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 (Inquiry into Industry Sector)

[Robert Vincent, Bloc, Shefford, QC]

moved that Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), be read the second time and referred to a committee.

Mr. Speaker, the purpose of Bill C-452, which we will be debating today, is to give the Competition Bureau more powers.

In my speech, I will talk about oil companies, but the same applies to banks, whose interest rates are practically identical.

In 2008, those poor oil companies made mind-boggling profits. That year, Exxon Mobil raked in record-breaking profits for an American company: $45.2 billion.

The oil giant's net profits fell by over half in 2009 to $19.3 billion. So far in 2010, Exxon is making up lost ground. The company was hit by plummeting crude prices last year, but now recovering prices have netted the company a first-quarter profit of $6.3 billion.

They lost money because of the economic crisis triggered by commercial paper, but I think that they themselves played a part in the crisis. Allow me to explain.

The price of a barrel of oil rose steadily. In June 2007, it was $51 a barrel; in January 2008, $99; and in July 2008, $150. The price at the pump skyrocketed for all consumers and businesses. Companies raised their prices to compensate for the cost of fuel, and that pushed prices on consumer goods through the roof.

Bank losses combined with rising prices on consumer goods triggered an economic crisis. That is why the parliamentary committee needs to study the possibility of giving the Competition Bureau more powers.

The parliamentary committee will have to look at the price of crude oil, the refining margin, taxes and the retail margin.

The retail margin is the difference between the price retailers pay for gas and the price they sell it for. In Quebec, the retailer margin is not really a problem because it is usually between 3.5 and 6 cents per litre.

Even if some find that the taxes are too high, they do not vary much and certainly cannot account for the fluctuations in the price of gasoline. Most of these taxes are set and do not vary. Taxes are not the cause of increased gas prices; oil companies are.

To lower refining costs, oil companies have shut down a number of refineries and increased production capacity. The gap between supply and demand has narrowed, and so the slightest weather-related or technical problem leads to a price increase to maintain the balance between those two factors.

Long weekends and vacations are not unforeseen events. However, oil companies never seem to be able to prepare for them. They have nothing in reserve, and they tell us that the price increase is due to scarcity.

Can we imagine a small businessperson failing to keep any inventory in the lead-up to Christmas, and then claiming scarcity to raise prices? Yet the oil companies do it. Because they sell an essential product and there is little competition, they profit from our dependency.

The Bloc Québécois moved a motion, asking that the Standing Committee on Industry, Science and Technology pass it quickly and in full so that it would be in force by the summer since prices tend to increase during summer holidays. But the Liberals and Conservatives were opposed to it at that time.

This was the motion:

That, in the opinion of the House, the government should move an amendment to the Competition Act so that the Commissioner of Competition have the power to initiate investigations of the price of gas and the role of refining margins in the determination of the said price.

We can conclude that the inability of the refining industry to deal with the slightest unforeseen event is responsible for recent increases. Is that situation intentional or not? We do not know, because the Competition Bureau does not have the tools that would enable it to carry out a serious, complete investigation; and that is the reason for Bill C-452 today.

One thing is certain, however: the structure of the oil industry encourages sudden price increases, and that is why it must be monitored.

However, I should note that some increases in the refining margin are hard to explain. For example, the refining margin increased slightly in January and February 2009. Since this happened in the middle of winter during a global recession, the traditional short-term or even long-term factors do not seem to apply. Winter is typically when the refining margin is at its lowest.

Furthermore, the data clearly indicate that Canadian demand for gas decreased in late 2008 and the first half of 2009. We can surmise that use of refinery capacity was probably not a factor in the increase in refining margins in January and February.

Gasoline price crises may be the result of the lack of competition in the oil industry. The three largest refiner-marketers have 76% of the market share. The five largest account for 90% of the market.

The Competition Act must have teeth. Measures have been proposed to discipline the industry, and that includes strengthening the Competition Act. At present, the Competition Act has shortcomings. The Competition Bureau cannot conduct an investigation on its own initiative. It can only respond to complaints or a request from Industry Canada. The Competition Bureau is sorely lacking in powers when it conducts a general review of the industry: it cannot summon witnesses and offer them protection to encourage them to speak out. It cannot require the disclosure of documents.

Without these tools, it is virtually impossible to prove collusion or other anti-competitive practices. Even when competitors reach an agreement, the burden of proving collusion is on the bureau.

