House of Commons Hansard #143 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was conservative.

Topics

Competition Act
Private Members' Business

5:55 p.m.

Liberal

The Speaker Peter Milliken

There being no motions at report stage, the House will now proceed, without debate, to the putting of the question on the motion to concur in the bill at report stage.

Competition Act
Private Members' Business

5:55 p.m.

Bloc

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.

Competition Act
Private Members' Business

5:55 p.m.

Liberal

The Speaker Peter Milliken

Is it the pleasure of the House to adopt the motion?

Competition Act
Private Members' Business

5:55 p.m.

Some hon. members

Agreed.

Competition Act
Private Members' Business

5:55 p.m.

An hon. member

On division.

Competition Act
Private Members' Business

5:55 p.m.

Liberal

The Speaker Peter Milliken

(Motion agreed to)

Competition Act
Private Members' Business

5:55 p.m.

Liberal

The Speaker Peter Milliken

When shall the bill be read the third time? By leave now?

Competition Act
Private Members' Business

5:55 p.m.

Some hon. members

Agreed.

Competition Act
Private Members' Business

5:55 p.m.

Bloc

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.

Competition Act
Private Members' Business

6:15 p.m.

NDP

Carol Hughes Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, I appreciated my colleague's speech. I can say that in my riding, the price of gas is unbelievable. It is often as high as $1.30 and sometimes higher. Whether in Wawa or Kapuskasing, everyone is very worried about gas prices. The fact is, in northern communities, we do not have much choice. We have to drive to our doctor's appointments and to work because everything is far away.

I support the member's bill. Perhaps he could expand on the fact that we really need to ensure that the Competition Bureau has the power to investigate. I think that is a very good idea. We have been asking the Liberals and the Conservatives to take concrete action on this for some time now, but nothing has been done.

Competition Act
Private Members' Business

6:15 p.m.

Bloc

Robert Vincent Shefford, QC

Mr. Speaker, I thank the hon. member. She is quite right. How can anyone convince themselves that gas prices should be so high, when we already know that whenever there is even speculation about the per barrel price of crude oil going up, the price at the pump increases? While the gas in the cisterns was purchased at a lower price, as soon as there is speculation about an increase, the price at the pump goes up.

If oil companies want to operate like that, they should do so both ways. When the cost of a barrel of crude oil drops, the price at the pump should also go down that very day, that very hour, that very minute. But that is not what happens. They use up their stock. Even the oil companies, refineries that have cisterns with millions of gallons of gas, sell it at a price that is much too high, based solely on speculation. That is terrible. I do not understand this.

Competition Act
Private Members' Business

6:15 p.m.

Bloc

Luc Desnoyers Rivière-des-Mille-Îles, QC

Mr. Speaker, I would like to commend my colleague from Shefford on his excellent speech. As you know, this is the subject of the hour. As my colleague said, it is an urgent matter. Who pays the price? It is the workers who go to work every day and who buy groceries to feed themselves. I still call these basic or minimum needs.

Unfortunately, today, we are spending more money on gas than we are on rent, food, hospital visits, etc. This is an urgent situation; it is having a major impact. When they go to the pump in the morning, workers and everyone else are complaining about the price of gas. Unfortunately, it is only the government that does not hear these cries for help, in fact, it stopped hearing them a long time ago. I am aware that the Liberals, just like the Conservatives, also ignored these cries for help.

However, today, we have to do something. If we do not, the prices will skyrocket and it is the workers, those who cannot even manage to negotiate reasonable salary increases, who will suffer as they are forced to cope with increased gas prices.

I would therefore like my colleague to tell us about the impact this will have on workers.

Competition Act
Private Members' Business

6:15 p.m.

Bloc

Robert Vincent Shefford, QC

Mr. Speaker, we are already seeing in the papers how the price of groceries is going to increase because of transportation costs. The price of all goods and services will increase because of the cost of transportation. It seems that these people are trying to play mind games with us by telling us that, at a given moment, gas will reach a certain price and the price of everything will go up. However, the price of everything cannot go up; we still have to be able to pay for things.

The Conservative government is opposed to this bill, but I can tell you that it will be among the first to pay too much. Given its fleet of cars, trucks and other equipment that use gas, it will pay the price. And I can tell you that it will cost several million dollars.

Competition Act
Private Members' Business

March 10th, 2011 / 6:15 p.m.

Conservative

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.

Competition Act
Private Members' Business

6:25 p.m.

Liberal

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—