Hon. Marty Klyne: Honourable senators, I was to promise that I would use my 45 minutes or less, but I promised Senator Manning 29 minutes.
I rise as sponsor of the Canadian prosperity act, Bill S-239. This is new legislation to improve internal trade in Canada through amendments to the Competition Act. The bill’s purpose is to help achieve lower prices, more choices for goods and services, stronger job growth and greater productivity and prosperity for Canadians. This is pro-consumer, pro-business legislation that can help spur investment and innovation across the country.
Specifically, the bill will empower a specialized and independent agency, the Competition Bureau, to make recommendations to reduce barriers to internal trade, such as unnecessarily anti-competitive regulations. This change will strengthen the bureau’s current mandate under section 10.1 of the Competition Act to conduct inquiries into the state of competition in a market or industry in the public interest.
As well, the bill will require the federal government to respond to the bureau’s recommendations as regards reducing federal barriers to internal trade within 120 days. It will also encourage — though not require — provincial, territorial and municipal governments to do so as regards reducing barriers to internal trade in their respective jurisdictions. This approach respects federalism while helping build a more competitive and cohesive Canadian economy. These last two measures answer a request the bureau made in 2023.
I’ll speak today on five subjects: first, the inspiration and context for this bill; second, voices of support for this bill; third, a little about competition law in Canada; fourth, the bill’s details; and finally, two examples of how this bill can help improve internal trade.
First, the inspiration: During the pandemic, I was honoured to contribute to the work of the Senate Prosperity Action Group. This was a working group of 12 senators from across the chamber, led by Senator Harder. Our aim was to develop public policy ideas towards Canadians’ future prosperity. Over 70 distinguished leaders and experts were interviewed and informed our study.
Two key recommendations in the Senate Prosperity Action Group’s 2021 report were to remove barriers to trade between provinces and territories and to reduce Canada’s often excessive and duplicative regulatory burden.
On internal trade, our report cited a 2019 working paper of the International Monetary Fund estimating that eliminating internal trade barriers in Canada could raise our GDP by 3.8%. A 2022 MacDonald-Laurier Institute paper by Trevor Tombe and Ryan Manucha found that the long-term gain to GDP could be up to 7.9%, meaning up to $200 billion per year or the equivalent of $5,100 per person. To put things into perspective, that’s enough money to wipe out the federal deficit several times over.
On the Prosperity Action Group’s second recommendation, reducing excessive regulations, our report noted that Canada’s regulatory burden is one of the major reasons for Canada’s poor ranking in the World Bank’s Doing Business 2020 report. As regards ease of doing business, Canada ranked twenty-third out of 190 countries. The Competition Commissioner, Matthew Boswell, has noted that Australia achieved 2.5% GDP growth over a decade by applying a competition lens to regulated sectors across the economy.
In the Prosperity Action Group’s work, Senator Harder inspired us to consider not only what Canada’s prosperity goals should be but, just as importantly, how to get there. As I will explain, this bill is about the how. You will ultimately understand the why by the time I’m done.
I turn to our here-and-now context. With Canada’s economy under threat of a wild-card tariff regime, internal trade and competition have renewed significance. The good news is that in March Canada’s first ministers jointly took the lead. Their statement said:
The Prime Minister and the premiers agreed to continue working together as they implement the shared plan to strengthen internal trade in Canada. Team Canada stands firm, united, resolute, and ready to face this challenge, and any others that come our way.
Our first ministers have since made great progress to improve internal trade. In June, Parliament passed the Free Trade and Labour Mobility in Canada Act as part of a government bill: Bill C-5. In July, Ontario signed the last of its memorandums of understanding with all provinces and territories to remove internal trade barriers. Also in July, nine provinces and one territory signed on to an agreement that will allow direct-to-consumer interprovincial alcohol sales by the spring of next year. In September, the Ontario government said it will remove interprovincial barriers for workers in regulated professions, allowing them greater mobility when searching for work across the country. Just last week, all provinces, territories and the federal government signed an agreement to drop interprovincial trade barriers on many goods except food and alcohol, starting in December.
