation, expand the definition of anti-competitive conduct, allow private access to the Competition Tribunal to remedy an abuse of dominance and improve the effectiveness of the merger notification requirements and other provisions.
Division 16 of Part 5 amends the Copyright Act to extend certain terms of copyright protection, including the general term, from 50 to 70 years after the life of the author and, in doing so, implements one of Canada’s obligations under the Canada–United States–Mexico Agreement.
Division 17 of Part 5 amends the College of Patent Agents and Trademark Agents Act to, among other things,
(a) ensure that the College has sufficient independence and flexibility to exercise its corporate functions;
(b) provide statutory immunity to certain persons involved in the regulatory activities of the College; and
(c) grant powers to the Registrar and Investigations Committee that will allow for improved efficiency in the complaints and discipline process.
Division 18 of Part 5 enacts the Civil Lunar Gateway Agreement Implementation Act to implement Canada’s obligations under the Memorandum of Understanding between the Government of Canada and the Government of the United States of America concerning Cooperation on the Civil Lunar Gateway. It provides for powers to protect confidential information provided under the Memorandum. It also makes related amendments to the Criminal Code to extend its application to activities related to the Lunar Gateway and to the Government Employees Compensation Act to address the cross-waiver of liability set out in the Memorandum.
Division 19 of Part 5 amends the Corrections and Conditional Release Act to restrict the use of detention in dry cells to cases where the institutional head has reasonable grounds to believe that an inmate has ingested contraband or that contraband is being carried in the inmate’s rectum.
Division 20 of Part 5 amends the Customs Act in order to authorize its administration and enforcement by electronic means and to provide that the importer of record of goods is jointly and severally, or solidarily, liable to pay duties on the goods under section 17 of that Act with the importer or person authorized to account for the goods, as the case may be, and the owner of the goods.
Division 21 of Part 5 amends the Criminal Code to create an offence of wilfully promoting antisemitism by condoning, denying or downplaying the Holocaust through statements communicated other than in private conversation.
Division 22 of Part 5 amends the Judges Act , the Federal Courts Act , the Tax Court of Canada Act and certain other acts to, among other things,
(a) implement the Government of Canada’s response to the report of the sixth Judicial Compensation and Benefits Commission regarding salaries and benefits and to create the office of supernumerary prothonotary of the Federal Court;
(b) increase the number of judges for certain superior courts and include the new offices of Associate Chief Justice of the Court of Queen’s Bench of New Brunswick and Associate Chief Justice of the Court of Queen’s Bench for Saskatchewan;
(c) create the offices of prothonotary and supernumerary prothonotary of the Tax Court of Canada; and
(d) replace the term “prothonotary” with “associate judge”.
Division 23 of Part 5 amends the Immigration and Refugee Protection Act to, among other things,
(a) authorize the Minister of Citizenship and Immigration to give instructions establishing categories of foreign nationals for the purposes of determining to whom an invitation to make an application for permanent residence is to be issued, as well as instructions setting out the economic goal that that Minister seeks to support in establishing the category;
(b) prevent an officer from issuing a visa or other document to a foreign national invited in respect of an established category if the foreign national is not in fact eligible to be a member of that category;
(c) require that the annual report to Parliament on the operation of that Act include a description of any instructions that establish a category of foreign nationals, the economic goal sought to be supported in establishing the category and the number of foreign nationals invited to make an application for permanent residence in respect of the category; and
(d) authorize that Minister to give instructions respecting the class of permanent residents in respect of which a foreign national must apply after being issued an invitation, if the foreign national is eligible to be a member of more than one class.
Division 24 of Part 5 amends the Old Age Security Act to correct a cross-reference in that Act to the Budget Implementation Act, 2021, No. 1 .
Division 25 of Part 5
