Bill C-452 (Historical)
An Act to amend the Competition Act (inquiry into industry sector)
This bill was last introduced in the 40th Parliament, 3rd Session, which ended in March 2011.
This bill was previously introduced in the 40th Parliament, 2nd Session.
Robert Vincent Bloc
Introduced as a private member’s bill. (These don’t often become law.)
Introduction and First 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.
Private Members' Business
March 10th, 2011 / 6:40 p.m.
Glenn Thibeault Sudbury, ON
Mr. Speaker, I am very pleased to speak to Bill C-452, An Act to amend the Competition Act (inquiry into industry sector).
I commend my colleague, the member for Shefford, for bringing forward such an important amendment to the Competition Act. I am happy to say that the New Democratic Party will be supporting this vital legislative initiative.
In essence, this bill seeks to change the current law, which says the Commissioner of Competition can only launch an investigation when there is a concern about one or more market participants. While the bill appears to have originally been tabled to deal with the retail gasoline sector, the broad amendment makes the proposed legislation applicable for all industry sectors, including communications industries.
This is particularly important at this time, as the banking disputes over competition have been increasing over the past few months, whether it is in relation to the oil and gas sector where consumers are being gouged at the pumps by abusive practices which hurt the wallets of ordinary working and middle-class Canadians, or some other issue.
I heard my hon. colleague from Winnipeg North talk about the gas prices in his riding. I believe he said it cost $1.20 a litre. In Sudbury right now it is close to $1.30. My colleague from Algoma—Manitoulin—Kapuskasing said the price in Wawa and Elliot Lake is $1.30 in some cases.
The dispute over usage-based billing demonstrates that we need this tool to widen the scope to encapsulate not just the oil and gas sector, which we are talking about, but other major sectors of our economy as well.
In the oil and gas sector there is clearly a lack of refining capacity in Canada. Coupled with vertical integration, this basically leads to a formula that is a recipe for disaster for Canadians and their pocketbooks.
It is interesting that when the government lowered the GST with regard to oil and gas, the companies did not pass the reduction on to consumers. Prices and profits have risen significantly and not even one single organization or company has taken advantage of the opportunity to pass the 2¢ reduction on to consumers. The companies took it and put it in their own pockets. That is shameful. More important, that 2% has a large impact on working and middle-class families who are being financially squeezed during tough economic times.
Therefore, it is only fair that we examine the bill and look at the oil and gas sector as one of the variables in how it can be addressed because the bill is specifically geared to the industry sector, which is a responsible way to approach it. It allows targeting to certain areas where there is a lot of interest.
In terms of the telecommunications sector, we have the entrance of new players into the Canadian market with regard to telecom and that means more communication devices, cellphones, BlackBerrys, iPhones, and wireless service providers that are being expanded in Canada. There are those who feel there is no competition in that sector and relatively similar pricing that makes it very difficult for consumers to get a better benefit. These companies have also been receiving record profits and are quite lucrative. Almost all of the groups and organizations of the big telecommunication companies have done extremely well.
Both the current CRTC chair, and Sheridan Scott, the former commissioner, have advocated for the authority to conduct market studies during their tenures as the head of the bureau. This amendment to the Competition Act is therefore obviously something which the regulators of our telecom sector deem necessary for bringing Canada's telecommunications regime into the 21st century. We have seen there are flaws in this regime and this bill is an important step in redressing these shortcomings.
Another issue raised often with regard to this issue is credit cards, something I have been talking about quite often. New Democrats have been calling for a number of credit card reforms. I have been pushing this issue to the forefront. The Minister of Finance is in favour of a voluntary agreement. It is clear that we have deficient credit card competition in Canada. There are some groups and organizations that are more progressive, but at the same time it is seen basically as a system that is stuck where the vast majority of credit cards have interest rates that are quite similar.
This voluntary code is not sufficient. We need something with the necessary teeth to oversee the credit card industry. I feel this amendment would provide an extra layer of protection for ordinary Canadian consumers, as well as small and independent businesses which are routinely encountering major issues with the predatory practices which are being employed by credit card providers. This is an area where we need to see more healthy competition, but we have not.
