Debates of May 12th, 2010

Robert Vincent Shefford, QC

Madam Speaker, I want to thank my colleague.

That is precisely what we want to do. I think that the people of Quebec and Canada shake their heads when they go to the pump to fill their gas tank and see the price of gas. There are people who earn minimum wage and when they put $60 of gas in their tank that is a third of their weekly pay. It is wrong. At some point someone needs to sit down and figure out why the oil companies are acting this way.

I mentioned this in my speech. The oil companies often keep gas in Canada and transfer it when there is a shortage in the U.S. in order to jack up the price. This then has an impact on the price in Montreal, but the prices are supposedly set here. That is how it works and we have to do something about it.

Mike Lake Parliamentary Secretary to the Minister of Industry

Madam Speaker, I rise today to speak to Bill C-452.

The bill would give Canada's Commissioner of Competition the power to launch broad based studies of market conditions in entire industry sectors¸

Competition in our economy is of enormous importance to both consumers and their employers. The Government of Canada has recognized that fact by taking significant steps over the past two years to modernize Canada's competition regime and to align it more closely with the competition laws of our country's major trading partners.

It is important to ensure that consumers and legitimate businesses do not fall prey to illegal activity and that if they do they have the confidence that the law will be enforced effectively and that penalties are tough enough to deter future illegal activity.

Important amendments to the Competition Act became law on March 13, 2009. The amendments will help to further increase the predictability, efficiency and effectiveness of the enforcement and administration of the act for businesses and for the Competition Bureau. In turn, this will better protect all Canadians from the harm caused by anti-competitive conduct.

These amendments came about through key recommendations made by the Competition Policy Review Panel which was formed in July 2007 with a mandate to review Canada's competition and foreign investment policies and to provide recommendations to the federal government on how to make Canada more globally competitive.

The panel spent a year reviewing Canada's competition and investment policies. Its report, “Compete to Win”, concluded that in order to prosper, Canada must adopt a more globally competitive mindset. The report concluded that intensifying competition will build a stronger economy, better products at lower prices, more jobs and higher earnings, stronger firms and greater prosperity.

The recommendations made by the panel formed a key part of Canada's economic action plan and provided the basis for the amendments to the Competition Act that were introduced in budget 2009 and passed as part of Bill C-10.

The main elements of the amendments were as follows: creating a more effective mechanism for the criminal prosecution of the most egregious forms of cartel agreements between or among competitors and introducing a non-criminal review process for other forms of competitor collaborations; allowing the Competition Tribunal to award administrative monetary penalties against companies that have abused a dominant position in the marketplace; introducing a two-stage merger review process to allow for a more efficient and effective review of proposed merger transactions; increasing penalties for deceptive marketing practices; expressly empowering the courts to award restitution to victims of false or misleading representations; and finally, repealing criminal sanctions for certain pricing practices to ensure that creative pro-competitive initiatives are encouraged.

These amendments ensure that we have the tools to better protect consumers and businesses from the most flagrant types of anti-competitive conduct, while being ever mindful of the importance of not discouraging pro-competitive behaviour in the market.

I raise the government's actions in this regard because of their importance with regard to the issue we are considering today. As I have described, as part of the amendments resulting from the passage of Bill C-10, new criminal cartel and civil agreements provisions came into force on March 12, 2010. These provisions were delayed for one year to give companies an opportunity to verify that their existing or proposed agreements and arrangements did not violate the new civil and criminal provisions. During this time, companies were able to apply to the bureau at no cost for an advisory opinion as to how the bureau would view a pre-existing agreement under the new provisions.

Under the previous cartel provisions of the act, it was extremely difficult to secure a conviction. The Crown needed to prove that an anti-competitive agreement resulted in substantial harm to competition and to prove that element to the criminal standard of beyond a reason doubt.

These hurdles faced by the bureau were out of step with our major trading partners and harmed Canada's international credibility. The provision had not changed significantly in almost 120 years. The Competition Policy Review Panel recommended that this outdated law be changed and this government acted.

We introduced a two-track approach to address agreements among competitors so that the bureau can crack down on harmful conspiracies and pro-competitive agreements and joint ventures can proceed expeditiously.