(a) amends the Canada Emergency Response Benefit Act to set out the consequences that apply in respect of a worker who received, for a four-week period, an income support payment and who received, for any week during the four-week period, any benefit, allowance or money referred to in subparagraph 6(1)(b)(ii) or (iii) of that Act;
(b) amends the Canada Emergency Student Benefit Act to set out the consequences that apply in respect of a student who received, for a four-week period, a Canada emergency student benefit and who received, for any week during the four-week period, any benefit, allowance or money referred to in subparagraph 6(1)(b)(ii) or (iii) of that Act; and
(c) amends the Employment Insurance Act to set out the consequences that apply in respect of a claimant who received, for any week, an employment insurance emergency response benefit and who received, for that week, any payment or benefit referred to in paragraph 153.9(2)(c) or (d) of that Act.
Division 26 of Part 5 amends the Employment Insurance Act to, among other things,
(a) replace employment benefits and support measures set out in Part II of that Act with employment support measures that are intended to help insured participants and other workers — including workers in groups underrepresented in the labour market — to obtain and keep employment; and
(b) allow the Canada Employment Insurance Commission to enter into agreements to provide for the payment of contributions to organizations for the costs of measures that they implement and that are consistent with the purpose and guidelines set out in Part II of that Act.
It also makes a consequential amendment to the Income Tax Act .
Division 27 of Part 5 amends the Employment Insurance Act to specify the maximum number of weeks for which benefits may be paid in a benefit period to certain seasonal workers and to extend, until October 28, 2023, the increase in the maximum number of weeks for which those benefits may be paid. It also amends the Budget Implementation Act, 2021, No. 1 to add a transitional measure in relation to amendments to the Employment Insurance Regulations that are found in that Act.
Division 28 of Part 5 amends the Canada Pension Plan to make corrections respecting
(a) the calculation of the minimum qualifying period and the contributory period for the purposes of the post-retirement disability benefit;
(b) the determination of values for contributors who have periods excluded from their contributory periods by reason of disability; and
(c) the attribution of amounts for contributors who have periods excluded from their contributory periods because they were family allowance recipients.
Division 29 of Part 5 amends An Act to amend the Criminal Code and the Canada Labour Code to, among other things,
(a) shorten the period before which an employee begins to earn one day of medical leave of absence with pay per month;
(b) standardize the conditions related to the requirement to provide a medical certificate following a medical leave of absence, regardless of whether the leave is paid or unpaid;
(c) authorize the Governor in Council to make regulations in certain circumstances, including to modify certain provisions respecting medical leave of absence with pay;
(d) ensure that, for the purposes of medical leave of absence, an employee who changes employers due to the lease or transfer of a work, undertaking or business or due to a contract being awarded through a retendering process is deemed to be continuously employed with one employer; and
(e) provide that the provisions relating to medical leave of absence come into force no later than December 1, 2022.
Division 30 of Part 5 amends the Canada Business Corporations Act to, among other things,
(a) require certain corporations to send to the Director appointed under that Act information on individuals with significant control on an annual basis or when a change occurs;
(b) allow that Director to provide all or part of that information to an investigative body, the Financial Transactions and Reports Analysis Centre of Canada or any prescribed entity; and
(c) clarify that, for the purposes of subsection 21.1(7) of that Act, it is the securities of a corporation, not the corporation itself, that are listed and posted for trading on a designated stock exchange.
Division 31 of Part 5 amends the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) to, among other things,
(a) create regimes allowing for the forfeiture of property that has been seized or restrained under those Acts;
(b) specify that the proceeds resulting from the disposition of those properties are to be used for certain purposes; and
(c) allow for the sharing of information between certain persons in certain circumstances.
It also makes amendments to the Seized Property Management Act in relation to those forfeiture of property regimes.

