Bill C-14 (Historical)

Fairness at the Pumps Act

An Act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act

This enactment provides for the imposition of administrative monetary penalties for contraventions to the Electricity and Gas Inspection Act and the Weights and Measures Act. It also provides for higher maximum fines for offences committed under each of those Acts and creates new offence provisions for repeat offenders.
The enactment also amends the Weights and Measures Act to require that traders cause any device that they use in trade or have in their possession for trade to be examined within the periods prescribed by regulation. That new requirement is to be enforced through a new offence provision. The enactment also provides the Minister of Industry with the authority to designate persons who are not employed in the federal public administration as inspectors to perform certain examinations.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chairman.

Ladies and gentlemen, good morning and welcome.

With respect to your concerns about the bill's title, if it's helpful, I would say that I also don't think it makes any sense. It means... How can I put it? It's precisely because the government cannot measure its own words that it chooses these types of titles.

I'm going to use an example to show you how the Conservative government works. When we were talking about minimum sentences and law and order, Sébastien's Law was created. This law made people emotional. Another act amending the Criminal Code referred to “trafficking in persons”. That meant that the government, if we didn't agree on certain parts of it, could say, for example, that the Bloc Québécois was protecting pedophiles. So you can see how this government doesn't know how to measure its words.

Now, in terms of fairness at the pump, it should be pointed out that Bill C-14 deals with all weights and measures for electricity and gas, obviously. On the other hand, we also know that the federal government has to market its message. We know that it hasn't received good press over petroleum, with western petroleum companies and everything that's happening. Therefore, it's making the retailers shoulder the responsibility. I don't think that's the way to do things. The title of this legislation could simply have included words such as “fairness in measuring”, “accurate measuring” or something like that that involves all devices for weights and measures.

The government refers mainly to petroleum because it does not want to give more power to the Competition Bureau. You know, collusion is much more profitable than inaccurate instruments and differences of 0.5% at the pump. Neither do they want any sort of monitoring agency. They know that this affects many individuals and people who buy gas. So they come up with a pompous title for marketing purposes, simply because they're concerned with their image, it's obvious. They think they can improve their image by doing that.

That said, we know perfectly well, as Mr. Lake said earlier, that the government is surprised by that $20-million loss to the consumer. Obviously, that's not right. However, it's a relatively small amount compared to the $40 billion worth of gas sold every year in Canada. If retailers wanted to, rather than manipulate their instruments—this is what Mr. Lake is claiming—they could simply increase their costs by a tenth of a cent, or a cent, and that would easily cover it.

Generally speaking the Weights and Measures Act covers all measuring devices. What's important is that consumers can feel confident that when they buy something they're getting the right amount.

I do not believe that retailers are going to manipulate their pumps to get a price that will set them a few cents more. Not everyone sells 10 million litres annually. In any case I don't believe it. That would be rare. They should not be accused without any proof. Accusing them offsets to some degree everything the Conservatives have done on the other side. Twenty million dollars is a lot of money for Mr. Lake when the issue is pump adjustments, but $1 billion over three days doesn't appear to be a problem. We could pay for a lot of inspections with that money.

With respect to inspection costs, I've heard that they would vary between $50 and $200. How much are they now? How much does a retailer pay currently for inspection and calibration, approximately?

[Jane Savage]

I think the most important difference that Bill C-14 brings is the mandatory inspection cycle. As a consumer, it makes sense that when I buy anything that's measured, I know that the measuring device has been subject to some level of an inspection cycle, to some measure of oversight. Again, the consumer confidence side of this is what we're talking about, and the mandatory inspection cycle is what creates this.

The fact that it is already happening and there are already inspections going on—at least in our sector and at least every two years, and sometimes more frequently—is one thing. But if it does serve to help consumers to have confidence when they buy a product by measurement, then that's the benefit of Bill C-14.

Again, we have to be judicious in this. We have to be careful about how we implement these additional powers and how the random inspections will proceed to ensure that there is not an atmosphere of witch hunting of retailers, whose names can be published if they get a fine or an AMP under this legislation.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and thank you for your patience today.

Thank you to our witnesses.

