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Bill C-56

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First Session, Forty-fourth Parliament,

70-71 Elizabeth II – 1-2 Charles III, 2021-2022-2023

HOUSE OF COMMONS OF CANADA

BILL C-56
An Act to amend the Excise Tax Act and the Competition Act
AS PASSED
BY THE HOUSE OF COMMONS
December 11, 2023
91179


RECOMMENDATION

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act to amend the Excise Tax Act and the Competition Act”.

SUMMARY

Part 1 amends the Excise Tax Act in order to implement a temporary enhancement to the GST New Residential Rental Property Rebate in respect of new purpose-built rental housing.

Part 2 amends the Competition Act to, among other things,

(a) establish a framework for an inquiry to be conducted into the state of competition in a market or industry;

(b) permit the Competition Tribunal to make certain orders even if none of the parties to an agreement or arrangement — a significant purpose of which is to prevent or lessen competition in any market — are competitors; and

(c) repeal the exceptions in sections 90.‍1 and 96 of the Act involving efficiency gains.

Available on the House of Commons website at the following address:
www.ourcommons.ca


1st Session, 44th Parliament,

70-71 Elizabeth II – 1-2 Charles III, 2021-2022-2023

HOUSE OF COMMONS OF CANADA

BILL C-56

An Act to amend the Excise Tax Act and the Competition Act

His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Short Title

Short title

1 This Act may be cited as the Affordable Housing and Groceries Act.

PART 1 
Excise Tax Act

R.‍S.‍, c. E-15

2 (1) The portion of subsection 256.‍2(3) of the Excise Tax Act after paragraph (d) and before the first formula in that subsection is replaced by the following:

 

the Minister shall, subject to subsections (3.‍1), (7) and (8), pay a rebate to the person equal to the total of all amounts each of which is an amount, in respect of a residential unit that forms part of the residential complex or addition, as the case may be, and is a qualifying residential unit of the person at the particular time, determined by the formula

(2) Section 256.‍2 of the Act is amended by adding the following after subsection (3):

Rebate for purpose-built rental housing
(3.‍1) The amount of a rebate under subsection (3) in respect of a taxable supply of purpose-built rental housing — being prescribed property — is determined in accordance with subsection (3.‍2) if prescribed conditions are met and if

  • (a) the taxable supply is a supply by way of sale of a residential complex or an interest in a residential complex to a person that is not a builder of the residential complex, or of a residential complex or an addition to a residential complex to a person that is, otherwise than by reason of subsection 190(1), a builder of the residential complex or addition, as the case may be, and the construction or last substantial renovation of the residential complex or addition, as the case may be, begins after September 13, 2023 but before 2031 and is substantially completed before 2036; or

  • (b) the taxable supply is a supply by way of sale of a residential complex that is deemed to be made to a person that has converted real property for use as the residential complex and is, as a result, deemed under subsection 190(1) to be a builder of the residential complex and the construction or alteration necessary to effect the conversion begins after September 13, 2023 but before 2031 and is substantially completed before 2036.

Amount of rebate — purpose-built rental housing
(3.‍2) If subsection (3.‍1) applies, the amount of the rebate under subsection (3) is equal to the amount determined as if the first formula in subsection (3) and the descriptions for that formula were read as follows:
A × B
where

A
is the total tax under subsection 165(1) that is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and

B
is

(i) if the unit is a residential condominium unit, 1, and

(ii) in any other case, the unit’s percentage of total floor space.

(3) Section 256.‍2 of the Act is amended by adding the following after subsection (9):

Public service bodies — purpose-built rental housing

(9.‍1) If a person that is a public service body is entitled to a rebate under section 259 in respect of the tax under subsection 165(1) that is payable in respect of a purchase from the supplier (within the meaning of subparagraph (3)‍(a)‍(i)) or a deemed purchase (within the meaning of subparagraph (3)‍(a)‍(ii)), if subsection (3.‍1) applies in respect of the purchase from the supplier or the deemed purchase and if the person files in accordance with subsection (7) an application for a rebate under subsection (3) in respect of the purchase from the supplier or the deemed purchase, the following rules apply:

  • (a) the reference in subsection (9) to “sections 254, 256, 256.‍1 and 259” is to be read as a reference to “sections 254, 256 and 256.‍1” in applying subsection (9) in respect of the tax included in determining the rebate under subsection (3); and

  • (b) no amount of the tax included in determining the rebate under subsection (3) may be included in determining a rebate of the person under section 259.

