Bill C-249 (Historical)
An Act to amend the Competition Act
This bill was last introduced in the 37th Parliament, 3rd Session, which ended in May 2004.
This bill was previously introduced in the 37th Parliament, 2nd Session.
Dan McTeague Liberal
Introduced as a private member’s bill. (These don’t often become law.)
(This bill did not become law.)
Excise Tax Act
May 12th, 2004 / 7:25 p.m.
Joe Jordan Leeds—Grenville, ON
Mr. Speaker, I want to congratulate my colleague for bringing this matter forward in the informed way that he has.
There are certain constituencies that are calling simply for the government as a short term measure to reduce the federal portion of the tax, somehow suggesting that this will lower the retail price.
I want to quote the member for Okanagan—Coquihalla who, while he was the finance minister in Alberta, was under a great deal of pressure to do just that, to reduce a portion of the tax with the assumption that it would reduce the price at the retail pump. At the time he said:
If we look at lowering the gas tax, what kind of guarantees do we have that the gas retailers will also drop the price, or are they just going to fill in the ditch?
That is a direct quote; it is not a term I would have used, but I think he was on to something. When we cannot determine what supply and demand factors would dictate the retail price to be, either the federal or provincial government's vacating tax room with the understanding that the retail price would go down is probably a very misguided approach.
There is a better approach. The Liberal task force on gasoline pricing looked at the Competition Act and looked at structural reasons within the industry. One of them is the chain of ownership. We proposed divorce legislation. There is Bill C-249 which is presently in the other house. The Liberal members supported it. We did not get similar support from the opposition.
There is no easy fix here, but I want to assure my colleague that we will continue to work extremely hard to minimize the negative aspects of the spike in gasoline prices.
Oral Question Period
May 12th, 2004 / 2:35 p.m.
Newfoundland & Labrador
R. John Efford Minister of Natural Resources
Mr. Speaker, it is time to set the record straight about the members opposite on gasoline prices. Let us look at when Bill C-23 and Bill C-249 came before the committee. Those members opposed the bills to amend the Competition Act and to look into the increase of gas prices each and every time they came before the committee, every time. Why? Because they know that the federal taxes have not increased on gasoline prices. The prices were put up by the oil companies and by the international world price of oil, their friends in Calgary.
Resumption Of Debate On Address In Reply
Speech From The Throne
February 12th, 2004 / 11:10 a.m.
Dan McTeague Parliamentary Secretary to the Minister of Foreign Affairs
Mr. Speaker, it is an honour to speak to the throne speech, the basic outline the government put forward last week.
On my new capacity as Parliamentary Secretary to the Minister of Foreign Affairs, I have quite a task ahead of me in terms of my responsibilities, not only in working with the hon. Minister of Foreign Affairs, but also in dealing with the ever increasing number of Canadians who find themselves in difficulties around the world.
Many speeches have been made on this side in terms of the great work that has been done in a number of areas which I will touch on very briefly. I was particularly pleased to hear of the situation that relates to assisting communities in a very real, tangible financial way as well as the beginning of the process of enhancing the starter grant for low income families, the learning bond, as well as a real solid commitment to the country's first nations peoples.
I was interested in the government's approach with respect to the situation as it unfolds in Africa, particularly as it relates to the pandemic there. I have discussed with many colleagues over the years my concerns with respect to Canada's drug patent policies. This is one area where we can clearly demonstrate that notwithstanding the difficulties we see on either side of this great debate, the one thing Canadians have in common is the concern about what is unfolding in that part of the world, which dare I say we cannot afford under any circumstance to ignore.
The position taken by the Prime Minister to uphold the changes to international aid to ensure that cheap drugs are accessed to confront serious pandemics is very much in keeping with the Canadian way. There are concerns that will have to be met. Let there be no doubt that the situation is serious in that part of the world. It is serious elsewhere.
People certainly in my community of Pickering—Ajax—Uxbridge do not need a reminder about the devastation that SARS brought upon our communities. We know that Canada is very much a part of the global village. The ease of transportation, the ease with which people can travel around the world, makes the problems of other parts of the world very much our own problems here in this country.
It is for that reason I would hope that the legislation which will ensue from the throne speech, the bill to provide cheaper generic drugs or anti-retroviral drugs, will contain no loopholes which might for instance allow a brand name manufacturer to have a first right of refusal where a generic might be able to substitute.