The federal government has also taken leadership to build a more competitive economy. The budget includes a plan to improve productivity, a new industrial strategy, measures to increase competition in the telecommunications and banking sectors and proposed restrictions on the use of non-compete agreements in federally regulated sectors.
In this context, and turning to this bill, the Canadian prosperity act will reinforce first ministers’ cooperative efforts to improve internal trade. Bill S-239 will support a road map for those efforts through the Competition Bureau’s independent and proven economic and legal expertise.
As well, the bureau’s studies and advice can support efforts in any jurisdiction to reduce unnecessarily anti-competitive regulations, which also hinder internal commerce. To be clear, this isn’t about questioning the public purpose of regulations — it’s about regulating smarter and better, with more competition. Canadians across the country stand to benefit from increased competition, especially through lower prices.
Examples of regulated sectors in Canada include professional services, alcohol sales, government procurement, telecommunications and aviation. No doubt Canadian consumers can see room for improvement in these and other sectors.
Colleagues, this bill doesn’t reinvent the wheel. As I said, the Competition Bureau already conducts industry inquiries and market studies and makes recommendations to enhance competition. Since 2015, the bureau has made 90 submissions to federal, provincial and other regulators and policy-makers on how to reduce barriers to competition. Since 2008, the bureau has released 10 reports following market studies, identifying competition issues and suggesting potential solutions. For example, the bureau completed a study on the airline industry in June, and another is now under way on financing small and medium enterprises.
Building on these activities, the changes in Bill S-239 will make the bureau’s studies and advice more effective, helping our federation to achieve a single, stronger Canadian economy. Again, the changes would be a stronger mandate for the bureau to study and provide advice on internal trade and excessive and unnecessary regulations; a requirement for the federal government to respond to the bureau’s recommendations; and encouragement for provincial, territorial and municipal governments to do the same.
These changes will make a difference. With sensible recommendations being implemented, more internal trade and competition will mean more money in Canadians’ bank accounts. It will mean more opportunities for workers, investors and entrepreneurs. It will mean more tax revenue for health care, education, infrastructure, defence, paying down the deficit and other priorities. Down the road, it could even make more room for tax cuts.
In short, Bill S-239 can contribute to a more prosperous Canada by making better use of the Competition Bureau, using existing resources and with no additional cost to taxpayers. Perhaps at this time of economic urgency, we can move quickly for that reason alone.
I will turn to my second subject: the voices of support for this bill. Colleagues, I am mindful that to the ears of some, competition law is not rock ‘n’ roll. But when it gets rockin’, we’ll be rolling in it.
I am honoured that this bill is endorsed by Lawson Hunter. He served as commissioner of the Competition Bureau from 1981 to 1985. Known as the “dean of the Canadian Competition Bar,” Mr. Hunter played an instrumental role in drafting the Competition Act and is a recipient of the Order of Canada. In supporting this bill, Mr. Hunter tells us:
As the global trading system becomes more protectionist, it will be critical that domestic competition remains or becomes vigorously competitive . . . . The Competition Bureau should play a larger, more visible role in ensuring that both governments and the private sector do not artificially restrict competition.
I am also honoured that this bill is endorsed by Sheridan Scott who served as the Commissioner of Competition from 2004 to 2009. Ms. Scott tells us:
This bill will provide the Competition Bureau with important new tools for encouraging competition for the benefit of Canadian consumers and businesses . . . . Removing unnecessary impediments to a robust Canadian economy is essential at this critical time.
Ryan Manucha, who I referred to earlier, is an internal trade expert with the C.D. Howe Institute. He says:
Explicitly tying competition policy with internal trade reform aligns Canada with international best practices seen in Australia and the EU. With deep expertise in tackling anti-competitive conduct and promoting market openness, the Competition Bureau is well positioned to play a key role.
Keldon Bester is the Executive Director of the Canadian Anti-Monopoly Project. He says:
Stronger internal trade and stronger competition policy are critical tools in tackling the oligopolies that raise the cost of living and drag down the productivity of Canadians. Bringing these tools together will be key as Canada seeks to diversify our trading relationships.
