Bill C-19 (Historical)
An Act to amend the Competition Act and to make consequential amendments to other Acts
This bill was last introduced in the 38th Parliament, 1st Session, which ended in November 2005.
David Emerson Liberal
Referral to Committee Before Second Reading
(This bill did not become law.)
Private Members' Business
March 10th, 2011 / 6:50 p.m.
France Bonsant Compton—Stanstead, QC
Mr. Speaker, I am pleased to speak today in the House on Bill C-452, An Act to amend the Competition Act (inquiry into industry sector) introduced by my colleague from Shefford.
Bill C-452 proposes to amend the Competition Act to give more power to the Competition Bureau. I would like to start by congratulating my colleague for this fine and very important private member’s bill. I think this is a subject that is dear to his heart and I want to salute the quality of the work he has done.
The amendment proposed by my colleague from Shefford will allow the Commissioner of Competition to initiate inquiries of his own accord into fluctuations in the price of gasoline, if there are reasonable grounds for doing so. It will therefore no longer be necessary to wait for complaints to be filed before making an inquiry. If this bill is enacted, the Competition Bureau will be better equipped to combat companies that might profit from their dominant market position to pick consumers’ pockets.
Every time gas prices rise, the governments hands us the same answer: nothing can be done, the Competition Bureau has concluded there was no agreement among the oil companies to fix prices. The truth is that there are a number of flaws in the present act. It does not allow the Competition Bureau to initiate inquiries. And when there is an inquiry, the Competition Bureau cannot really do anything with them because at present it cannot compel the production of documents or protect witnesses. Bill C-452 would eliminate these flaws by allowing the Bureau to initiate inquiries and allowing the federal Trade Tribunal to protect witnesses and seize relevant documents.
If the act is not amended, gas prices will continue to fluctuate with no justification, as is the case at present. And it will again, and still, be consumers who will continue to pay for the more dubious practices on the part of the oil companies.
Gas prices fluctuating is one thing. It is another thing when they rise stealthily and without justification. Recently, prices at the pump rose because of the political instability in north Africa. In just a few hours, prices rose spectacularly. That is completely bizarre, when we know that the events that occurred in north Africa had at that point not yet had any impact on the cost of refined gasoline that was already in Quebec. That practice is nothing more nor less than a way of making even more money on the backs of consumers, and there is a lot. It is estimated that because of collusion, retailers have overcharged Quebec consumers by as much as $100 million.
The Bloc Québécois recently supported Bill C-14, An Act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act, to fix price errors at the pump. But that bill does not solve the problems of collusion like the ones recently disclosed in Quebec and does not prevent sudden increases in the price of gas. The Conservative government claims that its initiative will save the public a lot of money. Gas consumption in Canada, calculated over a full year, is so high that it is completely foolish to think that bill can have any impact on consumers’ wallets. That is why we in the Bloc Québécois believe that in order to respond effectively to gas price increases, Bill C-452 must be enacted. This bill is the only thing that will have a real impact on prices at the pump.
For years, the Bloc Québécois has been pressuring the federal government to finally take action to address the rising cost of petroleum products. It has dogged the Liberal government of the day so that it would follow up on the recommendations made in 2003 by the Standing Committee on Industry, Science and Technology. In October 2005, just before the election, the federal government finally listened to the Bloc Québécois' arguments and decided to amend the Competition Act through Bill C-19. That legislation broadened the Competition Bureau's authority to investigate and increased the maximum penalty for conspiracy. However, Bill C-19 did not follow up on all the committee's recommendations. As we know, that legislation, which was only an election ploy, died on the order paper with the election call, and we certainly could not count on the Conservative government to bring it back.
In 2007, the Bloc Québécois introduced Bill C-454, which also died on the order paper, when the election of 2008 was called.
In 2009, the Conservatives took part of the bill and included it in the budget implementation act. However, they did not see fit to allow the Competition Bureau to initiate investigations. That is why the hon. member for Shefford came back again with Bill C-452. The recent years clearly show that neither the Conservatives, nor the Liberals acted to protect consumers. By contrast, the Bloc Québécois is taking action.
For the Bloc Québécois, the only effective way to deal with the rising cost of gas is to use a global strategy. That strategy is three-pronged: to bring the industry into line, to make it contribute, and to reduce our dependency on oil.
First, we must bring the oil industry into line. The initiative of my colleague for Shefford supports that approach. It is also necessary to set up a true monitoring agency for the oil sector.
Second, the oil industry must make a contribution. With the increase of costs and oil company profits, it is important that the latter pay their fair share of taxes. How can we accept that consumers are getting poorer, while oil companies are getting richer?
Despite the recent recession and despite the rise in the price of gas, oil companies are posting record sales. In 1995, the Canadian oil and gas sector posted combined sales of $25 billion. By 2008, this figure had climbed to $148 billion. That is an increase of nearly 600%.
Now let us talk about profits. In 2003, Canada's oil sector made $17.6 billion in profits. In 2008, it made $79 billion. In other words, the net profits of Canada's oil sector more than quadrupled in just five years. The Bloc members feel that the party must end for the oil companies.
But obviously the Conservatives do not feel that way. In 2003, they supported the Liberal government's move to reduce the overall tax rate for oil companies from 28% to 21%. With the changes brought in by the Liberals, supported by the Conservatives, taxes for Canada's oil sector became more advantageous than in Texas.
But that is not enough. In 2007, in their economic statement, the Conservatives introduced tax cuts for oil companies that would see their tax rates drop to 15% in 2012. These tax cuts will enable the oil companies to pocket approximately $3.6 billion in 2012. These figures make it clear that the federal government chooses to give priority to the interests of the oil companies, at the expense of consumers.
I do not know how the Conservative members justify this to their constituents, but I know that when I meet my constituents from Compton—Stanstead, not a single one tells me that the gifts to the oil companies are justified. On the contrary, the people I meet feel cheated by this Conservative government, a government that is in league with an industry that exploits consumers' dependence on oil.
The third component of the approach proposed by the Bloc Québécois has to do with reducing consumers' dependence on oil. This makes sense and it is perfectly in line with Quebec's efforts to fight global warming. The less gas that we consume, the less money the industry will pocket and the better off our planet will be.
Fairness at the Pumps Act
October 25th, 2010 / 4:55 p.m.
André Bellavance Richmond—Arthabaska, QC
Mr. Speaker, it is my turn so speak to Bill C-14, An Act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act.
Bill C-14 is not bad in itself because it is very important for pump measurements to be accurate. I have noted, though, the criticisms voiced by my colleagues. They said that consumers should not have to bear the cost of the new monitoring requirements under Bill C-14. We will have to be careful in committee to fully clarify this issue.
The Bloc Québécois is in favour of sending the bill to committee. However, the bill does nothing to address the real concern of people, which is that they pay too much for gasoline. Two things need to be done: we have to create an agency to monitor gasoline prices and to give the Competition Act more bite.
The Bloc Québécois has introduced some bills in this regard that I will discuss in a few moments. That is what we need to talk about. I hope the government is not going to pat itself on the back, claiming that it introduced a bill to regulate the fluctuations in the price of gasoline and it will ensure that people pay a fair price through tighter monitoring of the measurement devices at the pump. The accuracy of these measurements is a very interesting point.
We do not even know if consumers benefit or are penalized when pumps are not working quite right. I suppose that if people are tampering with the pumps, it is not to do consumers any favours. It remains to be seen, though, whether people have fiddled with the gauge showing the number of litres pumped. That is not the solution, and I will show why in the next few minutes.