We already know that Brazil, India and other countries have a comparative advantage in terms of access to this problem. We also know that Canada, through its NGOs, through its work with Médecins sans frontières, an initiative which I led in my own caucus some two years ago pursuant to the good work of people like Stephen Lewis and others, was taken very seriously by the government. I want to make sure that we understand that this is not something where there is much margin for error. We have to respond and we have to respond effectively.
I spent a considerable amount of time over the past few months dealing not only with the normal domestic issues, but also dealing with issues where Canadians find themselves in some difficulty. The work with William Sampson was only a beginning. We have since seen that there is a very troubling situation developing with Canadians who find themselves in harm's way.
I want to point out that our consular affairs officials within foreign affairs are doing an excellent job. They have an extremely good track record in helping Canadians get out of difficult situations. This is a perspective which I think is not widely shared and certainly is not well discussed often in the cut and thrust of question period. I can say with some certainty, having been involved on both sides of the equation, one as a critic of what was going on as well as seeing what was going on, there is far more that does not meet the public eye, but for which there are some good stories out there.
I plan to do my best to ensure that where we have difficulties, they are properly expressed. I will work with colleagues from all corners of the House to ensure that these issues are resolved. No Canadian should face undue hardship that is inconsistent with the country's own behaviour of treatment, particularly if the country is a signatory to various conventions, whether they be conventions on torture or conventions on treatment of prisoners. As well, we must ensure that due process in other countries is respected.
We cannot be all things to all people. We cannot tell another country how to conduct its business. However we can ensure that Canada's role in connection with other nations on humanitarian grounds is well respected. Many other countries in the world have taken the same position as Canada with respect to the protection of human rights.
I look forward to working with other colleagues on this to bring amplitude to the concern that has been raised as it relates to the situation Canadians find themselves in all too often.
I should point that the number of Canadians who find themselves incarcerated around the world has tripled since 1990. We have a number of people who are travelling and who do find themselves from time to time in harm's way. It is for that reason that we must work that much harder to ensure that Canadians get the message that the way we do things in Canada is not necessarily the way the rest of the world does it. To use an adage that is trite, and as trendy as it may be, when in Rome do as the Romans do.
I am pleased with respect to the initiatives taken by the Prime Minister, the cabinet and the caucus. I hear hon. members making remarks about democratic deficits and suggesting that it somehow does not work. I want to let all those individuals and critics know, and of course we understand the rules in having to say these things, but what we see in terms of the need to restore and enhance the role of members of Parliament did not happen by accident. The hon. member for Sarnia—Lambton, who is also the parliamentary secretary responsible with special emphasis on democratic reform initiatives, myself and others, as members will know in previous parliaments, tended to be on the outside of the conventions.
We have had an enormous amount of consideration given to be able to impact significant areas of public policy. It is not lost on the vast majority of people who know the reputations of many of the members of Parliament here who now find themselves in the position of some authority and trust with their positions having been enhanced. This enhancement is not shallow, nor is it window dressing. It is real and very much a tribute to the Prime Minister for ensuring that the role of members of Parliament is enhanced.
As you know, Mr. Speaker, I ran for Speaker of the House in 2000. In many respects, although it was the early days, the issue of democratic reform was certainly right. The concern that Canadians had and, of course, the low turnout in the last election, prompted many members of Parliament to become involved in the process of trying to, as it were, wrestle the balance between the executive and legislative authorities.
I think we have come closer to finding a balance that is acceptable and modernizes the instruments by which we govern ourselves. Therefore, we are, accordingly, to our constituents to whom we owe our utmost responsibilities, able to discharge our functions effectively and appropriately with some confidence.
I must say that the process has not been easy but it is one that I believe Canadians in general support. They can see that the modernization by which we govern ourselves is very much at the heart of what has made our parliamentary system both unique and accessible to all Canadians.
It is in that context that I am pleased to see that so much more in the throne speech has been suggested as far as accountability is concerned. Canadians can therefore believe in their governments and believe that this Parliament and this House of Commons can achieve things.
I have said it before. I have been successful for a number of years with the help of so many colleagues in the House of Commons in passing meaningful legislation. I want to make sure that is not the exception but the rule. The circumstances enhancing the ability for every member of Parliament to have a bill brought before it, debated in the House and sent on to the other place to become law is an effective representation of what Canadians expect.