Vass Bednar is the Managing Director of The Canadian SHIELD Institute. She is also the co-author of a 2024 book entitled The Big Fix: How Companies Capture Markets and Harm Canadians. She says:
There is a substantial role that the federal and provincial governments can play to improve competition in Canada. Working more effectively across the federation in a whole-of-Canada approach — one that sees competition work as a vital element of industrial strategy — can help ensure that markets are free and fair more often, benefiting consumers. Committing to reducing internal trade barriers is just the beginning of this work.
Thank you again to Senator Harder for his support of this bill as well as his leadership of the Senate Prosperity Action Group — this bill’s inspiration. I am grateful that Senator Harder has said the following of this bill:
In our 2021 report, the Prosperity Action Group urged governments at all levels to work together to unlock the full potential of Canada’s internal market . . . . The Canadian Prosperity Act answers that call by promoting cooperation and accountability across jurisdictions. Reducing interprovincial trade barriers will not only strengthen our economy — it will create opportunity and prosperity for Canadians in every region.
Thank you also to Jeff Brown, a retired competition lawyer, for his important contributions to this legislation, to his field and to Canadian prosperity.
To close this portion of my speech, the current Commissioner of Competition, Matthew Boswell, spoke positively about the goals of this bill at Canada’s Competition Summit 2025 on October 1. He said:
. . . we need to break down internal trade barriers.
These are, at their core, barriers to competition.
Canada’s fragmented regulatory environment creates unnecessary obstacles for businesses and workers. We cannot build a dynamic economy if businesses are forced to navigate 13 different regulatory regimes in one country.
Swift action to slash these barriers and harmonize regulations across Canada will unlock significant economic potential and create a more dynamic marketplace—one that encourages entry and growth across our internal borders. . . .
He continued:
. . . we need to foster a regulatory environment that promotes competition.
All levels of government in Canada—federal, provincial, territorial, and municipal—must work towards removing barriers that limit smaller players’ ability to compete in our economy. Smart regulations should encourage innovation and entrepreneurship, not entrench dominant players.
I will turn to my third topic: a little about competition law, which may not be familiar to everyone.
In economic history, competition law is a pivotal chapter. Called “antitrust law” in the U.S. — or sometimes “anti-monopoly law” — competition law is a legal restraint on capitalism that protects consumers and free enterprise. Essentially, competition is a public good in our social contract, ensuring that the benefits of capitalism flow to society. These include lower prices, more choices and better products as well as business, investment and employment opportunities.
Competitive economies are innovative and prosperous. The best businesses raise the bar for others. That’s why we protect competition in Canadian law. For example, competition laws prevent, deter and even punish dominant players, cartels and other actors from engaging in many unfair business practices. These include price-fixing and other forms of collusion, deceptive marketing and buying up competitors to form monopolies and raise prices.
Competition law also has soft levers, such as the Competition Bureau’s independent advisory function, which this bill strengthens. This area of competition law falls within federal jurisdiction through the trade and commerce power in subsection 91(2) of the Constitution Act, 1867.
As to the origins of competition law, in the late 19th century, concentration of industrial ownership in the U.S. by the so-called robber barons was a major problem. John D. Rockefeller controlled oil. Andrew Carnegie controlled steel. Cornelius Vanderbilt controlled railroads and steamships. Jay Gould controlled the telegraph. The Gilded Age was characterized by political corruption, lobbying run amok, exploitation of workers, control of information and manipulation of stocks. With free markets and democracy in peril, something had to be done.
In 1889, amid fears of similar dynamics in Canada, Canada passed the world’s first modern competition law, the Anti-Combines Act. Vass Bednar and Denise Hearn’s book The Big Fix states that:
Self-styled trustbuster Nathaniel Clarke Wallace, the Conservative chairman of a parliamentary committee that investigated monopolies, was the driving force behind Canada’s 1889 Act. It targeted combinations of businesses that unfairly fixed prices or otherwise combined to act as cartels . . . .
Passing the act was significant, although it was eventually watered down by the Senate.
Senators, after 136 years, redemption is within reach.
