Bill C-454 (Historical)

An Act to amend the Competition Act and to make consequential amendments to other Acts

This enactment amends the Competition Act to authorize the Commissioner of Competition to inquire into an entire industry sector. It also provides for the imposition of an administrative monetary penalty in respect of cases of abuse of dominant position, and for an increase in the amount of administrative monetary penalties in respect of deceptive marketing cases. It repeals all provisions dealing specifically with the airline industry and criminal provisions dealing with price discrimination, predatory pricing, discriminatory promotional allowances and geographic price discrimination. The enactment also provides that the court may make an order requiring a person who made a false or misleading representation to compensate persons affected by that conduct and may issue an interim injunction to freeze assets where the Commissioner of Competition intends to ask for such an order. It also makes consequential amendments to other Acts.

Competition Act

[Roger Gaudet, Bloc, Montcalm, QC]

moved that Bill C-454, An Act to amend the Competition Act and to make consequential amendments to other Acts, be now read a second time and referred to a committee.

Mr. Speaker, it is a pleasure for me to introduce Bill C-454, An Act to amend the Competition Act and to make consequential amendments to other Acts, for second reading. While we have a Competition Act at present, there are major flaws in that Act that are in need of speedy correction. I would like to demonstrate the need for the House of Commons to take action to improve the existing Competition Act.

Every time the price of gas soars, the government invariably responds by saying the same thing: there is nothing to be done because the Competition Bureau concluded that there was no agreement among the oil companies to fix prices and so there was no problem.

Well, the Competition Bureau has never investigated the matter properly, because it does not have the power to do so. All the Competition Bureau does is produce studies of the industry explaining how it operates. And when it does a study, the Competition Bureau has virtually no power, because the purpose of the studies is to explain the general operation of the oil industry, not to discipline it. Those studies have no impact and they provide no incentive for the government to take action.

The flaws in the existing Act prevent the Competition Bureau from doing any real work. The Competition Bureau cannot initiate investigations of its own accord; they have to be done in response to a request by the minister or where there have been a number of complaints. Well, we know very well that the minister is not requesting real investigations from which tangible results could be obtained.

In addition, the Competition Bureau cannot compel disclosure of documents or protect witnesses when it does a general industry study. In that kind of situation, how can we expect that individuals who have no protection will come forward to testify? As can be seen, there are limits to what the Competition Bureau can do—and that is putting it mildly. In point of fact, its hands are tied.

We need only look at the current situation to understand that it is urgent that the Competition Act be amended. The price of petroleum products is rising steadily. The price of crude oil has risen by 230% since early 2004. The price of heating oil has gone up by more than 50% in two years. Three years ago, in April 2005, a new price record was set in Montreal: the price of regular gas broke through the one dollar ceiling. Since then, it has stayed at an even higher level. In Quebec, the price continues to go up: the price of a litre of gas was 91.6¢ in May 2005, $1.06 in May 2006 and $1.10 in May 2007, and it has wavered between $1.09 and $1.18—and we have even seen $1.23—since the beginning of 2008.

But that is not all. Refining margins vary remarkably. It actually costs between 3¢ and 5¢ to refine a litre of gas, depending on the type of gas used.

According to the Association québécoise des indépendants du pétrole, when the refining margin is between 4¢ and 7¢ a litre, the company is making a healthy profit. On average, from 1998 to 2002, refining margins were 7.2¢ a litre. That is a little high, but it is within the limits of what is reasonable.

In 2003, on the other hand, the average margin in Montreal was 10¢ a litre, or twice as much as a reasonable amount. In 2004, the average refining margin increased 10% to 11¢ a litre. By 2005 and 2006, it was regularly exceeding 15¢ a litre, and in May 2007, it even reached 28¢ a litre. That is four times the reasonable margin.

At the present time, the refining margin has fallen back to 9¢ a litre, which seems better. However, when the oil companies decide they want their refining profits to soar again, the Competition Bureau will still not have the tools it needs to conduct a real investigation unless the House passes Bill C-454.

It is a great concern as well that a very small number of players have virtually total control over a market as important as gasoline. Is this situation international or not? We do not know because the Competition Bureau does not have the tools it needs to answer that question.

There is no need to remind the House of how shamelessly the oil companies are taking advantage of this. They are posting record sales. In 1995, the entire Canadian oil and gas sector posted combined sales of $25 billion. By 2004, this figure had climbed to $84.9 billion, which amounts to an increase of 239%. Total sales soared to $106.7 billion in 2005 and $118.9 billion in 2006. That is a 376% increase over 1995.

Net profits are also skyrocketing of course. The combined net profit of the six big integrated oil companies in Canada—Imperial Oil, Shell Canada, Husky Energy, Petro-Canada, Encana and Suncor—reached $12 billion in 2006. That is a $5 billion or 70% increase over 2004. The 2007 data are not available yet for all these companies, but there is every reason to believe that their results will be even more astronomical. For example, Petro-Canada finished its 2007 year with a profit of $2.73 billion or 57% more than in its 2006 financial year, which it finished with a net profit of $1.74 billion.

