The Liberal Party of Canada introduced new legislation this week that aims to tackle grocery prices and build more rental homes in the country.

Bill C-56, the Affordable Housing and Groceries Act, was announced by Deputy Prime Minister and Minister of Finance Chrystia Freeland on September 21, in an effort to "support Canadians with the cost of living," noted a government release.

It was the first piece of legislation introduced in the fall parliamentary sitting.

The proposed legislation has two parts.

First, it seeks to amend the Competition Act in order to increase and enhance competition, specifically in Canada's grocery sector, which is currently commanded by several large companies.

The proposed amendments will give more power to the Competition Bureau, allowing it to investigate and enforce action when companies are involved in price fixing or price gouging.

It would also work to end anti-competitive mergers that raise prices by removing the efficiencies defence.

Lastly, it would allow the Competition Bureau to stop any collaborations that prevent competition and customer choice, specifically when large grocery companies try to prevent smaller grocers from setting up shop nearby.

Feds met with grocery CEOs

The announcement comes after Freeland and Innovation, Science and Industry Minister François-Philippe Champagne met with Canada's big five grocery retailers earlier this week to come up with a strategy to stabilize grocery prices.

"I appreciate the constructive nature of the discussions we had," Champagne told reporters after the meeting on September 18. "Bottom line is that they agreed to work with the government to stabilize food prices in Canada."

The meeting was prompted by an ultimatum posed by Prime Minister Justin Trudeau on September 15, warning Canada’s big grocery chain CEOs that they needed to create a plan to steady prices or face repercussions.

In addition to the meeting with the retailers and the Liberal's proposed legislation, NDP leader Jagmeet Singh also introduced a bill in parliament that aims to "reign in corporate greed and stop grocery giants like Galen Weston from gouging you at the till."

More rental homes

The second part of Bill C-56 aims to increase the GST rental rebate — from 36 per cent to 100 per cent — on new rental housing in order to incentivize more construction of apartments, student housing, and residents for seniors.

It would also remove existing GST Rental Rebate phase-out thresholds for new rental housing projects.

The enhanced rebate would apply to projects that begin construction on or after September 14, 2023, and on or before December 31, 2030, and are completed by December 31, 2035.

According to the federal government, the increased rebate would provide $25,000 in tax relief for a rental unit valued at $500,000.