The banks are also making record profits, and we have seen the same things there. My office receives complaints with regard to how close bank fees are among different organizations. There does not actually have to be collusion where there are brown envelopes changing hands and information being wired back and forth to predetermine the actual cost of items and passing it on to consumers. There just has to be a general acknowledgement that they will stay in a certain field of play and compete in that field of play. That is not real competition.
Small and independent retailers are facing a similar dilemma in regard to the anti-competitive practices. The big issue for retailers is the influx of premium cards, for instance, and those that offer generous air miles. Consumers are lured to those cards because they offer a chance to collect points faster and reap the rewards such as free flights, electronics and jewellery. The use of these premium cards has risen dramatically since they first hit the market in 2008. That high end plastic, such as the Visa Infinite or the World Elite MasterCard, cost more for retailers to process than other standard gold or platinum cards.
Consumers do not know that their demand for those freebies from the credit card companies is actually squeezing profits from these small businesses, because it is the merchants who really foot this bill. Ordinarily the cost per transaction ranges from 1% to 3% of every sale, whether the customer pays cash or pulls out a card. Premium cards require much more than that, considering the razor-thin margins the competitive market demands, and $5 billion is a lot.
Family debt is on the rise. The debt carried by the average Canadian household has hit $100,000, up about 78% from two decades ago. The debt to income ratio stands at a record 150%, meaning for every $1,000 after tax income, Canadian families owe an average of $1,500.
In summary, Canadian families cannot wait much longer. They are being gouged because of anti-competitive practices in every facet of their lives, be it gas, cellphones, the Internet and their credit card bills.
Bill C-452 is a very, very important first step in curtailing these abusive practices, and I call on all members of the House to support my colleague's bill.
The House resumed consideration of the motion that Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), be read the third time and passed.
Private Members' Business
March 10th, 2011 / 6:25 p.m.
Kevin Lamoureux Winnipeg North, MB
Mr. Speaker, I appreciate the comments made by the member, but I do not necessarily agree with what he said. At the end of the day, the passage of a bill of this nature is in the best interests of our country and consumers, ultimately. In fact, I support the bill, as well as the Liberal Party critic. We will have to wait to see what happens at third reading.
One thing I would like to recognize is the fact that some of these issues are consumer-oriented and speak to Canadians in a very real and tangible way. Some of those issues include the price of gas, banking fees and things of this nature, issues that average Canadians have to face day in and day out.
Let us take a look at the impact of the price of gas. The percentage of the overall population that believes there is something wrong in the gas industry is immense. I was affiliated with the gas industry as a very young man, at the age of 11. I pumped gas. If the corner gas station put the price of gas at x cents, other stations copied that price or they would get a phone call telling them to match that price. They had to be competitive with the price.
Even back in the early 1970s, consumers felt that there were a few gas companies and the price of gas always seemed to be the same or close to it. There was a sense of frustration as to how to justify the increases, especially if we take a look at it in the last number of years. Four or five years the price of a litre of gas was 80¢.
I just sent a text to my assistant in Winnipeg to find out the price of gas at a local station there. It is $1.15 for a litre of gas. I have seen it well over $1.20 a litre. Think of the impact that has on the economy. Let us say someone burns 40 litres, which is it not much. A person can drive a Cobalt for a week and burn 40 litres very easily. That is a modest car that many people drive and is somewhat gas efficient.
If the price is $1.20 a litre, 40 litres would cost $48 compared to a few years back when it was 80¢ a litre and it would have cost $32. That is a $16 difference. Imagine what that consumer could do with that $16. Maybe he or she could purchase a TV or go out for a meal. Those are the types of purchases that could be made.
If we were to canvass the average person at the pump putting gas in his or her vehicle, that individual would say there has to be some sort of price fixing going on because it just does not make sense. A very small minority would disagree with that assessment.
In good part, the Canadians are looking to the House and asking what Ottawa is prepared to do to deal with this problem. I do not know why the government would fear Bill C-452. It says that it already allows the commissioner to conduct inquiries. This legislation would provide a lot more clarity to it. There would no doubt that the commissioner would have the authority.