Near the end of its mandate, the Liberal government introduced Bill C-66, which was for the most part inspired by a comprehensive plan tabled one month earlier, but never adopted.

When the competition commissioner, Konrad von Finckenstein, appeared before the Standing Committee on Industry, Science and Technology on May 5, 2003, he identified 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....

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.

I stated at the beginning of my speech that it is important for a parliamentary committee to examine the Canadian oil industry. The reason is simple. A similar study was conducted in the United States and the resulting report by the U.S. Senate dealt with whether or not refiners attempted to raise the price at the pumps.

So it is important for consumers in Canada and Quebec that the Committee on Industry, Science and Technology conduct the same study here in Ottawa,

An article in the May 25, 2002 issue of Les affaires refers to the report I mentioned. On page 16, François Normand said that from 1999 to 2001, refiners tried to drive up gas prices at the pump in the U.S. by deliberately reducing supply.

At least that was the main finding of the Permanent Subcommittee on Investigations of the U.S. Senate in a report entitled Gas Prices: How are They Really Set? The report was released in late April 2002 by the subcommittee chair, Democratic Senator Carl Levin from Michigan.

To reduce supply, refiners kept inventory very low. This also had an indirect impact on Quebec. Low inventory in the northeastern United States, one of the areas the report focused on, drives up market prices in New York, which refineries in Montreal use to set their rack price.

The Senate subcommittee looked at the practices of refiners in three areas of the U.S.: the west coast, especially California; the Midwest, particularly Michigan, Ohio and Illinois; and the east coast, particularly Maine and Washington D.C.

The subcommittee used statistics, such as wholesale and retail gas prices, which it got from the Energy Information Administration and the Oil Price Information Service.

Some refiners and pipeline operators also had to provide stacks of documents—103 boxes containing about 265,000 pages—on their refining and marketing activities from 1998 to 2001.

The subcommittee made some troubling findings. For example, an internal BP memo mentions a series of actions that could help keep prices high in the Midwest, including shipping gas to Canada and limiting gas coming into the area.

Testifying before the subcommittee, BP marketing vice-president Ross Pillari stated that the recommendations in the memo were inappropriate and that the company had not acted on them.

Let us talk about the decrease in the number of refineries. The American oil industry, which has been on the defensive since the report was released, acknowledges that inventory is low, but claims that there is no collusion—which would be a crime—between refiners to keep inventory low. According to the industry, there are two reasons for the low inventory: the decline in the number of refineries and the growing demand for petroleum products in the 1990s.

The subcommittee noted that mergers in the oil industry and the closing of many refineries over the past 20 years have increased the concentration in the refining industry. It also noted that during this period, the margin between supply and demand became tight. The subcommittee stated that higher retail prices, for example, in California, were the result of having a highly concentrated market.

The subcommittee did not discover any evidence of collusion among the oil companies to reduce supply in order to drive up prices. However, Senator Levin pointed out that the industry was so concentrated that collusion was not necessary to artificially impact supply. That is why it is important that the House of Commons examine this issue.

However, we have other options available to us, such as creating a petroleum monitoring agency. In its November 2003 report on the price of gas, the Standing Committee on Industry, Science and Technology proposed the creation of a petroleum monitoring agency.

It is quite incredible that, while the oil industry supported this initiative, the Conservatives were against it. The Conservatives are even more inflexible than the oil companies when it comes to defending the interests of the oil companies. They really do not need lobbyists, when they have the Conservative government.

To make it look as if it was doing something, the government set up an Internet site that gave the price of gasoline in major cities. It was just an Internet site. It did not conduct any studies on the oil industry and was unable to recommend any course of action. In other words, it achieved nothing. It takes a real office to monitor this industry.

We have to redistribute resources in order to stop the oil industry from making our society poor. We have to impose a $500 million surcharge on the oil companies' profits. We have to repeal the accelerated capital cost allowance for investments in the oil sands, when the price of crude exceeds a threshold of somewhere between $40 and $50. The government announced this measure in its last budget, but it will not come into effect for another three years. We have to make the oil companies pay for the environmental damage they cause by establishing emissions caps, together with a carbon tax and a permit trading system.

On December 9, 2009, I invited some officials from the Competition Bureau to my Ottawa office to explain to them that Bill C-452 would give them more investigative powers but, to my surprise, they told me that they did not want more powers.