Bill C-14 amends certain provisions of the Electricity and Gas Inspection Act and the Weights and Measures Act in order to better protect consumers against inaccurate gasoline pump measurements. That is basically what we are talking about. Many people are concerned about this. The bill covers other measurement devices as well and not just gasoline pumps.
The bill imposes penalties for contraventions to the laws in question, increases maximum fines for offences, and introduces a new fine for repeat offenders. It also introduced mandatory frequencies for measuring devices and proposes the appointment of non-government inspectors, to be trained and certified by Measurement Canada to conduct mandatory measuring device inspections.
The Bloc Québécois is in favour of Bill C-14 in principle and of sending it to committee.
However, Bill C-14 does not directly address the issue of collusion that has recently come to light in Quebec. Nor does it effectively prevent sudden increases in gas prices. I spoke about two objectives earlier: creating an agency to monitor gasoline prices and giving the Competition Act more teeth.
I want to talk about what happened in my own municipality. Many vehicles are stolen and many people are in possession of stolen vehicles in central Quebec. I do not want people to think that my region is particularly problematic, but in Victoriaville we also had the infamous gas price cartel. Luckily, the scheme was uncovered and people are being held accountable. I hope that if this happens elsewhere in Canada, we will be able to stop them.
However, under current legislation, criticism or complaints must be filed in order for the Competition Bureau to act. That is the difference. The Competition Bureau needs to have quasi-police authority to act when it feels the need and as soon as there are suspicions, not only when there is a complaint. I will come back to that.
We also believe that we still need to make an effort to efficiently respond to rising gas prices, and we can do so with our bill, Bill C-452, which the NDP member mentioned during questions and comments. That bill was introduced by my colleague from Shefford. The Competition Act does not allow the Competition Bureau to conduct inquiries on its own initiative. It must always wait for a private complaint before it can start an inquiry. We are also calling for a petroleum agency to closely monitor gasoline prices and to respond to any attempts at collusion or unjustified price hikes.
If the government had taken a serious approach to really helping consumers, it would have focused on those two points. Every time the price of gasoline rises suddenly, people begin to wonder about the oil industry, and rightfully so. These increases are unjustified, and consumers must not be the victims of dubious business practices on the part of oil companies. I repeat, the existing Competition Act has significant gaps. For instance, it does not allow the Competition Bureau to undertake a real investigation of an industrial sector. How can it gather information if it can neither force the disclosure of documents nor protect witnesses? This aspect must be corrected.
Bill C-452 introduced by the Bloc Québécois would toughen up the Competition Act to give the federal trade tribunal the right to initiate an investigation, rather than waiting for complaints or accusations, the right to protect witnesses and the right to conduct searches and seize documents. A petition to that effect has been circulating. It is a very popular petition, particularly in my region, understandably, since it was seriously affected by this cartel. To ensure that everyone clearly understands the importance of this issue, I would like to read the petition.
1. Individuals and companies pled guilty in the summer of 2008 to conspiring to fix the price of gasoline;
2. According to Le Soleil, retailers could be overcharging by more than $100 million a year;
3. The current Competition Act has significant gaps, preventing the Competition Bureau from conducting investigations until complaints are lodged.
THEREFORE, your petitioners call upon the House of Commons to pass Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), authorizing the Commissioner of Competition to conduct an inquiry of her own accord into the fluctuating price of gasoline.
I can say that this petition is very popular. People are requesting it. They get it online and sign it. People want something to be done about what happened. The Competition Bureau did manage to take action in my region. It is so difficult to do anything about this that this was only the second time the Competition Bureau was able to take action in this type of incident. The first time was in Vancouver in 1995. The second time was in 2008 because there was a complaint. We should not have to wait for a complaint before something can be done. Nonetheless, it worked out and that is how it should be, with increased powers and investigations before things get to the complaint stage.
The Competition Bureau discovered a gasoline cartel in Quebec. By cartel we mean an agreement between companies not to compete with one another. It is a rather simple definition. I will read from a Competition Bureau document, a press release that was issued on June 12, 2008:
...the Competition Bureau became aware of allegations of price-fixing at gas stations in Victoriaville, Quebec. The evidence gathered during the Victoriaville investigation led to further probes in other local markets in Quebec, namely Thetford Mines, Sherbrooke and Magog.
In conducting its investigation, the Bureau uncovered evidence of agreements between competitors to fix the price at the pump at which gasoline was sold to consumers. The evidence indicated that participants in the targeted markets carried out the conspiracy mainly by phoning each other to agree on the price of gasoline and about the timing of price increases, contrary to section 45 of the Competition Act.
A number of investigative tools were used, including wiretaps, searches and the Competition Bureau’s Immunity Program.
Some could dispute my argument since I was saying earlier that the Competition Bureau did not have enough room to manoeuvre. Some might say there was collusion, and that a cartel formed in Victoriaville, Thetford Mines, Sherbrooke, and Magog and perhaps elsewhere, but there have been no reports of this in other places.
The competition bureau was able to take action. Lawsuits were filed and some people have already pleaded guilty. So, it works. However, as I keep saying, it took a complaint. At one point, a gasoline retailer from the Victoriaville area received threats, seemingly from other retailers, because he did not want to go along with their scheme. He would keep his prices a little lower than those of the others for a while. His company supported him for a while. However, he eventually found himself all alone and he decided to expose this situation. If I am not mistaken, he talked to a local weekly newspaper. He expressed his frustration to a journalist regarding these events, the threats he had received and the fact that, as a merchant, he wanted to continue to be able to compete with the others.
That is what is wrong with the petroleum industry. If someone wants to buy a pair of shoes, he can go to two or three different stores. Chances are the price of a pair of shoes of the same brand and colour will not be the same everywhere. There may be a $5 or $10 difference. The person may even find a pair on sale, at 50% off the regular price if he is lucky. However, when it comes to gasoline, even if we look everywhere, we will rarely find much variation in prices. In the case that took place in my community, the competition bureau showed that retailers would phone each other and set prices. So, obviously, prices were the same everywhere.
That individual decided that enough was enough, and he spoke out about it. It is only when the competition bureau saw what was going on that it could take action. It reasoned that since a complaint had been filed, it could take action. Otherwise, it could not have done anything. That is why the procedure at the competition bureau must change.
As I said, a number of charges were laid. In Victoriaville, 11 companies were involved in the scheme. In Thetford Mines there were 6. In Sherbrooke there were 20, and in Magog there were 5.
As I mentioned earlier, several companies in Victoriaville, Thetford Mines and Sherbrooke pleaded guilty. The fines are rather stiff, that is $179,000 in one case, $1,850,000 for an oil company, and $600,000 and $90,000 respectively for two other companies. That is more than a slap on the wrist. The $1,850,000 fine was imposed on an oil company, not on a retailer. There is no doubt that these penalties will have a sobering effect.
Obviously, I travel a lot, like all of my colleagues here. We all travel within our ridings. When we are responsible for files, we deal with them away from here, which allows us to compare gas prices. It is interesting to note that at one time in Victoriaville, gas was always slightly more expensive than in Trois-Rivières or Drummondville. Sometimes it was less expensive than in Quebec City, but it was not the cheapest in the province, far from it. Since the Competition Bureau started its inquiry and the results came out, it is funny, but the prices are often lower. People had to be caught red-handed for others to be far more careful in terms of fixing prices. We are still the ones who are benefiting today. Luckily, the Competition Bureau's inquiry allowed us to find out what was going on.
