Bill C-452 (Historical)

An Act to amend the Competition Act (inquiry into industry sector)

This enactment amends the Competition Act to authorize the Commissioner of Competition to inquire into an entire industry sector.

Competition Act

[Kevin Lamoureux, Liberal, 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—

[The Deputy Speaker, Andrew Scheer]

Order, please. I understand the hon. member for Churchill is rising on a question of privilege.

The House resumed consideration of the motion that Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), be read the third time and passed.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I am very pleased to speak to Bill C-452, An Act to amend the Competition Act (inquiry into industry sector).

I commend my colleague, the member for Shefford, for bringing forward such an important amendment to the Competition Act. I am happy to say that the New Democratic Party will be supporting this vital legislative initiative.

In essence, this bill seeks to change the current law, which says the Commissioner of Competition can only launch an investigation when there is a concern about one or more market participants. While the bill appears to have originally been tabled to deal with the retail gasoline sector, the broad amendment makes the proposed legislation applicable for all industry sectors, including communications industries.

This is particularly important at this time, as the banking disputes over competition have been increasing over the past few months, whether it is in relation to the oil and gas sector where consumers are being gouged at the pumps by abusive practices which hurt the wallets of ordinary working and middle-class Canadians, or some other issue.

I heard my hon. colleague from Winnipeg North talk about the gas prices in his riding. I believe he said it cost $1.20 a litre. In Sudbury right now it is close to $1.30. My colleague from Algoma—Manitoulin—Kapuskasing said the price in Wawa and Elliot Lake is $1.30 in some cases.

The dispute over usage-based billing demonstrates that we need this tool to widen the scope to encapsulate not just the oil and gas sector, which we are talking about, but other major sectors of our economy as well.

In the oil and gas sector there is clearly a lack of refining capacity in Canada. Coupled with vertical integration, this basically leads to a formula that is a recipe for disaster for Canadians and their pocketbooks.

It is interesting that when the government lowered the GST with regard to oil and gas, the companies did not pass the reduction on to consumers. Prices and profits have risen significantly and not even one single organization or company has taken advantage of the opportunity to pass the 2¢ reduction on to consumers. The companies took it and put it in their own pockets. That is shameful. More important, that 2% has a large impact on working and middle-class families who are being financially squeezed during tough economic times.

Therefore, it is only fair that we examine the bill and look at the oil and gas sector as one of the variables in how it can be addressed because the bill is specifically geared to the industry sector, which is a responsible way to approach it. It allows targeting to certain areas where there is a lot of interest.

In terms of the telecommunications sector, we have the entrance of new players into the Canadian market with regard to telecom and that means more communication devices, cellphones, BlackBerrys, iPhones, and wireless service providers that are being expanded in Canada. There are those who feel there is no competition in that sector and relatively similar pricing that makes it very difficult for consumers to get a better benefit. These companies have also been receiving record profits and are quite lucrative. Almost all of the groups and organizations of the big telecommunication companies have done extremely well.

Both the current CRTC chair, and Sheridan Scott, the former commissioner, have advocated for the authority to conduct market studies during their tenures as the head of the bureau. This amendment to the Competition Act is therefore obviously something which the regulators of our telecom sector deem necessary for bringing Canada's telecommunications regime into the 21st century. We have seen there are flaws in this regime and this bill is an important step in redressing these shortcomings.

Another issue raised often with regard to this issue is credit cards, something I have been talking about quite often. New Democrats have been calling for a number of credit card reforms. I have been pushing this issue to the forefront. The Minister of Finance is in favour of a voluntary agreement. It is clear that we have deficient credit card competition in Canada. There are some groups and organizations that are more progressive, but at the same time it is seen basically as a system that is stuck where the vast majority of credit cards have interest rates that are quite similar.