[Ryan Turnbull, Liberal, Whitby, ON]

I strongly disagree with my colleagues in that this is imposing a maximum penalty, which removes the court's discretion. We heard from witness testimony very strongly that this would not increase penalties. In fact, it caps penalties and doesn't allow the courts to use their discretion when determining the penalties. The order of fines could be higher without this in place. In fact, I think Bill C-19 addresses this already, so we'll be voting against it.

I wanted to clarify, Chair, that on the previous vote I said “on division”, but apparently you can't vote something down on division. That's my mistake. I shouldn't have made that mistake, because I know better.

[Ryan Turnbull, Liberal, Whitby, ON]

Penalties already increased in Bill C-19 through the elimination of a statutory maximum. This clause reintroduces a cap based on a formula not adapted to criminal provisions, which would, in practice, lower the penalties.

We're opposed to this one.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you.

My last question is around is another point of debate that is left over, I think.

In previous rounds and consultations that were done after Bill C-19 was passed, in the lead-up to Bill C-56 and Bill C-59, and those rounds of changes there were lots of conversations about what are called structural presumptions and the idea that within a merger review, we're looking at a number of different factors.

I think a lot of what we heard in the consultation was that market share could be an indicator of a substantial lessening of competition, but is not sufficient in itself to determine whether a merger should be blocked or not.

Bill C-352, the private member's bill that we're discussing, reinserts that into the bill. We repealed that, on the one hand, in Bill C-59. We repealed the section of the Competition Act that expressly prohibits the tribunal from concluding that a merger is likely to harm competition “solely on the basis of evidence of concentration or market share.”

The reason is that most of the experts say that market share isn't sufficient in itself because there are contextual factors. There are times where market share or concentration may increase slightly with a merger, but that doesn't necessarily harm competition in every case. The point is that the tribunal can still consider any factors. It's the same with the efficiencies defence. The tribunal can still consider efficiencies within its merger review process and it can still consider market share and concentration, but we don't want to reinsert that as a structural presumption that is the only factor that determines their decisions.

Mr. Charlebois, maybe I could ask you if you concur with that finding as well.

Should we stick with the things we heard in the consultation, which led to the change that Bill C-59 introduced or should we go backwards and reintroduce market share back into it?

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks, Chair.

Just following up on my last line of questioning, I'd like to focus my remaining time on two other lines of questions. Two other pieces of Bill C-352, which is the private member's bill we're talking about, have not been addressed.

What I think we heard from witnesses is that about 98% or 99% of all the things that are in Mr. Singh's private member's bill have already been dealt with in Bill C-19, Bill C-56 and Bill C-59, which have made successive rounds of changes—I would call it a comprehensive package of amendments—over time, in three different bills, to our competition laws. I could go through all those changes, but we would run out of time very quickly.

I want to focus on two points.

One is that the fines that are being introduced in Bill C-352 put an upper limit on the fines.

We heard from the lawyers who were here earlier in the week that, in fact, allowing the discretion of the courts to basically determine a maximum fine is better—to have harsher penalties—than actually including a maximum upper limit to the fines people could be ordered to pay.

Mr. Charlebois, would you agree with the expertise of the lawyers that we shouldn't be reintroducing an upper limit?

Most legal proceedings that happen don't end up starting at a maximum penalty and over time, the courts could decide, if there's repeated behaviour, to surpass any upper limit we might conceive of here today.

What would you say about that, Mr. Charlebois?

[Brian Masse, NDP, Windsor West, ON]

Thank you.

I haven't had a chance to get Professor Iacobucci and Professor Quaid in, so I want to take the opportunity to have them reflect on European law. A good example is the U.K., which just extended their windfall taxes on oil and gas. As Mr. Ross mentioned, that's one strategy out there.

All we have available to us as a tool, and what Mr. Singh had available to him, is a private member's bill, which was eclipsed by other stuff. We can either choose to make some improvements or ignore it altogether and wait for probably another three years to do anything.

Where do we fit in now that we've had Bill C-19, Bill C-56, Bill C-59 and Bill C-352, whatever we choose to do with it, compared to our American and European colleagues, in your opinion, as it pertains to competition protection for Canadians? I'd really appreciate your input and analysis. I know it's pretty hard to do, but just give us a snapshot of where we are.