This is why I think it essential that this bill be carefully examined in parliamentary committee, and I hope my colleagues will allow that to happen.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Madam Speaker, I would like to commend and congratulate the member for having introduced this bill. I know he cares deeply about this. He has worked very hard on this matter.

There is one thing that will be raised in the debate if this bill is referred to committee—and I hope it is—namely, is the authority to conduct inquiries really a good idea for the Competition Bureau, which can usually conduct investigations? That is why I am asking him if it relates only to the inquiry itself or if it is also a question of ensuring that the laws and regulations in the Competition Act are strict enough.

If, after an inquiry, it is determined that the Competition Act has some shortcomings and does not meet the requirements for strong competition, as we have raised many times in this House, will this process end up not having the impact that is expected of this bill?

[Robert Vincent, Bloc, Shefford, QC]

Madam Speaker, I thank the hon. member for his question.

Let me be clear. The Competition Bureau does not want additional powers. As a first step, the Standing Committee on Industry, Science and Technology should investigate. I believe the committee has the authority to actually conduct an investigation and not merely call witnesses. We have already done this kind of thing. We need to be able to go into refineries and look for documents. We could draw up a list of all the documents and know how it works.

Imagine for a moment that the executives from all the oil refineries, whether in Montreal, Ontario or New Brunswick, sit down in their offices at the beginning of every month and set the price of a litre of refined gas and imagine that, by coincidence, the executives all come up with the same price.

[Some hon. members]

Oh, oh!

[Robert Vincent, Bloc, Shefford, QC]

I hear the Conservative member shouting across the floor. He can verify this if he does not believe me. He should go see what happens. He will see for himself.

[The Acting Speaker, Denise Savoie]

The hon. member for Elmwood—Transcona. There are two minutes left, so he has one minute.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I want to congratulate the member for bringing in a real consumer bill. Perhaps the Conservatives could learn by this member's example. I think it will certainly be groundbreaking, particularly in view of the fact that he has reported that Exxon earned a record $45.2 billion in 2008.

The consumers are not unaware of this. They know what is happening with the gas companies and how they are being hosed at the pumps. They know that over the last number of years, 125 studies have shown over and over again that there is price fixing, but we cannot get to the bottom of it because we require changes to the Competition Act.

That is what this bill is all about. I want to congratulate the member. I encourage all members here to vote for this bill to get it to committee. We will see where we can go from there.

[Robert Vincent, Bloc, Shefford, QC]

Madam Speaker, I want to thank my colleague.

That is precisely what we want to do. I think that the people of Quebec and Canada shake their heads when they go to the pump to fill their gas tank and see the price of gas. There are people who earn minimum wage and when they put $60 of gas in their tank that is a third of their weekly pay. It is wrong. At some point someone needs to sit down and figure out why the oil companies are acting this way.

I mentioned this in my speech. The oil companies often keep gas in Canada and transfer it when there is a shortage in the U.S. in order to jack up the price. This then has an impact on the price in Montreal, but the prices are supposedly set here. That is how it works and we have to do something about it.

[Mike Lake, Conservative, Parliamentary Secretary to the Minister of Industry]

Madam Speaker, I rise today to speak to Bill C-452.

The bill would give Canada's Commissioner of Competition the power to launch broad based studies of market conditions in entire industry sectors¸

Competition in our economy is of enormous importance to both consumers and their employers. The Government of Canada has recognized that fact by taking significant steps over the past two years to modernize Canada's competition regime and to align it more closely with the competition laws of our country's major trading partners.

It is important to ensure that consumers and legitimate businesses do not fall prey to illegal activity and that if they do they have the confidence that the law will be enforced effectively and that penalties are tough enough to deter future illegal activity.

Important amendments to the Competition Act became law on March 13, 2009. The amendments will help to further increase the predictability, efficiency and effectiveness of the enforcement and administration of the act for businesses and for the Competition Bureau. In turn, this will better protect all Canadians from the harm caused by anti-competitive conduct.

These amendments came about through key recommendations made by the Competition Policy Review Panel which was formed in July 2007 with a mandate to review Canada's competition and foreign investment policies and to provide recommendations to the federal government on how to make Canada more globally competitive.

The panel spent a year reviewing Canada's competition and investment policies. Its report, “Compete to Win”, concluded that in order to prosper, Canada must adopt a more globally competitive mindset. The report concluded that intensifying competition will build a stronger economy, better products at lower prices, more jobs and higher earnings, stronger firms and greater prosperity.