Today the commissioner has the responsibility for the administration and enforcement of the Competition Act. He can launch inquiries to a good degree and challenge matters before the Competition Tribunal. He can make recommendations on criminal matters to the Director of Public Prosecutions. He can intervene as a competition advocate, whether it is in a provincial or federal arena.
What would the bill actually do? It would allow, in a very clear and concise way, the commissioner to look at an entire sector and say that he or she is concerned about the perception of the average consumer or a vast majority of Canadians toward price-fixing at the gas pump. The commissioner can investigate, call witnesses, hold individuals, corporations and boards accountable for the price of gas. What is wrong with that? Why would we not want to make our expectations perfectly clear?
There is nothing wrong with using the Competition Act in a manner which would enable and empower our commissioner to look at an industry that has caused a great deal of frustration for a good number of years. I can recall it all the way back to the 1970s. I suspect it is only a question of time. If we continue to ignore the issue, the public, as a whole, will continue to build that sense of frustration and disappointment as to why Ottawa has not responded to the needs of average consumers.
If I were anywhere in Canada, putting gas in my the car, and found out that the government had an opportunity to pass a bill of this nature, but said that it was not necessary, I would be disappointed. I would like to see a government take whatever actions it can to protect the consumer.
The government talked about a decrease in the GST. If we go from that $1.15, $1.20 a litre back to a few years ago when it was 80¢ a litre, that is a lot of money. A lot of disposable income is being gobbled up at the pump.
We can do a lot more to provide and restore confidence in the public to show the politicians in Ottawa care about the consumer, that we will not sit back and say that this is the way it has been, that it will continue to be that way and the consumer pay will pay whatever the big oil companies want to charge for gas. That would be highly irresponsible.
As has been pointed out, the price of gas causes huge ripple effects, which affect us all. In terms of the affordability of food in some of the northern parts of Manitoba and other remote areas in Canada, huge increases in the price of gas mean that to provide those communities with milk and fresh produce the price will go up dramatically as a direct result.
The Conservative Party claims to be a party that represents western Canada. Western Canada has a good number of farmers and the price of gas is hurting a lot of farmers, particularly in the Prairies. Those farmers need to have a government that recognizes the value of having someone standing up against the oil companies and holding them to account to ensure there is a higher sense of competition. At the end of the day, the farmers are paying a lot more for their gas and that is going to have to be passed on to someone.
We are allowing a few in certain geographic areas of the world to get exceptionally wealthy, while at the other end there is more and more poverty because of issues like the oil prices. I do not believe we spend enough time talking about the cost of energy. This type of bill can go a long way—
Private Members' Business
March 10th, 2011 / 6:15 p.m.
Mike Wallace Burlington, ON
Mr. Speaker, I welcome the opportunity to rise this evening to participate in the third reading debate of Bill C-452.
This private member's bill seeks to amend the Competition Act to provide Canada's Commissioner of the Competition Bureau with the power to launch a broad-based inquiry into an industry sector in Canada.
I will give a brief history of this bill in Parliament.
Bill C-452 was added to the order of precedence last spring and referred to the Standing Committee on Industry, Science and Technology, of which I am a member, just prior to the summer recess of Parliament.
The industry committee took up its consideration of Bill C-452 in two sessions this past December prior to the Christmas break. With the support of all three opposition parties, the committee members agreed to report the bill back to the House of Commons without amendment. This is where we stand today.
The government has raised several concerns with Bill C-452 over the last number of months and I will highlight a number of them.
First, it is not evident that the new powers proposed in the bill are required or helpful given the authority that the competition commissioner already has under the existing legislation. The 2009 amendments to the Competition Act provided the commissioner with significantly stronger tools to take action against cartel activities, which are a source of concern underlying this bill.
Second, there is a risk that authorizing this use of formal investigation powers to conduct open-ended inquiries into industry sectors could pose significant compliance and reputation costs on the businesses that they affect. This would also impose significant financial and human resource costs on the Competition Bureau. This would require the commissioner to reallocate resources away from her current enforcement priorities, including cartel investigations and other anti-competitive conduct that negatively impacts the day-to-day lives of Canadians.
Third, during the committee hearings it became evident that a misconception regarding the commissioner's ability to initiate an investigation into wrongdoing or, specifically, an incorrect concern that she does not have this power, may be a driving force behind the bill.
