David Pratt

[Petitions, June 11th, 1999]

Mr. Speaker, it is my honour and privilege to present a petition for 50 of my constituents from Nepean—Carleton dealing with the concept of marriage as a voluntary union between a single male and a single female.

[Tiananmen Square, June 4th, 1999]

Mr. Speaker, 10 years ago television cameras revealed to the world horrific scenes of the brutal suppression of civil and political rights on Beijing's Tiananmen Square.

In the early hours of June 4, 1989 the tanks and soldiers were sent into the square by Chinese leader Deng Xiaoping to end a pro-democracy student protest. The protest had lasted seven weeks. Martial law had been declared on May 19 by Chinese Premier Li Peng and the troops began to arrive in the centre of the city on June 3.

Reports indicate that the first soldiers arrived in the square at 12.50 a.m. on the morning of June 4. By 4.00 a.m. the troops had crushed the protest in a bloody massacre.

We will never know how many people died that night. Estimates, however, put the number into the thousands. Remarkably, unbelievably, the government of the People's Republic of China stated that the massacre never happened.

We must resist any attempt to rewrite the history of Tiananmen Square and we must never allow the memory of those who died in the quest for democracy to be forgotten.

[Lord Strathcona Horse, May 28th, 1999]

Mr. Speaker, on Monday one of Canada's proudest regiments celebrated its rich history. The Lord Strathcona's Horse (Royal Canadians) marked Strathcona Day, the anniversary of its crossing of the Melfa River during the Italian campaign of 1944.

The western based regiment's illustrious history began during the Boer War under the command of Sam Steele, the famous policeman of the Klondike Gold Rush. In fact, Canada's first Victoria Cross of the Boer War was awarded to Strathcona Sergeant Arthur Richardson.

The regiment served with distinction in the Great War before trading its horses for tanks in the second world war. Their successful crossing of the Melfa River was an important contribution to allied success in Italy.

Now based in Edmonton, the Strathconas have also served in Holland, Korea, the Sinai, Cyprus and Bosnia. The regiment is now deploying to Kosovo where they will once again serve Canada in the international community.

I am sure all members of the House join me in wishing them God speed as they head once again to the Balkans.

[World Telecommunications Day, May 14th, 1999]

Mr. Speaker, Monday, May 17 is the day members of the International Telecommunications Union celebrate World Telecommunications Day.

The theme of this year's World Telecommunications Day is electronic commerce. This theme captures many of the most important challenges facing the ITU as we enter the 21st century.

E-commerce means that the nature of economic activity will change everywhere in the world, not just in the developed countries.

Access to information networks will become as important for investors as raw materials, energy and labour. In the information age, countries that do not have access to information networks will not grow, no matter how rich their natural endowments.

Access to electronic information services will be necessary for consumers and producers to buy and sell products at the most efficient prices. In the coming global competition for goods and services, protected markets will not prosper.

Canada is well positioned to take advantage of the e-commerce challenge. As the Prime Minister said last year, we want to make Canada the most connected nation in the world and a world leader in e-commerce by the year 2000. I know that as a nation we will rise to this challenge.

[Foreign Affairs, May 13th, 1999]

Mr. Speaker, Canadian defence and aerospace companies are very concerned about recent restrictions that have been placed on them by the United States government which could threaten as much as $5 billion of our exports.

Can the Minister of Foreign Affairs advise the House on the current status of this very serious issue and the prospects for an early resolution of the matter?

[Competition Act, May 7th, 1999]

Mr. Speaker, it is my pleasure to speak today to Bill C-393, an act to amend the Competition Act which relates specifically to negative option marketing. I commend the hon. member for Sarnia—Lambton for introducing the legislation once again. It seeks to protect consumers and offer consumers greater choice in the marketplace.

Bill C-393 deals with the business practice known as negative option sales and marketing. The practice is also known as unsolicited marketing and marketing by inertia. Related concepts include the following: bundling, tied selling, automatic renewal contracts and misleading advertising and/or deceptive marketing.

