CAMP Opening Statement to the House Standing Committee on Finance (FINA) on the Study of Bill C-59

Thank you to the committee for inviting me to speak today on this important piece of legislation. 

My name is Keldon Bester and I’m the Executive Director of CAMP, a think tank dedicated to addressing the harm caused by monopoly and building a more democratic economy. We appreciate the opportunity to return to this committee to discuss improvements to Canada’s competition law contained in C-59.  

Of the changes to the Competition Act included in C-59, I want to focus my opening statement on two areas – the opening of the Act to private access and its improvements to the merger enforcement framework.  

Today, in contrast to the United States where individual companies can bring cases against corporations harming competition, in Canada nearly all competition law cases originate from the Competition Bureau. Despite its best efforts, the Competition Bureau has finite resources and cannot have eyes on every corner of Canada’s $2 trillion economy. A more decentralized competition law framework is more likely to address harms to competition, especially those affecting small and medium-sized businesses. 

Accordingly, a robust private access framework is an important complement to the expert work of the Competition Bureau and C-59 creates the foundation for this by expanding private access to the Competition Act and allowing companies to seek damages for the harm caused by that anticompetitive conduct. 

Shifting to merger enforcement, today the Competition Act downplays the role that market structure, the number and size of players in a market, plays in competition. By removing language that rejects market structure as an indicator of competitive harm and adding increases in concentration as a factor in evaluating a merger, C-59 gives our competition law a better defense against mergers in markets where Canadians already face limited choices. 

C-59 also addresses a gap in Canada’s law that excludes a core component of our economy from analysis of mergers. Though we often talk about the benefits of competition to consumers, Canadians benefit from a more competitive economy not just as consumers, but as entrepreneurs and workers as well. While competition law has long considered the cost of consolidation on consumers and businesses it has been largely silent on the potential effects on workers. 

Thankfully this is changing. It is changing at home with the recent inclusion of wage-fixing and no-poach agreements under Canada’s competition law and it’s changing abroad with the inclusion of effects on workers in the U.S. Federal Trade Commission’s recent complaint against the proposed Kroger-Albertson’s grocery merger. 

C-59 is another positive step in this direction. By including effects on workers as a factor for merger review, C-59 gives our competition law a more complete view of the costs of consolidation to Canadians. 

In addition to these changes, this committee should consider the ways in which C-59 could go further to protect Canadians who already face limited choice in important markets.  

When a market is highly concentrated, further consolidation is more likely to harm competition at the cost of Canadian consumers, workers and entrepreneurs. Recognizing this, a bias against mergers in markets with few players, often referred to as a structural presumption, should be incorporated into Canada’s competition law. With structural presumptions, merging parties must work harder to prove a merger in an already concentrated market will benefit Canadians. These presumptions can intensify as a market becomes more concentrated, banning them outright where a single firm dominates a market. 

As others have pointed out, Canada’s current competition law has repeatedly allowed mergers to near- or literal monopoly, killing competition and choice for Canadians. This is a consequence of competition law that does not take market structure seriously, a trend that C-59 provides an opportunity to break with.  

C-59 is an important component of comprehensive reform to the law that Canadians depend on to protect competition and affordability in all sectors of the economy, and this committee has the chance to strengthen these reforms to truly protect competition and Canadians.  

Thank you for your time today and I look forward to your questions.