When Canadians go to the ballots and see the names of the candidates and then elect a candidate, they want to know that the individual can purposefully bring forth concerns and introduce legislation that will have an impact, which has, for many reasons and for a variety of other pitfalls in the system, been ignored in the past.
I think everyone in the House would agree that those kinds of amendments are necessary for the survival of the evolution of this great House. I would point out that Bill C-249, a bill which was passed some 10 months ago, has yet to receive royal assent. It seems to be caught in the other place. Of course, we hope there is also a spirit of reform that involves both Houses.
I look forward to the day when all members of Parliament can go back to their constituencies after a particular election and say that we have made a difference, that we are not nobodies, 50 feet away from the House of Commons, but that collectively, regardless of our differences of opinion and regardless of partisanship, we can still do the job for the Canadian public.
Mr. Speaker, I want to make sure that I do not exceed my 10 minutes. I will be pleased to answer the questions of hon. members opposite.
I am also taking this opportunity to say that, even though an election will soon be called, there is still work to do. We must immediately begin vigorous debates on the bills introduced by the government, this for the benefit of all Canadians.
Business of the House
February 2nd, 2004 / 4:50 p.m.
May I remind hon. members that a time limit is placed on the consideration of private members’ bills. Indeed, pursuant to Standing Order 97.1, committees will be required to report on these reinstated private members’ public bills within 60 sitting days of this statement.
At prorogation, five private members' bills originating in the House of Commons had been read the third time and passed. Therefore, pursuant to Standing Order 86.1, the following bills are deemed adopted at all stages and passed by the House: Bill C-212, an act respecting user fees; Bill C-249, an act to amend the Competition Act; Bill C-250, an act to amend the Criminal Code (hate propaganda); Bill C-260, an act to amend the Hazardous Products Act (fire-safe cigarettes); and Bill C-300, an act to change the names of certain electoral districts.
(Bills deemed adopted at all stages and passed by the House)
Private Members' Business
May 13th, 2003 / 3:50 p.m.
The House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C-249 under private members' business.
(The House divided on the motion, which was agreed to on the following division:)
Private Members' Business
May 9th, 2003 / 2 p.m.
Private Members' Business
May 9th, 2003 / 1:55 p.m.
Dick Proctor Palliser, SK
Madam Speaker, I am pleased to rise to speak to Bill C-249, an act to amend the Competition Act. I want to congratulate the member for Pickering—Ajax—Uxbridge for his diligent work in bringing this particular private member's bill forward.
Bill C-249 is about the balance of power between companies and consumers, big people and little people. It seeks to amend the Competition Act to clarify the powers of the competition tribunal when making orders in the case of a merger that would, if approved, create a monopoly or near monopoly situation at the expense and detriment of consumers and competition in the marketplace.
The bill would have the effect of giving the competition tribunal more flexibility in approving or disapproving mergers. It is the opinion of the member who put the bill forward that section 96 of the current Competition Act is outdated and needs to be amended to protect consumers against mergers that would allow monopolies or near monopolies with all of the negative consequences that flow from that.
We in the Prairies know a little something about monopoly or near monopoly situations because prairie history is rife with protests that have occurred as a result of the stranglehold that the big railroads and grain companies have had, at present and in the past, over our farming communities and other primary shippers. That is why I was particularly intrigued to hear the member from the Alliance talking against this bill. The Alliance purports to speak for western Canadians, but is sadly out of touch on this particular piece of legislation.
That near monopoly on the Prairies still applies to a great extent and our farmers continue to pay the price. They are seeing freight rates on grain rise dramatically, whether it is grain companies, equipment manufacturers, the people who produce tractors, combines and sprayers, et cetera, or the commercial fertilizer companies. These situations have arisen mainly because Ottawa has walked away from its responsibility to regulate these near monopolies in the public interest.
Recently, our smaller cities have also suffered as a result of the merger of Air Canada and Canadian. In that transaction Air Canada argued that it would make the airline industry more efficient. However, the question always remains, efficient for whom, for the company or for the passengers and consumers the company is supposed to be serving?
In the 36th Parliament we had to deal with the threat of mergers among the big banks that claimed this would create new efficiencies. Sadly, that issue may not be very far away from being back in the House again. The question remains, efficient for whom, the bank or the elderly pensioner whose local branch is closing; the bank or the teller who loses his or her job? Our party and caucus was in the forefront of the campaign, including my colleague from Regina—Qu'Appelle, against bank mergers, and it was a campaign that succeeded, at least temporarily.