The net profit of the entire oil sector rose from $17 billion in 2003 to $20 billion in 2004 and then $35 billion in 2006, for an increase of 100%.

The Competition Bureau will only be useful and effective if it is able to conduct real investigations. It is illusory to think that it can take real action and come up with real results under the current legislation.

This worrisome situation—the increase in the price of gas, the upward trend in refining margins and the increase in profits—and the flaws in the current Competition Act are a constant source of discussion at the House's Standing Committee on Industry, Natural Resources, Science and Technology. In fact, in the committee's 2003 report on the Competition Act, it recommended reversing the onus of proof for handling “agreements between competitors” and determining whether there is a conspiracy.

In other words, when the Competition Bureau conducts an investigation, only at the request of the minister or if there is a complaint, of course, the Bureau must prove that there was an agreement between the companies, when it should be the opposite. If we consider the economic issues that are at stake, businesses should have to prove their good faith. Businesses that want to sign agreements should also have to prove the social or economic value of the agreements.

For example, in Quebec, there is a single refinery that supplies all the companies, Petro-Canada, Ultramar, Shell, Exxon, Olco, Esso Imperial and so on. The prices are all the same. How can we talk about competition when all the oil companies are in bed together helping each other out and sharing the market? This situation is reminiscent of a cartel—a group of businesses conspiring to create a monopoly.

When Konrad von Finckenstein, the competition commissioner, appeared in front of the Standing Committee on Industry, Natural Resources, Science and Technology on May 5, 2003, he identified the following shortcomings in the Competition Act:

—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.

He added, and I quote:

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.

These statements prove that the existing Competition Act does not enable the Competition Bureau to undertake a real investigation of the industrial sector. How can it gather information if it can neither force the disclosure of documents nor protect witnesses?

During the last Parliament, a review of the legislation was undertaken. The Bloc Québécois found it too weak, but nevertheless supported it and proposed amendments to improve it. The bill died on the order paper, and the Conservatives decided not to bring it back, so the Bloc Québécois introduced Bill C-454 to strengthen the Competition Act.

Bill C-454 was inspired in large part by Bill C-19, which the Liberals introduced shortly before the 2005-06 election, but it corrects that bill's shortcomings. When the Standing Committee on Industry, Natural Resources, Science and Technology studied the act in 2003 and 2005, it found that the act contained a number of provisions that were outdated and no longer useful. In essence, the bill seeks to adapt the Competition Act to today's economic realities. It gives the Competition Bureau the power to conduct its own inquiries into industry. The Competition Bureau will be able to call witnesses and protect them. That last point is very important.

Under current legislation, if businesses decide to reach an agreement to fix prices, no evidence of that will be left behind. If we cannot call and protect witnesses, there is a very good chance we will never be able to prove anti-competitive practices.

Under the new legislation, when businesses try to reach agreements with their competitors, they must demonstrate that those agreements are in the public's best interest. Presently, these agreements among competitors are permitted, unless it can be proven that they are contrary to public interest. This is unhealthy.

The bill contains another proposal: a significant increase in the amount of fines to be paid for violations of the Competition Act, from $10 million to $25 million. If this legislation were passed, the Competition Bureau would be much better equipped to fight against businesses that try to use their dominant position in the market to fleece consumers and damage other economic sectors.

On the whole, Bill C-454 will allow for the creation of a comprehensive strategy to deal with the rising cost of petroleum products. For some time now, the Bloc Québécois has been pressuring the government to take action to address the rising cost of petroleum products. Fighting to defend the interests of Quebec, the Bloc Québécois would like to see the oil and gas industry disciplined. Bill C-454 is a step in that direction. It is time to correct the situation and give the Competition Bureau the powers it needs to do its job properly.

Bill C-454, An Act to amend the Competition Act and to make consequential amendments to other Acts, is pivotal to any real investigations into the oil and gas sector. Passing this legislation would give the Competition Bureau the powers it needs to carry out its mandate.

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, I would like to make two points and ask a question.

First, I would like to ask the Bloc member if he is aware that the proposed definition of an anti-competitive act for the abusive dominance provisions to include abusive exploitation may encroach upon provincial jurisdiction?

In other jurisdictions this language has been taken to mean excessive pricing or price gouging. Determining whether a price is too high or too low requires price monitoring and regulation, which are matters of provincial jurisdiction, not federal jurisdiction.

Second, the proposal to amend the anti-cartel provision might, as it now stands, criminalize a number of common forms of business arrangements, such as supply management or joint ventures, which can be beneficial to competition.

The government will not support provisions that could criminalize business arrangements such as joint ventures or supply management, or intrude on provincial jurisdiction.

I would like to ask if the hon. member would take time to reflect on implications of his proposed legislation on the province's right to monitor and regulate prices in certain markets and the potential negative effects that the anti-cartel provisions may have on supply management before the second hour of debate?

[Roger Gaudet, Bloc, Montcalm, QC]

Mr. Speaker, the Parliamentary Secretary to the Minister of Industry is somewhat mistaken. When it suits him, he says that is a provincial matter; when it does not suit him, he is prepared to meddle in provincial jurisdictions.