As for the individuals linked to this collusion, this cartel, there were fines of $50,000, $10,000 and $5,000. For once, we caught the people and were able to make them pay. I have here a series of fines for $10,000, $20,000 and $25,000, depending on the person's involvement in the scheme.
As for how this all played out, an article in La Tribune says that the gas cartel may have cost each car owner up to $180. This whole story came to light in 2008, but prices were fixed between 2002 and 2006. The newspaper article says:
A very rough estimate [because it is difficult to know how much gas each person bought over the years] is that each year a car owner in Sherbrooke, Magog, Thetford Mines and Victoriaville paid an extra $20 to $40 to fill up their vehicle because of the cartel, which distorted gas prices for approximately four and a half years.
It is interesting to note that a class action lawsuit against the gas cartel is now before the civil division of the Quebec Superior Court, which will attempt to determine how much money should be given back to people who were swindled for four and a half years.
To date, over 12,000 people—and that number is a few months old—have signed on to the class action lawsuit authorized by Quebec Superior Court Justice Dominique Bélanger on November 30, 2010, concerning gas price fixing between January 1, 2002, and June 30, 2006, in the aforementioned cities.
According to another interesting article, this time in Le Soleil:
Plaintiffs are seeking $7.5 million plus interest as of January 1, 2002. In addition, they are seeking $500 for trouble and inconvenience for each participant in the lawsuit, as well as $1,000 in punitive damages. The Automobile Protection Association is also seeking $250,000.
That should give a sense of the amounts of money sought by this class action. It is important to note that Bill C-14 does not address these concerns at all. Conservative members should not be saying that this bill will solve all gas price fixing problems. The bill might make retailers more accountable by imposing regular mandatory inspections of measuring devices, such as gas pumps, but it will not prevent the price of gas from going up right before a long weekend for who knows what reason.
I have said this a number of times in the House and I will say it again: every time I see gas prices jump and watch television reports about it, I am always curious about what could possibly have caused gas prices to jump by 5¢, 10¢ or 12¢ per litre.
When a representative of the association of oil companies explains on television that there is a problem in Iraq or an oil rig leak, it is always rather difficult to believe him. In many cases, the facts show that the price of a barrel of oil, given that we have reserves, was a certain amount when the problem occurred. As this amount has still not gone up, the price hike should come later, but that is not what happens. As soon as a problem is announced—and we never know if it is real—the price at the pump goes up right away and never goes down as quickly as it should. Thus, we have reason to wonder.
Getting back to Bill C-14, the fines that the courts could impose pursuant to the Weights and Measures Act would increase from $1,000 to $10,000 for minor offences, and from $5,000 to $25,000 for major offences. In the case of subsequent offences, a new maximum fine of $50,000 and/or imprisonment for a term not exceeding two years could be imposed. I would be surprised to see that happen.
There are some measures like this in Bill C-14 but, I repeat, that is not what consumers asked for initially.
The member for Westmount—Ville-Marie even said that the Liberal Party, in 2005, had introduced Bill C-19. There again, the recommendations of the Standing Committee on Industry, Science and Technology, which called for the creation of a gasoline price monitoring agency and more teeth for the Competition Act, were ignored. These two objectives were not achieved by the previous Liberal government, nor by the Conservative government. It is our responsibility to tackle this issue immediately.
Competition Act (Inquiry into Industry Sector)
Private Members' Business
May 12th, 2010 / 6:10 p.m.
Robert Bouchard Chicoutimi—Le Fjord, QC
Madam Speaker, it is a pleasure for me to rise today on Bill C-452. I want to congratulate my colleague, the hon. member for Shefford, for having introduced this bill to strengthen the Competition Bureau’s ability to make inquiries. We also hope that some parts of this legislation will find their way into government bill C-14 on electricity and gas inspection and on the Weights and Measures Act.
I had an opportunity earlier this week to speak on Bill C-14, and it is good that we are now going to discuss Bill C-452, which is still necessary in our view. We need to continue our efforts to deal effectively with the problem posed by the Competition Act, which still does not allow the Competition Bureau to conduct inquiries on its own initiative. It is still necessary, unfortunately, to wait for a complaint from some individual before an inquiry can be initiated.
Even though the Bloc Québécois supports Bill C-14 in principle, it is not an end in itself. With the introduction of Bill C-452, the Bloc Québécois reiterates its intention of freeing Quebec from its dependence on oil through a bold program focused on green energy and the electric car.
To do this, Bill C-452 expands on the measures the government is introducing in Bill C-14 by proposing further steps that could be taken to protect consumers.
Our bill would give the Competition Bureau the power to conduct on its own initiative real inquiries into an industry if there are reasonable grounds for doing so. At present, this is not permitted. The Bureau has to wait for complaints or for instructions from the minister before it can act.
Even though the government says it took action to correct the situation in the Budget Implementation Act of January 2009, there are no provisions in this act allowing the Competition Bureau to make inquiries on its own initiative. A complaint is still needed before an inquiry can be launched.
It is obvious that a bill like this would leave the Competition Bureau much better equipped to fight companies that want to take advantage of their dominant position in the market to fleece consumers.
The Bloc Québécois is not inventing anything new here. We have simply repeated for several years now the recommendations in the report of the Standing Committee on Industry, Science and Technology, which was tabled in November 2003. The federal government has never done anything to help consumers in this regard. It has a fine opportunity here, though, to set up a monitoring system for the petroleum industry.
To understand the steps leading to the debate on Bill C-452, we need to go into the history of it.
In 2003, the Standing Committee on Industry, Science and Technology tabled a study on the price of gasoline that made two recommendations to the government: create a petroleum monitoring agency and tighten up the Competition Act. The committee even specified the changes to the Competition Act that it would like to see. At the time, the Bloc was already saying that the government should implement the committee’s recommendations.
In October 2005, the Liberal government came around to the Bloc’s arguments and, as part of its plan to help curb the increase in the price of gas, it tabled amendments to the Competition Act in Bill C-19.
Unfortunately, Bill C-19 was just an election gimmick to give the impression the government was doing something to discipline the oil industry and it died on the order paper.
The Conservatives are quite enamoured of the oil industry, of course, and it is hardly surprising that they did not re-introduce the bill.
As a result, in 2007 the Bloc Québécois tabled Bill C-454, which passed second reading on April 28, 2008. But it too died on the order paper when an election was called in 2008.
In 2009, the Conservative government partly revived Bill C-454 in the Budget Implementation Act of January 27, 2009, although the Competition Bureau still was not allowed to launch inquiries on its initiative.
So here we are seven years later debating Bill C-452 to give the Competition Bureau some real teeth.
There is no doubt, in the Bloc’s view, that the Competition Bureau should have greater freedom of action and more discretionary power over its inquiries. To conduct an inquiry, the Competition Bureau needs access to all the documents so that it can do a good job of investigating and promoting competition.
The Bloc Québécois has long been pressing the government to take action in view of the rising price of petroleum products. Bill C-452 is just a first step toward countering the increase in the price of gas.
Apart from Bill C-452, the Bloc is more convinced than ever that the industry should do its fair share.
As I said at the beginning of my speech, Bill C-452 is part of a plan for sweeping change.
First, we must put a stop to the tax cuts for oil companies. In 2007 or just one year after taking power, the Conservative government gave the oil companies another tax cut in the 2007 economic update. As a result, the companies will see their tax rate fall to 15% in 2012. In that year alone, this tax break will help them pocket nearly $3.6 billion.