Price-fixing is a criminal activity that deprives Canadians of the benefits of a competitive market, such as lower prices and choice. The new cartel provision will provide the commissioner with even stronger tools to challenge this type of anti-competitive practice.

At the same time, a new civil provision has been introduced that allows firms to combine capabilities and resources in order to lower their costs of production, enhance product quality and reduce the time required to bring new products to market, all without any fear of a criminal investigation, and this is as it should be, of course.

These collaborations may be reviewed civilly where they are likely to lead to a substantial lessening or prevention of competition. In such circumstances, the Competition Tribunal may prohibit collaboration, but that is all it can do.

Bill C-452 proposes to amend the Competition Act to authorize the Commissioner of Competition to inquire into an entire industry sector. The commissioner currently has considerable powers in her enforcement role to investigate the state of competition in the marketplace and these powers are appropriately tied to whether the Competition Act is being violated. Importantly, the commissioner investigates the behaviour of businesses and individuals where there is evidence that they may have broken Canada's competition laws.

It is clear that the issues the House must consider when debating this bill are far-reaching and very complex. I want to take this opportunity to thank the hon. member for his efforts to date and the introduction of this bill. I understand that he has noble intentions regarding this matter. However, I wish to remind him of the public and private costs associated with assigning new powers to the commissioner.

We must also recognize the very significant new powers that this government has recently provided the commissioner in order to investigate and deter the types of activities that lie at the heart of this bill. These tools are targeted directly at the types of practices that lie at the heart of the hon. member's concerns and, therefore, will be far more effective than those proposed in the current bill.

The Competition Policy Review Panel argues forcefully that it is vigorous competition that spurs a cycle of innovation, boosts efficiency and adaptability, and raises productivity. The recent changes to the Competition Act are evidence that this government will continue to take the right steps to strengthen Canada's economy and create sustainable employment. It is against this backdrop that the proposal outlined in Bill C-452 should be thoroughly reviewed.

Marc Garneau Westmount—Ville-Marie, QC

Madam Speaker, I rise today to speak to Bill C-452, legislation designed to protect Canadian consumers. Competition in Canadian industry is essential to the health of the Canadian economy. It encourages firms to develop new products and provides consumers with improved products and a variety of choices.

The Liberal Party believes in both healthy competition in the Canadian marketplace and consumer protection. We, as members of Parliament, must support legislation that encourages healthy competition within Canadian industries while offering solid protection to consumers.

Currently, Canada's Competition Act regulates trade and commerce in respect of conspiracies, trade practices and mergers affecting competition. The purpose of the act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy and in order to provide consumers with competitive prices and product choices.

The purpose of Bill C-452 introduced by my colleague from the Bloc is to ensure that the Competition Act applies to a specific case, in other words, to an entire industry sector.

My party is prepared to support this bill in the interest of competition and in order to clearly identify a case where the Competition Act must apply.

Some people may argue that existing legislation already covers this particular case. But let us be certain that this particular case proposed in Bill C-452 is covered and let us include it explicitly in the legislation with as few conditions and extra restrictions as possible. Let us get rid of any ambiguity.

I want to explain the specific situation being addressed in this bill. As the legislation currently dictates, the Commissioner of Competition is responsible for administering and enforcing the Competition Act. He or she has the authority to launch an inquiry into individual and specific cases where there may be a violation of the Competition Act. This should include the authority to independently initiate an inquiry into an entire industry.

Currently, the Competition Bureau must receive instructions from the minister or conduct an inquiry in response to a complaint filed by a company, consumer or legal entity. This means that Canadians are left unprotected if an official complaint is not made or the minister does not issue instructions. As a result, Canadian consumers could be subjected to unfair dealings, and this could conceivably be occurring at the level of an entire industrial sector.

Bill C-452 would provide the Commissioner of the Competition Bureau with the mandate to launch an inquiry into an entire industry if he or she deems it necessary to do so. Support for this bill would ensure that the Competition Bureau is provided with the necessary authority to take action against companies or individuals that attempt to take advantage of Canadian consumers.

The bill would strengthen the Competition Act, giving the government the right to initiate investigations when there are sufficient grounds to investigate possible collusion, price-fixing or anti-competitive behaviour in an entire industry sector.