I understand you're advocating—and so am I—for a larger picture, but this is what we have in front of us, and we have it for a lot of different reasons. It's part of our democratic process until we get a government that wants to do a full review.

[Edward Iacobucci]

There's overlap, but I'd have to go back and cross-reference. One of the challenges I find with this process is that it has come in iterations.

As to what's in Bill C-56 versus Bill C-59 versus Bill C-19 versus Bill C-352, I'd have to take a moment to respond to you on that. I'll just wait and pass.

[Keldon Bester]

I'll just jump in quickly.

Bill C-59, Bill C-56, Bill C-352 and Bill C-19 are all very sound investments in the future of competition law in Canada. They're not a silver bullet. We're not going to turn the tap on and have competition increase tomorrow. However, in grocery and markets well beyond it—and I'll reference again the bureau's investigation into property controls in the grocery sector and the market study on airlines—these are foundational improvements that are going to pay off for generations to come.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair. It's good to see you.

I think there's a misunderstanding or lack of understanding about how a private member's bill takes place and the scope that a private member's bill can have. This is the way we got here. Basically, Bill C-19, Bill C-56 and Bill C-59 were pieces of government legislation that had various changes. Ironically, some of the changes we tried to get in the first set of laws are finally being included in Bill C-59—15 years later. However, many people came here from different institutions and spoke against those changes, quite frankly. When you go back and look at Hansard and the blues, there's been a consistent public outcry for improved competition laws, but there has not been consistency in academia and the private sector with regard to how to do so. That's been the challenge.

This bill is part of what a private member can do after being selected in a lottery system, but legislative issues have to be scoped. They can't include increased funding, taxation and a whole series of other things. Also, we're left with a bill that later on was eclipsed by another piece of legislation, which took some of the ideas of this bill. Here we are today trying to see whether we want to continue to increase competition laws for Canadians. This is the opportunity we have for amending parts of the bill to get some improvements that the Competition Bureau, the commissioner and many others continue to advocate for.

My first question, Mr. Hatfield, is on what you're hearing from the public. If we do not use this opportunity to at least make some improvements to the Competition Act, do you think Canadians would be disappointed? Although it has been raised that we need a more comprehensive process—even the Competition Bureau commissioner mentioned it—we still have tools available in front of us right now. With Parliament winding down, having a bill selected high enough in the Order Paper to try to squeak through in five years, if we last that long.... I'd like to know what your outreach can tell us about public confidence in institutions like the Competition Bureau.

[Dr. Jennifer Quaid]

I will start by saying that I can't climb inside Mr. Singh's mind. I listened to what he said, and this is my interpretation of what he said. I certainly stand to be corrected if I've misinterpreted him.

I understood that what he wants to see is greater accountability in the form of a higher quantum of fines that's more closely related to the capacity to pay, essentially. If you are a multi-billion dollar company, a $25-million fine is not going to make a sufficient financial impact. I understand what that reflects. Mr. Singh was very concerned about the punishment imposed in the Canada Bread negotiated settlement. I might use that as an illustration.

One thing we have to be very careful about is that changes to criminal law that make it more severe or change the substance are prospective only. The change in Bill C-19 to make the fine at the discretion of the court applies to cartels or conspiracies entered into after June 23, 2023. Most cartels are not discovered immediately. The bread cartel—this is a lesson in how long it takes for things to come into effect—involved counts in 2007 and 2010. The applicable fines were those applied in 2007, which were $10 million. In 2010, they just squeaked into the new provisions, so you had $25 million.

The court worked with the maximum, and it was very surprising. They applied the maximum in those cases, and I think it was a recognition that they were butting up against the highest amounts. However, normally, courts do not treat the maximum as where they're starting. That's not how sentencing works. Sentencing starts with the idea that a sentence has to be proportionate to the gravity and culpability involved.