We also need to reduce our dependence on oil. Quebec does not produce any oil and every drop that Quebeckers consume impoverishes Quebec, in addition to contributing to global warming. The Bloc Québécois therefore wants to reduce our dependence on oil.
In 2009 alone, Quebec imported $9 billion worth of oil, less than usual because of the recession, but in 2008, oil imports totalled $17 billion. Over a period of five years, from 2003 to 2008, oil imports increased by $11 billion.
Furthermore, to reduce our dependence on oil, the Bloc has proposed substantial investments in alternative energies to create a green energy fund, launch a real initiative to reduce our consumption of oil for transportation, heating and industry, including an incentive to convert oil heating systems, and introduce a plan for electric cars.
We have to get ready, because by 2012, 11 auto manufacturers plan to introduce some 30 fully electric and hybrid models.
The objectives of Bill C-452 are clear. A bold program focused on green energies and electric cars that will allow Quebec to end its dependence on oil is urgently needed.
Until we can put an end to this dependence on oil, we must give more power to the Competition Bureau by allowing it to initiate inquiries, and by creating a petroleum monitoring agency.
Fairness at the Pumps Act
May 12th, 2010 / 3:55 p.m.
Meili Faille Vaudreuil-Soulanges, QC
How can investigative powers be given to an institution when it must bow to the will of the minister or when this institution is only able to take action after receiving a complaint?
The Bloc Québécois wonders why it takes a complaint and a request by the minister to set the wheels in motion. If the Competition Bureau has information pointing to collusion, it should be able to initiate an inquiry immediately.
Still in 2003, the Standing Committee on Industry, Science and Technology concluded its study on fluctuating gasoline prices with some recommendations. The first was to create a petroleum monitoring agency. The second was to toughen up the Competition Act.
According to the committee, this agency would have been able to clear up confusion among the general public regarding the price of gas by providing existing data to the public. The agency would have overseen all aspects of this activity.
That same year, the Standing Committee on Industry, Science and Technology spelled out the changes it wanted to see made to the Competition Act.
Obviously the Bloc Québécois agrees with this recommendation and it pushed for the government to respect the work of the committee and agree to implement this monitoring body, something it did not do. In response to the committee, the government of the day said it did not feel it was necessary to create this monitoring agency and it argued for the status quo.
In 2005, the Liberal Party of Canada had proposed, through Bill C-19, amendments to the Competition Act allowing for measures to mitigate rising gas prices. Note that, once again, the government did not incorporate the recommendations of the Standing Committee on Industry, Natural Resources, Science and Technology into its Bill C-19. The committee had recommended reversing the burden of proof to address agreements between competitors and to make it possible for the Competition Tribunal to award damages to parties affected by restrictive trade practices, where applicable.
The purpose of the first recommendation was to make it the responsibility of the parties wishing to enter into an agreement between competitors to prove the ultimate social value of that agreement. The second recommendation of the Standing Committee on Industry, Natural Resources, Science and Technology would have made the pendulum swing back the other way since measures restricting the business practices of the guilty parties could have been imposed.
You can guess what happened. Bill C-19 died on the order paper since it was introduced just before the election. That is why, in 2007, the Bloc Québécois introduced Bill C-454. That bill made it to second reading stage, but another election saw the Bloc Québécois bill scrapped. In 2009, a little more recently, the Bloc Québécois noted that the Conservative government had adopted part of Bill C-454. Nonetheless, the government does not think it is necessary for the Competition Bureau to initiate its own investigations.
It is clear that in 2010 nothing much has changed. The flow of information has not improved much and there is no agency governing the attitude of the oil companies, quite the contrary.
The government must deal with problems of fairness swiftly and I want to know what it is waiting for to take action. Consumers are sick of bearing the cost of fluctuating prices at the pump.
Fairness at the Pumps Act
May 10th, 2010 / 12:50 p.m.
Serge Cardin Sherbrooke, QC
Mr. Speaker, Bill C-14 is obviously important, but frankly, only relatively so. For the next 20 minutes, I will try to clearly explain the Bloc's position. I may not go into every detail of Bill C-14, but I will describe the Bloc's concerns about the Competition Act and the fact that successive governments have done nothing. And, of course, I will describe the Bloc's response to this bill, which is Bill C-452. I will also briefly explain a comprehensive strategy for dealing with increases in the price of petroleum products.
As the parliamentary secretary said earlier in his speech, the government introduced its bill to protect itself and consumers against negligent retailers. “Negligent” is putting it rather mildly. There will obviously be mandatory inspections, but they will be much more frequent. The government is talking about increasing the number of inspections from 8,000 to 65,000. The bill would also authorize the minister to appoint or designate professionals to conduct these inspections. In addition, there would obviously be fines that could be quite high, especially for repeat offenders. Of course, the government says that it is doing all this to protect the consumer.
Has the government, as usual, conducted an impact study of its bill to compare it to what is being done to manage or monitor gas prices at the pump? Naturally, there will be costs associated with all that. Inspections are not free, of course, and retailers will likely be stuck with the bill in the end. I imagine that retailers' costs will go up substantially, all to save consumers about $20 million, which is the estimated difference between the prices. That may seem like a lot of money, and it is, but how many litres and how many consumers are we talking about? Are all the costs of implementing Bill C-14 really worth it? I do have to say, though, that when consumers are hurt, it is our duty to try to make things right.
So I will say right away that we support Bill C-14 in principle. But it does not directly address collusion problems, like the ones that recently came to light in Quebec, nor does it effectively prevent sudden gas price hikes.
The Bloc Québécois still believes that the government needs to work toward offering an effective response to rising gas prices by passing the Bloc's Bill C-452. This bill would strengthen the Competition Act and create a petroleum monitoring agency.
The Competition Act still does not allow the Competition Bureau to conduct an inquiry of its own accord. It has to wait until it receives a complaint before launching an inquiry. The Bloc Québécois also wants the government to establish a petroleum monitoring agency to scrutinize gas prices and to deal with attempts to collude and unjustified price hikes.
According to tools devised to measure how much this is costing consumers, the suggested figure is $20 million.
According to the April 2009 gas consumption data that I found, that $20 million corresponds to one-tenth of a cent per litre of gas purchased in Canada. The cost of gas varies from 90¢ to $1, but it always includes a decimal that people rarely look at. However, oil companies adjust their prices to a tenth of a cent, which represents an amount much higher than the $20 million per year those tools suggest.
Overall, a one-cent difference adds up to $200 million per year, not the $20 million they are trying to correct for.
The Minister of Industry introduced Bill C-14 at first reading on April 15, 2010, claiming that it will protect Canadian consumers from inaccurate measurement when they buy gas. The proposed bill would make retailers more accountable by imposing regular mandatory inspections of measuring devices, such as gas pumps.
The penalties that the courts can impose under the Weights and Measures Act will increase from $1,000 to $10,000 for minor offences and from $5,000 to $25,000 for major offences. For consumers who feel they have been wronged, this might lead them to believe they have increased protection thanks to their hallowed and benevolent government. This is just more smoke and mirrors to trick consumers who believe they are being protected from additional costs, when the government is not doing enough to protect them when it comes to gas prices.
I am going to skip the other possible fines, because I would like to get straight to the point. The new section 29.28 in the Electricity and Gas Inspection Act allows the Minister of Industry to disclose the names and addresses of people convicted under this legislation.