While appearing at the Standing Committee on Industry, Science and Technology in December, the representative from the Competition Bureau clarified that the competition commissioner does not require the powers in this bill to discharge any of her enforcement responsibilities. The commissioner already has clear authority under the act to initiate her own investigation into the actions of businesses and individuals whenever there is evidence that the enforcement provisions have been, or are about to be violated.
More important to our debate today, she does not have to wait for the filing of a complaint by the public or for instructions from the minister. In fact, the committee was told that at the time of the hearings, approximately 30% of the ongoing formal investigations under the act were initiated by the commissioner without having received a complaint regarding that matter. Clearly the commissioner is able to exercise her discretion to act whenever the circumstances warrant.
In our debate on the merits of the bill today, we believe it is important that we also reflect on the advice that the Canadian Bar Association provided to the committee in December. During their testimony, representatives of the Canadian Bar Association examined the types of outcomes resulting from such broad-based industry inquiries. Their overall conclusion was that they could not foresee any circumstance where there would be any overreaching benefit to society resulting from this bill.
The Canadian Bar Association explored three possible outcomes.
First, at the end of such an inquiry the commissioner concludes that the sector in question is sufficiently competitive. In that situation, the bureau would likely be widely criticized, both for significant financial costs and for disruptions it imposed on the daily business operations of Canadian businesses, only to confirm that the market in question was indeed competitive.
Second, the sector is not sufficiently competitive. However, this could be owing to such aspects as the structure of the market and is in no way related to the conduct that offends the specific enforcement provisions of the Competition Act.
As we are aware, the commissioner does not gain any new authority through the bill that would allow her to impose structural changes on the market. As a result, in these circumstances there would be a finding that the market is not competitive, but there would not be any avenues available to the commissioner to address the problem. Such an outcome would only result in widespread frustration to the entire process.
A third outcome that the Bar Association highlighted is that the commissioner could determine that the industry is not sufficiently competitive and that it is indeed the result of activities that violate specific provisions of the Competition Act.
The bar cautioned committee members that the bureau's ability to pursue a subsequent case using its enforcement powers may be potentially undermined on account of the legal due process concerns arising from the manner in which the evidence was collected.
In particular, the bar was of the view that serious legal challenges could arise regarding the rights against self-incrimination, where information is compelled from a person for the purpose of a market-wide inquiry and then later used in enforcement proceedings against that person.
Even in this case, where anti-competitive behaviour has been identified, the commissioner's ability to challenge the behaviour may be hindered because of the legal constraints that could arise from this bill.
The bar also took the opportunity to remind committee members of the fundamental objective that the Competition Act is designed to address, which is to protect the competitive process and not the day-to-day operations of specific markets. This is done through targeted enforcement action against specific anti-competitive conduct. The act is not intended to regulate the operations of a market.
In conclusion, I want to remind the House that it has only been 24 months since Parliament passed the most significant amendments to the Competition Act in 20 years.
During the industry committee's review of Bill C-452, both the Canadian Bar Association and representatives from the bureau emphasized the value and clarity provided by these new laws, which make it clear and unequivocal that it is illegal to agree with one's competitor on price, market allocation or output levels.
In effect, this government provided the competition commissioner with access through the amended legislation to new and powerful provisions that clearly strike at the heart of the concerns that underlie this legislative initiative.
It is important that we allow more time before we move to consider further changes to such an important piece of the framework of legislation. Only in that way will we be able to judge the full effect of the new provisions that this government has introduced to the Competition Act.
Private Members' Business
March 10th, 2011 / 5:55 p.m.
Robert Vincent Shefford, QC
moved that the bill be read the third time and passed.
Mr. Speaker, it is my pleasure to take the floor in this third reading debate, which will wrap up the efforts of my political party and myself to convince the hon. members of the House of the merits of Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), which continues to be a current concern. The bill would give the Competition Bureau the requisite powers to carry out its investigations.
The price of a barrel of oil was in free fall at one time, but because of the situation in Libya, the price shot up last week. The price of a barrel of oil has skyrocketed, and that has repercussions on prices at the pump. That is the problem.