We can agree that conspiracy, in section 45, is targeted at morally reprehensible conduct. One of the functions of the penalties—and on that, I agree with Mr. Singh, but I don't think the discretion of the court was a problem; I think that's a better signal—is to convey seriousness. It's not an accurate measure, but an offence that carries a maximum 14-year imprisonment connotes a serious amount of gravity. Not many other provisions in the Criminal Code are economic in nature and carry that kind of sanction, so it's a very severe sanction.

The expectation that the application of sentencing principles is going to result in something that hits up against the 10% is unrealistic. That's not how it happens. My research shows that when courts apply the sentencing factors adapted to business organizations in section 718.21, they're all over the map. They're not consistently applying them as aggravating or mitigating. What happens is you do not necessarily get the outcomes you want.

Here's the solution. If you really want courts to be more thorough and to apply and get to sanctions that are adapted to reality, you have to give more than what you can give in a law. The law is going to be too simple, and it's not going to give enough detail. Left with that, you won't get the results you want. You're going to need judicial education and a lot more structure.

The final thing I'm going to say is that we are not a jurisdiction that uses sentencing guidelines. I don't think a change in the Competition Act is going to change sentencing policy in this country. If you want to change criminal law, you have to start with the Criminal Code. I know this is the Competition Act, but when you're talking about using criminal law for an extremely serious offence, you cannot get away from the structure of criminal law.

I'm sorry for the long answer.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks.

Ms. Quaid, I'm going to start with you. I appreciated your opening remarks, and I appreciated specifically you outlining what pieces of Bill C-352 have overlap and remain as questions we can consider. Where I'm starting this conversation is that with Bill C-56, Bill C-59 and Bill C-19, to some degree, we've dealt with rounds of reforms to the Competition Act. We've had lots of debate about that. I think there are some very good steps forward.

Perhaps all of the panellists today have different opinions about different pieces of that, and I get that the legal community is not always going to agree. Neither are politicians. I think the debate is important.

I want to hone in on your comment because I found it a useful structure. You looked at clauses 3 and 4 as a package, although they're different. I think you said that you're not sure they are going to get the desired outcome.

Could you explain what you think the intended outcome was from listening to Mr. Singh's appearance? Then, could you explain specifically why the two changes being proposed to those clauses would not get the outcome that was intended?

[Dr. Jennifer Quaid]

No one made me any specific promises. I'm an academic.

I had hoped when it was first announced that there would be phase 1 and phase 2. Phase 1 was Bill C-19. We all expected that was going to be mostly small changes. I had hoped with the announced consultation, before the details were announced, that we were going to step back and ask what we were doing. Are we modernizing the act? As soon as I saw the consultation document, I realized that we were leaving unchanged the basic structure of the act and, more importantly, what the goals of competition were.

There was more optimism, in my view, after the Wetston consultation, which was much more informal and fewer people participated in. It was like the sky was the limit. Everyone just said, “Let's figure out what we want for the 21st century.” By the time we had the consultation, we'd already taken off the table considering the purpose clause and considering the basic organization of the act. I thought that was too bad, personally.

[Dr. Jennifer Quaid]

I'll try to do that as efficiently as possible. Thank you for the question.

I would really like to see clause 3 stay with what was done in Bill C-19. I'm preparing a brief with a little more detail. I'm sorry that's not ready right now. If need be, there can be further guidance provided in other ways, but I am very reluctant to go back to having a cap on the fines because, unfortunately, maximum penalties are not minimum penalties.

There was a lot of discussion last week that seemed to treat this maximum penalty as some kind of minimum and it's not. Believe me, you do not want to have a mandatory minimum because this provision applies to individuals and corporations, and you will immediately trigger a charter argument. Whether it succeeds is a different question. I think giving courts the maximum flexibility is the better way to go. If there are preferred ways of calculating fines and preferred ways of dimensioning what would be appropriate punishment, those things can be put together in judicial training.