If the retailer can show that he did due diligence and did everything to ensure the accuracy of his equipment, his name will likely not appear on the list of those whose equipment is defective in terms of measuring the volume. We need to determine how this measure will be applied, because any retailer could wind up on that list, even by mistake.
A clarification has been made to establish that violations of this legislation are not actually offences and therefore not subject to the Criminal Code. The individual would not have a criminal record following a conviction.
If convictions are frequent, can they be subject to a prison sentence, in cases of repeat offences, of less than two years, since they are not criminal offences? Once again, the provinces and Quebec are left to pay for this. With respect to offences, recidivism and imprisonment, Quebec will have to pay, no matter what it costs to send someone to prison for less than two years.
The Bloc's main concern is that every time the price of gas skyrockets, the government invariably says the same thing, that its hands are tied because the Competition Bureau has found that there is no collusion between the oil companies to set the price of gas and therefore there is no problem.
It is always the same answer. It is never the oil companies' fault and when the Competition Bureau conducts an investigation it always comes to the same conclusion: there is no collusion.
It would be rather surprising to see representatives of all the major oil companies openly sitting around the same table at a big restaurant. It is not likely to happen. It may be more difficult, but there must be a will to find a solution.
The Competition Act has major shortcomings that prevent the Competition Bureau from initiating an investigation. Any investigation has to be requested by the department or initiated as the result of complaints. On May 5, 2003, when Konrad von Finckenstein, the then commissioner of competition and the current chair of the CRTC, appeared before the Standing Committee on Industry, Science and Technology, he pointed out the shortcomings in the Competition Act. He said:
...while the bureau's mandate includes the very important role of being investigator and advocate for competition, the current legislation does not provide the bureau with the authority to conduct an industry study.
There was some borrowing from Bill C-452, and equivalent measures were put in place as part of the January 27, 2009 budget implementation act. However, these new provisions still do not give the Competition Bureau the authority to investigate on its own initiative. A complaint is still required before an investigation can begin.
In 2003, the Standing Committee on Industry, Science and Technology concluded its study on gas prices by making two recommendations to the government: create a petroleum monitoring agency and toughen up the Competition Act.
In 2003, the Standing Committee on Industry, Science and Technology also spelled out the changes it wanted to see made to the Competition Act. The Bloc Québécois was adamant that the government respect the committee's recommendations.
In October 2005, shortly before the election, the Liberal government finally agreed with the Bloc's arguments and, as part of its federal plan to help alleviate the impact of high gas prices, introduced Bill C-19 to amend the Competition Act. It strengthened this act by raising the maximum fine for conspiracy from $10 million to $25 million and broadening the Competition Bureau's authority to investigate, which would have allowed it to inquire into an entire industry sector.
However, the government bill ignored these recommendations from the Standing Committee on Industry, Science and Technology: reverse the burden of proof to deal with agreements among competitors and to determine whether there is a conspiracy—the objective of this was to make it the responsibility of the party wishing to enter into an agreement to prove the ultimate social value of that agreement—as well as allow the Competition Tribunal to award damages to parties affected by restrictive trade practices, where applicable.
The Bloc Québécois had proposed numerous amendments along these lines.
Bill C-452 would address the shortcomings in the measures put in place under the January 2009 budget implementation act, Bill C-10
The Competition Bureau needs true investigative powers. Bill C-452 would give the Competition Bureau the authority to carry out real investigations into the industry, if warranted, on its own initiative, something it is not currently permitted to do because it must receive a complaint first.
If this legislation were passed, the Competition Bureau would be much better equipped to take on businesses that try to use their dominant position in the market to fleece consumers.
We could implement a comprehensive strategy to deal with price hikes of petroleum products. For some time now, the Bloc Québécois has been pressuring the government to take action to address the rising cost of petroleum products.
We recommend a three-pronged approach. First, we must bring the industry into line. That is the goal of Bill C-452, which gives teeth to the Competition Act. We should also set up a true monitoring agency for the oil sector.
Second, the industry must make a contribution. With soaring energy prices and oil company profits, the economy as a whole is suffering while the oil companies are profiting. The least we can do to limit their negative impact is to ensure that they pay their fair share of taxes. The Bloc Québécois is therefore asking that the government put an end to the juicy tax breaks enjoyed by the oil companies.
Third, we must decrease our dependence on oil. Quebec does not produce oil and every drop of this viscous liquid consumed by Quebeckers impoverishes Quebec and also contributes to global warming. The Bloc Québécois is proposing to reduce our dependence on oil. All the oil Quebec consumes is imported. Every litre consumed means money leaving the province, thus making Quebec poorer and the oil industry richer.
In 2009, Quebec imported $9 billion worth of oil, a reduction because of the recession. In 2008, oil imports totalled $17 billion, an increase of $11 billion in the five years between 2003 and 2008.
At the same time, Quebec went from a trade surplus to a trade deficit of almost $12 billion, not to mention that the increase in Alberta's oil exports made the dollar soar, which hit our manufacturing companies and aggravated our trade deficit. The increase in the price of oil alone plunged Quebec into a trade deficit. It is time to put an end to the tax holiday for the oil sector.
In 2003, the Liberal government, supported by the Conservatives, introduced a vast reform of taxation for the petroleum sector. Although the oil sector had special status under the Income Tax Act, with its Bill C-48 the government reduced the overall tax rate for oil companies from 28% to 21% and also introduced many tax breaks, including accelerated capital cost allowance and preferential treatment of royalties.
This made taxes for Canada's oil sector more advantageous than in Texas. As if that were not enough, in the 2007 economic statement, the Conservatives presented additional tax reductions for oil companies, which would bring the tax rate down to only 15% by 2012. These tax breaks will enable Canadian oil companies to pocket close to $3.6 billion in 2012 alone. The Bloc Québécois thinks that these measures for the oil companies are unjustified. That it why it is proposing that we eliminate handouts to the oil companies.
I was saying that the long-term solution is to reduce our dependency on oil. We must invest considerably in alternative energies; allocate $500 million per year over five years to green energies; launch a real initiative to reduce our consumption of oil for transportation, heating and industry; introduce incentives of $500 million per year over five years to convert oil heating systems; develop a plan worth $475 million per year over five years for electric cars.
By 2012, 11 manufacturers plan on releasing some 30 fully electric or rechargeable hybrid models. These cars will be more reliable, more energy efficient and much cheaper to operate than gas-powered models.
Bill C-14 is intended to save consumers $20 million. As I was saying earlier, $20 million corresponds to one-tenth of a cent per litre of gas. Therefore, just one cent per litre could save $200 million per year. Furthermore, we must strengthen the Competition Act.
February 23rd, 2009 / 8:55 p.m.
Anu Bose Head, Ottawa Office, Option consommateurs
Thank you, Mr. Chair, members of the Standing Committee on Finance, Mr. Clerk of the Committee and the staff of the committee, for inviting me to appear before you this evening to discuss Part 12 of Bill C-10, that is the proposed amendments to the Competition Act.
My name is Anu Bose and I am in charge of the Ottawa office of Option consommateurs, an organization that is headquartered in Montreal. With me are Michael Janigan, Executive Director and General Counsel for the Public Interest Advocacy Centre in Ottawa.
For over three decades now, our two organizations have been working to represent the interests of consumers in the area of regulated trade. Mr. Janigan has already testified before the Industry Committee on connection with the former Bill C-19 tabled during the 38th Parliament. This bill to amend the Competition Act was never adopted.