I have a lot of concerns about this bill and also about the industry, because Windsor was very much the focus of some of the discussion by Measurement Canada and the original story in the Ottawa Citizen. The fact as well that, according to Measurement Canada, nobody has been charged despite there being all this evidence weakens it.

There is something that is important for this committee. On Bill C-14, An Act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act, I'd like to ask the clerk how many witnesses we've had on electricity to this point in time, since electricity is the first thing and gas is the second. How many witnesses have we had on electricity in these hearings so far?

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

This question is for anyone who wishes to respond.

Do you think that if Bill C-14 were passed with amendments preventing overlap, consumers would have more confidence in retailers? Would there be greater trust in businesses and retailers?

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

I don't know who spoke about Bill C-14's title. What do you think the title should be?

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Mr. Blouin, you said that you support the goals of Bill C-14. Does that mean that if Quebec and the provinces took precedence, given that these rules already exist, you would support the bill?

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chairman.

Good morning ladies and gentlemen. And thank you for coming here this morning.

My first question is for Ms. Marcotte. Perhaps Mr. Blouin can expand on her answer later.

From what I understand, you're saying in your brief that Quebec already has regulations that provide for obligatory monitoring of retailers. In that case, Bill C-14 is an overlap.

Could you tell us more about this?

[Jane Savage]

As I understand it, the two-year inspection cycle is not in Bill C-14 but will be decided in the regulatory regime. From our perspective, the two-year cycle is a logical cycle for the large urban sites. As I mentioned, the greater the volume going through a pump, the more it wears, and logically the more often, from a statistical point of view, it should be calibrated. Some of the rural sites that we are involved with and that many of you here are familiar with would have one-twentieth the volume of a large urban site.

If we have a one-size-fits-all regime--a two-year cycle for all sites in Canada--the rural sites will have a disproportionate burden of the cost of this regime. Again, as I mentioned, we look forward to working with Measurement Canada in the regulatory phase to ensure that there is some understanding of the way pumps wear and of what logical inspection cycles would look like so that we don't burden rural sites with the cost of this bill.

[Jane Savage, President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association]

Good morning.

I would like to thank the committee for the opportunity to make this submission on behalf of CIPMA members regarding Bill C-14, an act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act.

The Canadian Independent Petroleum Marketers Association represents the interests of independent fuel marketers, that is, the non-refiners, or non-majors, of our industry. CIPMA is a national, not-for-profit trade association, incorporated in Canada in 1996. Leadership for the association is a board of directors made up of owners and senior managers of the member companies.

CIPMA's member companies are the larger independent fuel marketers in Canada. Many are family owned, many are rural in their roots and emphasis, and most are national in scope. All are strong competitors and play a major role in the communities in which they operate.

I would like to name our members. They are, from west to east, PetroValue, based in Vancouver; Parkland Income Trust, based in Red Deer, Alberta; United Farmers of Alberta, or UFA, based in Calgary; Can-Op, of Thunder Bay, Ontario; McDougall Energy, based in Sault Ste. Marie, Ontario; Davis Fuels, of Burford, Ontario; Gales, of Niagara Falls; Pioneer Petroleums, of Burlington, Ontario; Canadian Tire Petroleum, based in Toronto; Max Convenience; Cango of Burlington; Niapen Oil, based in Stoney Creek; MacEwen Petroleum, of Maxville, Ontario; Mr. Gas, of Orleans; Norcan Petroleum Products, of Montreal; Olco Petroleum, based in Montreal; Wilson Fuel, based in Halifax, Nova Scotia; and Co-Op Atlantic, of Moncton, New Brunswick. Collectively, we sell approximately 14 billion litres of fuel products in Canada.

CIPMA members participated in all aspects of the downstream marketing and distribution industry. The majority of CIPMA member companies are in the business of gasoline retailing, and the majority have operations in more than two provinces. Collectively, CIPMA members supply 20% of Canada's approximate 12,500 retail gas stations.

CIPMA believes that consumers have the right to get what they pay for, and CIPMA supports and believes that the retailer is responsible for the accuracy of their measuring devices. We see these as the two fundamental principles behind the current Weights and Measures Act and behind Bill C-14, and, again, CIPMA supports these fundamentals.