That is not a valid reason. Why is there a Competition Bureau in Ottawa if it is interference in provincial matters? I would like the parliamentary secretary to give me a reason.

In addition, the parliamentary secretary should not forget that the Conservatives did not wish to bring back Bill C-19, introduced by the Liberals, as they were lobbying the government on behalf of the companies.

That is my answer to the Parliamentary Secretary to the Minister of Industry.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, first I would like to congratulate my colleague for Montcalm for introducing this bill. My colleague is quite right. The Conservatives cannot continue to say that it is a provincial jurisdiction or that it is a federal jurisdiction, according to what suits them at the time.

Citizens are at the mercy of the refining margin, the percentage taken by oil companies. We need to get to the bottom of it.

My remarks are for my colleague. I toured Quebec. When I visited a Conservative riding in Quebec, I quickly noted, as they did, that since the Conservatives have come to power gasoline prices have hit record highs. It is about time that we have a bill like the one introduced by my colleague.

[Roger Gaudet, Bloc, Montcalm, QC]

Mr. Speaker, I want to thank my colleague for his comments. This proves what I was saying earlier. It is true in every municipality. For example, the Ultramar refinery in Quebec City supplies all the independent and national-brand service stations, including Shell, Imperial Oil—all the companies. They all get their gas from the same place. How can there not be some collusion between them?

That is why I was asking the Parliamentary Secretary to the Minister of Industry earlier about Ottawa's Competition Act. Is it there to help the oil companies or to discipline them so that Quebec and Canadian consumers are taken care of?

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, I am pleased to rise to take part in the second reading debate on Bill C-454, An Act to amend the Competition Act and to make consequential amendments to other Acts.

As members are no doubt aware Bill C-454 proposes a wide range of amendments to the Competition Act. Among its many provisions, Bill C-454 proposes to amend the Competition Act to provide restitution for consumers harmed by deceptive marketing practices and would give the Competition Tribunal the ability to issue injunctions to stop the disposal of assets by anyone engaged in deceptive marketing. This is to ensure that there is money available for restitution.

Bill C-454 also proposes to deter companies from abusing their dominant position by giving the tribunal the ability to award administrative monetary penalties, commonly known as AMPs.

The bill proposes to further discourage deceptive marketing practices such as false advertising, by increasing penalties for the violation of these legislative provisions.

Furthermore, Bill C-454 proposes to decriminalize the criminal provisions dealing with price discrimination and predatory pricing. It also proposes a number of consequential amendments to the act and other statutes.

I do not intend to address specific provisions of the bill today. Some of my colleagues will handle that, I am sure.

It is my hope that should Bill C-454 be referred to committee, there would be a thorough and detailed analysis of its provisions.

My primary purpose in rising to speak on this issue is to express my view that any amendments to the Competition Act should not be made lightly.

More particularly, there must be careful consideration as to how the act fits into broader competition policy, specifically the “price gouging” or, to put it another way, price regulation provisions which are provincial, not federal, jurisdictions, as well as the “anti-cartel” provisions which might negatively impact supply management.

This Conservative government understands the necessity of a modern and aggressive competition policy in this global economy. That is why in July 2007 this government took the proactive step and announced the creation of the Competition Policy Review Panel. The panel's core mandate is to review two key pieces of Canadian legislation: the Competition Act and the Investment Canada Act.

The panel will review key elements of Canada's competition and investment policies to ensure that they are working effectively, allowing Canada to encourage even greater foreign investment and create more and better jobs for Canadians. The government is looking forward to receiving the report on June 30.

What I would like to do today is set out why I believe that a careful approach to amending the Competition Act is essential.

Competition stimulates innovation and enhances productivity and economic growth. I think my colleagues from all parties recognize the importance of these factors for Canada.

I would hope they would also agree that economic prosperity is closely linked to the intensity of competition that exists in a country's markets.

Canada has achieved substantial economic success through privatization, free trade and deregulation, despite outright disapproval at one time for one of these economic provisions by all opposition parties. Through a reliance on competition and market forces our economy has thrived.

This government takes the issue of our economic competitiveness very seriously. We are determined to create the kind of competitive environment that will make Canadians much more prosperous.

In saying that, we are well aware that prosperity is not created by governments. What might come as a shock to the Bloc is that a government's job is to put in place conditions that encourage entrepreneurship and innovation. It is the private sector's role to innovate, take risks and create wealth in a way that benefits our entire society.

The Competition Act is an important part of Canada's competition policy. However, it is only one part of a larger legislative policy and regulatory framework.

This framework has a crucial impact on the competitiveness of Canadian businesses and Canada's economic performance. As I mentioned earlier, that is why this government created the competition panel in order to ensure these policies are modern and internationally competitive.

This government has also acted in other ways to increase innovation, productivity and strengthen our economy.

We are committed to providing effective economic leadership for a prosperous future and to strengthen the Canadian economy through our long term economic plan, “Advantage Canada”, and through our science and technology strategy.

In our recent economic statement, we built on that foundation, introducing important new measures that will help Canadian businesses compete, attract new investment to Canada, increase productivity, and create more and better jobs for Canadians.