We would first note that while the proposed amendments are quite comprehensive, they have certainly been the subject of considerable past discussion amongst stakeholders and, in our opinion, represent a fairly balanced approach to the necessary refinements to the act.
Take, for example, the issue of the amendments that complete the reform of misleading advertising or deceptive marketing that has been the consensus for over two decades. These amendments help the competition authorities address this abuse in an economic and administrative fashion.
In the view of Option consommateurs, this package of amendments places appropriate emphasis on the importance of deterring anti-competitive conduct, particularly in the current difficult economic and financial environment that all Canadians are experiencing.
I'm asking Michael Janigan to give some additional comments on the importance of these amendments.
Private Members' Business
April 28th, 2008 / 11 a.m.
Michael Savage Dartmouth—Cole Harbour, NS
Bill C-454 is an act to amend the Competition Act and to make consequential amendments to other acts. We will support the bill at this stage because we believe it is important that it should go to committee to be discussed.
Other members have spoken about some of the things that are contained in Bill C-454. I want to address some of those, but I also want to talk in general about why it is important that we as parliamentarians take our responsibility seriously when it comes to competition.
I filled up my car on the weekend in my home riding of Dartmouth and the price was $1.32 a litre. That is pretty high and the big concern is not what it does to my pocketbook. As a member of Parliament I get paid well to do the job that I do. I have an awful lot of constituents who cannot afford gas at $1.32 a litre. It may be in fact that the price of gas is going to continue to go up. That may be a simple fact of life.
I think Canadians have the right to expect that their government, their members of Parliament, takes seriously the fact that in a free market economy we nonetheless have a responsibility to make sure that competition is real and open, and that in fact it is a free market and not a closed market.
In a previous life I used to run a home heating oil company for the Irving family and I can recall, and I am actually probably younger than I look, but I can recall when the price of heating oil in Nova Scotia was 26.3¢ a litre, which was the posted price for home heating oil in Nova Scotia on or about 1986, just some 22 years ago. The price of heating oil in Nova Scotia now is I think somewhere around 90¢ a litre, so we have gone from 26.3¢ a litre to somewhere around 90¢ and on top of that of course the new government disbanded the EnerGuide for low income houses which has made it even more difficult for families to heat their homes.
If we look at the basics of life, home heating oil in a province like Nova Scotia, where most houses are heated by oil, is not a luxury. It is an absolute necessity of life that one has to heat one's home. At 26.3¢ a litre, even 22 years ago, it was a lot easier to do that than at almost 90¢ a litre today. I think that consumers have a right to ask, where is the protection and is it a fair price?
Consumers are concerned about many things. I think that certainly the bill could address some of those things because people are nervous. What the bill would do is ensure that there is proper scrutiny on what is supposed to be a competitive market and appropriate penalties when companies, large big companies, abuse their right on the open market and are unfair to consumers.
The bill is very similar to Bill C-19 that was brought in during the last Parliament and that was in response to a report released by the Standing Committee on Industry in 2002, entitled “A Plan to Modernize Canada's Competition Regime”.
One of the things that I often talk to my constituents about, and I talk a lot in high schools about, is the work that Parliament does outside of question period and even outside of this chamber, and the fact that committees can do a lot of good work. The committee that I sit on now is the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities. We released a report recently that was very good. The committee was well chaired by the government member for Niagara West—Glanbrook and the work that was done was very positive.
This obviously was a report done in 2002 following up on the VanDuzer report, an independent study of the Competition Act, that was requested at that time by John Manley, who was the minister of industry, and a good one.
The committee worked hard on the report, consulting widely with stakeholders and provided a comprehensive report with a list of recommendations to bring Canada's competition laws up to date. Canada was one of the first industrial countries in the world to adopt a competition or anti-trust law.
Competition legislation is intended to prevent monopolies and price conspiracies that work against the interests of consumers. The Competition Act, Canada's competition legislation, is administered by the Competition Bureau, an independent federal agency.
The way companies and corporations do business has changed a lot in recent years because of new technologies, mainly in communications and transport. Of course, we have had the globalization of trade and a number of government and private members' bills have been introduced to try to cope with these changes.
Bill C-454 would, among other things, do the following: authorize the Commissioner of Competition to inquire into an entire industry; create administrative monetary penalties, AMPs, for abuse of dominant position; increase administrative monetary penalties for deceptive marketing, which I think is something else that a lot of consumers are looking for some action on; and repeal provisions dealing specifically with the airline industry, which has been an intermittently scrutinized industry.
At the time that the study did its work, just after the coming together of Air Canada and Canadian Airlines, there were concerns about that. I think there are still concerns about the airline industry and while I am talking about this, I want to commend my colleague from Humber—St. Barbe—Baie Verte, who is bringing forward a private member's bill for an airline passengers bill of rights, which also reflects issues that I hear in my constituency from people who have concerns.
Bill C-454 would repeal criminal provisions for price discrimination, predatory pricing, discriminatory promotional allowances and geographic price discrimination. It would authorize the court to make an order requiring a person who made a false or misleading representation to compensate persons affected by that and to issue an interim injunction to freeze assets. It would allow for these AMPs that would abuse their dominant position in the industry. Now there are criminal penalties, but we need to go beyond that to allow for these other direct penalties to be put in place.
When we talk about consumers and a free market, I think that in general, Canadians would support the fact that we have a free market and would say that it works, but it causes concern when we have price spikes, and it happens in gasoline and heating oil, it has happens in insurance, and it happens in many areas. We are hearing now, with the potential of a downturn in the economy, that food prices are going up, and of course we have the international issue of food scarcity and the hungriest people on this planet are once again those who are penalized the most by that.
All these sorts of issues are causing Canadians concern and to wonder how they are going to pay their bills, how they are going to fill their oil tanks, how they are going to fill their cars, how they are going to afford groceries, how they are going to afford shelter, what will happens if the economy continues to deteriorate, and what will happen if manufacturing jobs continue to go elsewhere.
Other industries such as forestry continue to suffer. An awful lot of consumers are very worried and I think they look to Parliament and to their representatives to say that we believe in a free market and we think that this is the best way to have it, but if we believe that competition works and if we believe in capitalism and that there is in fact a free market, then it has to be free. We cannot allow large companies to have a half free, half closed market which always benefits them. It is important that there be direct action that can be taken to protect consumers in that case.
This bill is complex and it is important that we give this to the committee. The industry committee in 2002 did a good job in having a look at this. That is what committees do well. They call witnesses, talk to consumers, talk to consumer groups, talk to business advocates, and talk to the people who are most affected to consider the work that needs to be done.
Stakeholders and other interested parties will have an opportunity to make recommendations or changes as this goes forward. I am pleased to stand here today and support in principle this bill, so that we can let the industry committee do further work.
Private Members’ Business
March 13th, 2008 / 7 p.m.
Dave Van Kesteren Chatham-Kent—Essex, ON
Mr. Speaker, it is a pleasure to take part today in the second reading debate of Bill C-454, An Act to amend the Competition Act and to make consequential amendments to other Acts.
My intention is to outline the provisions of Bill C-454, which proposes extensive amendments to the Competition Act.
Bill C-454 contains a number of provisions that were in earlier legislation, specifically Bill C-19. However, Bill C-454 not only alters some of the provisions that were in Bill C-19, but also introduces some new provisions.
As such, I would caution my hon. colleagues to give this bill very serious attention. Any amendments to the Competition Act will be of great interest to a wide range of stakeholders across Canada.