CIPMA has been active with Measurement Canada in their deliberations about pump accuracy since 2004. CIPMA provided input to this process formerly in 2008. At that time, we stated that the public has a right to be confident in their purchases at the gas pump and that CIPMA supports a mandatory inspection cycle of gasoline-dispensing devices. We reiterate that position here for this committee.

We support the objectives of Bill C-14, and, combined with robust regulations, we believe it will succeed in meeting its objectives, namely, providing consumers with confidence in the trade measuring devices used for purchases.

It is important to note that Measurement Canada, in their earlier appearance at this committee, testified that contrary to press reports, fraud or deliberate tampering is not the root cause of pumps found to be out of calibration. Rather, pumps wear, and the more volume a gasoline metering device pumps, the more it wears. This is the primary reason for pumps going out of calibration.

Retailers know this, so they undertake regular inspections and recalibrations of their pumps, even though they are not required to do so under the current legislative regime. Most CIPMA retailers inspect their pumps every two years, and some as often as every year. This is to ensure integrity. Inspections and recalibrations are a fundamental and well-accepted practice in our industry, and this practice explains the high compliance rates of the gasoline retailing industry. At 94%, gasoline retailing has one of the highest compliance rates of all measurement trade sectors.

Summarizing these three points for a moment, fraud and tampering are not the causes of gasoline pumps going out of calibration. Gasoline retailers regularly inspect and calibrate their pumps today, and the gasoline sector has one of the highest compliance rates of all the trade measurement sectors.

We still support the intent of Bill C-14, but given these three facts, we strongly recommend that the short name of the bill be changed. Since we are talking about accuracy, let's accurately name the bill. A more accurate name is the “consumer confidence in measurement act”, whether we're talking about gasoline, electricity, natural gas, salami, or green beans.

We are confident that together with properly crafted regulations, this bill will ensure consumer confidence in measurements. We look forward to working closely with Measurement Canada officials in the development of a fair regulatory regime for Bill C-14, soon to be known, we respectfully request, as the “consumer confidence in measurement act”.

Thank you. I'll be happy to answer your questions.

[Sonia Marcotte, President and Chief Executive Officer, Association québécoise des indépendants du pétrole]

Good morning.

The Association québécoise des indépendants du pétrole represents petroleum companies active in Quebec. They are involved in imports, distribution and retail sales of fuel, heating oil, and lubricants. Retail sales for petroleum companies in Quebec represent $1 billion a year.

We are aware of the government's concerns about the accuracy of measuring devices. The AQIP feels that it is normal and to be expected that consumers receive the amounts of fuel they are billed for. Therefore, the AQIP is not opposed to implementing the kinds of clauses that Bill C-14 contains. However, we have a hard time understanding why the bill has been called the Fairness at the Pumps Act. That implies that currently the amounts of fuel being measured at the pump are inaccurate.

Yet, when Measurement Canada began consultations on this in August 2008, we asked for a serious study to assess the situation regarding the accuracy of devices or meters used in measuring the fuel being sold. We were never told that this type of study had been undertaken. What we did notice was that the government seemed to be relying on an article in the Ottawa Citizen, which claimed that consumers were not receiving the amount of fuel they had paid for.

Fraud is a serious accusation and must be based on proof rather than a newspaper clipping. We are even more surprised about the direction this debate has taken given that in Quebec, there are regulations under which fuel retailers must ensure that—and I will quote from the regulation—“all fuel distributors with underground tanks must have meters which shall be calibrated at least once every two years”. This requirement is in section 141 of the Safety Code in Quebec's Building Act. In order, therefore, to avoid further red tape, we insist that the federal government refrain from adding regulations, given that the provincial government has already taken on this responsibility.

Competition Act

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, I would like to congratulate my colleague from Shefford for introducing Bill C-452. The Competition Act is a very relevant topic, particularly with all of the news lately about oil. A huge quantity of oil is spilling into a natural environment and causing terrible pollution. I do not believe that such a major catastrophe has ever happened in our oceans. Those who authorize the construction of drilling platforms should make sure that they will be problem-free before construction begins.

The introduction of Bill C-452 virtually coincides with the study of Bill C-14. The Conservatives call this bill the Fairness at the Pumps Act, but that is just for show and yet another con on their part.