(4) Subsections (1) to (3) are deemed to have come into force on September 14, 2023.

PART 2 
Competition Act

R.‍S.‍, c. C-34; R.‍S.‍, c. 19 (2nd Supp.‍), s. 19

Amendments to the Act

3 The Competition Act is amended by adding the following after section 10:

Market or industry inquiry
10.‍1 (1) The Commissioner may, after consulting the Minister, conduct an inquiry into the state of competition in a market or industry if the Commissioner is of the opinion that it is in the public interest to do so.
Direction to conduct inquiry
(2) The Minister may direct the Commissioner to conduct an inquiry into the state of competition in a market or industry if the Minister is of the opinion that it is in the public interest that such an inquiry be conducted. Before making the direction, the Minister must consult the Commissioner to determine whether the inquiry would be feasible, including with regard to its cost.
Proposed terms of reference
(3) If, after the consultation referred to in subsection (1) or (2), it is decided to proceed with the inquiry, the Commissioner must prepare proposed terms of reference for the inquiry and publish them on a publicly available website and invite the public to provide comments during a period of not less than 15 days.
Final terms of reference
(4) After having taken into account any comments received from the public, the Commissioner must submit to the Minister for approval the Commissioner’s final terms of reference and, if they are approved, the Commissioner must publish them on a publicly available website.
Duration of inquiry
(5) The inquiry commences on the day on which the final terms of reference are published and the Commissioner must complete the inquiry and publish a report of the Commissioner’s findings on a publicly available website before the expiry of the period specified by the Minister, which period, subject to subsection (6), is not to exceed 18 months.
Extension
(6) The Minister may extend the specified period for periods of up to three months.
Sending draft to certain persons
(7) Before the report is published, the Commissioner must send to every person who was required to do anything under an order made under subsection 11(1) a complete or partial draft of the report and inform the person that they may, within three working days after the day on which it was sent, provide the Commissioner with the person’s concerns regarding factual inaccuracies or confidential information that should not be disclosed in the final report.

4 The portion of subsection 11(1) of the Act before paragraph (a) is replaced by the following:

Order for oral examination, production or written return
11 (1) If, on the ex parte application of the Commissioner or his or her authorized representative, a judge of a superior or county court is satisfied by information on oath or solemn affirmation that an inquiry is being made under section 10 or 10.‍1 and that a person has or is likely to have information that is relevant to the inquiry, the judge may order the person to

5 Section 21 of the Act is replaced by the following:

Counsel
21 Whenever in the opinion of the Commissioner the public interest so requires, the Commissioner may apply to the Attorney General of Canada to appoint and instruct counsel to assist in an inquiry under section 10 or 10.‍1, and on such an application the Attorney General of Canada may appoint and instruct counsel accordingly.

6 Paragraph 29.‍1(2)‍(b) of the Act is replaced by the following:

  • (b) any information obtained in the course of an inquiry under section 10 or 10.‍1;

7 Paragraph 29.‍2(2)‍(b) of the Act is replaced by the following:

  • (b) any information obtained in the course of an inquiry under section 10 or 10.‍1;

7.‍1 Subsection 78(1) of the Act is amended by striking out “and” at the end of paragraph (i), by adding “and” at the end of paragraph (j) and by adding the following after paragraph (j):

  • (k) directly or indirectly imposing excessive and unfair selling prices.

7.‍2 (1) Subsections 79(1) and (2) of the Act are replaced by the following:
Prohibition if abuse of dominant position
79 (1) On application by the Commissioner or a person granted leave under section 103.‍1, if the Tribunal finds that one or more persons substantially or completely control a class or species of business throughout Canada or any area of Canada, it may make an order prohibiting the person or persons from engaging in a practice or conduct if it finds that the person or persons have engaged in or are engaging in

  • (a) a practice of anti-competitive acts; or

  • (b) conduct

    • (i) that had, is having or is likely to have the effect of preventing or lessening competition substantially in a market in which the person or persons have a plausible competitive interest, and

    • (ii) the effect is not a result of superior competitive performance.

