Canadian Chamber Appears Before Senate Standing Committee on National Finance

On June 11, 2024, our Senior Director of Natural Resources and Sustainability, Bryan N. Detchou, and our Director of Policy and Government Relations, Liam MacDonald, appeared before the Standing Senate Committee on National Finance to discuss the amendments adopted by the House of Commons to Bill C-59. Representing over 400 Chambers and Boards of Trade and approximately 200,000 businesses nationwide, they voiced significant concerns about about the retroactive nature of the proposed Digital Services Tax, as well as the recent amendments to the Competition Act included in the bill.

The full remarks and video recording are available below.

_____________________

Mr. Chair, Honourable Senators:

On behalf of the Canadian Chamber of Commerce, our 400 Chambers and Boards of Trade, and approximately 200,000 businesses across the country, thank you for the opportunity to participate in today’s discussion as this Committee reviews the amended version of Bill C-59.

We were pleased to present our views before the Senate Committee on National Finance on March 20 and the House of Commons Finance Committee on April 11 as they studied Bill C-59. As you know, we raised concerns at that time about the retroactive nature of the proposed Digital Services Tax, as well as significant changes being introduced to the Competition Act.

However, on Tuesday, April 30, during the House of Commons Standing Committee on Finance’s clause-by-clause review of Bill C-59, we were surprised and disappointed to see significant, new amendments to the Competition Act adopted without prior warning and without consulting businesses of all sizes that will be affected.

We believe these proposed changes will have a long-term negative impact on the economy and must be thoroughly studied and debated by Parliament, and carefully reviewed by officials and legal experts inside government. A clear understanding of the bill’s unintended consequences is essential.

Bill C-59 is the second piece of legislation in only a few months that will amend the Competition Act. It also contains the second set of proposals that were introduced without warning, substantially amended at the last minute, and then moved through parliament with hardly any debate.

This piecemeal and ad-hoc approach to reforming our competition laws means poor public policy choices that will negatively affect Canadians. After all, the Competition Act applies to all Canadian businesses and is one of Canada’s most important marketplace framework policies.

An amendment to Bill C-59 proposes to add structural presumptions for merger review consistent with those set forth in the 2023 U.S. Federal Trade Commission (FTC) merger guidelines.

As we noted in our first appearance before the committee on C-59, these are just guidelines – they carry no force of law and have not been recognized by any U.S. courts, who continue to rely on well-established, effects-based anti-trust principles.

These guidelines have also been widely criticized by competition experts. An article published by the American Bar Association describes them as “anachronistic, constituting a marked retrenchment to long-discarded approaches and rejected legal positions.”

Further, the amendments introduce language and figures that are inconsistent with the

Competition Bureau’s merger enforcement guidelines and practice. If this Committee does not remove the new amendments, then we have included proposed language in our submission to ensure, at a minimum, that Canadian law remains consistent with Canadian enforcement guidelines and definitions.

The consensus among anti-trust experts since the 1970s has been that measures of market structure, like the Herfindal-Hirschman Index, say little about competitive conditions because market power is an outcome, not an immutable determinant of competition in an industry or market. Many firms gain market power precisely because they were operating in highly competitive markets and were able to out-compete rivals.

Lowering the burden of proof for enforcement is the wrong solution to the fact that proving competitive harm is difficult in today’s dynamic markets. This change will lead to enforcement being taken against benign or pro-competitive conduct which competition laws are meant to protect.

Finally, we would like to address the new language on deceptive marketing practices when it comes to Environmental Claims.

The Canadian Chamber and our members are committed to decarbonizing our economy as we pursue common Net-Zero targets. We strongly oppose any effort to mislead consumers or greenwash in pursuit of these goals. However, we believe the proposed amendments are excessively broad and represent a significant shift from the traditional scope of competition law.

Our diverse membership is justifiably concerned about the uncertainty introduced by the new, inherently vague standard. This standard could impact any company making public statements or warranties regarding environmental and climate change matters. We urge you to carefully consider the Commissioner of Competition’s advice to fully withdraw this amendment.

Decarbonizing Canada’s economy is one of the greatest challenges and opportunities of our time. Governments need to collaborate with businesses to drive the innovation necessary to achieve our ambitious climate goals. In light of this, we recommend that the Senate withdraw amendment section 74.01(1)(b.2) to the Competition Act from Bill C-59 and engage with the business community and other constituents to determine a path forward that prevents misrepresentations without creating uncertainty or additional bureaucratic burden for business.

In conclusion, Canada’s business community recognizes the need to modernize our country’s decades-old Competition Act to ensure it remains relevant in a rapidly evolving economy, however the latest proposed changes will bring Canada out of step with international best practices and raise regulatory compliance costs, including on SMEs, and will likely reduce rather than increase competition.

Thank you