The recommendations made by the panel formed a key part of Canada's economic action plan and provided the basis for the amendments to the Competition Act that were introduced in budget 2009 and passed as part of Bill C-10.

The main elements of the amendments were as follows: creating a more effective mechanism for the criminal prosecution of the most egregious forms of cartel agreements between or among competitors and introducing a non-criminal review process for other forms of competitor collaborations; allowing the Competition Tribunal to award administrative monetary penalties against companies that have abused a dominant position in the marketplace; introducing a two-stage merger review process to allow for a more efficient and effective review of proposed merger transactions; increasing penalties for deceptive marketing practices; expressly empowering the courts to award restitution to victims of false or misleading representations; and finally, repealing criminal sanctions for certain pricing practices to ensure that creative pro-competitive initiatives are encouraged.

These amendments ensure that we have the tools to better protect consumers and businesses from the most flagrant types of anti-competitive conduct, while being ever mindful of the importance of not discouraging pro-competitive behaviour in the market.

I raise the government's actions in this regard because of their importance with regard to the issue we are considering today. As I have described, as part of the amendments resulting from the passage of Bill C-10, new criminal cartel and civil agreements provisions came into force on March 12, 2010. These provisions were delayed for one year to give companies an opportunity to verify that their existing or proposed agreements and arrangements did not violate the new civil and criminal provisions. During this time, companies were able to apply to the bureau at no cost for an advisory opinion as to how the bureau would view a pre-existing agreement under the new provisions.

Under the previous cartel provisions of the act, it was extremely difficult to secure a conviction. The Crown needed to prove that an anti-competitive agreement resulted in substantial harm to competition and to prove that element to the criminal standard of beyond a reason doubt.

These hurdles faced by the bureau were out of step with our major trading partners and harmed Canada's international credibility. The provision had not changed significantly in almost 120 years. The Competition Policy Review Panel recommended that this outdated law be changed and this government acted.

We introduced a two-track approach to address agreements among competitors so that the bureau can crack down on harmful conspiracies and pro-competitive agreements and joint ventures can proceed expeditiously.

Price-fixing is a criminal activity that deprives Canadians of the benefits of a competitive market, such as lower prices and choice. The new cartel provision will provide the commissioner with even stronger tools to challenge this type of anti-competitive practice.

At the same time, a new civil provision has been introduced that allows firms to combine capabilities and resources in order to lower their costs of production, enhance product quality and reduce the time required to bring new products to market, all without any fear of a criminal investigation, and this is as it should be, of course.

These collaborations may be reviewed civilly where they are likely to lead to a substantial lessening or prevention of competition. In such circumstances, the Competition Tribunal may prohibit collaboration, but that is all it can do.

Bill C-452 proposes to amend the Competition Act to authorize the Commissioner of Competition to inquire into an entire industry sector. The commissioner currently has considerable powers in her enforcement role to investigate the state of competition in the marketplace and these powers are appropriately tied to whether the Competition Act is being violated. Importantly, the commissioner investigates the behaviour of businesses and individuals where there is evidence that they may have broken Canada's competition laws.

It is clear that the issues the House must consider when debating this bill are far-reaching and very complex. I want to take this opportunity to thank the hon. member for his efforts to date and the introduction of this bill. I understand that he has noble intentions regarding this matter. However, I wish to remind him of the public and private costs associated with assigning new powers to the commissioner.

We must also recognize the very significant new powers that this government has recently provided the commissioner in order to investigate and deter the types of activities that lie at the heart of this bill. These tools are targeted directly at the types of practices that lie at the heart of the hon. member's concerns and, therefore, will be far more effective than those proposed in the current bill.

The Competition Policy Review Panel argues forcefully that it is vigorous competition that spurs a cycle of innovation, boosts efficiency and adaptability, and raises productivity. The recent changes to the Competition Act are evidence that this government will continue to take the right steps to strengthen Canada's economy and create sustainable employment. It is against this backdrop that the proposal outlined in Bill C-452 should be thoroughly reviewed.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Madam Speaker, I rise today to speak to Bill C-452, legislation designed to protect Canadian consumers. Competition in Canadian industry is essential to the health of the Canadian economy. It encourages firms to develop new products and provides consumers with improved products and a variety of choices.