It is a little like the bill whose title referred to trafficking in children, but that contained nothing on the subject at all. That is how the Conservative Party operates. Calling it the Fairness at the Pumps Act is just a marketing strategy. Nothing could be further from the truth. The Electricity and Gas Inspection Act and the Weights and Measures Act cover all measuring instruments, from scales used at the grocery store to weigh fruits and vegetables to those that weigh gold extracted from a mine. The acts cover all weights and measures. The Conservatives are calling this bill the Fairness at the Pumps Act because they want to look good in the public eye by positioning this as an issue that has a financial impact on Canadian and Quebec families.

The summer will soon be here. Some companies will get together to fix prices, because they know that gas use goes up in the summer. So they make the price fluctuate. Obviously, when we point a finger at the oil companies and say that there must certainly be collusion, proponents of economic theory and of the oil sector say that it is a result of the law of the market and the price of crude oil on the stock exchange, and even the price of gas on the stock exchange. I think it is a combination of faulty basic economic principles and people who speculate on the important issue of gas.

There is no doubt that we missed our chance, and that we have a problem with our dependency on oil. We must not be afraid to admit that society has failed. It is too easy to extract oil, but it is becoming a little more difficult. People are starting to think of alternatives. In Quebec, the Bloc Québécois has been saying for a number of years that we need to reduce our dependency on oil.

Right now, on the island of Montreal, the Shell refinery will perhaps force us to reduce that dependency more quickly. However, we must not forget that, as I was saying earlier, there has been a failure in terms of alternative and renewable energy.

The Competition Bureau still does not have the ability to launch its own inquiries. There must be a complaint from the private sector. Then, the Bureau can launch inquiries regarding potential collusion among oil companies, and even gas stations themselves, as we saw in the Eastern Townships two years ago. Time certainly flies.

We really have to change our attitude toward the oil industry and competition.

We need to develop a comprehensive strategy for dealing with oil price hikes. For some time now, the Bloc Québécois has been pressuring the government to take action to address the rising cost of petroleum products. We recommend a three-pronged approach.

First, we must bring the industry into line. That is the goal of Bill C-452, which gives teeth to the Competition Act. We should also set up a true monitoring agency for the oil sector.

Second, the industry must make a contribution. With soaring energy prices and oil company profits, the economy as a whole is suffering while the oil companies are profiting. The least we can do to limit their negative impact is to ensure that they pay their fair share of taxes. The Bloc Québécois is therefore asking that the government put an end to the juicy tax breaks enjoyed by the oil companies.

Third, we must decrease our dependency on oil. Quebec does not produce oil, and every drop of this viscous liquid consumed by Quebeckers impoverishes Quebec and also contributes to global warming.

Oil is making Quebec poorer, and we have to put an end to the bloodletting. All the oil Quebec consumes is imported. Every litre consumed means money leaving the province, thus making Quebec poorer and the oil industry richer.

In 2009, Quebec imported $9 billion worth of oil, a reduction because of the recession. In 2008, oil imports totalled $17 billion, an increase of $11 billion in the five years between 2003 and 2008. At the same time, Quebec went from a trade surplus to a trade deficit of almost $12 billion in 2009, not to mention that the increase in Alberta's oil exports made the dollar soar, which hit our manufacturing companies and aggravated our trade deficit. The increase in the price of oil alone plunged Quebec into a trade deficit.

Meanwhile, the oil companies are shamelessly taking advantage of this situation. They are posting record profits. In 1995, the entire Canadian oil and gas sector posted combined sales of $25 billion. By 2004, this figure had climbed to $84 billion.

Using and importing oil has a very significant impact on Quebec. Consequently, oil prices must be competitive and allow for alternative solutions to reduce our dependency on oil.

The best way to do that in the short term is to vote for Bill C-452, which would take fairness at the pumps beyond weights and measures and extend it to the oil industry as a whole.

[Peter Boag]

Yes. Over the course of time and just with routine wear and tear, the accuracy of a device could deteriorate to the point that it could come outside of the tolerances and standards that currently exist as promulgated by Measurement Canada.

The other point I want to add here is we've been talking about a two-year inspection cycle. That was certainly the recommendation that came out of the 2004 retail petroleum trade sector review. It's what the voluntary standard is now that has been promulgated by Measurement Canada. But actually, Bill C-14 does not specify what that mandatory inspection period will be. That ultimately will be the function of regulations that are made under this act.