I wish to point out to the member proposing Bill C-249 that I do not see in his literature or testimony before committee any reference to workers. He talks about consumers, and rightly so, but every large merger almost inevitably means lost jobs and that has a negative effect on individuals, families and communities.
Bill C-249 has been before the industry, science and technology committee. One of the witnesses who appeared before that committee on this bill was Konrad von Finckenstein, the Commissioner of Competition. The commissioner said in testimony that he believed the bill before us today was, “a workable alternative to the status quo”. I interpret this to mean that the competition commissioner thinks that the current bill is too merger friendly and that he would welcome an opportunity to modernize the legislation around the Competition Act.
Obviously he believes that Bill C-249 would be helpful in that regard because it would ensure that consumers and not just companies must benefit from any gains and efficiencies being predicted due to business mergers.
There is no unanimity in the business sector. I note that the Canadian Federation of Independent Business does support the bill, while the Canadian Chamber of Commerce does not. That again may speak to market solutions and the Canadian Alliance refusing to support this bill.
I suspect that the Canadian Federation of Independent Business is opposed to this because it speaks for smaller businesses likely to be harmed by big business mergers, while the chamber speaks mainly for big business in Canada.
In summary, I believe Bill C-249 would improve the Competition Act by protecting people against the most cynical and voracious business mergers. I am happy to support the legislation.
Private Members' Business
May 9th, 2003 / 1:45 p.m.
Pierre Paquette Joliette, QC
Madam Speaker, I would like to say at the outset that the Bloc Quebecois will support Bill C-249. I remind the House that this bill would amend the Competition Act to clarify the Competition Tribunal's powers to make an order or not in the case of a merger when gains in efficiency are expected or when the merger would create or strenghten a dominant market position.
I think that it is important, to be able to assess the changes proposed by this bill, to keep in mind the current text of subsection 96(1) of the Competition Act. It says something like this:
The Tribunal shall not make an order under section 92—
The purpose of this section is to dispose of assets or any other measure.
—if it finds that the merger or proposed merger in respect of which the application is made has brought about or is likely to bring about gains in efficiency that will be greater than, and will offset, the effects of any prevention or lessening of competition that will result or is likely to result from the merger or proposed merger and that the gains in efficiency would not likely be attained if the order were made.
In the current act, we see that if the parties before the tribunal are able to demonstrate that the merger would have the effect of creating gains in efficiency that would be greater than the gains which would result from a lessening of competition, the tribunal cannot require dissolution of a merger, even in the case of very significant adverse effects on competition. That is the section as it now reads, and we see that there is not much leeway regarding the evidence related to gains in efficiency.
In the proposed amendment—I shall read just a little of it—in order to determine whether section 92 applies:
—the Tribunal may, together with the factors that may be considered by the Tribunal under section 93, have regard to whether the merger or proposed merger has brought about or is likely to bring about gains in efficiency that will provide benefits to consumers, including competitive prices or product choices, and that would not likely be attained in the absence of the merger or proposed merger.
We see that in the amendment proposed in Bill C-249, the Competition Tribunal is being asked to evaluate whether a merger might have the effect of bringing about gains in efficiency that would benefit consumers, and then to decide whether or not to make an order under section 92.
The spirit of the bill is to identify who will benefit from these gains in efficiency. The Competition Tribunal is being given much more specific guidelines than under the current section of the Competition Act. Already, there is a difference.
There are four positive elements in Bill C-249. First, the bill lessens the importance, as determined by the Competition Bureau, of gains in efficiency attained through mergers. The bill places limits on the use of the efficiency defence that is allowed under the current wording. It is limited to gains in efficiency that benefit consumers and not solely shareholders or foreign consumers.
In the Superior Propane case, the company had, in relation to a merger, pleaded gains in efficiency without specifying for whom. When the committee met, my friend and colleague, the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques asked Thomas Ross, of the Competition Bureau, if passing Bill C-249 would have allowed the tribunal to make a better determination in the case. In the end, the bureau decided not to appeal the Competition Tribunal's decision, even though it felt that there were numerous negative impacts from the proposed merger. Mr. Ross responded that, in fact, if Bill C-249 had existed, they would have been better able to set limits and perhaps prevent this merger as the gains in efficiency, while they do exist, apparently will not benefit consumers.