You could even have the bureau develop further its immunity and leniency programs. There was a lot of discussion of the Canada Bread case. I won't have time to get into it now, but the thing you need to know about corporate sanctions is that they're negotiated settlements that come under the immunity and leniency program. The first one in gets immunity and the second ones get leniency. Even if you had a maximum fine and you started with the maximum fine, which is what happened with Canada Bread, there is still a 30% discount because that's part of the leniency program.

People are talking about 10% of revenues. That's the maximum. Courts never impose the maximum, especially with a first-time offender, which is what mostly happens with corporations, and especially when you have other factors like co-operation. We need the co-operation of the participants in a cartel to get anywhere with these investigations. The idea that you would hit these maximums is fantasy. We need to dimension our expectations differently. That doesn't mean courts wouldn't benefit from help figuring out the right way to calculate the right kind of fine.

I'm going to leave the structural presumptions to the economists. I tend to agree that guidance on thresholds is helpful, but it shouldn't be in the law. That's my view. It's part of the larger question of having principles in the law and operationalization in guidelines.

The other thing is about the efficiencies defence, but I don't really want to talk about it that way. It's the recognition of pro-competitive benefits. It's a mistake to think that pro-competitive benefits shouldn't be explicitly recognized in the law. I just think taking the old language is not the right way to do it.

I'm going to loop around to my main question, which is that we haven't thought about what we're doing. In order to give any kind of context to how you're going to assess pro-competitive benefits, you need to ask, “Pro-competitive in relation to what?” One thing we've had in the way the efficiencies defence was interpreted in the past was a total surplus model, which says that we only care about whether the pie is bigger; we don't care who gets what piece. If you want to add into that a concern for consumers—like a consumer surplus type of model—then perhaps you need to be more explicit about that in guidelines. However, I wouldn't put it in the law.

Things like that are given content when courts interpret the words. We can get ahead of that by thinking about what it is about pro-competitive effects that we want recognized and when they are important. I also think efficiencies and so on are more complex than just—

Opposition Motion—Measures to Lower Food Prices

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Mr. Speaker, I am happy to participate in this debate on the NDP motion submitted by the hon. member for Cowichan—Malahat—Langford in relation to the price of essential foods and the conduct of grocery giants, such as Loblaws, Metro and Sobeys.

The proposed motion is timely, because by voting in favour of Bill C-59 last week, this House approved the latest initiative in the government's comprehensive modernization of the Competition Act. The relevant clauses were approved unanimously, showing the strong consensus here in this chamber on these issues.

The truth of the matter is that the government has been extremely active in promoting competition in all sectors of the economy, including in the grocery retail industry. It begins with resourcing. In budget 2021, the government increased the Competition Bureau's budget by $96 million over five years and $27.5 million ongoing thereafter. The increase in resources was a much needed boost to the bureau's capacity, and in its own words, “These funds enhance our ability to enforce the law and advocate for more competition. They help ensure we have the right tools to deal with Canada’s competition challenges now and in the future.”

Needless to say, law enforcement will not be effective if the enforcers are not able to carry out their tasks, and that is why this extraordinary increase was crucial to the bureau's functioning. The next step had to do with the legal framework under which the bureau operates, the Competition Act, which was aging and falling short compared to our international partners.

Through the 2022 budget bill, Bill C-19, we took the first step in remedying this, correcting some of the obvious issues. This included criminalizing wage-fixing agreements, allowing private parties to seek an order for abuse of a dominant position and raising maximum penalty amounts to be based on the benefits of anti-competitive conduct. This ensures that sanctions would no longer be a mere slap on the wrist for today's largest economic actors.

The government knew, however, that much more remained to be done. Where the solutions were less readily obvious, the minister turned to the public process, launching a comprehensive public consultation on the future of Canada's competition policy. The process ran from November 2022 through March 2023.