Regardless of the term or concept, this practice is a perversion of the normally accepted rules of contract or sales. The law of contracts insists that a form of offer and acceptance is required to make an agreement binding. It could be argued that negative option marketing, in the absence of independent consent, undermines the fundamental principles necessary for a valid commercial contract.

Negative option marketing involves a consumer receiving a product and a payment request because the consumer failed to say no to the offer. Normally in the context of the rules of contract or sales, an offer is made, acceptance is given, the service is delivered and payment is required.

The framework employed under negative option sales is inverted. An offer is sometimes made, sometimes hidden and sometimes there is no choice at all. The consumer accepts the offer not because the individual necessarily wants the product but because they do not specifically say “No, I do not want this service”.

Why is this practice employed? It is obvious. The assumption that the consumer desires the product is made in the absence of refusal in order to increase revenue. Practitioners of this type of marketing or sales do not seek to meet the demands of the marketplace but create what can be termed as a false demand. This sleight of hand technique violates consumers' right to choice. Moreover approving sales where there is no market is synonymous with forcing sales where there is no demand. It is unreasonable to allow the creation of both market and demand where neither exist.

Bill C-393 would amend the Competition Act to force federally regulated companies to obtain the permission of customers for any new service. Why is it unreasonable to suggest that a consumer has the right to say “I know what is offered. I know the cost. I want what is offered”. It is not unreasonable to expect federally regulated companies to obtain a definite and positive response before supplying and charging for services.

This bill protects a basic consumer right, the right to express consent before purchasing a new product. Negative option marketing or billing relies on implied consent. In other words, by not responding to solicitation the consumer is deemed to have given his or her consent. Rather than foster competition, negative option marketing concentrates market share with the dominant players in a particular sector. Any anti-competitive practice limits choice for consumers and acts contrary to the foundation of the Canadian marketplace.

In today's marketplace consumers are inundated with communication through various mediums. It is unreasonable to sanction the onerous task of requiring consumers to examine the endless amount of communications from customer dealings in search of negative option marketing. Consumer arrangements resulting in new products or services being offered that obligate additional consumer expenditure should require expressed consent.

Several points should be made clear. Bill C-393 applies to federally regulated businesses such as banks, cable and telephone companies. The provinces are free to prohibit negative option marketing within their jurisdictions. Several have already taken steps in this direction. The time has arrived to enact measures at the federal level in order to protect consumers. Bill C-393 provides the appropriate measures.

Bill C-393 also proposes that steps be taken in order for specific negative option programs to be legal. Why? Because the bill recognizes that situations may exist where a consumer would benefit from a negative option billing arrangement. This is supported by a document produced by Industry Canada entitled “Negative Option Marketing: A Discussion Paper” wherein it is stated “Negative option marketing takes many forms and in some circumstances may benefit consumers as well as industry”.

This bill does not seek to impede successful industry in Canada. It does however ensure that consumers are able to make informed decisions and express consent before entering into an agreement with additional charges. Moreover, Bill C-393 recognizes or provides for exemptions in order that specific enterprises remain competitive in their sector of activity while maintaining consumer protection.

The bill in section 128(1.1) states:

The Governor in Council may, by regulation, exempt from the definition of “service” in section 53 any service that, in the opinion of the Governor in Council, should be exempted in order to allow enterprises to which this section applies to remain competitive in their sector of activity, provided that the exemption does not deprive consumers of their right to competitive prices and product choices.

This provision would allow any minister or department to express concern for services under their purview that might be effected. For example, Heritage Canada could propose justification for exemption based on concerns relating to heritage.

Bill C-393 provides for warranted protection of certain services against unfair competition which in turn protects consumers and, as in the example given, possible cultural or heritage issues as well. This provision however does not exclude consumer protection. In fact, it specifies clearly that the exemption must not deprive consumers of their right to competitive prices and product choices.

Recently the Consumers Association of Canada issued a statement with respect to Bill C-393: “It is timely that private member's Bill C-393 is being debated in parliament this week prior to world consumers rights day. World consumers rights day celebrates eight fundamental consumer rights of which the right of choice is paramount. A piece of legislation that bans abusive negative option marketing is a positive step in the promotion of consumers' right to choice”.