To show how great an interest, I would refer hon. members to the Competition Policy Review Panel. As hon. members will recall, in July of 2007 the government announced the creation of the panel, which has as the central part of its mandate a review of key elements of Canada's competition and investment policies, including the Competition Act. In the context of its consultations, the panel received approximately 140 written submissions.
Given the importance of the Competition Act for Canadians, I would like to take a few minutes to review some of the provisions of Bill C-454.
First, there are some provisions in Bill C-454 that are the same as those in Bill C-19. For example, Bill C-454 would decriminalize the price discrimination, predatory pricing, discriminatory promotional allowances and geographic price discrimination provisions of the Competition Act. These provisions would then be dealt with under the non-criminal abuse of dominance provisions of the act.
Bill C-454 proposes to allow the tribunal to order restitution to consumers affected by deceptive marketing practices. In addition, the bill gives the tribunal new power to impose interim injunctions to stop the disposal of assets by anyone engaged in deceptive marketing practices. This is to ensure that there is property available for such restitution.
However, there are several key provisions in Bill C-454 that are different from what was contained in Bill C-19. Bill C-454 proposes to add three different types of financial consequences to deter abuse of dominance. I understand that all three would be applied at the same time.
First, the Competition Tribunal could order an administrative monetary penalty, or AMP, against individuals and companies that engage in anti-competitive conduct: up to $10 million for a first offence and up to $15 million for each subsequent one.
Second, Bill C-454 gives the tribunal the ability to order an additional AMP on top of the one I just mentioned. This second AMP would be an amount not greater than the profits generated by the anti-competitive conduct in question.
In addition to these two AMPs, Bill C-454 would allow private parties to pursue separate private litigation before the Competition Tribunal when they believe that a dominant firm has abused its market position. At present, only the Commissioner of Competition may bring abuse of dominance matters to the tribunal. In relation to private access to the tribunal, Bill C-454 includes a provision to grant the tribunal the ability to award damages to private parties.
Next, Bill C-454 introduces a proposal to change the definition of “anti-competitive act” for the purposes of the abuse of dominance provision. Bill C-454 would introduce the concept of “exploitative conduct” into the Competition Act. In other jurisdictions, particularly the European Union, this phrase has been taken to mean excessive pricing or price gouging.
As I understand it, an attempt to deal with price gouging would be viewed as a form of price regulation that would have far-reaching implications for the Canadian marketplace. As such, this provision should be carefully considered.
As we know, price regulation is essentially a matter of provincial jurisdiction. I am quite sure that the sponsor of the bill and his colleagues would not want to intrude on a matter of provincial jurisdiction.
Moving on to the issue of deceptive marketing practices, Bill C-454 proposes a series of financial consequences. The provisions in Bill C-454 include an increase to the existing AMP: from $50,000 to $750,000 for individuals and from $100,000 to $10 million for corporations. For subsequent violations of the act, the proposed AMPs are $1 million for individuals and $15 million for corporations.
At the same time, Bill C-454 provides for an additional AMP for deceptive marketing practices, up to the amount of profits generated by the practices. Again, it appears that both AMPs could be ordered by the tribunal at the same time. Bill C-454 would also amend the list of factors the tribunal considers when determining the appropriate penalty for deceptive marketing practices.
Bill C-454 also amends the anti-cartel provision of the act, section 45. The proposed amendments would strike the word “unduly” from section 45 and raise the level of fines that would be imposed. Section 45 is one of the key provisions in the Competition Act.
As I understand it, removing the word “unduly” could expose to criminal liability conduct currently regulated by provincial or federal law. For example, it is not clear whether provincial authorization of certain price-fixing arrangements, such as through marketing or supply management boards, would continue to shield such arrangements from criminal liability under section 45 if the amendments proposed in the bill are passed.
I see that my time is nearly up. Finally, I would like to say that Bill C-454 would change the rules regarding pre-notification of mergers, by lowering the threshold at which companies considering merging would have to notify the commissioner of their intent. In this regard, we should ask ourselves whether the costs imposed on businesses are warranted.
Private Members’ Business
March 13th, 2008 / 6:50 p.m.
Claude DeBellefeuille Beauharnois—Salaberry, QC
Mr. Speaker, it is my great pleasure today to speak to Bill C-454, which was introduced by the Bloc Québécois member for Montcalm. First, I would like to congratulate my colleague on his excellent work and on this initiative to bring this important issue back to the House of Commons. It has not lost its relevance over the past few years with the price of gas at the pump now hovering around $1.15.
Bill C-454 is being read for the first time in Parliament, but I want to remind some of my colleagues from other parties that it is inspired in large part by Bill C-19, which the Liberals tabled shortly before the 2005-06 elections, and which the Conservatives decided not to reintroduce. Of course, it has been rewritten and improved, but it is, in essence, the same. If I were to provide a broad outline of this bill, I would summarize it by saying that its purpose is to strengthen the Competition Act.
First, it gives the Competition Bureau the power to conduct its own inquiries into the oil industry. Currently, the bureau can do no more than undertake general studies that have no consequences.
In the course of conducting such inquiries, it can summon and protect witnesses. If it could not do so, it would very likely never be able to prove anti-competitive practices.
Lastly, when companies want to enter into agreements with their competitors, they will have to prove that these agreements are in the public interest. The bill also significantly raises the amount of fines, from $10 million to $25 million.
That said, exactly what need is this bill trying to meet?
Prices of petroleum products are rising steadily, and we want Quebeckers to have a way of finding out why this is happening, who is benefiting and, most importantly, whether this is reasonable.
The first major problem that is affecting everyone to different degrees is the rising price of crude oil. This is having a direct impact on the price per barrel, which is fluctuating today between US$100 and US$110 and has increased by 230% since early 2004.
This in turn is affecting the price of heating oil, which is on the rise. It has averaged about 90¢ since early 2007 and has gone up by more than 50% in the past two years. I want to remind the House that according to Statistics Canada, approximately 500,000 Quebec households in Quebec still heat with oil or another liquid fuel.
The increase in the price of crude oil is also driving up the price of gas, which, understandably, has raised the public's ire for the past several years.
For a number of years, in fact, old records have fallen repeatedly as the price of regular gas has regularly reached new highs. Fluctuations aside, the price of gas in Quebec is going up steadily; it was 71.3¢ in May 2002, 94.4¢ in May 2004 and $1.10 in May 2007. Since the beginning of the year it has fluctuated between $1.09 and $1.18.
At the same time, oil companies have posted record sales for a number of years. But that is not all. Oil companies' net profits have also skyrocketed in recent years. The oil industry's net profits rose from $17.6 billion in 2003 to $20.2 billion in 2004 and $35 billion in 2006, a 100% increase.
What is more, with respect to the increase in costs, if we compare the price of regular gas in Quebec today with the price in 2004, we find that the retailer mark-up has remained stable, taxes have remained stable and even gone down in proportion to the price of a litre of gas, and the increase in the price of crude oil accounts in part for the increases.
But lately, the constant fluctuations in gas prices cannot be explained by crude oil prices; they are attributable to the obscene profits made by the refineries.
Is this situation intentional? We do not know, because the Competition Bureau does not have the tools it needs to conduct a serious and complete investigation. But one thing is for sure: the structure of the oil industry encourages spikes in gas prices, and is conducive to abuse. That is why the industry must be monitored, hence Bill C-454.