The results are already paying off. Just last week Statistics Canada announced that Canada's unemployment rate had decreased to 5.8%, the lowest in 30 years. In Quebec the unemployment rate has decreased from 7.4% to 6.8% and 77,000 new jobs were created since January 2007.

Canada's economy is still creating better paying, full time jobs, while the U.S. economy is on the brink of recession because this Conservative government has put in place all the right economic fundamentals.

Let me now briefly describe the Competition Bureau's role and mandate, and discuss the importance of the Competition Act.

The Competition Bureau is an independent law enforcement agency. It contributes to the prosperity of Canadians by protecting and promoting market competition and allowing consumers to make informed choices.

Led by the Commissioner of Competition, the Bureau investigates anti-competitive practices and ensures compliance with the laws under its jurisdiction.

An extremely important piece of this legislative framework is the Competition Act. It touches on virtually all sectors of the Canadian economy. It promotes and maintains competition so Canadians can benefit from competitive prices, product choice and quality services.

The Competition Act is important for both consumers and businesses. The legislation contains several provisions to address false or misleading representations and deceptive marketing practices. For example, the Competition Bureau investigates misleading advertising and deceptive telemarketing targeting Canadians. It ensures that businesses provide accurate information to consumers when marketing their products and services.

False or misleading representations and deceptive marketing practices can have serious economic consequences, especially when directed toward large audiences or when they take place over a long period of time.

The Competition Act also helps businesses. A competitive marketplace promotes the efficiency and flexibility of the economy. It expands opportunities for Canadian enterprises in world markets and ensures that small and medium sized Canadians businesses have equal opportunities.

Competition is the foundation of a strong, modern and knowledge-based economy, spurring innovation, competitiveness and productivity growth. The Competition Act is one of the key pieces of framework legislation that we have in Canada. As such, it should only be amended after there has been very careful consideration of the impact of any amendment. I would particularly note two provisions in Bill C-454 that warrant careful consideration.

First, I would hope that the Bloc members would revisit the proposal to amend the definition of an “anti-competitive act” for the abuse of dominance provisions to include “abusive exploitation” of a dominant position.

In other jurisdictions this language has been taken to mean excessive pricing or price gouging. Determining whether a price is too high requires price monitoring and regulation, which are matters of provincial jurisdiction, not federal jurisdiction. Such monitoring may best be left to the hon. member's colleagues in Quebec City. This government will not support provisions that will intrude on provincial jurisdiction.

Second, the proposal to amend the anti-cartel provisions might, as it now stands, criminalize a number of common forms of business arrangements such as supply management or joint ventures that can be beneficial in the long term to competition. Again, the government will not support provisions that could criminalize business arrangements as joint ventures or supply management.

In carrying out their deliberations, I hope the Bloc members will do their best to ensure that these substantive changes are addressed. I also hope a wide range of stakeholders representing consumers, small and medium sized businesses and other interested groups will have the opportunity to make their views known.

In closing, I hope my comments today have shown how important competition and the Competition Act are for Canadian consumers and Canadian companies, no matter what their size.

I also hope my hon. colleagues—

[The Acting Speaker, Conservative, Royal Galipeau]

I am sorry to interrupt the hon. parliamentary secretary, but his time has run out.

Resuming debate. The hon. member for Markham—Unionville.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I am pleased to speak to Bill C-454. I would like to congratulate the member for Montcalm on his bill.

The origins of the bill can be traced back to early 2002 when the Standing Committee on Industry, Science and Technology released a report entitled, “A Plan to Modernize Canada's Competition Act”. The proposed changes from that committee's report formed the basis of government Bill C-19 during the 38th Parliament, under the leadership of the member for LaSalle—Émard.

Reading this private member's bill, I noticed that virtually all the provisions of Bill C-19 have been included as well as some of the other recommendations from the industry committee's 2002 report, which did not find their way into the original bill.

I understand many of the additions in Bill C-454 had been proposed during the rather lengthy year that the industry committee spent studying Bill C-19 before it died on the order paper in November 2005.

Above and beyond those additions, Bill C-454 has a number of other amendments that were not in the original bill.

While I am willing to lend my vote to the bill at second reading, I do so in the hope that it will receive the same diligent consideration at committee stage that Bill C-19 received in 2005. We must, as legislators, ensure that the objectives of the bill will be met without any unintended consequences.

To reiterate my position for the member, the bill shows good promise and I will support it at this stage. However, I will reserve my final judgment until it returns from committee wherein stakeholders and Canadians will have had the opportunity to voice their praise or their concerns for the bill.

While I am on the topic of committee stage, I hope the industry committee' s efforts to review the bill will be well coordinated with the Minister of Industry's review of the Competition Act. I believe the minister is expecting his panel to report later this spring and I hope that the two tracks will find some common ground.

The underlying purpose of Bill C-454 is to enhance the Competition Act, with a view to ensuring that businesses in our country compete with each other in a fair and open market. The act helps to protect businesses, especially small businesses, but large ones as well, from becoming the victims of such anti-competitive behaviour as predatory pricing and abuse of dominance.