In response to a consultation paper released by Innovation, Science and Economic Development Canada, over 500 responses were received. This consisted of over 130 from identified stakeholders like academics, businesses, practitioners and non-government organizations.

While this feedback was being received, government officials also met with stakeholders in round table groups, allowing them to voice their views and to interact with each other as well. Stakeholders were not shy about sharing their opinions with us. They knew what sorts of outcomes they wanted to be delivered.

There was no shortage of proposals made, some highly concrete and detailed, others more directional in nature. What we heard, however, is that Canadians wanted more competition. Across many domains, the desire to strengthen the law, to enable the bureau to act and to align with international counterparts was evident.

Of course, many also expressed reservations about ensuring we get the details right and warned about overcorrection. The government took those to heart as well, taking inspiration from examples in other jurisdictions and recognizing the careful balancing that must be done when developing new legislation.

All told, the results of the consultation can be seen in two pieces of government legislation.

First, Bill C-56, the Affordable Housing and Groceries Act, was adopted in December 2023. It took some of the largest issues off the table. It eliminated the “efficiency exception”, which allowed anti-competition mergers to withstand challenge. It revised the law on abuse of dominant position to open up new avenues for a remedial order. It broadened the types of collaboration the bureau can examine, including those that are not formed between direct competitors. It established a framework for the bureau to conduct marketing studies, including the possibility of production orders to compel information. Work on this last amendment is already under way, as the bureau has announced an intention to launch a study into the passenger air travel industry.

Bill C-59, the fall economic statement implementation act, 2023, is the second legislative effort following the consultation. As we know, it is currently before the Senate, and the government looks forward to its quick adoption. The amendments to the Competition Act that it contains are incredibly comprehensive. I will provide some of the highlights.

The bill makes critical amendments to merger notification and review to ensure that the bureau is aware of the most important deals and would be able to take action before it is too late. It significantly revamps the enforcement framework to strengthen provisions dealing with anti-competitive agreements, and it broadens the private enforcement framework so that more people could bring their own cases before the Competition Tribunal for a wider variety of reasons; in some cases, they could even be eligible for a financial award.

Bill C-59 also helps address important government priorities by making it harder to engage in “greenwashing”, which is the questionable or false representation of a product or a business’s environmental benefits. It facilitates useful environmental collaboration that might otherwise have been unlawful. It helps to make repair options more available for consumers by ensuring that refusals to provide the necessary means can be reviewed and remedied as needed.

Finally, overall, Bill C-59 makes a number of critical but often technical updates throughout the law to remove enforcement obstacles and make sure that the entire system runs smoothly.

I cannot overstate how important these measures are. The competition commissioner has referred to this as a “generational” transformation. It is by far the most significant update to the law since the amendments in 2009, following the recommendations of the competition policy review panel; arguably, it is the most comprehensive rewrite of the Competition Act since it first came into effect in 1986. Our world has changed since then, and it became clear that the law needed to keep pace to enable institutions that can oversee fast-changing markets and landscapes.

After the passage of Bill C-59, we can guarantee that our competition law will work for Canadians in markets such as the one under scrutiny here, as well as the many other markets throughout our economy.

I am thankful for having been given the opportunity to share a few words.

[Matthew Boswell]

Thank you for that very pragmatic question. I was hoping to have an opportunity to address that head on.

From the Competition Bureau's perspective, as I said in my opening comments, we're really pleased with the attention that's been paid to competition in this private member's bill, and other private member's and government bills to amend the law. I agree with Professor Larouche. It was probably too complex out of the gates in 1986, when it was, some say, drafted by the business community.

In terms of this bill, from the Competition Bureau perspective, I would say that we don't need to address clauses 2, 3, 5, 6, 7, 8, 9, 10 and 11. Clause 4, which deals with the penalty provision for federal financial institutions, is great in terms of the 14 years, but it should be a fine at the discretion of the court—not a maximum fine, the $25 million that it has now.