So, the first advantage of this legislation is that it lessens the importance of gains in efficiency and also lessens the defence allowed under the interpretation of the current section.
Second, and clearly specified in the bill, is that what is used to judge whether a merger is acceptable is not all pertinent factors, but specifically that gains in efficiency must provide clear benefits to Canadian and Quebec consumers, not just any consumers. The previous speaker said that the Competition Act is primary aimed at creating wealth. It seems to me that the ultimate purpose of the Competition Act must be not to create wealth but to ensure that consumers have access to a variety of quality products at a competitive price.
It seems to me that this element introduced by Bill C-249 comes far closer to the primary purpose of the Competition Act. It is therefore the second argument, we feel, in favour of passing Bill C-249.
The third is that it strikes a better balance between the interests of consumers and of shareholders when a merger is planned. This is not the case with the present provision, there will be checks to see who will benefit from the gains in efficiency. This is, of course, an exercise that will be extremely difficult, but one that is necessary.
As you probably know Madam Speaker, I am a member of the Standing Committee on Finance. We just tabled a report on bank mergers. Underlying all the recommendations made to the Minister of Finance in that report is the idea that bank mergers, through the development of international activities, can certainly serve the interests of shareholders; however, as members of Parliament and representatives of the people, we must ensure that Canadian and Quebec investors and communities also benefit from these mergers. We all know that, although they are private businesses, banks provide services of a quasi-public nature. For example, the accounts in these banks will have to remain accessible.
In our recommendations, we ask the government and the Competition Bureau, during its review, to make sure that the improved efficiency and economies of scale benefit not only shareholders, but also consumers, communities and investors, and especially small and medium-size businesses.
It seems to me that if Bill C-249 were passed, it would reflect all of the concerns of the Standing Committee on Finance regarding bank mergers. We know that this will be an extremely hot topic. I do not expect that it will be dealt with before the end of the Liberal leadership race, because this would obviously be an extremely sensitive issue for the candidates. However, we know that once the race is over, and maybe after the next federal election—let us not fool ourselves—bank mergers will be proposed.
It is in everyone's best interest that Bill C-249 be passed to set guidelines for the Competition Bureau when it comes to proposed bank mergers. That was the third argument.
The fourth and final argument is that the Competition Act, as amended by Bill C-249, would better reflect the objectives of public policy. What is the purpose of legislation? It is there to serve the public interest, not private interests, and to defend the majority of citizens. In the present case, it seems to me that Bill C-249 would make for public policy that better reflects the objectives it is meant to fulfill.
In conclusion, I will say, as I said earlier, that the Competition Act is aimed at thwarting a common tendency in our capitalistic markets. In terms of the concentration of activities resulting in oligopolies or monopolies, we have laws to regulate monopolies and the situation regarding oligopolies is being monitored. As we know, there has been a lot of debate around oil companies and refining costs. But why do we have laws? Because we know that the concentration of businesses affects productivity. At the end of the day, when there are no more competitors, there is no need to be productive. That in turn affects the quality of both services and products. It also affects prices and economic growth.
Competition serves not only consumers but also economic growth and, in that sense, Bill C-249 must be passed. As I mentioned at the very beginning, the Bloc Quebecois will support the bill.
In conclusion, I too wish a happy Mother's Day to every mother in Quebec and Canada.
Private Members' Business
May 9th, 2003 / 1:35 p.m.
James Rajotte Edmonton Southwest, AB
Madam Speaker, I want to commend my colleague for introducing this bill and for taking such an active interest in competition law. As he mentioned, his own government is supporting this so I expect we will see the bill become law fairly soon.
I do want to raise some concerns about this piece of legislation, because we in the Alliance and I in particular have decided after reflection not to support this particular bill.
I want to begin my talk here today with a few thoughts on economics, efficiencies and the distribution of wealth. The purpose of the Competition Act, whether we like it or not, is to create wealth. Obviously society would like to have some checks and balances on wealth and wealth distribution, but largely we depend on the market to regulate itself. What makes this subject complicated is that it raises the issue of distribution of wealth. The interesting thing about this bill is that it would set in motion a new purpose for the competition commissioner, that is, to make decisions about wealth distribution.