The end beneficiary of this is the Canadian consumer, who will benefit from increased competition, diversified choice and in theory lower prices at the cash register. The act achieves this through the Competition Bureau, which enforces the provisions by responding to consumer complaints and investigating evidence of illegal activity by businesses.

The biggest change that Bill C-454 would make to the Competition Act is it would allow for general administrative monetary penalty, or AMP, provisions to be used against businesses or individuals abusing their dominant position in any industry. This would allow businesses and individuals injured by an abuse of dominance to seek financial remuneration for any damages they have suffered due to abuse of a dominant position. Currently there are only criminal penalties for such breaches of the act.

Similar administrative monetary penalty provisions are already in place for abuse of dominance in many countries around the world. Adding Canada to the list of countries that allows for these fines in cases where dominance has been abused is important, not only domestically but also in terms of strengthening ties with our major trading partners.

Let me move on to other aspects of Bill C-454. One is that the bill would increase the administrative penalties, or AMPs, that a business could be fined for practising in deceptive marketing practices. With the low limits of the current maximums, deceptive marketing can often lead to profits that are far greater than the monetary penalties that can be administered. By raising the limits, we will increase the deterrence factor and help to ensure that the people who are hurt by deceptive marketing campaigns can get a much greater percentage of their investment back from the guilty party.

Another measure included in the bill, which came directly from the industry committee's 2002 report, was to eliminate the section of the Competition Act that dealt specifically with airlines. This special mention of our airline industry was added at a time when Canadian and Air Canada were merging and there was widespread concern that the Competition Bureau needed stronger tools to ensure that the combined giant did not engage in predatory conduct.

Today, however, there are many low cost carriers that have emerged and the airline industry no longer needs special mention in the act. The industry can go back to being covered by the general provisions, which, as I have mentioned, would be strengthened the bill.

I am glad to see that the Bloc Québécois have taken an interest in helping to build a stronger 21st century economy, supported by a competitive marketplace and a competition with the tools to ensure that they get the job done. The Bloc often takes a narrow and isolationist approach to economic matters, so it is nice to see it put country before its own party interests.

It would have been very easy for the Bloc for instance to dismiss a bill, such as C-19, as an intrusion of the federal government into matters of provincial jurisdiction. For instance, price controls are the exclusive jurisdiction of the provincial government, save for in emergency situations. The Bloc of old might have believed that the federal government had no place deciding when a business had engaged in predatory pricing. Determining the appropriate price of something could be interpreted as a matter purely for provincial jurisdiction.

In this instance I am glad to see that my Bloc colleague from Montcalm was willing to table a bill that proves a federal bill can be good for all Canadians including the people of Quebec.

I look forward to seeing what the industry committee does with Bill C-454 and when it arrives back here in the House for report stage and third reading.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I rise to speak to Bill C-454, An Act to amend the Competition Act and to make consequential amendments to other Acts and to congratulate the hon. member from the Bloc Québécois for introducing it.

The Competition Act is an important law in Canada. It governs how we do business in a number of ways. The purpose of the Competition Act is to encourage Canadian businesses to compete with one another with the belief that enhanced competition will lead to lower prices and greater product choice for consumers.

The Competition Act contains criminal and civil provisions which apply to most industries and businesses in Canada, both large and small. The Competition Bureau is an independent federal agency which administers the act.

The current act criminalizes some anti-competitive practices. The criminal provisions include: conspiracy to unduly lessen competition; bid rigging; discriminatory and predatory pricing; price maintenance; refusal to supply; and certain misleading advertising and deceptive marketing practices. The offences are investigated by the Competition Bureau and prosecuted in federal or provincial superior courts.

Attempts have been made before to update the Competition Act. In April 2002 the House of Commons Standing Committee on Industry, Science and Technology released a report entitled “A Plan to Modernize Canada's Competition Regime”. It recommended extensive amendments to the Competition Act.

Subsequently Bill C-19 was introduced. It proposed changes to the Competition Act that would have allowed the Competition Tribunal to impose an AMP, an administrative monetary penalty, if it found that a person or a company abused its dominant position. It would have increased the AMP that the Competition Tribunal or court could impose when it found that a person or company had engaged in deceptive marketing. It would have repealed the airline specific provisions that are currently found in the act, which arose out of a particular period in Canada's aviation history and were designed to deal specifically with the airline industry. Bill C-19 proposed to decriminalize predatory and discriminatory pricing provisions.

At the time, there was a great deal of debate about Bill C-19 but it died on the order paper and ultimately did not pass. The Competition Act remained unchanged and that is very unfortunate for Canadians.

Every time the price of gasoline goes up, we hear complaints from our constituents. They see gas prices rise in lockstep usually just before a long weekend. The greatest instance of consumer complaints is probably from people who believe they are being gouged by gas and oil companies.

The government should deal with this in a more effective way. It is clear that the Competition Act, as it currently stands, does not have the teeth to deal with this kind of price gouging. It should be thoroughly investigated so that Canadian consumers are protected.