The Liberal Party believes in both healthy competition in the Canadian marketplace and consumer protection. We, as members of Parliament, must support legislation that encourages healthy competition within Canadian industries while offering solid protection to consumers.

Currently, Canada's Competition Act regulates trade and commerce in respect of conspiracies, trade practices and mergers affecting competition. The purpose of the act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy and in order to provide consumers with competitive prices and product choices.

The purpose of Bill C-452 introduced by my colleague from the Bloc is to ensure that the Competition Act applies to a specific case, in other words, to an entire industry sector.

My party is prepared to support this bill in the interest of competition and in order to clearly identify a case where the Competition Act must apply.

Some people may argue that existing legislation already covers this particular case. But let us be certain that this particular case proposed in Bill C-452 is covered and let us include it explicitly in the legislation with as few conditions and extra restrictions as possible. Let us get rid of any ambiguity.

I want to explain the specific situation being addressed in this bill. As the legislation currently dictates, the Commissioner of Competition is responsible for administering and enforcing the Competition Act. He or she has the authority to launch an inquiry into individual and specific cases where there may be a violation of the Competition Act. This should include the authority to independently initiate an inquiry into an entire industry.

Currently, the Competition Bureau must receive instructions from the minister or conduct an inquiry in response to a complaint filed by a company, consumer or legal entity. This means that Canadians are left unprotected if an official complaint is not made or the minister does not issue instructions. As a result, Canadian consumers could be subjected to unfair dealings, and this could conceivably be occurring at the level of an entire industrial sector.

Bill C-452 would provide the Commissioner of the Competition Bureau with the mandate to launch an inquiry into an entire industry if he or she deems it necessary to do so. Support for this bill would ensure that the Competition Bureau is provided with the necessary authority to take action against companies or individuals that attempt to take advantage of Canadian consumers.

The bill would strengthen the Competition Act, giving the government the right to initiate investigations when there are sufficient grounds to investigate possible collusion, price-fixing or anti-competitive behaviour in an entire industry sector.

We as legislators promised to protect the rights of consumers. I encourage my colleagues to join me in supporting Bill C-452 so we can accomplish just that.

I would like to take a moment to discuss the practical application of Bill C-452.

As I brought to the House's attention on Monday, gasoline pricing has been at the top of the minds of Canadians for many years. As we all know, and as my colleague from the Bloc pointed out, there have been allegations as well as proven cases of price-fixing at the pumps. This unjust manipulation takes advantage of consumers and threatens healthy competition.

Having spoken of one industry, this is not the only industry that this bill addresses. This bill is focused on any industry as a whole that provides a service or a product to the consumer. The current government promised to remedy this issue but we have not yet seen anything of substance presented by the government. It appears as though the Canadian government has largely forgotten about Canadians' concerns over gas pricing.

With the support of my colleagues, Bill C-452 would empower the Commissioner of Competition to initiate investigations that relate to this debacle and take action to ensure that these types of schemes do have consequences.

The amendment to the Competition Act may appear minor at first reading but the changes would ensure healthy competition in Canadian industry, including within the gasoline industry, a change which all hon. members can applaud.

I will close by reiterating that my party is prepared to support this bill in the interest of consumers. This bill should put us on the right track. We must debate it in committee to ensure that the Competition Act is clear on the issue of inquiries by the commissioner. We want to clearly identify the fact that an entire industry sector could be subject to an inquiry by the commissioner.

Finally, we must look at another important tool when we talk about the Competition Act. I am talking about the resources available to the commissioner to carry out his task unhindered. There is no use in conferring powers if the means to use them are not there. Let us take this opportunity with this bill to ensure that commissioner is given the necessary resources to do the job. We could then be sure that the Competition Act is an effective consumer protection tool.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, I am pleased to speak to Bill C-452. The New Democratic Party will be supporting this initiative. The member should be commended for bringing this issue forward. There are those who argue that the Competition Bureau does have sufficient powers right now and does not need additional resources, but I am of a different opinion. There are a number of different products and services out there with which I will deal.

I think competition is not entirely happening the way that it should. It should be noted that the debate that will continue at committee will be very important as part of a process to review a series of sectors and I hope we can get experts and witnesses to come forward.