The Competition Bureau could conduct an inquiry. Consumers are not clueless and they are not idiots. They are aware that the gasoline sitting in underground tanks at service stations was bought at a much cheaper price. Even if the price of a barrel of oil has risen to $104 or $120, there should be no direct increase at the pump because that gas cost much less. It is easier for the oil companies and service stations to raise the pump price as soon as there is an increase. People feel they are being taken hostage by the oil companies.
I will give one concrete example. There is a Canadian Tire with a service station near where I live. On Tuesday, the price at 7 a.m. was $1.17. Three hours later, at the same service station, it was $1.25. What happened between 7 a.m. and 10 a.m.? I have no idea, but the price rose by 8¢. Twenty-four hours later, the price was back down to $1.17. How does one explain to the population that the price of gas can fluctuate in 24 hours even though nothing has happened? The retailer has pocketed 8¢ a litre, and I think it is the consumers who lose out. That is why consumers want a bill so that the Competition Bureau can conduct inquiries into the petroleum sector.
When I speak of the petroleum sector, it is not just the price at the pump. We already know that when the price of a barrel of oil goes up, the cost of refining goes down, but the opposite happens as well. When the price of a barrel of oil goes down, the cost of refining goes up.
I asked that question of the Competition Bureau and in the committee. I was told that the oil companies do not talk to each other, but how can it be that every Monday, without having talked, all the refiners in Quebec and Canada have the same prices at the pump? If the refining price is set at 8¢, the following month it is 13¢, 15¢ or 16¢. We do not see a change in the price at the pump because the oil companies are different. That is what we think, but that is not the case. In fact, the oil companies all buy from the same place. The refiner's gas and the gas in the underground tanks at the service station come from the same place. So how can the refining price be the same?
There used to be one refinery in Montreal and one in Quebec City, but they were owned by two different companies. Yet, every Monday, the price at the refinery was the same. Consumers would expect that each Monday there will be a disparity between the two oil companies or brands at the gas stations.
How can the price be the same if they are not talking? How can the same litre of oil be refined at the same price? I asked the Competition Bureau that question, but it was confused and did not understand why the price was the same. I asked if it would investigate, but it said no. It claimed to have enough investigative powers. But what kind of investigative powers? Personally, I do not think that it has any. The bureau said that it had conducted an investigation in the Sherbrooke area and that it was able to prove that there was collusion among the oil companies to fix prices at the pump. But they needed an informant.
Someone had to phone the Competition Bureau and tell them he had received threats to force him to increase his price at the pump. That is when the Competition Bureau launched an investigation. In order to get an investigation going, someone must act as an informer. I tried it myself. The Competition Bureau said we could call to complain about the price of gas in our city or town, if it was higher than in the neighbouring city or town, and if we did not understand why gas was so expensive at the pump.
Many people in my riding complained to the Competition Bureau, asking for an investigation. However, it never did, because there was no whistle-blowing. The Competition Bureau was not provided with all the evidence required to start an investigation.
Do people know what competition means for oil companies? It is not competition between companies but, rather, between municipalities. If a municipality is large, gas will cost a lot more, because the population is much larger. Conversely, if a municipality located 10 kilometres away is much smaller, the price of gas will be much lower. Oil companies say that this is competition. People living in the larger municipality should fill up in the small town. That is what they call competition.
It goes even further. In Montreal, some streets are busy and the price at the pump is much higher than it is four or five blocks away, where there is less traffic. Again, that is what oil companies call competition. However, for consumers that is not competition, it is gouging.
We have to put gas in our car. Oil companies make billions of dollars in profits every year, but I think they take the money directly from our pockets. And I am not the only who thinks so. If one were to ask people from each and every riding in Canada whether they think they are getting taken by oil companies, I am sure their answer would be yes.
Is it so hard to give the Competition Bureau an investigative power? We often hear political parties wonder whether that is done elsewhere, and whether we would be the only ones to do so. The fact is that, at one time, the Competition Bureau had a power to investigate. It had it until 1986, when the Conservatives of the day came to office. They took that investigative power away from the Competition Bureau, and said it was because that industry had already been investigated.