The issue of deceptive marketing and deceptive advertising is also of great concern to Canadians. We have an aging population. We all know of situations where seniors especially have fallen prey to deceptive advertising. Again, the Competition Act simply does not have the teeth to protect consumers. It is basically a buyer beware situation, and that is simply not good enough.

We should think of a situation where an individual senior, who lives alone in his or her own home, who maybe does not have access to the Internet, and does not read as widely as some other folks, is up against a very powerful and well resourced company that has a very slick marketing campaign. That individual senior could be quite vulnerable. I believe it is our job as parliamentarians to do everything we can to ensure that all consumers are protected.

We all want to foster a healthy economy. We want to make sure that we are creating the conditions for businesses in our economy to do well and for them to compete. We have a very mature economy, but there has to be a balance so that consumers are also protected.

Today the average person is really getting squeezed. Savings are at an all time low and consumer debt is the highest it has been in a generation. People are incredibly price sensitive. There are people who have to commute from the suburbs to the centre of town to go to work every day. Some people in my part of the country and the greater Toronto area commute long distances. With respect to the price of gas, people are phenomenally price sensitive. When the price of oil goes up, consumers really take a hit in the pocketbook. They need us to make sure that they are protected.

There is one concern that I do have with this bill, and it was a concern with Bill C-19 as well, which is that the AMPs, the administrative monetary penalties, would be tax deductible for the corporations that face these penalties. That does not make any sense. It makes no sense that the Government of Canada and the Canadian taxpayers would somehow be responsible for paying these monetary penalties. That is something we should discuss at the committee.

I will be supporting this bill. As a member of the industry committee, I look forward to discussing the bill at the industry committee. The goal is to protect Canadian consumers, to put teeth into the Competition Act, and to protect our seniors from deceptive advertising. I believe all of these provisions would lead to greater competition and a healthier economy.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, it is my great pleasure today to speak to Bill C-454, which was introduced by the Bloc Québécois member for Montcalm. First, I would like to congratulate my colleague on his excellent work and on this initiative to bring this important issue back to the House of Commons. It has not lost its relevance over the past few years with the price of gas at the pump now hovering around $1.15.

Bill C-454 is being read for the first time in Parliament, but I want to remind some of my colleagues from other parties that it is inspired in large part by Bill C-19, which the Liberals tabled shortly before the 2005-06 elections, and which the Conservatives decided not to reintroduce. Of course, it has been rewritten and improved, but it is, in essence, the same. If I were to provide a broad outline of this bill, I would summarize it by saying that its purpose is to strengthen the Competition Act.

First, it gives the Competition Bureau the power to conduct its own inquiries into the oil industry. Currently, the bureau can do no more than undertake general studies that have no consequences.

In the course of conducting such inquiries, it can summon and protect witnesses. If it could not do so, it would very likely never be able to prove anti-competitive practices.

Lastly, when companies want to enter into agreements with their competitors, they will have to prove that these agreements are in the public interest. The bill also significantly raises the amount of fines, from $10 million to $25 million.

That said, exactly what need is this bill trying to meet?

Prices of petroleum products are rising steadily, and we want Quebeckers to have a way of finding out why this is happening, who is benefiting and, most importantly, whether this is reasonable.

The first major problem that is affecting everyone to different degrees is the rising price of crude oil. This is having a direct impact on the price per barrel, which is fluctuating today between US$100 and US$110 and has increased by 230% since early 2004.

This in turn is affecting the price of heating oil, which is on the rise. It has averaged about 90¢ since early 2007 and has gone up by more than 50% in the past two years. I want to remind the House that according to Statistics Canada, approximately 500,000 Quebec households in Quebec still heat with oil or another liquid fuel.

The increase in the price of crude oil is also driving up the price of gas, which, understandably, has raised the public's ire for the past several years.

For a number of years, in fact, old records have fallen repeatedly as the price of regular gas has regularly reached new highs. Fluctuations aside, the price of gas in Quebec is going up steadily; it was 71.3¢ in May 2002, 94.4¢ in May 2004 and $1.10 in May 2007. Since the beginning of the year it has fluctuated between $1.09 and $1.18.

At the same time, oil companies have posted record sales for a number of years. But that is not all. Oil companies' net profits have also skyrocketed in recent years. The oil industry's net profits rose from $17.6 billion in 2003 to $20.2 billion in 2004 and $35 billion in 2006, a 100% increase.

What is more, with respect to the increase in costs, if we compare the price of regular gas in Quebec today with the price in 2004, we find that the retailer mark-up has remained stable, taxes have remained stable and even gone down in proportion to the price of a litre of gas, and the increase in the price of crude oil accounts in part for the increases.

But lately, the constant fluctuations in gas prices cannot be explained by crude oil prices; they are attributable to the obscene profits made by the refineries.

Is this situation intentional? We do not know, because the Competition Bureau does not have the tools it needs to conduct a serious and complete investigation. But one thing is for sure: the structure of the oil industry encourages spikes in gas prices, and is conducive to abuse. That is why the industry must be monitored, hence Bill C-454.