The sponsor of the bill made reference to the oil and gas industry in the previous debate on a government bill and mentioned the lack of competition in the oil and gas sector. There is almost a collusive element. I noted in particular the Petro-Canada situation where instead of investing in Petro-Canada refineries in Burlington, it shut down the plant and now imports gasoline from Esso and sells it in Petro-Canada stations across Ontario. So there does not necessarily have to be price fixing, but there will not be very much in variables involved with regard to trying to move into a more competitive situation.

It has always been the case, as we look at the oil and gas sector, where there is a lack of refinery capacity, vertical integration with the industry, a series of different elements that lead to basically a formula that is a recipe for disaster for Canadians and their pocketbooks. It was interesting when the government lowered the GST with regard to oil and gas, and the cost that the companies now actually get back, it was not passed on to the consumers. The prices and profits have risen significantly and not even one single organization or company took advantage of the opportunity of the 2¢ reduction to pass it on to consumers. They took it and put in their own pockets.

Because the government had no accountability whatsoever in terms of monitoring the process, or no interest whatsoever, we have lost hundreds of millions of dollars out of the coffers of this country every single year that could have gone to different things whether it be health care, or whether it be more money to the Competition Bureau to be able to examine anti-competitive practices. A whole series of things that could have been addressed are now gone, and the companies now have record profits and record tax cuts from the government which are windfalls they have enjoyed.

It is only fair that we actually 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.

We are seeing that now at committee where there are a couple of current issues that are very important. We have the entrance of new players into the Canadian market with regard to telecom and that means more communication devices, cellphones, BlackBerrys and wireless service provisions that are being expanded in Canada. There are those who feel there is no competition in that sector and relatively similar price elements make it very difficult for consumers to get a better benefit. They have also been receiving record profits and are quite lucrative. Almost all the groups and organizations of the big telecommunication companies have done well.

There are three new entrants coming into the market, so there is no question that this is timely to look at whether or not the Competition Bureau is going to be sufficient to have the independence to examine cases, have the resources to do so, and have the tools to be able to make decisions that are going to increase the competitive nature of businesses in Canada, those that are regulated and those that are non-regulated.

Another issue raised often with regard to this issue is credit cards. New Democrats have been calling for a number of credit card reforms. My good colleague from Sudbury has been pushing this issue and the Minister of Finance is basically moving for 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.

Once again, that is an area where we want 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 a collusion, where there are brown envelopes changing hands and information being wired back and forth to predetermine the actual cost of items and passing them on to the consumer. There just has to be basically a general acknowledgement that they are going to stay in a certain field of play and compete in that field of play. That is not real competition.

For a few years, we used to carry out inquiries into the insurance industry as well and about the issues there. We just have to talk to people about auto insurance and a series of things, and they often find that there is not enough healthy competition or they cannot get certain services whatsoever. I know that some people are outright denied or have to pay really high fees. There are maybe only one or two companies that will provide that demographic, so the fees are through the roof with regard to costs and they really do not get into a competitive market because certain groups of people are written off altogether by these companies.

The Competition Bureau would be well-equipped to look into that because if people cannot even get quotes on insurance, they are stuck with very few recourses of action. We can just talk to young people about what they are paying for auto insurance. They in particular are scammed because I have not seen the evidence that warrants that type of behaviour.

The other issue I have been working on regarding competition is the issue with Toyota. Toyota is a company that is under criminal investigation in Japan, the United States and Europe. Yet here, the government has not even done anything, aside from having two meetings at the transport committee, which we forced the government to do.

The issue behind that is not just in regard to the safety of the vehicles. It is also an issue of competition. Did Toyota know about problems with its vehicles and choose not to fix them, to gain market share at the expense of other manufacturers? It does not matter if one makes a curling iron or a car, if one knows that the device has a problem and chooses to neglect and not fix that to gain market share, it becomes a competition issue because it runs other companies under.

I am very proud of negotiating a change in public policy here, with the Liberals at that time, a number of years ago. It used to be law in Canada that if a business was given an environmental fine or penalty, it could claim that as a business tax deduction. I viewed that as an environmental issue, health and public safety issue, but also a competition issue, and here is why.

We had a drug company, for example, which had a $10 million fine. To explain this clearly, this company was charged with something. It went to court. It was fined $14 million and at tax time, it actually got $10 million back as a business-related expense. If a company polluted the lakes, oceans and streams, and it got caught and was fined, whether it be millions of dollars or hundreds of thousands of dollars, it could claim it as a business tax deduction and get money back on that.