In this era of deregulation and government downsizing, it is important that we establish a regulatory framework which is consumer oriented. It is my contention that Bill C-393 addresses the inconsistency between negative option marketing and accepted contract norms. In doing so, this bill protects consumers by offering them a choice of which products they desire while increasing the competitiveness of the marketplace.

[Battle Of The Atlantic, April 30th, 1999]

Mr. Speaker, on May 2, Canadians across the country will pause to commemorate the Battle of the Atlantic.

On September 10, 1939, Canada declared war against Nazi Germany. Within a matter of weeks the Royal Canadian Navy, the Royal Canadian Air Force and the Merchant Navy joined the battle.

The Battle of the Atlantic was the longest and perhaps the most critical battle of the second world war. The liberation of Europe depended on the ability of allied merchant convoys to make their way through a phalanx of German U-boats.

Canada played a pivotal role in the ultimate victory of the Battle of the Atlantic. Thousands of young and inexperienced Canadians went to sea, unprepared but ready to fight, and they fought. They fought with courage and they fought with pride, under horrible conditions and the vagaries of a cruel sea, because they knew that the freedom of our nation was at stake. Over 5,000 Canadians paid the ultimate price and never returned home.

I invite my hon. colleagues and all Canadians to participate in the activities being held this weekend to commemorate the Battle of the Atlantic. It is an opportunity to reflect on the proud heritage of our men and women in uniform and to pay tribute to those who sacrificed—

[Newbridge Networks Corporation, April 29th, 1999]

Mr. Speaker, Newbridge Networks chairman, Terry Matthews, gave a speech recently proposing a tax break on stock options for employees of research and development intensive companies.

Can the Minister of Finance advise the House as to whether or not Mr. Matthews' suggestion is receiving consideration within his department?

[Public Sector Pension Investment Board, April 22nd, 1999]

Mr. Speaker, we have before us Bill C-78, an act to amend the Public Service Superannuation Act, the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act.

The proposed amendments touch the full range of pension operations: benefits, contributions and plan administration. The underlying thrust of all of these proposed amendments is to ensure the long term sustainability of the Canadian public service pension plans.

I propose to direct my remarks today to one particular aspect of these amendments, the proposed changes to employee contribution rates. Before I discuss the proposed changes, I think it is important that I give a brief overview of the existing contribution rate provisions.

A review of the existing legislative provisions will provide a rationale and context for the proposed amendments. Under the existing legislative provisions, employee contributions to the Canada pension plan, CPP, and the public service pension plans are integrated. But what does integrated mean?

The existing integration feature is such that the total contribution rate for an employee is 7.5% of pay composed of both the contributions to the CPP and the public service pension plans. For an employee earning the average wage, the contribution to the public service pension plans would be 7.5% minus the CPP contribution rate, currently at 3.5% of pay, which equals 4% of pay. To the extent that the CPP contribution rates increase, there is an equivalent decline in the public service pension plan contribution rate to preserve the constraint that the maximum pension contribution equals 7.5% of pay.

In the past, with periods of relative stability in contribution rates, this integrated approach has served the public service pension plans well. However, under the integrated contribution rate structure, the increase in CPP contribution rates beginning in 1987 has distorted the distribution of employee contributions going to the CPP and the public service pension plans.

Under the integrated structure, the impact of the increases in CPP rates has been such that for employees earning the average wage, contributions to the public service pension plans have declined from 5.7% of pay in 1986 to 4% of pay in 1999. To reiterate, over the past decade, individual employee contribution rates for the CPP have gone up, while those for the public service pension plans have declined. What are the implications of this shift in the distribution of employee contributions between the CPP and the public service pension plans?

To this point I have discussed only employee contribution rates. The other side of the coin of course is the employer contributions, that is the contribution of the federal government in its role as employer.