The issue of wealth distribution or dividing up pieces of the pie is inherently a political question. Who deserves more? Who deserves less? Who does the distributing? Surely these are issues for elected and accountable representatives, not civil servants or quasi-judicial tribunals. The other thorny issue with wealth distribution is that once we begin to consider it, efficiencies are cast aside. If we think of all the time and effort that goes into redistribution in government, if we look at some of the regional development agencies, and if we look at Technology Partnerships Canada, the politicians basically focus on who gets the money, not on keeping the underpinning or the economy healthy to balance that.
Others will give their interpretation of the bill and now I will give mine.
Under the Competition Act, the competition commissioner has the ability to challenge mergers that likely would lessen or prevent competition. The parties to the merger can defend their merger based upon what presently is called the efficiency defence. Such a defence can be made where the merger is likely to bring about gains and market efficiency that will be greater than, and therefore offsetting, the supposed anti-competitive effects of the merger.
Why is this technical economic theory an issue? Mainly because of one prominent case. When Superior Propane proposed a merger with ICG in 1998, it was found that the new company likely would achieve a national market share in propane of 70%. This would have enabled it to become virtually a monopoly propane provider in 16 local markets, mostly in Atlantic Canada. The Competition Bureau deemed this merger to be anti-competitive and therefore challenged it.
Superior and ICG defended their merger using the efficiency defence. The efficiency defence is technical and cumbersome. It falls under section 96 of the Competition Act. It assesses the social benefits of a merger: whether or not a marginally higher price passed on to the consumer outweighs the market efficiencies gained by the creation of a new company.
In the end, the Superior-ICG merger was allowed because the efficiencies resulting from the merger increased the competitiveness of Canadian propane by reducing duplication and allowing the firm to engage in more efficient production. In other words, the increase in productivity resulting from the merger was seen to outweigh the possible costs to the consumer; the costs were not known for certain. They actually did come up with a number for this case. It was found that the impact on low income Canadians possibly could be as high as $8.6 million. The benefit of the merger, from greater efficiencies of scale and other positive impacts, was found to be $29 million.
Bill C-249 attempts to clarify the efficiency defence by limiting the application of this efficiency defence. However, the sponsor of Bill C-249, the member who just spoke, has just explained that he has amended his own bill, something that does not typically happen. He sought to amend it because he thought it would be much better than the current form.
Either in its original form or amended as it is, we in the Canadian Alliance simply cannot support Bill C-249. There are several reasons why we cannot support the bill, which I would like to outline.
First, throughout hearings over the past three years on the issue of competition, the Canadian Alliance members of the Standing Committee on Industry, Science and Technology consistently have put forth the view that Canadian consumers and producers are best served not by a tribunal or by government intervention in the marketplace, but by genuine business to business competition.
The focus of competition policy should not be to protect individuals or individual companies but to facilitate competition itself. Therefore, another intervention into the marketplace as outlined by both the bill and the amendment would not necessarily promote competition but could allow for ways for government bodies to interfere with competition.
Second, the industry committee recommended in April 2002 that a task force of experts be established to study the role of efficiencies in the Competition Act. One of the reasons the standing committee made this recommendation was that the efficiency defence has caused a problem within the Competition Bureau itself. Just when the tribunal came to agree with the bureau's guidelines on the treatment of efficiencies according to the total surplus standard, the bureau abandoned its guidelines.
The standing committee also heard from witnesses concerning the problems in accurately calculating efficiencies. Obviously there are not too many members of the House who are experts in econometrics, but this is something where we are looking into the future of efficiencies and predicting. Even those people who are experts in this area have a difficult time doing this.
I would note here that the Competition Bureau commissioned and received a comprehensive study by experts on the treatment of efficiencies in merger reviews. However, that was a study on different international jurisdictions, where the standing committee requested a study of the role that efficiencies should play in all civilly reviewable sections of the Competition Act. In our view, this is a subtle but critically important difference.
Another reason why the committee would like to have this issue studied on a broader level is historical. To quote from the Canadian Bar Association when it appeared before our committee:
It's our understanding that the inclusion of section 96 in the package of amendments to the law enacted in 1986 was a response in part to concerns which had been raised by the business community about the then new merger provisions. It is particularly important to modify [the efficiency defence] only after due reflection has been given and an opportunity for broader public discussion. There is a constituency out there that thinks that was part of an understanding about how the act would have been amended.
