Industry Committee on Dec. 9th, 2010

[Richard Bilodeau]

Do you mean in the recent amendments?

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

There was no amendment to that, was there?

[Richard Bilodeau]

In 2009 there wasn't, no.

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

Okay. So you still have the same powers you have in parts IV and VI, sections 32 and 33. Nothing has been materially changed in section 10, save and except that we continue to have a concern as to whether the industry is competitive.

When was the last time the Competition Bureau did an in-depth analysis of the health and standing of the wholesale market for gasoline in Canada?

[Richard Bilodeau]

I would have to check on that. Off the top of my head, I can't answer that.

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

Monsieur Vincent.

[Robert Vincent, Bloc, Shefford, QC]

I believe its biggest investigation was in 1981. When the investigation wrapped up in 1986, the bureau tabled three reports. That is when the power to investigate was removed, when the gas and oil industry complained about the excessive cost of the investigation. So that was the last major investigation done before losing the power to investigate.

[Richard Bilodeau]

We did look when we did the study on Katrina. And a few studies before that looked at the wholesale aspect of the business, not just at the retail but at the entire industry. Monsieur Vincent is right. The RTPC looked at the wholesale market, among other things, in an inquiry that lasted from 1973 to 1986, until the publication of the three books he's referring to.

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

In a previous generation I met with Mr. Bertrand, the previous commissioner. Back in the days, we used to call them.... What was the name of the old commissioner back in the day?

[Richard Bilodeau]

It was the director of investigation and research.

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

That's right. It was the DIR.

You recall that with Katrina—I'm just raising this as a matter—there was an increase in the United States of about two cents a litre in the Texas region. For average Canadians, it was 12.9 cents. The bureau at that point said that it was just a result of competition.

Mr. Bilodeau, if we were to grant the powers Mr. Vincent so clearly wants to give you, and you had the resources, would one of the things you could look at be the fact that in the United States and in every regional market and among various players, the wholesale price differential amounts to several cents a gallon on any given day? This could be proven through OPIS or Bloomberg or whoever you want. It also explains why on street corners in the United States, which anybody travelling down there will notice, there are substantial differentials in prices, which do not exist in Canada.

[Richard Bilodeau]

In terms of comparing Canada and the United States, there are obviously, as you well know, differences in taxes.

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

There are not at wholesale.

[Richard Bilodeau]

We looked at the most recent Fuel Focus report. My understanding of those numbers is that the wholesale pricing between comparable markets was relatively consistent over time.

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

If you're giving an example, now that the Montreal refinery has shut down, what's your relevant market? I'm not asking these things to bait you, sir. What I'm trying to do is demonstrate why now, more than ever, there probably is great need for what Mr. Vincent has suggested.

No one has done an updated analysis of this industry as it currently exists, given the number of refineries that have quit or left, many of which have done so, as I pointed out, for governmental and environmental reasons. When we make these things onerous, they don't necessarily make economic sense. The impact is that we have lock-step, uniform wholesale prices in Canada, which do not exist in Europe, Australia, New Zealand, Asia, or the United States. So Canadians are right to ask how, if we are dealing with what appear to be monopoly prices or similar prices, we can conclude anything other than that there is a monopoly here. Obviously they need to worry about collusion or conspiracy, because the same several players get together in the dark of night to fix prices.

If they don't exist at the wholesale level, and there's only one player calling the shots, aren't we talking about an outmoded piece of legislation? Wouldn't his investigative powers actually allow the bureau, once and for all, to understand the industry as it exists today?

[Richard Bilodeau]

We have that now with the amendments that were brought in in March 2009 and 2010. We have that ability. And it did remove the requirement of the bureau to demonstrate before a judge that a cartel had a significant competitive impact in the marketplace. It makes it much easier to target those hard-core cartels that have no redeeming benefits for Canadians.

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

Thank you, Mr. Bilodeau.

Thank you, Mr. Chair. And thank you for the extra time.

[The Chair, Conservative, David Sweet]

It's my understanding that we have exhausted all the questions today in regard to these witnesses. Was there any other business that...?

Mr. McTeague.

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

Mr. Chair, I have suggested a couple of witnesses. I'm not sure, given the circumstance we find ourselves in, having been sort of plunged into legislation, that we should have.... We should actually provide those witnesses an opportunity to appear, perhaps on Tuesday. Beyond that, Mr. Chair, I'm not sure. I can't predict what we're going to be doing next Thursday, which really leaves us only one more meeting before making a decision.

I will obviously have questions of witnesses. I actually have a few more here, but I can discuss that privately with them. Perhaps we should determine through the clerk whether there is a possibility of other witnesses being here, and whether they can be here on Tuesday, first of all. It's my understanding that we haven't sent out the invitations yet. Or if we have, they were just sent out this morning.

[The Chair, Conservative, David Sweet]

They haven't been sent out yet. We haven't invited anybody yet.

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

Mr. Chair, I would suggest that, at your discretion, if we have no witnesses, we have no meeting. So we have two options. Either we go to clause-by-clause on Tuesday or we wait to hear from witnesses, which could carry us into Thursday, if indeed there is a meeting.

[The Chair, Conservative, David Sweet]

Mr. Lake and then Mr. Bouchard.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I guess we have a couple of alternatives here.

I think we need to hear from witnesses on the issue. Potentially if we have trouble getting witnesses for Tuesday, probably the prudent thing to do would be to wait until we come back. To hear from witnesses on Thursday just before we leave, when we may or may not be having a meeting--we don't know what the schedule is going to look like--and then to have a six-month, or I mean a six-week break before--

[Serge Cardin, Bloc, Sherbrooke, QC]

It might be six months.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Hopefully it's not six months. You guys can't bring us down while we're gone.

Mr. Chair, maybe we want to consider actually holding off and having the witnesses when we come back, since they haven't been invited yet and we don't know which witnesses are going to be able to come on Tuesday. It might make more sense to actually have our witness meetings together when we come back and go immediately into clause-by-clause rather than having the break. I'm just throwing that out there as a possibility.