As members know, I am the Bloc's natural resources critic, and it is part of my duties to learn about the oil industry. That is precisely what the Standing Committee on Natural Resources did for several months last year, as part of an important study on the oil sands industry. Over the course of about 30 meetings, we heard from some 100 witnesses, many of whom came from the oil industry.

I listened to and questioned these witnesses carefully, and although our conclusions can be found in the committee's report, I would like to share how these testimonies touched me personally.

When I was listening to these professional lobbyists, I was deeply struck by the excesses of the industry, with its echoes of the gold rush.

People in the oil industry came to talk to us, they explained the challenges, confidently predicted the future, easily came up with rational solutions to complex problems in their heads, but were so detached from the effects caused by their industry, that it literally took my breath away.

As everyone also knows, I am a social worker by training, and if I wanted to draw a parallel with a type of clientele, I would say we are dealing with an industry that has a very hard time regarding itself objectively or engaging in any self-criticism, and above all, we are dealing with an industry for whom the end justifies the means and that is always right. It has a bit of a superiority complex, which places it above other things and makes it prone to over-ambition and exaggeration, often in a shameless manner.

In the case of the petroleum industry, the excessiveness of the financial stakes—we are still talking about billions of dollars—and the current importance of their products, which are practically essential to the functioning of society, create this cavalier attitude that often lacks any moral or ethical sensibility. I could give so many examples that I could easily keep the House busy until tomorrow, but let us look at just one, more recent and very typical example.

On Monday, March 10, the Minister of the Environment presented his solutions for climate change problems—a plan whose flabbiness will surely go down in history. One of his proposals is carbon capture and storage by the oil industry. Speaking through a task force that delivered a study to Natural Resources Canada, the oil industry responded that it refuses to invest great sums of money in this technology because of the uncertainty surrounding its large-scale commercialization.

And as if that were not enough, the task force, composed of one academic and four industry representatives, went even further. Try to listen to this without being too surprised:

...it is a very difficult proposition for individual private sector players to commit additional hundreds of millions of dollars...to achieve a public good...for which it may not be compensated with an adequate (or any) return on investment.

In any context that statement would be unacceptable, but in the current climate change crisis, it is totally irresponsible and insulting. This method would force private companies to contain their pollution.

The members of this task force act as if they are doing us a favour. They are completely disconnected from reality, so much so that they add even more. As François Cardinal reported in La Presse on March 11, the report recommends that the federal government allocate $2 billion immediately and that both levels of government provide “stable financial incentives”.

I would like to remind hon. members that the oil industry made $35 billion in profits in 2006. And these people are talking about the impossibility of investing in the public good unless profit is involved?

I also want to point out that in addition to $66 billion in direct subsidies from the federal government between 1970 and 1999, this industry is currently benefiting, through accelerated capital cost allowance, from tax measures such as former Bill C-48, under the Liberals in 2003, and from tax cuts announced by the Conservatives in the economic statement of November 2007 of up to $1.5 billion annually.

In the coming year alone, the oil industry will receive a $1.18 billion gift. In total, for the 2008-13 period, roughly $7.8 billion will go into the pockets of the oil companies through various measures implemented by both the Conservatives and the Liberals.

Yesterday I received a phone call from a constituent from Saint-Bruno—Saint-Hubert, who said that her heating costs have increased by 50% in two years. She thought that was totally unacceptable.

Bill C-454 is needed to help people like that and to supervise the oil industry more carefully. We hope the bill will be adopted.

[The Acting Speaker, Conservative, Royal Galipeau]

Resuming debate. The hon. member for Chatham-Kent—Essex, who normally would have 10 minutes, will have only 8 minutes because I will have to interrupt.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, it is a pleasure to take part today in the second reading debate of Bill C-454, An Act to amend the Competition Act and to make consequential amendments to other Acts.

My intention is to outline the provisions of Bill C-454, which proposes extensive amendments to the Competition Act.

Bill C-454 contains a number of provisions that were in earlier legislation, specifically Bill C-19. However, Bill C-454 not only alters some of the provisions that were in Bill C-19, but also introduces some new provisions.

The House should not make the mistake of thinking that Bill C-454 is merely Bill C-19 by another name. This is a very different bill in many important ways.

As such, I would caution my hon. colleagues to give this bill very serious attention. Any amendments to the Competition Act will be of great interest to a wide range of stakeholders across Canada.

To show how great an interest, I would refer hon. members to the Competition Policy Review Panel. As hon. members will recall, in July of 2007 the government announced the creation of the panel, which has as the central part of its mandate a review of key elements of Canada's competition and investment policies, including the Competition Act. In the context of its consultations, the panel received approximately 140 written submissions.

Given the importance of the Competition Act for Canadians, I would like to take a few minutes to review some of the provisions of Bill C-454.

First, there are some provisions in Bill C-454 that are the same as those in Bill C-19. For example, Bill C-454 would decriminalize the price discrimination, predatory pricing, discriminatory promotional allowances and geographic price discrimination provisions of the Competition Act. These provisions would then be dealt with under the non-criminal abuse of dominance provisions of the act.

Bill C-454 proposes to allow the tribunal to order restitution to consumers affected by deceptive marketing practices. In addition, the bill gives the tribunal new power to impose interim injunctions to stop the disposal of assets by anyone engaged in deceptive marketing practices. This is to ensure that there is property available for such restitution.