Additional or alternative order
(2) If, on an application under subsection (1), the Tribunal finds that a practice of anti-competitive acts amounts to conduct that has had or is having the effect of preventing or lessening competition substantially in a market in which the person or persons have a plausible competitive interest and that an order under subsection (1) is not likely to restore competition in that market, the Tribunal may, in addition to or in lieu of making an order under subsection (1), make an order directing any or all persons against whom an order is sought to take actions, including the divestiture of assets or shares, that are reasonable and necessary to overcome the effects of the practice in that market.
(2) The portion of subsection 79(3.‍1) of the Act before paragraph (b) is replaced by the following:
Administrative monetary penalty
(3.‍1) If the Tribunal finds that a person has engaged in or is engaging in a practice of anti-competitive acts that amounts to conduct that has had or is having the effect of preventing or lessening competition substantially in a market in which the person has a plausible competitive interest and it makes an order against the person under subsection (1) or (2), it may also order them to pay, in any manner that it specifies, an administrative monetary penalty in an amount not exceeding the greater of

  • (a) $25,000,000 and, for each subsequent order under either of those subsections, an amount not exceeding $35,000,000, and

(3) Subsection 79(4) of the Act is replaced by the following:
Factors to be considered
(4) In determining, for the purposes of subsections (1) and (2), whether conduct has had, is having or is likely to have the effect of preventing or lessening competition substantially in a market, the Tribunal may consider

  • (a) the effect of the conduct on barriers to entry in the market, including network effects;

  • (b) the effect of the conduct on price or non-price competition, including quality, choice or consumer privacy;

  • (c) the nature and extent of change and innovation in a relevant market; and

  • (d) any other factor that is relevant to competition in the market that is or would be affected by the conduct.

(4) Subsection 79(6) of the Act is replaced by the following:
Limitation period
(6) No application may be made under this section in respect of a practice of anti-competitive acts or conduct more than three years after the practice or conduct has ceased.
8 (1) Section 90.‍1 of the Act is amended by adding the following after subsection (1):
Exception — non competitors
(1.‍1) If the Tribunal finds that a significant purpose of the agreement or arrangement, or any part of it, is to prevent or lessen competition in any market, it may make an order under subsection (1) even if none of the persons referred to in that subsection are competitors.

(1.‍1) Subsections 90.‍1(4) to (6) of the Act are repealed.

(2) Subsection 90.‍1(11) of the Act is replaced by the following:

Definition of competitor
(11) In subsections (1) and (1.‍1), competitor includes a person who it is reasonable to believe would be likely to compete with respect to a product in the absence of the agreement or arrangement.

9 The portion of subsection 92(1) of the Act after paragraph (d) and before paragraph (e) is replaced by the following:

the Tribunal may, subject to sections 94 and 95,

10 Section 96 of the Act is repealed.

11 Subsection 124.‍2(1) of the Act is replaced by the following:

Reference if parties agree
124.‍2 (1) The Commissioner and a person who is the subject of an inquiry under section 10 or 10.‍1 may by agreement refer to the Tribunal for determination any question of law, mixed law and fact, jurisdiction, practice or procedure, in relation to the application or interpretation of Part VII.‍1 or VIII, whether or not an application has been made under Part VII.‍1 or VIII.

Transitional Provision

Sections 92 and 96 of the Competition Act

12 Sections 92 and 96 of the Competition Act, as they read before the day on which sections 9 and 10 come into force, continue to apply after that day to a proposed transaction notified under section 114 of that Act before that day or to a merger that has been substantially completed before that day.

Coordinating Amendment

Bill C-59

12.‍1 If Bill C-59, introduced in the 1st session of the 44th Parliament and entitled the Fall Economic Statement Implementation Act, 2023, receives royal assent, then on the first day on which both subsection 247(2) of that Act and section 7.‍2 of this Act are in force, subsection 79(4.‍1) of the Competition Act is replaced by the following:

Additional order — person granted leave

(4.‍1) If, as the result of an application by a person granted leave under section 103.‍1, the Tribunal finds that a person has engaged in or is engaging in a practice of anti-competitive acts that amounts to conduct that has had or is having the effect of preventing or lessening competition substantially in a market in which the person has a plausible competitive interest and it makes an order under subsection (1) or (2) against the person, it may also order the person against whom the order is made to pay an amount, not exceeding the value of the benefit derived from the conduct that is the subject of the order, to be distributed among the applicant and any other person affected by the conduct, in any manner that the Tribunal considers appropriate.

Coming into Force

First anniversary

13 Section 8 comes into force on the first anniversary of the day on which this Act receives royal assent.

Published under authority of the Speaker of the House of Commons

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