We as legislators promised to protect the rights of consumers. I encourage my colleagues to join me in supporting Bill C-452 so we can accomplish just that.

I would like to take a moment to discuss the practical application of Bill C-452.

As I brought to the House's attention on Monday, gasoline pricing has been at the top of the minds of Canadians for many years. As we all know, and as my colleague from the Bloc pointed out, there have been allegations as well as proven cases of price-fixing at the pumps. This unjust manipulation takes advantage of consumers and threatens healthy competition.

Having spoken of one industry, this is not the only industry that this bill addresses. This bill is focused on any industry as a whole that provides a service or a product to the consumer. The current government promised to remedy this issue but we have not yet seen anything of substance presented by the government. It appears as though the Canadian government has largely forgotten about Canadians' concerns over gas pricing.

With the support of my colleagues, Bill C-452 would empower the Commissioner of Competition to initiate investigations that relate to this debacle and take action to ensure that these types of schemes do have consequences.

The amendment to the Competition Act may appear minor at first reading but the changes would ensure healthy competition in Canadian industry, including within the gasoline industry, a change which all hon. members can applaud.

I will close by reiterating that my party is prepared to support this bill in the interest of consumers. This bill should put us on the right track. We must debate it in committee to ensure that the Competition Act is clear on the issue of inquiries by the commissioner. We want to clearly identify the fact that an entire industry sector could be subject to an inquiry by the commissioner.

Finally, we must look at another important tool when we talk about the Competition Act. I am talking about the resources available to the commissioner to carry out his task unhindered. There is no use in conferring powers if the means to use them are not there. Let us take this opportunity with this bill to ensure that commissioner is given the necessary resources to do the job. We could then be sure that the Competition Act is an effective consumer protection tool.

Brian Masse Windsor West, ON

Madam Speaker, I am pleased to speak to Bill C-452. The New Democratic Party will be supporting this initiative. The member should be commended for bringing this issue forward. There are those who argue that the Competition Bureau does have sufficient powers right now and does not need additional resources, but I am of a different opinion. There are a number of different products and services out there with which I will deal.

I think competition is not entirely happening the way that it should. It should be noted that the debate that will continue at committee will be very important as part of a process to review a series of sectors and I hope we can get experts and witnesses to come forward.

The sponsor of the bill made reference to the oil and gas industry in the previous debate on a government bill and mentioned the lack of competition in the oil and gas sector. There is almost a collusive element. I noted in particular the Petro-Canada situation where instead of investing in Petro-Canada refineries in Burlington, it shut down the plant and now imports gasoline from Esso and sells it in Petro-Canada stations across Ontario. So there does not necessarily have to be price fixing, but there will not be very much in variables involved with regard to trying to move into a more competitive situation.

It has always been the case, as we look at the oil and gas sector, where there is a lack of refinery capacity, vertical integration with the industry, a series of different elements that lead to basically a formula that is a recipe for disaster for Canadians and their pocketbooks. It was interesting when the government lowered the GST with regard to oil and gas, and the cost that the companies now actually get back, it was not passed on to the consumers. The prices and profits have risen significantly and not even one single organization or company took advantage of the opportunity of the 2¢ reduction to pass it on to consumers. They took it and put in their own pockets.

Because the government had no accountability whatsoever in terms of monitoring the process, or no interest whatsoever, we have lost hundreds of millions of dollars out of the coffers of this country every single year that could have gone to different things whether it be health care, or whether it be more money to the Competition Bureau to be able to examine anti-competitive practices. A whole series of things that could have been addressed are now gone, and the companies now have record profits and record tax cuts from the government which are windfalls they have enjoyed.

It is only fair that we actually 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.

We are seeing that now at committee where there are a couple of current issues that are very important. We have the entrance of new players into the Canadian market with regard to telecom and that means more communication devices, cellphones, BlackBerrys and wireless service provisions that are being expanded in Canada. There are those who feel there is no competition in that sector and relatively similar price elements make it very difficult for consumers to get a better benefit. They have also been receiving record profits and are quite lucrative. Almost all the groups and organizations of the big telecommunication companies have done well.