However, there are several key provisions in Bill C-454 that are different from what was contained in Bill C-19. Bill C-454 proposes to add three different types of financial consequences to deter abuse of dominance. I understand that all three would be applied at the same time.

First, the Competition Tribunal could order an administrative monetary penalty, or AMP, against individuals and companies that engage in anti-competitive conduct: up to $10 million for a first offence and up to $15 million for each subsequent one.

Second, Bill C-454 gives the tribunal the ability to order an additional AMP on top of the one I just mentioned. This second AMP would be an amount not greater than the profits generated by the anti-competitive conduct in question.

In addition to these two AMPs, Bill C-454 would allow private parties to pursue separate private litigation before the Competition Tribunal when they believe that a dominant firm has abused its market position. At present, only the Commissioner of Competition may bring abuse of dominance matters to the tribunal. In relation to private access to the tribunal, Bill C-454 includes a provision to grant the tribunal the ability to award damages to private parties.

Next, Bill C-454 introduces a proposal to change the definition of “anti-competitive act” for the purposes of the abuse of dominance provision. Bill C-454 would introduce the concept of “exploitative conduct” into the Competition Act. In other jurisdictions, particularly the European Union, this phrase has been taken to mean excessive pricing or price gouging.

As I understand it, an attempt to deal with price gouging would be viewed as a form of price regulation that would have far-reaching implications for the Canadian marketplace. As such, this provision should be carefully considered.

As we know, price regulation is essentially a matter of provincial jurisdiction. I am quite sure that the sponsor of the bill and his colleagues would not want to intrude on a matter of provincial jurisdiction.

Moving on to the issue of deceptive marketing practices, Bill C-454 proposes a series of financial consequences. The provisions in Bill C-454 include an increase to the existing AMP: from $50,000 to $750,000 for individuals and from $100,000 to $10 million for corporations. For subsequent violations of the act, the proposed AMPs are $1 million for individuals and $15 million for corporations.

At the same time, Bill C-454 provides for an additional AMP for deceptive marketing practices, up to the amount of profits generated by the practices. Again, it appears that both AMPs could be ordered by the tribunal at the same time. Bill C-454 would also amend the list of factors the tribunal considers when determining the appropriate penalty for deceptive marketing practices.

Bill C-454 also amends the anti-cartel provision of the act, section 45. The proposed amendments would strike the word “unduly” from section 45 and raise the level of fines that would be imposed. Section 45 is one of the key provisions in the Competition Act.

As I understand it, removing the word “unduly” could expose to criminal liability conduct currently regulated by provincial or federal law. For example, it is not clear whether provincial authorization of certain price-fixing arrangements, such as through marketing or supply management boards, would continue to shield such arrangements from criminal liability under section 45 if the amendments proposed in the bill are passed.

I see that my time is nearly up. Finally, I would like to say that Bill C-454 would change the rules regarding pre-notification of mergers, by lowering the threshold at which companies considering merging would have to notify the commissioner of their intent. In this regard, we should ask ourselves whether the costs imposed on businesses are warranted.

[The Acting Speaker, Conservative, Royal Galipeau]

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

When we next reconsider Bill C-454, there will be three minutes remaining for the hon. member for Chatham-Kent—Essex.

The House resumed from March 13 consideration of the motion that Bill C-454, An Act to amend the Competition Act and to make consequential amendments to other Acts, be read the second time and referred to a committee.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, I would like to reiterate basically what we talked about the last time this bill was before the House.

Bill C-454 amends the anti-cartel provision of the act, section 45. The proposed amendments would strike the word “unduly” from section 45 and raise the level of fines that would be imposed. Section 45 is one of the key provisions in the Competition Act.

As I understand it, removing the word “unduly” could expose criminal liability conduct currently regulated by provincial or federal laws. For example, it is not clear whether provincial authorization of certain price fixing arrangements, such as thorough marketing or supply management boards, would continue to shield such arrangements from criminal liability under section 45 if the amendments proposed in the bill were passed.

Given this, I would hope that my hon. colleagues will ensure that they take all points of view into consideration before deciding how to address the conduct that is targeted in this section.

Bill C-454 would also give the Commissioner of Competition the ability to launch inquiries, with formal investigative powers, into entire sectors of the economy. It would be useful to get more information as to what is contemplated here.

The commissioner already has the ability to conduct market studies as part of her role as an advocate for competitive markets, the recent study into generic drug pricing being one example. Is something more intended, such as using the information gathered in subsequent criminal proceedings? This will need to be clarified as soon as possible.

Bill C-454 would change the rules regarding pre-notification of mergers by lowering the threshold at which companies considering merging would have to notify the commissioner of their intentions. In this regard we should ask ourselves whether the costs imposed on businesses by lowering the threshold for merger notification outweigh any benefits of having the Competition Bureau examine smaller transactions.

There is a lengthy list of proposed amendments to the Competition Act. Given the importance of the issues involved with this bill, I look forward to the careful consideration that this House will give it.