Very much, this is enabling legislation, and we look forward to working with Industry Canada staff as they begin the regulation-making process after passage of Bill C-14 to determine what makes sense in terms of the mandatory inspection cycle. Clearly, in our view, that should be on the basis of a solid cost-benefit analysis in examining the magnitude of the problem and what is a balanced approach that makes sense on the basis of that cost-benefit analysis.

[The Chair, Conservative, Michael Chong]

Thank you very much.

Now we'll have about 40 minutes of questions and comments from members of the committee.

We'll not be moving on to the third item on the orders of the day because Mr. McTeague has indicated that he's not going to move his motion, so we'll use the remaining time to 11 o'clock for the study of Bill C-14.

We'll begin with Mr. McTeague.

[Peter Boag, President, Canadian Petroleum Products Institute]

Thank you very much.

Good morning, Mr. Chair and committee members.

As the president of the Petroleum Products Institute of Canada, I certainly want to thank you for the opportunity to be here today and to share the views of the institute on Bill C-14. With me today is Monsieur Carol Montreuil. vice-president of the institute's eastern Canada division.

The Canadian Petroleum Products Institute is the national association representing the public policy interests of the downstream petroleum industry for all aspects of petroleum refining, distribution, transportation, and marketing for transportation, home energy, and industrial uses. Collectively, CPPI members operate 17 refineries across Canada, representing 80% of Canadian refining capacity, and supply some 10,000 branded stations with transportation fuels across the country.

CPPI members include Chevron Canada Limited, Husky Energy, Imperial Oil Limited, North Atlantic Refining, Parkland Income Fund, Shell Canada Products, Suncor Energy Products Inc., marketing under the brand name Petro-Canada, and Ultramar Ltd.

At the outset, I want to emphasize that CPPI and its members are committed to the principle that consumers should get what they pay for. CPPI members operate with the highest levels of integrity and have developed trust with their customers by providing full value for high-quality and reliable energy products.

CPPI members support the concept of mandatory periodic device inspections that are enabled by Bill C-14. Having a two-year mandatory inspection cycle was a principal recommendation of Measurement Canada's 2004 retail petroleum trade sector review. CPPI was a participant in that multi-stakeholder consultation and endorsed the recommendations of the review.

I would also like to take this opportunity to reinforce some remarks made by Measurement Canada officials when they appeared before the committee last week. First, I would like to acknowledge that the retail petroleum sector has a very high compliance rate, which met Measurement Canada's standards: 94% for gasoline pumps over a 10-year period. In 2007, the compliance rate, as reported in the Canwest story referenced by Measurement Canada last week, was 97%. Clearly our goal is to get to 100%, but the mid- to high nineties--and certainly in comparison to the other sectors that were described last week--are very high.

Moreover, Measurement Canada officials confirmed that the calibration error threshold is low at 0.5%, which is really about one cup of fuel for a 50-litre fill-up. They also confirmed that there was no evidence to suggest that calibration errors are the result of intentional actions on the part of refuelers. I think this is an important point to make in the context of some of the public commentary on the issue at the time that Bill C-14 was first tabled.

The last point I would like to make refers to the title of Bill C-14, the Fairness at the Pumps Act. Given that the act amends both the Electricity and Gas Inspection Act and the Weights and Measures Act and is applicable to a broad range of trade sectors, I would respectfully suggest that the committee consider recommending a change to the bill's name to better reflect this broad application.

I would conclude by reaffirming our position that our members are firmly committed to the concept and the principle that consumers should get what they pay for.

Thank you for your attention. Mr. Montreuil and I would be happy to take your questions.

[The Chair, Conservative, Michael Chong]

We're coming out of suspension. Welcome back. We're moving on to the second item on our orders of the day.

We're here pursuant to the order of reference of Thursday, May 13, 2010, to study Bill C-14, An Act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act. In front of us today we have Mr. Boag, who is president of the Canadian Petroleum Products Institute, and Monsieur Montreuil, vice-president of the same organization. We also have with us Madam Huzar from the Consumers Council of Canada.

Welcome to our three witnesses.

We'll begin with an opening statement from Mr. Boag of the Canadian Petroleum Products Institute.