Existing legislation for the public service pension plans is such that the employer must ensure that the various accounts for the public service pension plans are credited with an amount equal to the total cost of entitlements accrued by employees in that year.

In other words, the federal government is responsible for the total costs of the plan in a given year, less the employee contributions. As a consequence of the declining employee contribution rates, the federal government, and by extension taxpayers, has had to shoulder an ever increasing share of the cost of employee pension plans.

Let me use the pension plan under the Public Service Superannuation Act as an example. Over the last three decades the financing of that plan has averaged approximately 60% employer funding and 40% employee funding. More recently that distribution has shifted rather dramatically. For 1999 the distribution is approximately 70% employer and 30% employee. Next year in the absence of any changes to the legislation it is projected that the distribution of the financing of the PSSA plan will shift to approximately 75%-25% and by 2003 it will be 80%-20% in favour of the employee.

This ongoing shift in the cost of the pension plan to the employer is not sustainable. It clearly puts the viability of the existing plan at risk unless changes are made. It is our intention to introduce the necessary changes to the contribution rate structure in order to preserve the long term sustainability of the public service pension plans.

With the amendments proposed in Bill C-78, contribution rates for the public service plans and the Canada pension plan will no longer be integrated. In other words, the public service contribution rates will henceforth be set independently and there will be no overall maximum contribution rate. In addition, there will be a two tier contribution rate structure to more directly match contribution rates with the different benefit accruals below and above the average wage as defined by the CPP.

This government recognizes that there will be a financial impact on employees as a result of these changes. In order to facilitate the movement to a long term sustainable pension plan environment, the government is proposing to freeze employee contribution rates to public service pension plans over the period 2000 to 2003 inclusive. Over this period, employee contributions on earnings below the average wage as defined by the CPP will continue at the present 1999 rate of 4%. Contributions on earnings above that average will continue at the present rate of 7.5%.

It must be understood however, that even though federal employees will thus be spared any increases in contribution rates for their public service pensions from 2000 through to 2003, they will nevertheless be subject to Canada pension plan rate increases scheduled for that period, the same CPP rate increases to which all working Canadians alike will be subject. Through integration of contributions, federal employees in effect have been sheltered from such increases in the past. Now they will have to pay for them like the rest of us.

Fortunately the CPP rate is scheduled to stabilize in the year 2004. What of the public service rates then? Will they rise in 2004 after being frozen for four years? Possibly, but not necessarily.

For the year 2004 and beyond, Treasury Board will set the contribution rate structure with the ability to return the cost sharing ratio gradually to the historical average of approximately 60%-40% between the employer and employees. The employer would continue to assume the larger share.

Employee contribution rate increases may or may not be necessary from 2004 on, depending on a number of variables. However, any necessary increases would be gradual. For example, the members of the pension plan under the Public Service Superannuation Act can rest assured that no increase in their public service pension contribution rate will be greater than an additional .4%, not 4%, but .4% in any single year after 2003.

If an increase proves necessary in 2004, the contribution rate will still not be more than 4.4% of salary up to the average wage and 7.9% of the employee's salary over that average, that is, the previous rate of 7.5% plus the maximum possible increase of .4%.

PSSA plan members can also rest assured under the amended legislation that their employee share of current service cost for their pension plan will never exceed 40%. In other words, their contribution rates will not be increased beyond the point where they are paying their historical average cost of 40%. The historical average therefore will also be a limit under the amended legislation.

As for members of the other two public service plans, that is those under the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act, the legislation will provide that their contribution rates will not exceed those of PSSA members.

Amendments to the contribution rate structure are one component of the package of changes required to ensure the long term sustainability of public service pension plans. This bill provides as part of a comprehensive package of amendments the required changes in the contribution rate structure to ensure that the public service pension plans will be sustainable over the longer term.

[Canadian Forces, April 16th, 1999]

Mr. Speaker, the defence committee commented extensively in its quality of life report about the need to help injured and retired Canadian forces personnel.

Could the parliamentary secretary to the minister tell the House about any new initiatives to assist injured and retired Canadians forces members?