This voluntary code is not sufficient. We need something with the necessary teeth to oversee the credit card industry. I feel this amendment would provide an extra layer of protection for ordinary Canadian consumers, as well as small and independent businesses which are routinely encountering major issues with the predatory practices which are being employed by credit card providers. This is an area where we need to see more healthy competition, but we have not.

The banks are also making record profits, and we have seen the same things there. My office receives complaints with regard to how close bank fees are among different organizations. There does not actually have to be collusion where there are brown envelopes changing hands and information being wired back and forth to predetermine the actual cost of items and passing it on to consumers. There just has to be a general acknowledgement that they will stay in a certain field of play and compete in that field of play. That is not real competition.

Small and independent retailers are facing a similar dilemma in regard to the anti-competitive practices. The big issue for retailers is the influx of premium cards, for instance, and those that offer generous air miles. Consumers are lured to those cards because they offer a chance to collect points faster and reap the rewards such as free flights, electronics and jewellery. The use of these premium cards has risen dramatically since they first hit the market in 2008. That high end plastic, such as the Visa Infinite or the World Elite MasterCard, cost more for retailers to process than other standard gold or platinum cards.

Consumers do not know that their demand for those freebies from the credit card companies is actually squeezing profits from these small businesses, because it is the merchants who really foot this bill. Ordinarily the cost per transaction ranges from 1% to 3% of every sale, whether the customer pays cash or pulls out a card. Premium cards require much more than that, considering the razor-thin margins the competitive market demands, and $5 billion is a lot.

Family debt is on the rise. The debt carried by the average Canadian household has hit $100,000, up about 78% from two decades ago. The debt to income ratio stands at a record 150%, meaning for every $1,000 after tax income, Canadian families owe an average of $1,500.

In summary, Canadian families cannot wait much longer. They are being gouged because of anti-competitive practices in every facet of their lives, be it gas, cellphones, the Internet and their credit card bills.

Bill C-452 is a very, very important first step in curtailing these abusive practices, and I call on all members of the House to support my colleague's bill.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Speaker, I am pleased to speak today in the House on Bill C-452, An Act to amend the Competition Act (inquiry into industry sector) introduced by my colleague from Shefford.

Bill C-452 proposes to amend the Competition Act to give more power to the Competition Bureau. I would like to start by congratulating my colleague for this fine and very important private member’s bill. I think this is a subject that is dear to his heart and I want to salute the quality of the work he has done.

The amendment proposed by my colleague from Shefford will allow the Commissioner of Competition to initiate inquiries of his own accord into fluctuations in the price of gasoline, if there are reasonable grounds for doing so. It will therefore no longer be necessary to wait for complaints to be filed before making an inquiry. If this bill is enacted, the Competition Bureau will be better equipped to combat companies that might profit from their dominant market position to pick consumers’ pockets.

Every time gas prices rise, the governments hands us the same answer: nothing can be done, the Competition Bureau has concluded there was no agreement among the oil companies to fix prices. The truth is that there are a number of flaws in the present act. It does not allow the Competition Bureau to initiate inquiries. And when there is an inquiry, the Competition Bureau cannot really do anything with them because at present it cannot compel the production of documents or protect witnesses. Bill C-452 would eliminate these flaws by allowing the Bureau to initiate inquiries and allowing the federal Trade Tribunal to protect witnesses and seize relevant documents.

If the act is not amended, gas prices will continue to fluctuate with no justification, as is the case at present. And it will again, and still, be consumers who will continue to pay for the more dubious practices on the part of the oil companies.

Gas prices fluctuating is one thing. It is another thing when they rise stealthily and without justification. Recently, prices at the pump rose because of the political instability in north Africa. In just a few hours, prices rose spectacularly. That is completely bizarre, when we know that the events that occurred in north Africa had at that point not yet had any impact on the cost of refined gasoline that was already in Quebec. That practice is nothing more nor less than a way of making even more money on the backs of consumers, and there is a lot. It is estimated that because of collusion, retailers have overcharged Quebec consumers by as much as $100 million.

