Industry Committee on June 15th, 2010

[The Chair, Conservative, Michael Chong]

Good morning, members, and good morning to our witnesses. We're here at the 23rd meeting of the Standing Committee on Industry, Science and Technology.

I'd like to welcome our four witnesses in front of us today.

We're here pursuant to the order of reference of Thursday, May 13, 2010, to study Bill C-14, An Act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act.

In front of us today we have Madame Marcotte, president and chief executive officer, Association québécoise des indépendants du pétrole. We also have Monsieur Blouin from the same organization.

We also have Mr. Harnois, from the same organization.

We also have Madame Savage from the Canadian Independent Petroleum Marketers Association.

We'll begin with Madame Marcotte.

[Sonia Marcotte, President and Chief Executive Officer, Association québécoise des indépendants du pétrole]

Good morning.

The Association québécoise des indépendants du pétrole represents petroleum companies active in Quebec. They are involved in imports, distribution and retail sales of fuel, heating oil, and lubricants. Retail sales for petroleum companies in Quebec represent $1 billion a year.

We are aware of the government's concerns about the accuracy of measuring devices. The AQIP feels that it is normal and to be expected that consumers receive the amounts of fuel they are billed for. Therefore, the AQIP is not opposed to implementing the kinds of clauses that Bill C-14 contains. However, we have a hard time understanding why the bill has been called the Fairness at the Pumps Act. That implies that currently the amounts of fuel being measured at the pump are inaccurate.

Yet, when Measurement Canada began consultations on this in August 2008, we asked for a serious study to assess the situation regarding the accuracy of devices or meters used in measuring the fuel being sold. We were never told that this type of study had been undertaken. What we did notice was that the government seemed to be relying on an article in the Ottawa Citizen, which claimed that consumers were not receiving the amount of fuel they had paid for.

Fraud is a serious accusation and must be based on proof rather than a newspaper clipping. We are even more surprised about the direction this debate has taken given that in Quebec, there are regulations under which fuel retailers must ensure that—and I will quote from the regulation—“all fuel distributors with underground tanks must have meters which shall be calibrated at least once every two years”. This requirement is in section 141 of the Safety Code in Quebec's Building Act. In order, therefore, to avoid further red tape, we insist that the federal government refrain from adding regulations, given that the provincial government has already taken on this responsibility.

[Serge Harnois, Chair of the Board of Directors, Association québécoise des indépendants du pétrole]

As we stated earlier, we're having a hard time understanding why the government has given this bill a title that implies that there is an unfairness at the pumps. In fact, our experience has shown us that when inspectors calibrate our fuel pumps they end up needing to calibrate pumps that have in fact given the consumers a slight advantage rather than the opposite. Once the calibration is done, the pumps are sealed so that no one can change the work that has been done.

Because of this we are calling for a serious study to determine whether or not we need to correct an unfair situation or whether, on the contrary, the real situation is that consumers have been well served. Furthermore, one mustn't forget that mechanical pumps are gradually being replaced by electronic pumps whose accuracy is well known.

[René Blouin, Senior Advisor, Association québécoise des indépendants du pétrole]

In conclusion, we call upon parliamentarians to refrain from making regulations more cumbersome given that the province already ensures that fuel distributors are giving consumers their money's worth. Given that the lack of serious studies demonstrating that consumers have been ill served, we think there should be much greater caution in making unfair statements that unfairly target fuel retailers. There should be much greater caution as well in any measures that are being considered to resolve a hypothetical problem that we feel, until there is evidence to the contrary, is more fictitious than real, at least in Quebec.

[The Chair, Conservative, Michael Chong]

Merci.

Madam Savage.

[Jane Savage, President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association]

Good morning.

I would like to thank the committee for the opportunity to make this submission on behalf of CIPMA members regarding Bill C-14, an act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act.

The Canadian Independent Petroleum Marketers Association represents the interests of independent fuel marketers, that is, the non-refiners, or non-majors, of our industry. CIPMA is a national, not-for-profit trade association, incorporated in Canada in 1996. Leadership for the association is a board of directors made up of owners and senior managers of the member companies.

CIPMA's member companies are the larger independent fuel marketers in Canada. Many are family owned, many are rural in their roots and emphasis, and most are national in scope. All are strong competitors and play a major role in the communities in which they operate.

I would like to name our members. They are, from west to east, PetroValue, based in Vancouver; Parkland Income Trust, based in Red Deer, Alberta; United Farmers of Alberta, or UFA, based in Calgary; Can-Op, of Thunder Bay, Ontario; McDougall Energy, based in Sault Ste. Marie, Ontario; Davis Fuels, of Burford, Ontario; Gales, of Niagara Falls; Pioneer Petroleums, of Burlington, Ontario; Canadian Tire Petroleum, based in Toronto; Max Convenience; Cango of Burlington; Niapen Oil, based in Stoney Creek; MacEwen Petroleum, of Maxville, Ontario; Mr. Gas, of Orleans; Norcan Petroleum Products, of Montreal; Olco Petroleum, based in Montreal; Wilson Fuel, based in Halifax, Nova Scotia; and Co-Op Atlantic, of Moncton, New Brunswick. Collectively, we sell approximately 14 billion litres of fuel products in Canada.

CIPMA members participated in all aspects of the downstream marketing and distribution industry. The majority of CIPMA member companies are in the business of gasoline retailing, and the majority have operations in more than two provinces. Collectively, CIPMA members supply 20% of Canada's approximate 12,500 retail gas stations.

CIPMA believes that consumers have the right to get what they pay for, and CIPMA supports and believes that the retailer is responsible for the accuracy of their measuring devices. We see these as the two fundamental principles behind the current Weights and Measures Act and behind Bill C-14, and, again, CIPMA supports these fundamentals.