On clause 12, the bureau believes—and we put this in our recommendations to ISED—that a three-year limitation period for notifiable transactions is a good step forward. Right now, it's only one year. With our colleagues in the United States, there's no limitation period on reviewing mergers.

Finally, with respect to the costs award, that has been addressed in Bill C-59, but I would just point out that in our submission to ISED, we talked about full immunization. Bill C-59 is a pretty reasonable balance so, one way or the other, we're pretty happy with how that comes out. Really, quite strongly, we don't believe that we need those other clauses. They've been addressed in Bill C-19, Bill C-56, and hopefully soon in Bill C-59, but this has been a valuable contribution to the debate and the marketplace of ideas.

[Matthew Boswell, Commissioner of Competition, Competition Bureau Canada]

Good afternoon, Mr. Chair. Thank you for the invitation to appear before you today.

My name is Matthew Boswell and I am the commissioner of competition. With me is my colleague Anthony Durocher, who is the deputy director of the competition promotion branch.

We are pleased to be here today to discuss Bill C‑352. As a result of several pieces of legislation, competition policy in Canada is undergoing a generational upgrade. We are grateful to the members of this committee and other people who have particularly stressed the need to strengthen competition in the Canadian economy.

As you undoubtedly know, most of the important points in Bill C‑352 have been incorporated into past and future legislation: Bills C‑19, C‑56and C‑59. Those amendments give effect to a large number of recommendations by the bureau and better harmonize our competition framework with the best international practices.

Just as competition in the marketplace forces firms to offer products and services that better meet consumer needs, competition in the marketplace for ideas leads to better public policies. In my view, the sponsors of Bill C-352 and other private members' bills introduced this session deserve credit for prompting substantial improvements to the Competition Act. These improvements include, among other things, a significant revamp of our abuse of dominance provisions, including stronger penalties, the addition of rebuttable structural presumptions in merger reviews and stronger remedies for anti-competitive mergers, the possibility for formal market studies to be initiated by the commissioner, and insulating the commissioner of competition from adverse cost awards at the Competition Tribunal.

By my count, there are only a few outstanding elements of Bill C-352 that have not been taken forward already in other legislation. In the grand scheme of competition law modernization that has taken place, the remaining issues are not of pressing concern, but certainly, some of them could further enhance the Competition Act. We would be happy to discuss those few elements.

There are also some aspects of the bill that would, in my view, represent a step backward, given prior reforms, such as the reintroduction of a cap on cartel fines. We would be happy, of course, to discuss those as well.

During our time today, or perhaps in a future appearance before this committee, it might also be productive to discuss what I often refer to as the elephant in the room in Canada. That is regulatory barriers to competition in this country.

The Competition Act is a foundational tool to protect and promote greater competition in Canada, but it is not the only tool. To build on the incredible progress made in modernizing the Competition Act, all of us in the public sector, at all levels of government, need to examine what more can be done to address the regulations and policies that hold back competition in Canada, often unintentionally. We know that Canada’s competitive intensity has decreased over the last two decades. It will take a whole-of-government approach to turn the tide, with the federal government working alongside municipal, provincial and territorial governments.

Increased competitiveness is key to tackling affordability challenges, improving consumer choice and fostering stronger, more inclusive growth over the long term and, importantly, addressing Canada’s pressing need for more productivity.

Competition policy in Canada is clearly having a moment. We need to seize that moment. There has never been a stronger consensus that Canada needs more competition. Now is the time for governments across Canada to work together to make competition a national economic priority.

In conclusion, the competition bureau is determined to apply the law in a transparent and evidence-based way. We have been unwavering in our efforts to implement the new and improved tools that Parliament has given us, and we will stay on this course.

Thank you for giving us the opportunity to appear before you today.

It will be our pleasure to answer your questions.

Thank you. We look forward to your questions.