There are three new entrants coming into the market, so there is no question that this is timely to look at whether or not the Competition Bureau is going to be sufficient to have the independence to examine cases, have the resources to do so, and have the tools to be able to make decisions that are going to increase the competitive nature of businesses in Canada, those that are regulated and those that are non-regulated.

Another issue raised often with regard to this issue is credit cards. New Democrats have been calling for a number of credit card reforms. My good colleague from Sudbury has been pushing this issue and the Minister of Finance is basically moving for 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.

Once again, that is an area where we want 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 a collusion, where there are brown envelopes changing hands and information being wired back and forth to predetermine the actual cost of items and passing them on to the consumer. There just has to be basically a general acknowledgement that they are going to stay in a certain field of play and compete in that field of play. That is not real competition.

For a few years, we used to carry out inquiries into the insurance industry as well and about the issues there. We just have to talk to people about auto insurance and a series of things, and they often find that there is not enough healthy competition or they cannot get certain services whatsoever. I know that some people are outright denied or have to pay really high fees. There are maybe only one or two companies that will provide that demographic, so the fees are through the roof with regard to costs and they really do not get into a competitive market because certain groups of people are written off altogether by these companies.

The Competition Bureau would be well-equipped to look into that because if people cannot even get quotes on insurance, they are stuck with very few recourses of action. We can just talk to young people about what they are paying for auto insurance. They in particular are scammed because I have not seen the evidence that warrants that type of behaviour.

The other issue I have been working on regarding competition is the issue with Toyota. Toyota is a company that is under criminal investigation in Japan, the United States and Europe. Yet here, the government has not even done anything, aside from having two meetings at the transport committee, which we forced the government to do.

The issue behind that is not just in regard to the safety of the vehicles. It is also an issue of competition. Did Toyota know about problems with its vehicles and choose not to fix them, to gain market share at the expense of other manufacturers? It does not matter if one makes a curling iron or a car, if one knows that the device has a problem and chooses to neglect and not fix that to gain market share, it becomes a competition issue because it runs other companies under.

I am very proud of negotiating a change in public policy here, with the Liberals at that time, a number of years ago. It used to be law in Canada that if a business was given an environmental fine or penalty, it could claim that as a business tax deduction. I viewed that as an environmental issue, health and public safety issue, but also a competition issue, and here is why.

We had a drug company, for example, which had a $10 million fine. To explain this clearly, this company was charged with something. It went to court. It was fined $14 million and at tax time, it actually got $10 million back as a business-related expense. If a company polluted the lakes, oceans and streams, and it got caught and was fined, whether it be millions of dollars or hundreds of thousands of dollars, it could claim it as a business tax deduction and get money back on that.

What was important about this change, and why I am proud of negotiating the end to it, was that the good companies were getting punished just as much as any others. They were following the law and doing the right things and they had to compete against those that were actually abusing people and the environment, and that is not right.

I welcome the member's bill here today and look forward to having the discussion at committee. I think it will be a helpful discussion at a very important time, when many products and services need to be looked at under a competitive regime.

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.

Dean Allison Niagara West—Glanbrook, ON

Madam Speaker, I welcome this opportunity to take part in the second reading debate regarding Bill C-452, An Act to amend the Competition Act (inquiry into industry sector).

I would like to take a moment to frame my thoughts on this bill within the broader context of the government's plan for Canada's continuing economic recovery.

As we made clear in the Speech from the Throne, this government's goal, as we move forward into our recovery, is to ensure all Canadians benefit from our agenda of providing jobs and growth.

Over the last year, our government has taken decisive steps to protect incomes, create jobs, ease credit markets and help workers and communities get back on their feet.

Moving forward, our strategy for the economy is to create the conditions for continued success in the industries that are the foundation for Canada's prosperity. Our government is committed to identifying and removing unnecessary job-killing regulation and barriers to growth. This government stands for free and open markets. Open and competitive markets are the best way to promote new dynamic, innovative products and ideas.

Having set out this broader perspective on the government's priorities, allow me now to the turn to the details of the bill.