As members know, I am the Bloc's natural resources critic, and it is part of my duties to learn about the oil industry. That is precisely what the Standing Committee on Natural Resources did for several months last year, as part of an important study on the oil sands industry. Over the course of about 30 meetings, we heard from some 100 witnesses, many of whom came from the oil industry.
I listened to and questioned these witnesses carefully, and although our conclusions can be found in the committee's report, I would like to share how these testimonies touched me personally.
When I was listening to these professional lobbyists, I was deeply struck by the excesses of the industry, with its echoes of the gold rush.
People in the oil industry came to talk to us, they explained the challenges, confidently predicted the future, easily came up with rational solutions to complex problems in their heads, but were so detached from the effects caused by their industry, that it literally took my breath away.
As everyone also knows, I am a social worker by training, and if I wanted to draw a parallel with a type of clientele, I would say we are dealing with an industry that has a very hard time regarding itself objectively or engaging in any self-criticism, and above all, we are dealing with an industry for whom the end justifies the means and that is always right. It has a bit of a superiority complex, which places it above other things and makes it prone to over-ambition and exaggeration, often in a shameless manner.
In the case of the petroleum industry, the excessiveness of the financial stakes—we are still talking about billions of dollars—and the current importance of their products, which are practically essential to the functioning of society, create this cavalier attitude that often lacks any moral or ethical sensibility. I could give so many examples that I could easily keep the House busy until tomorrow, but let us look at just one, more recent and very typical example.
On Monday, March 10, the Minister of the Environment presented his solutions for climate change problems—a plan whose flabbiness will surely go down in history. One of his proposals is carbon capture and storage by the oil industry. Speaking through a task force that delivered a study to Natural Resources Canada, the oil industry responded that it refuses to invest great sums of money in this technology because of the uncertainty surrounding its large-scale commercialization.
And as if that were not enough, the task force, composed of one academic and four industry representatives, went even further. Try to listen to this without being too surprised:
...it is a very difficult proposition for individual private sector players to commit additional hundreds of millions of dollars...to achieve a public good...for which it may not be compensated with an adequate (or any) return on investment.
In any context that statement would be unacceptable, but in the current climate change crisis, it is totally irresponsible and insulting. This method would force private companies to contain their pollution.
The members of this task force act as if they are doing us a favour. They are completely disconnected from reality, so much so that they add even more. As François Cardinal reported in La Presse on March 11, the report recommends that the federal government allocate $2 billion immediately and that both levels of government provide “stable financial incentives”.
I would like to remind hon. members that the oil industry made $35 billion in profits in 2006. And these people are talking about the impossibility of investing in the public good unless profit is involved?
I also want to point out that in addition to $66 billion in direct subsidies from the federal government between 1970 and 1999, this industry is currently benefiting, through accelerated capital cost allowance, from tax measures such as former Bill C-48, under the Liberals in 2003, and from tax cuts announced by the Conservatives in the economic statement of November 2007 of up to $1.5 billion annually.
In the coming year alone, the oil industry will receive a $1.18 billion gift. In total, for the 2008-13 period, roughly $7.8 billion will go into the pockets of the oil companies through various measures implemented by both the Conservatives and the Liberals.
Yesterday I received a phone call from a constituent from Saint-Bruno—Saint-Hubert, who said that her heating costs have increased by 50% in two years. She thought that was totally unacceptable.
Bill C-454 is needed to help people like that and to supervise the oil industry more carefully. We hope the bill will be adopted.
Private Members’ Business
March 13th, 2008 / 6:40 p.m.
Peggy Nash Parkdale—High Park, ON
Mr. Speaker, I rise to speak to Bill C-454, An Act to amend the Competition Act and to make consequential amendments to other Acts and to congratulate the hon. member from the Bloc Québécois for introducing it.
The Competition Act is an important law in Canada. It governs how we do business in a number of ways. The purpose of the Competition Act is to encourage Canadian businesses to compete with one another with the belief that enhanced competition will lead to lower prices and greater product choice for consumers.
The Competition Act contains criminal and civil provisions which apply to most industries and businesses in Canada, both large and small. The Competition Bureau is an independent federal agency which administers the act.
The current act criminalizes some anti-competitive practices. The criminal provisions include: conspiracy to unduly lessen competition; bid rigging; discriminatory and predatory pricing; price maintenance; refusal to supply; and certain misleading advertising and deceptive marketing practices. The offences are investigated by the Competition Bureau and prosecuted in federal or provincial superior courts.
Attempts have been made before to update the Competition Act. In April 2002 the House of Commons Standing Committee on Industry, Science and Technology released a report entitled “A Plan to Modernize Canada's Competition Regime”. It recommended extensive amendments to the Competition Act.
Subsequently Bill C-19 was introduced. It proposed changes to the Competition Act that would have allowed the Competition Tribunal to impose an AMP, an administrative monetary penalty, if it found that a person or a company abused its dominant position. It would have increased the AMP that the Competition Tribunal or court could impose when it found that a person or company had engaged in deceptive marketing. It would have repealed the airline specific provisions that are currently found in the act, which arose out of a particular period in Canada's aviation history and were designed to deal specifically with the airline industry. Bill C-19 proposed to decriminalize predatory and discriminatory pricing provisions.
At the time, there was a great deal of debate about Bill C-19 but it died on the order paper and ultimately did not pass. The Competition Act remained unchanged and that is very unfortunate for Canadians.
Every time the price of gasoline goes up, we hear complaints from our constituents. They see gas prices rise in lockstep usually just before a long weekend. The greatest instance of consumer complaints is probably from people who believe they are being gouged by gas and oil companies.
The government should deal with this in a more effective way. It is clear that the Competition Act, as it currently stands, does not have the teeth to deal with this kind of price gouging. It should be thoroughly investigated so that Canadian consumers are protected.
The issue of deceptive marketing and deceptive advertising is also of great concern to Canadians. We have an aging population. We all know of situations where seniors especially have fallen prey to deceptive advertising. Again, the Competition Act simply does not have the teeth to protect consumers. It is basically a buyer beware situation, and that is simply not good enough.
We should think of a situation where an individual senior, who lives alone in his or her own home, who maybe does not have access to the Internet, and does not read as widely as some other folks, is up against a very powerful and well resourced company that has a very slick marketing campaign. That individual senior could be quite vulnerable. I believe it is our job as parliamentarians to do everything we can to ensure that all consumers are protected.
We all want to foster a healthy economy. We want to make sure that we are creating the conditions for businesses in our economy to do well and for them to compete. We have a very mature economy, but there has to be a balance so that consumers are also protected.
Today the average person is really getting squeezed. Savings are at an all time low and consumer debt is the highest it has been in a generation. People are incredibly price sensitive. There are people who have to commute from the suburbs to the centre of town to go to work every day. Some people in my part of the country and the greater Toronto area commute long distances. With respect to the price of gas, people are phenomenally price sensitive. When the price of oil goes up, consumers really take a hit in the pocketbook. They need us to make sure that they are protected.
There is one concern that I do have with this bill, and it was a concern with Bill C-19 as well, which is that the AMPs, the administrative monetary penalties, would be tax deductible for the corporations that face these penalties. That does not make any sense. It makes no sense that the Government of Canada and the Canadian taxpayers would somehow be responsible for paying these monetary penalties. That is something we should discuss at the committee.
I will be supporting this bill. As a member of the industry committee, I look forward to discussing the bill at the industry committee. The goal is to protect Canadian consumers, to put teeth into the Competition Act, and to protect our seniors from deceptive advertising. I believe all of these provisions would lead to greater competition and a healthier economy.