An investigation can be carried out into any industry. We could also talk about the construction industry in Montreal, where there is talk that bids may have been rigged. The Competition Bureau can investigate; however, at present, it cannot do so on its own initiative. There has to be an informer. Because of this, pressure from industry lobbies resulted in the government of the day taking away the investigative powers of the Competition Bureau.
Do other countries have investigative powers like those we want to give to Canada's Competition Bureau? The answer is yes. In the United States, this type of study can be initiated in three ways: Congress uses its legislative authority to ask the Federal Trade Commission, the FTC, to draft a specific report; members of Congress or of a congressional committee, without using its legislative authority, ask the FTC to conduct a study; and the FTC initiates or conducts an investigation on its own. There are no formal criteria limiting what kind of research and policy inquiries the FTC can undertake.
We would also like to point out the situation that exists in the United Kingdom with the Office of Fair Trading.
The OFT has carried out market studies of various sectors of the economy, in particular liability insurance, new car warranties, private dentistry, taxi services, proprietary credit cards, and pharmacies.
...The OFT may also make a market investigation reference to the Competition Commission if there are reasonable grounds for suspecting that any feature, or combination of features, of a market prevents, restricts or distorts competition.
Hence, the United Kingdom can conduct its own investigations. Also, the European Union has the following provision:
When the trend of trade between member states, the rigidity of prices or other circumstances suggest that competition may be restricted or distorted within the common market, the Commission may conduct an inquiry...
Thus, the European Union can also initiate an investigation.
Canada is often compared to Australia. In committees, we often ask what Australia is doing, perhaps to follow its lead. In Australia, the Australian Competition and Consumer Commission can conduct general investigations into all sectors of the economy. The commissioner can conduct investigations on his own initiative. We want to do the same thing.
In 1998, when the CITT Act was passed, Canada conducted four inquiries. However, as I said earlier, there have been no inquiries related to competition issues under the Inquiries Act since the repeal of section 47 in 1986. It is important to mention that even the Commissioner of Competition, Konrad von Finckenstein, described the flaws in the Competition Act in his testimony before the Standing Committee on Industry on May 5, 2003. 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... It seems to me that it would be preferable to have a study on the overall situation carried out by an independent body that would have authority, that would be able to summon witnesses and gather information. It should also have the power to protect confidential information that someone is not necessarily going to want to share, but which would be vital in order to reach a conclusion based on the real facts.
In the United States, a study on oil companies was conducted to determine whether the refineries had tried to increase the price of gas at the pumps for consumers. It is also important for consumers in Canada and Quebec that a similar study be conducted by the Competition Bureau.
I want to refer you to an article about a report. On Saturday, May 25, 2002, the magazine Les Affaires reported that refiners had tried to drive up gas prices at the pump in the U.S. by deliberately reducing supply.
I can say right now—even today we have heard stories about oil companies—that since the closure of the refinery in Montreal, the price of gas is much lower. That is why it is important for the Competition Bureau to have the authority to investigate.
Private Members' Business
March 10th, 2011 / 5:55 p.m.
Robert Vincent Shefford, QC
moved that Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), be concurred in at report stage.
The House proceeded to the consideration of Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), as reported (without amendment) from the committee.
March 10th, 2011 / 10:15 a.m.
Robert Vincent Shefford, QC
Mr. Speaker, I am pleased to present a petition signed by 4,203 people.
This petition calls on the government to move forward with Bill C-452, which would authorize the Commissioner of Competition to conduct an inquiry of her own accord into the fluctuating price of gasoline. This is even more important these days, since the price at the pumps changes from one day to the next.
Members from every party hear from the public every day. These fluctuating gas prices make no sense. This petition calls on the government to authorize the Competition Bureau to conduct inquiries to determine whether consumers are paying a fair price for gasoline.
Industry, Science and Technology
Committees of the House
February 2nd, 2011 / 3:10 p.m.
David Sweet Ancaster—Dundas—Flamborough—Westdale, ON
Mr. Speaker, I have the honour to present, in both official languages, the 13th report of the Standing Committee on Industry, Science and Technology.
In accordance with its order of reference of Monday, June 14, 2010, your committee has considered Bill C-452, An Act to amend the Competition Act (inquiry into industry sector) and agreed on Tuesday, December 14, 2010 to report it without amendment.