The government unveiled Bill C-56 yesterday, legislation it touts as supporting the building of more rental homes (through tax measures) and stabilizing grocery prices (through Competition Act reforms). While the proposed Competition Act changes include increased investigative and merger blocking powers for the Competition Bureau as well as the long overdue elimination of the efficiencies defence, the bill also includes provisions that undermine Competition Bureau independence. The government is not promoting those changes – there is no reference to it in the press release – but bill gives it broad powers to order inquiries into any market or industry and dictate the terms of the inquiry to the Competition Bureau. Those reforms are not subject to any significant limitations and are open to potential abuse.

The Competition Act currently grants the government (or more particularly the ISED Minister, who is responsible for the law) the power to order an inquiry where it believes certain offences or contravention of the law has been committed. Bill C-56 expands these powers in two important ways. First, it establishes the power for government to order an inquiry not on the basis of offences but rather on nothing more than the “public interest”:

10.‍1 (1) The Minister, if he or she is of the opinion that it is in the public interest to do so, may direct the Commissioner to conduct an inquiry into the state of competition in a market or industry.

This provision effectively opens the door to ordering an inquiry into any market, since the government would argue that any order would by definition constitute acting in the “public interest”. While there may be benefits in expanding the scope of ordering investigations without the need to suspect or believe that there has been a contravention of the law, without safeguards or limitations, there are risks of government ordering fishing expeditions or retaliatory measures.

Second, far from establishing safeguards, Bill C-56 does the opposite as the government also grants itself significant powers over the inquiry itself. The bill provides that the terms of the inquiry and the timeline for reporting on it are ultimately decided by the Minister and not the Competition Bureau.

10.‍1 (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.

10.‍1 (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.

This too represents an important change as it undermines Competition Bureau independence in establishing and conducting inquiries. Earlier this year, the Canadian Heritage committee launched a fishing expedition against tech companies in retaliation for response to Bill C-18 that drew widespread criticism. There is little doubt that the Bureau needs to become increasingly active on digital economy issues, but when the government grants itself the power to order inquiries and to set the terms of those inquiries without limitation there are long term risks to the independence and credibility of the Bureau. If the Bureau is to remain independent from political interference, Bill C-56 needs reforms to limit the government’s power into its inquiries and investigations.