On its face, the bill appears to be quite straightforward. It proposes a single amendment to the Competition Act. If adopted, it would provide the Commissioner of Competition with additional power to commence a formal inquiry under the act.

To be clear, the act already allows the commissioner to start a formal inquiry into the conduct of a company, or companies, whenever she has reasonable grounds to believe that the act has, in some way, been violated. The amendment being proposed now would add to that authority. It would allow the commissioner to start an inquiry into an entire industry sector at large.

There is an important distinction between what exists today and what is being proposed.

Under Bill C-452, there would be no requirement to show any evidence that the enforcement provisions of the act might, in some way, have been contravened.

It is important to understand the consequences of such a change. The commencement of a formal inquiry is a serious step in the investigative process. Once at the stage of inquiry, the commissioner is able to apply to the courts for permission to use the investigative powers of the Competition Act to subpoena oral and written evidence from any party who may have relevant information regarding the matter under investigation. This is reasonable power for the commissioner when she is examining business practices that she has a basis for believing violate the enforcement sections of the act.

The commissioner must have access to modern and sophisticated investment tools to allow her to determine, in an unbiased fashion, whether the law has been violated.

At the same time, this is an authority that imposes both considerable and complicated obligations for those under investigation and significant public and private costs to ensure the obligations are met. Failure to comply raises the risk of being found in contempt and the possibility of fines and imprisonment.

The position of the Commissioner of Competition demands the exercise of prudence and good judgment. I have every confidence that the Commissioner of Competition does, and will continue to, exercise her authorities with the utmost care and responsibility.

However, the Office of the Commissioner requires direction. The introduction of this type of power proposed by the bill would put at risk the reputation of the commissioner and the staff she directs. The authority to inquire into an entire industry sector without any evidence of wrongdoing would open the commissioner to criticism that she is engaging in a costly fishing expedition.

We must also remember that the commencement of a formal inquiry and the commissioner's use of her formal powers come at a cost to her office. Her primary responsibilities are the enforcement provisions of the Competition Act. Any inquiry into an entire industry sector would demand extensive use of limited bureau resources. Without additional funding, the commissioner would need to reallocate assets from her other priorities.

It is imperative that Parliament consider the burdens we would impose on the commissioner when we amend the legislation and establish her enforcement priorities, and the cost to Canadian businesses and consumers if we distract from that principled focus.

As I noted at the outset of my comments, this government is committed to improving job opportunities for Canadians and growing our economy. We are committed to finding and eliminating unnecessary job-killing regulation and barriers to growth. We are not here to introduce measures that would result in new barriers to growth and prosperity.

As we consider this bill, we must also remember the steps that this government and this Parliament have already taken to address the issues that lie at the heart of this bill.

With the passage of Bill C-10, the Budget Implementation Act, 2009, in March 2009, this government introduced the most substantial amendments to Canada's anti-cartel laws in more than 100 years. These changes introduced an outright prohibition on agreements between competitors regarding prices, output levels and market sharing.

The Acting Speaker Denise Savoie

Order. The hon. member will have five minutes when this debate continues.

The time provided for the consideration of private members' business has now expired and the bill is dropped to the bottom of the order of precedence on the order paper.

Pursuant to order made on Friday, May 7, the House in committee of the whole will now proceed to the consideration of Motion No. 4 under Government Business.

I do now leave the Chair for the House to go into committee of the whole.

The Deputy Chair Denise Savoie

Before we begin this debate tonight, I would like to remind hon. members of how the proceedings will unfold. Each member speaking will be allotted 10 minutes for debate, followed by 10 minutes for questions and comments. The debate will end after four hours or when no member rises to speak. Pursuant to the order adopted earlier, the Chair will receive no dilatory motions, no quorum calls and no requests for unanimous consent.

We will now begin the take note debate.

The Minister of Fisheries and Oceans.

Gail Shea Minister of Fisheries and Oceans

Madam Chair, I stand today to talk about the importance of the shellfish industries on our east coast and to discuss some of the challenges we face in these important fisheries. My hope is this evening's take note debate can be a valuable and constructive discussion of those serious issues.