Taking on the robber barons, the U.S. followed Canada with the Sherman Anti-Trust Act of 1890. In recent years, concentrations of market power in the tech sector have ignited fresh interest in competition law.
In Canada, in 1985, former prime minister Brian Mulroney’s government enacted our modern Competition Act. That act has received important updates in recent years. These include the addition of information-gathering powers for market studies through Bill C-56, a government bill, in 2023. The Senate passed that bill unanimously in less than a week.
Like the Senate, Prime Minister Carney was also enthusiastic about competition. In his book Values, he wrote:
The cycle of new firms and ideas overtaking the old is at the heart of the market economy, but dynamism is not self-perpetuating. Countries must jealously guard and actively nurture the conditions that promote it. . . .
The more decentralized an economy is, the more dynamic it can be, and, by definition, the more the leaders in economic sectors change as good new ideas come to market. In contrast, concentration leads to rent seeking and efforts to entrench existing advantages . . . .
Eternal vigilance in the name of competition is essential. The future will be made by entrepreneurs we do not yet know.
Colleagues, as I complete this section on the history of competition law, your expressions convey that brevity is the soul of wit. I promised not to use my 45 minutes. I also promised 29 minutes to Senator Manning, and I am a man of my word.
Therefore, as I round minute 20, I’ll move swiftly through the last two subjects.
Topic four regards the details of Bill S-239. This is an easy one, as the bill is a little over two pages. As I’ve said, the bill makes three minor — yet important — changes to the Competition Act. To read this bill is not going to be laborious; it’s two pages.
First, the bill enhances the Competition Bureau’s existing mandate under section 10.1 of that act to conduct inquiries into the state of competition in a market or industry in the public interest. Specifically, the bill would empower the Commissioner of Competition to make recommendations to federal, provincial, territorial or municipal institutions, stating:
. . . any barrier to trade within Canada — including an Act, a regulation, a rule, an order or a by-law — that, in the Commissioner’s opinion, unduly affects the state of competition in the market or industry that is the subject of the inquiry or any related market or industry in Canada.
As I said, we’re not reinventing the wheel. The Competition Bureau can already do studies and make recommendations under section 10.1. However, this change will give the commissioner and the bureau a stronger mandate to focus on issues of internal trade and excessive regulation.
The bill’s second change is to require the federal government to respond to the bureau’s recommendations as regards reducing federal barriers to internal trade, including excessive regulations, within 120 days.
As senators know, requiring or requesting government responses is a sensible and very common accountability mechanism in legislation and parliamentary work. In terms of the 120 days for government responses, this bill takes that time frame from three recent federal statutes: the National Housing Strategy Act of 2019, the Canadian Net-Zero Emissions Accountability Act of 2021 and the Canadian Sustainable Jobs Act of 2024.
The bill also encourages or invites provincial, territorial and municipal governments to respond to the bureau’s recommendations with regard to reducing barriers to internal trade in their respective jurisdictions.
Specifically, the bill provides that the head of a provincial, territorial or municipal institution may respond to any recommendation made to the institution within 120 days. It requires the commissioner to publish the response or, if no response is received, a notice to this effect, which will be posted on a publicly available website.
In the bill, the head of an institution is the relevant federal, provincial or territorial minister, the municipal chief officer or, in the case of Crown corporations, the CEO.
The bill’s measures on recommendations answer a request the Competition Bureau made in 2023 in their submission to the government on the future of competition policy in Canada. The bureau noted that the lack of a requirement for implicated bodies to respond to bureau recommendations is a key gap in Canada’s competition policy tool kit. The bureau said:
While any Bureau recommendations flowing from market studies would be non-binding, the regime should require government entities subject to the Bureau’s recommendations to provide a public response within a reasonable timeframe after the report is Published. Such a requirement could, if necessary, be limited to recommendations directed at federal government entities. . . .
It continued, saying:
Wherever possible, regulators and other implicated government bodies should be required to respond to Bureau recommendations within a reasonable time period.
As I said, this bill’s requirement for responses is limited to the federal government. However, it does include an encouragement or an invitation for provincial, territorial and municipal governments to respond as well.
