CAMP Opening Statement to the Senate Standing Committee on National Finance’s 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 harms caused by monopoly and building a more democratic economy. Echoing my message to this committee last year, this is an exciting time for competition policy in Canada.

While several elements of C-59 will improve competition in the Canadian economy, notably those to support the modernization of the payments system and fostering employee ownership of Canadian firms, I will focus my statement today on reforms to the Competition Act, with a fuller discussion included in the written brief submitted to this committee.

One of the most important changes to Canada’s competition law in C-59 is the opening of private access to the Competition Act. In contrast to the United States where individual companies 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.

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 the conduct available to private access and allowing companies to seek damages for the harm caused by that conduct.

Another area of C-59 I would like to highlight is the important changes to the Competition Act’s treatment of mergers.

Today the Competition Act downplays the role that market structure, the number and size of players in a market, plays in competition. One way it does so is by rejecting increases in concentration as indicative of potential harm to competition. By removing language that rejects market structure as a potential indicator of competitive harm and adding increases in concentration as a factor in evaluating a merger, C-59 gives our competition law additional tools to defend against mergers in markets where Canadians already face limited choices.

C-59 also addresses a gap in Canada’s merger law that has excluded a critical component of our economy from analysis. Though we often view competition through the lens of 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.

By including effects on workers as a factor for review, C-59 is a step towards a competition law that takes a more holistic view of the costs of consolidation.

The amendments proposed in C-59 serve to catch Canada’s competition law up to those of peer jurisdictions. In the spirit of learning lessons from our international partners, this committee should consider the potential for C-59 to go further in strengthening the law’s stance against mergers in already concentrated 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 already concentrated markets, 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 and mergers in sectors exhibiting very high levels of concentration can be banned outright.

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.