The Bloc Québécois recently supported Bill C-14, An Act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act, to fix price errors at the pump. But that bill does not solve the problems of collusion like the ones recently disclosed in Quebec and does not prevent sudden increases in the price of gas. The Conservative government claims that its initiative will save the public a lot of money. Gas consumption in Canada, calculated over a full year, is so high that it is completely foolish to think that bill can have any impact on consumers’ wallets. That is why we in the Bloc Québécois believe that in order to respond effectively to gas price increases, Bill C-452 must be enacted. This bill is the only thing that will have a real impact on prices at the pump.

For years, the Bloc Québécois has been pressuring the federal government to finally take action to address the rising cost of petroleum products. It has dogged the Liberal government of the day so that it would follow up on the recommendations made in 2003 by the Standing Committee on Industry, Science and Technology. In October 2005, just before the election, the federal government finally listened to the Bloc Québécois' arguments and decided to amend the Competition Act through Bill C-19. That legislation broadened the Competition Bureau's authority to investigate and increased the maximum penalty for conspiracy. However, Bill C-19 did not follow up on all the committee's recommendations. As we know, that legislation, which was only an election ploy, died on the order paper with the election call, and we certainly could not count on the Conservative government to bring it back.

In 2007, the Bloc Québécois introduced Bill C-454, which also died on the order paper, when the election of 2008 was called.

In 2009, the Conservatives took part of the bill and included it in the budget implementation act. However, they did not see fit to allow the Competition Bureau to initiate investigations. That is why the hon. member for Shefford came back again with Bill C-452. The recent years clearly show that neither the Conservatives, nor the Liberals acted to protect consumers. By contrast, the Bloc Québécois is taking action.

For the Bloc Québécois, the only effective way to deal with the rising cost of gas is to use a global strategy. That strategy is three-pronged: to bring the industry into line, to make it contribute, and to reduce our dependency on oil.

First, we must bring the oil industry into line. The initiative of my colleague for Shefford supports that approach. It is also necessary to set up a true monitoring agency for the oil sector.

Second, the oil industry must make a contribution. With the increase of costs and oil company profits, it is important that the latter pay their fair share of taxes. How can we accept that consumers are getting poorer, while oil companies are getting richer?

Despite the recent recession and despite the rise in the price of gas, oil companies are posting record sales. In 1995, the Canadian oil and gas sector posted combined sales of $25 billion. By 2008, this figure had climbed to $148 billion. That is an increase of nearly 600%.

Now let us talk about profits. In 2003, Canada's oil sector made $17.6 billion in profits. In 2008, it made $79 billion. In other words, the net profits of Canada's oil sector more than quadrupled in just five years. The Bloc members feel that the party must end for the oil companies.

But obviously the Conservatives do not feel that way. In 2003, they supported the Liberal government's move to reduce the overall tax rate for oil companies from 28% to 21%. With the changes brought in by the Liberals, supported by the Conservatives, taxes for Canada's oil sector became more advantageous than in Texas.

But that is not enough. In 2007, in their economic statement, the Conservatives introduced tax cuts for oil companies that would see their tax rates drop to 15% in 2012. These tax cuts will enable the oil companies to pocket approximately $3.6 billion in 2012. These figures make it clear that the federal government chooses to give priority to the interests of the oil companies, at the expense of consumers.

I do not know how the Conservative members justify this to their constituents, but I know that when I meet my constituents from Compton—Stanstead, not a single one tells me that the gifts to the oil companies are justified. On the contrary, the people I meet feel cheated by this Conservative government, a government that is in league with an industry that exploits consumers' dependence on oil.

The third component of the approach proposed by the Bloc Québécois has to do with reducing consumers' dependence on oil. This makes sense and it is perfectly in line with Quebec's efforts to fight global warming. The less gas that we consume, the less money the industry will pocket and the better off our planet will be.

[The Deputy Speaker, Andrew Scheer]

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.