On this point, I’m mindful and vigilant of the limits of the federal jurisdiction in terms of not trying to exercise control over non-federal institutions. All jurisdictions need to be respected, and this bill won’t allow the Competition Bureau to impose any changes on anyone.
Instead, with this bill, we’re looking for a positive exchange of ideas and a cooperative effort, leveraging the economic and legal expertise of the Competition Bureau as a shared Canadian resource with outstanding credibility and know-how.
At the same time, it’s sensible to include language in the bill that reflects that all Canadian markets — and all Canadian regulations, including provincial ones — can play a role in building Canadian prosperity. If we try to achieve internal trade and competition without recognizing the huge potential of the provinces around achieving that, we won’t get very far. Vibrant competition is a matter of national importance, but achieving it requires a coordinated effort.
Internal trade is a Team Canada effort, and we need the whole team pulling in the same direction. Fortunately, that’s been the case. The Prime Minister and the premiers deserve the credit, and since the First Ministers agree on the “what,” this bill contributes to the “how.” They’re quite complementary, and I trust you understand why and what’s in it for us as Canadians.
On that note, to wrap up, let me give you two concrete examples of how this bill can improve internal trade and competition.
In June the Competition Bureau released its market study on competition in Canada’s airline industry. The report recommended increasing opportunities for foreign investment to increase competition. My two cents is that that could be relevant to the quality, availability and pricing of passenger air service in Canada. In turn, inadequate air service can be a barrier to internal trade, in terms of tourism, labour mobility, business investments in underserved regions — you name it.
The government has made some comments on this subject. However, if Bill S-239 were law, the federal government would have had to formally respond to those recommendations that I just mentioned with regard to the airline industry within 120 days, while the subject still held the public attention, following the release of the report. As of today, 159 days have passed without a formal response, and there is no requirement to provide one.
Of course, the passage of time cools public and media interest in such reports. It also, perhaps, allows incumbent lobbying to occur that may be out of step with increasing competition and lowering prices. Requiring a timely response would therefore be better, and it might also prompt policy changes.
That’s an example at the federal level. An example at the provincial level is that Canada has notorious interprovincial barriers to alcohol sales. I mentioned that our premiers are making progress. In July nine provinces and one territory signed on to an agreement that will allow direct-to-consumer alcohol sales by next spring.
But colleagues, what about retail? Where’s the B.C. wine in the LCBO? In the National Post on October 6, John Ivison wrote:
Even if [direct-to-consumer] does take off next year, it doesn’t solve the bigger problem of accessing wines from other provinces in liquor stores.
The U.S. has had interstate [direct-to-consumer] for years and it accounts for just eight per cent of sales.
A real reduction of interprovincial trade barriers would see provincial liquor stores creating Canadian aisles, with the prominent display of wine from other provinces.
Mr. Ivison points out that Canada is one of the only countries in the world that doesn’t allow wine distribution to different regions. It costs a B.C. winemaker less in duties to ship a bottle of Pinot Noir to South Korea or Italy than to Ontario, Quebec or Atlantic Canada. In fact, to get B.C. wine into Ontario’s LCBO or Quebec’s SAQ, a B.C. winemaker is obliged to pay markups of 71% and 130% respectively.
On November 10, a report from the Canadian Federation of Independent Business stated, “Broader, deeply entrenched barriers continue to stifle growth, innovation, and competition in Canada’s domestic alcohol industry.”
If, or when, Bill S-239 becomes law, and if the Competition Bureau makes recommendations to address such barriers to internal trade, provincial governments would be encouraged and invited to respond, perhaps with some public expectation of engagement, considering the potential benefits to consumers — their constituents.
In conclusion, the Canadian Prosperity Act is a bill that doesn’t cost anything, with the potential to help lower prices for Canadians and boost our country’s GDP. What are we waiting for? Let’s support our first ministers’ leadership and create our own prosperity.
For my part, with our federation — federal, provincial, territorial and Indigenous partners — pulling together to face current challenges, I’ve never been prouder to be Canadian. That’s why I’m putting this bill forward as, hopefully, a small contribution to our country’s economic effort. I ask you to please support it. Thank you, hiy kitatamihin.