I can tell hon. members that I have a very deep understanding of the importance of these fisheries to our communities, because my own hometown, like many others, relies heavily on shellfish. For better or for worse, I am never very far from talk about shellfish. I have also devoted a great deal of my time as fisheries minister to working on many levels to address some of the difficulties facing these vital industries.

To first put this in perspective, shellfish fisheries make up 85% of the total value of all landings in Atlantic Canada. In 2009 this represented $1.4 billion flowing into communities across five provinces, providing thousands of employment opportunities in fishing and processing sectors.

The largest of the shellfish fisheries is of course lobster. There are 41 lobster fishing areas on the east coast and most of the harvest occurs close to shore, usually within 15 kilometres. There is also an offshore fishery that harvests in the deep basins and outer banks off southwestern Nova Scotia, about 90 kilometres from shore. The harvesting sector is made up of approximately 10,000 licensed harvesters, with each participant restricted to fishing in a specific lobster fishing area, which is generally next to the participant's home port.

The lobster fishery has one of the longest histories of fisheries regulations in Canada. Many of the management measures in place today date back over a century. The inshore lobster fishery is managed by effort control. This means limits are set on the number of licences, length of fishing seasons and number of fishing days and traps. Conservation measures involving minimum size limits and the production of egg-bearing females are used. Lobster fishing seasons are designated for each area and they are staggered to protect summer moults. Output control, such as total allowable catch, is used for the offshore fishery. This fishery is open year round and its total allowable catch has remained unchanged since it was established.

Lobster is Canada's most valuable seafood export and our primary export market is the United States. However, more than 59 countries from all corners of the globe enjoy lobster harvested in Canadian waters. Given the industry is highly reliant on foreign markets, it was greatly affected by last year's global economic downturn. I am proud to say that our government was there to help our lobster fishermen during these difficult times. We invested $10 million last year in marketing support for the industry, $8.5 million in short-term support and an additional $50 million in long-term support, designed to restructure the fishery for future sustainability.

The second most valuable shellfish is crab, specifically snow crab. Canada is the world's largest producer of snow crab, accounting for about two-thirds of the global supply. In 2009 almost 80% of all snow crab exports from Canada went to the United States. China and Japan are also major markets.

There are 32 crab fishing areas in Canada spanning four geographic regions: the northern Gulf of St. Lawrence, the southern Gulf of St. Lawrence, east and southwest Nova Scotia, and Newfoundland and Labrador. There are just over 4,000 licence holders across these regions. The annual crab harvest is managed on the basis of total allowable catches that are established through the development of an integrated fisheries management plan for each of the four geographic areas. Licence holders are allocated a specific tonnage of crab and a maximum number of traps.

Snow crab stocks are naturally variable and cyclical. Regardless of fishing activity, crab populations have periods of abundance followed by periods of decline.

As most here will know, our snow crab fishery in the southern gulf is currently at the bottom of its natural cycle and, for conservation purposes, reductions in the total allowable catch needed to be made this year. This is never an easy decision for a fisheries minister to make, but it was necessary to ensure the stock remains healthy into the future.

I have also instructed my department to provide as much flexibility as possible this year to help reduce costs to harvesters by allowing them to combine their operations for the season.

My department's science has advised that the outlook for this stock in 2012 is positive if we use caution in the meantime. Therefore, I remain hopeful this stock will continue to play an important role for the Atlantic Canadian economy in the future.

The species that has experienced the biggest growth in the past decade, particularly off the coast of Newfoundland and Labrador, is the shrimp fishery. East coast shrimp was also the first Canadian fishery to attain eco-certification by the Marine Stewardship Council as being sustainable. We are very proud of this development because eco-certification will be both an important challenge and an opportunity for our fisheries in the future.

Canada is the world's largest supplier of cold water shrimp. The cooked and peeled product, also known as shell-off, is a very valuable export for Canada. It is marketed primarily to Denmark, Japan, the Russian Federation and the United Kingdom, with major markets also in the United States and Europe. Offshore frozen at sea products are sold primarily to Russian and Asian markets. Combined, the export value for shrimp in 2009 was almost $330 million.