The third reason why we in the Alliance cannot support the bill has to do again with interference in the marketplace by government, specifically for the purpose of what it calls wealth distribution. No matter how one looks at the bill or the amendment, it will change competition law by asking the Competition Bureau to play a role in wealth distribution. This is a role for which it is ill suited. There are other mechanisms, for example a taxation system, that are better suited to wealth and income distribution. The intent of the amendment is consistent with the intent of the original bill where the sponsor wanted “gains in efficiency to be passed onto customers within a reasonable time in the form of lower prices”.
We in the Canadian Alliance believe the marketplace can sort out these issues better than any formula proposed by Parliament.
Section 96 is designed, in theory, to help Canada create a more productive economy. To quote the Canadian Chamber of Commerce:
Unlike the United States anti-trust laws which aim to directly protect and benefit consumers, our [Competition Act] seeks to ensure that marketplace frameworks are in place to promote competition and the efficient operation of markets. This in turn will lead to benefits for all segments of society.
In conclusion, in our view Canadian consumers are best served not by a tribunal or by government intervention in the marketplace but by genuine business to business competition. The focus of competition policy should not be to protect individuals or individual companies but to facilitate competition itself. The Minister of Industry should recognize business to business competition as one of this government's highest priorities and the Liberals should make a concerted effort to reduce regulation and government interference in the marketplace.
Private Members' Business
May 9th, 2003 / 1:30 p.m.
Dan McTeague Pickering—Ajax—Uxbridge, ON
moved that the bill be read the third time and passed.
Madam Speaker, first, I want to thank the member on the other side who brought to the attention of the House the fact that Sunday will be Mother's Day.
I want to wish a happy Mother's Day to all my constituents and to all Canadian women who will be celebrating that important day.
I am pleased to rise to speak at third reading of Bill C-249; it has been a few years. It deals with a substantive, important change to the Competition Act. I would like to thank the industry committee, including its chair, the member for St. Catharines, as well as my colleague the vice-chair, representing the Alliance, and members of all other parties for their work in making this such an important milestone as far as private members' bills are concerned.
The bill has as its origins the need to ensure that the loophole created in 1986, which in effect allows anti-competitive activity, not occur unless factors other than efficiency are considered. The case that was before the House dealt with Superior Propane and that issue saw a potentially damaging merger take place. The reality is that the language of the act was in dire need of change as a result.
I am pleased that Bill C-249 as amended has the support of the competition commission, the Canadian Federation of Independent Business and a substantial number of consumer groups across the country.
As the competition commissioner said at committee on March 31:
The bill seeks to ensure that consumers are not left out of the equation when considering mergers involving efficiency claims. It would also safeguard competition to the benefit of consumers and the [Canadian] economy.
I want to point out that nowhere else in the world is there an efficiencies defence that is used to promote a potentially damaging merger that would see consumers and the competitive process harmed, not in the United States, not in Europe, not in Australia, nowhere around the world. Other competitive processes always try to at least balance the interests of consumers and the interests of those who are trying to create certain types of innovations and efficiencies.
Unfortunately, the act was left wide open for interpretation. It is correct and appropriate, as the committee quite rightly pointed out rather substantially, not only for this Parliament, that the issue be fully addressed. The commissioner also suggested that the act in itself is an important public knowledge document that allows consumers to certainly be aware of the fact that any quantifiable efficiencies would be treated appropriately.
Former Federal Trade Commission chair Robert Pitofsky pointed this out on the question of efficiencies:
My view is that the acceptance and clarification of the role of efficiencies in defense of mergers has been, on balance, a useful development in the United States. If there are no significant efficiencies, enforcement agencies and judges can be much more comfortable finding that particular mergers are anti-competitive--
His concern, which I think speaks very much to the concern we have here in Canada, was that benefits can only happen if they are likely to be passed on to consumers and efficiencies cannot be achieved in a substantially less anti-competitive way.
More important, I believe that the position taken for some years by groups and organizations that have tremendous concern with this precedent and with the wording of the act agrees that efficiencies in terms of merger review should not be stand-alone, that in fact they should be compared to all other factors. The amendment prescribed by the industry committee is appropriate and correct and I believe that Parliament must pass this bill. More important, I am pleased to have the support of my government as well as the Competition Bureau on this matter.