CIPMA has been active with Measurement Canada in their deliberations about pump accuracy since 2004. CIPMA provided input to this process formerly in 2008. At that time, we stated that the public has a right to be confident in their purchases at the gas pump and that CIPMA supports a mandatory inspection cycle of gasoline-dispensing devices. We reiterate that position here for this committee.

We support the objectives of Bill C-14, and, combined with robust regulations, we believe it will succeed in meeting its objectives, namely, providing consumers with confidence in the trade measuring devices used for purchases.

It is important to note that Measurement Canada, in their earlier appearance at this committee, testified that contrary to press reports, fraud or deliberate tampering is not the root cause of pumps found to be out of calibration. Rather, pumps wear, and the more volume a gasoline metering device pumps, the more it wears. This is the primary reason for pumps going out of calibration.

Retailers know this, so they undertake regular inspections and recalibrations of their pumps, even though they are not required to do so under the current legislative regime. Most CIPMA retailers inspect their pumps every two years, and some as often as every year. This is to ensure integrity. Inspections and recalibrations are a fundamental and well-accepted practice in our industry, and this practice explains the high compliance rates of the gasoline retailing industry. At 94%, gasoline retailing has one of the highest compliance rates of all measurement trade sectors.

Summarizing these three points for a moment, fraud and tampering are not the causes of gasoline pumps going out of calibration. Gasoline retailers regularly inspect and calibrate their pumps today, and the gasoline sector has one of the highest compliance rates of all the trade measurement sectors.

We still support the intent of Bill C-14, but given these three facts, we strongly recommend that the short name of the bill be changed. Since we are talking about accuracy, let's accurately name the bill. A more accurate name is the “consumer confidence in measurement act”, whether we're talking about gasoline, electricity, natural gas, salami, or green beans.

We are confident that together with properly crafted regulations, this bill will ensure consumer confidence in measurements. We look forward to working closely with Measurement Canada officials in the development of a fair regulatory regime for Bill C-14, soon to be known, we respectfully request, as the “consumer confidence in measurement act”.

Thank you. I'll be happy to answer your questions.

[The Chair, Conservative, Michael Chong]

Thank you to the witnesses for their remarks.

We will now have a 1 hour and 45-minute period for questions and comments from the committee members.

We will begin with Mr. McTeague.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Thank you Mr. Chairman.

Thank you to the witnesses, who are people I have known for a very long time.

I'd like to know if you think this bill is focusing on independent retailers. In 2002-2003, Option consommateurs drafted a report that indicated that a large majority of people believed that pumps could be inaccurate, especially those belonging to independent retailers or independent service stations.

Are you happy with the actions and comments of the minister? He has said that—and I will use the English expression—

“you're chisellers”.

Do you have problems with that?

[René Blouin]

Sir, we did not see this as an attack against independent businesses but rather against gasoline retailers.

First, as the CIPMA representative pointed out, the bill has been given its short title. Then, when the minister announced the bill he gave the impression that gasoline retailers were not acting appropriately. This morning I became aware of a letter that a member sent to her constituents that implies that the government wants to correct a type of fraud on the part of gasoline retailers. I think it's this perception that has to be corrected.

[Brian Masse, NDP, Windsor West, ON]

Can we have it tabled, Mr. Chair?

[The Chair, Conservative, Michael Chong]

Yes, we can have it tabled.

Mr. McTeague, you can give it to the clerk.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Yes.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

[The Chair, Conservative, Michael Chong]

We'll have it translated.

[Brian Masse, NDP, Windsor West, ON]

It appears to be a ten percenter from the House of Commons printing...

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

I was going to get to that.

[The Chair, Conservative, Michael Chong]

Give it to the clerk. We'll have it distributed when it's fully translated.

Go ahead, Monsieur Blouin.

[René Blouin]

As we stated earlier, we agree with the goals of the bill. We simply hope that there won't be overlap with provincial regulation, where it exists, and that the message being sent out will not accuse gasoline retailers who, as officials have explained very clearly, are in no way dishonest and have in no way acted inappropriately.

We know this because 94% and 95% of sales are done under ideal circumstances. Where there are problems, as Mr. Harnois pointed out, based on the experience of our members there may be a slight increase or slight decrease, but only very slight. On a full tank of gas that may represent 25¢, 30¢ or 40¢ more or less. It's very slight.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

We received a ten percenter from a certain Conservative member. Like you, I think it is absurd to state:

“It saves Canadian consumers millions of dollars every year.”

[Brian Masse, NDP, Windsor West, ON]

A point of order, Mr. Chair.

[The Chair, Conservative, Michael Chong]

One moment, Mr. McTeague.

Go ahead, Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Sorry, Mr. McTeague.

I would just like to see it tabled. I would like to know who the members is, and I would like the Commons committee here to come back with the cost of that ten percenter. We've had a lot of discussion in the House of Commons about the cost of ten percenters, so I would like that to be brought back to this committee.

[The Chair, Conservative, Michael Chong]

That's not a point of order, but I'll take that point, and the clerk will ensure that it's distributed when it's in both official languages.

If the member, Mr. McTeague, or the witnesses wish to elucidate who the member is who sent out the ten percenter, they're more than capable of doing so; they have it in front of them. But until it's in...

Pardon me?

[Brian Masse, NDP, Windsor West, ON]

This is taxpayers' money. This is not—

[The Chair, Conservative, Michael Chong]

I understand. Just one moment. Let me finish.

Until it's in both official languages I will not distribute it.

If the member wishes to elucidate who the member is who sent it out, he's more than capable of doing that.

With respect to the cost of the ten percenter, I'll ask the analyst to see if they can produce that figure for the next meeting.

Go ahead, Mr. McTeague.