The final fishery that contributes significantly to the overall value of landings in shellfish is scallop. Although scallops are found in adjacent waters in most provinces, the most important fishery takes place offshore, although still within Canada's 200 mile limit. The offshore scallop fishery is managed through the use of geographical zones ranging from St. Pierre Bank off Newfoundland to Georges Bank off southwest Nova Scotia. The primary markets for sea scallops are the United States and several members of the European Union, with an export value of close to $100 million.

I am also pleased to announce that on March 25, 2010 the eastern Canada offshore sea scallop fishery received Marine Stewardship Council certification. This is the first scallop fishery in North America to receive this eco-certification and put this fishery on very solid ground to compete in the international market. Access to international markets is essential to Canada's fish and seafood industry, as 85% of its production is exported.

In 2010 the European Union introduced a new regulation which requires exporting countries to provide catch certificates attesting that marine fish and seafood products are legally harvested. That is why the government provided $7.2 million over two years in budget 2010 to support the DFO Catch Certification Office. This office will certify that Canadian seafood exports are legally harvested, ensuring that the Canadian fish and seafood industry maintains access to our second largest export destination.

From this brief description of these fisheries, I am sure members can appreciate the important role they play in communities on our eastern shores.

As I have briefly outlined, these industries are highly valuable, yet face challenges brought about by international market fluctuations, changing market demands, and natural changes in biomass cycles.

I look forward to tonight's debate and to a healthy and frank discussion on these important industries.

Lawrence MacAulay Cardigan, PE

Madam Chair, I certainly sympathize with the minister but it is unfortunate that again the government has put us in a situation that is devastating to a fishery on the east coast of Canada. People spend hundreds of thousands of dollars to get into this industry and to have the likes of this happen is disgraceful.

There has been a 63% drop in the total allowable catch. There has been a total mismanagement of the fishery. A boat can catch 27,000 pounds, down from 58,000 pounds. The snow crab draw is important for the inshore fishery in Atlantic Canada. The lobster fishery that is having such great difficulty is down to 28 allotments. How unfortunate it is. This is another slap in the face for the inshore fishery in eastern Canada.

What is the minister going to do for the people involved in the fishery? What is the government going to do for the people working in the plants, the people who depend on the snow crab fishery for employment? How are these people going to make a living? What programs is the government going to put in place so that these people can have a decent life?

I also would like the minister to explain how the people involved in the snow crab fishery, who have spent such large sums of money, can survive today with the likes of this total mismanagement and such a devastating slap in the face to their economy.

Gail Shea Egmont, PE

Madam Chair, I will tell the House what would be a slap in the face to the industry. It would be mismanagement enough to allow overfishing and actually fishing out the resource.

What we are doing is protecting the future for the fishermen's children and grandchildren.

As I said, this was not a decision that was taken lightly, but I can say that these decisions are based on science. If we look back to what happened to the cod fishery in Newfoundland, we should have been making more decisions based on science. We cannot just look after today.

I know that this is causing a lot havoc for a lot of people and they are trying to cope.

I can tell the hon. member that last October the federal government transferred labour market agreement and labour market development agreement funds to the province and it has the flexibility to assist the people who are currently out of work.

There is not a big crab processing sector on Prince Edward Island, but some people no doubt will be affected. We have talked to many of the financial institutions. In a lot of cases, provinces are financing enterprises and they have been flexible in their repayment terms because they realize that people are seeing some hard times in this fishery sector.

Raynald Blais Gaspésie—Îles-de-la-Madeleine, QC

Madam Chair, I can see that the minister cares and that she is sincere. But this is a case of once bitten, twice shy. There was a program to support the lobster fishery, but the money spent added up to barely 60% of the expected amount. Either the criteria or the planning fell short, or both.

The crab fishery is in crisis, and that is affecting fishers, their helpers, factory workers and communities. Let us not forget that the quota was cut by 63%. That percentage applies to Quebec's economy and all affected maritime provinces. I had an opportunity to ask several questions about that. The answers that I have received to date suggest that there is no government assistance plan. This is happening now. It started several days ago—several weeks even. It is almost over. Plant workers are in danger of losing their jobs over the next few days, perhaps this weekend.

How does the government plan to help the helpers and plant workers who are feeling the effects of this crisis? I have not heard the federal government say anything about a plan to help these people.