What was important about this change, and why I am proud of negotiating the end to it, was that the good companies were getting punished just as much as any others. They were following the law and doing the right things and they had to compete against those that were actually abusing people and the environment, and that is not right.

I welcome the member's bill here today and look forward to having the discussion at committee. I think it will be a helpful discussion at a very important time, when many products and services need to be looked at under a competitive regime.

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

Madam Speaker, it is a pleasure for me to rise today on Bill C-452. I want to congratulate my colleague, the hon. member for Shefford, for having introduced this bill to strengthen the Competition Bureau’s ability to make inquiries. We also hope that some parts of this legislation will find their way into government bill C-14 on electricity and gas inspection and on the Weights and Measures Act.

I had an opportunity earlier this week to speak on Bill C-14, and it is good that we are now going to discuss Bill C-452, which is still necessary in our view. We need to continue our efforts to deal effectively with the problem posed by the Competition Act, which still does not allow the Competition Bureau to conduct inquiries on its own initiative. It is still necessary, unfortunately, to wait for a complaint from some individual before an inquiry can be initiated.

Even though the Bloc Québécois supports Bill C-14 in principle, it is not an end in itself. With the introduction of Bill C-452, the Bloc Québécois reiterates its intention of freeing Quebec from its dependence on oil through a bold program focused on green energy and the electric car.

To do this, Bill C-452 expands on the measures the government is introducing in Bill C-14 by proposing further steps that could be taken to protect consumers.

Our bill would give the Competition Bureau the power to conduct on its own initiative real inquiries into an industry if there are reasonable grounds for doing so. At present, this is not permitted. The Bureau has to wait for complaints or for instructions from the minister before it can act.

Even though the government says it took action to correct the situation in the Budget Implementation Act of January 2009, there are no provisions in this act allowing the Competition Bureau to make inquiries on its own initiative. A complaint is still needed before an inquiry can be launched.

It is obvious that a bill like this would leave the Competition Bureau much better equipped to fight companies that want to take advantage of their dominant position in the market to fleece consumers.

The Bloc Québécois is not inventing anything new here. We have simply repeated for several years now the recommendations in the report of the Standing Committee on Industry, Science and Technology, which was tabled in November 2003. The federal government has never done anything to help consumers in this regard. It has a fine opportunity here, though, to set up a monitoring system for the petroleum industry.

To understand the steps leading to the debate on Bill C-452, we need to go into the history of it.

In 2003, the Standing Committee on Industry, Science and Technology tabled a study on the price of gasoline that made two recommendations to the government: create a petroleum monitoring agency and tighten up the Competition Act. The committee even specified the changes to the Competition Act that it would like to see. At the time, the Bloc was already saying that the government should implement the committee’s recommendations.

In October 2005, the Liberal government came around to the Bloc’s arguments and, as part of its plan to help curb the increase in the price of gas, it tabled amendments to the Competition Act in Bill C-19.

Unfortunately, Bill C-19 was just an election gimmick to give the impression the government was doing something to discipline the oil industry and it died on the order paper.

The Conservatives are quite enamoured of the oil industry, of course, and it is hardly surprising that they did not re-introduce the bill.

As a result, in 2007 the Bloc Québécois tabled Bill C-454, which passed second reading on April 28, 2008. But it too died on the order paper when an election was called in 2008.

In 2009, the Conservative government partly revived Bill C-454 in the Budget Implementation Act of January 27, 2009, although the Competition Bureau still was not allowed to launch inquiries on its initiative.

So here we are seven years later debating Bill C-452 to give the Competition Bureau some real teeth.

There is no doubt, in the Bloc’s view, that the Competition Bureau should have greater freedom of action and more discretionary power over its inquiries. To conduct an inquiry, the Competition Bureau needs access to all the documents so that it can do a good job of investigating and promoting competition.

The Bloc Québécois has long been pressing the government to take action in view of the rising price of petroleum products. Bill C-452 is just a first step toward countering the increase in the price of gas.

Apart from Bill C-452, the Bloc is more convinced than ever that the industry should do its fair share.

As I said at the beginning of my speech, Bill C-452 is part of a plan for sweeping change.

First, we must put a stop to the tax cuts for oil companies. In 2007 or just one year after taking power, the Conservative government gave the oil companies another tax cut in the 2007 economic update. As a result, the companies will see their tax rate fall to 15% in 2012. In that year alone, this tax break will help them pocket nearly $3.6 billion.

We also need to reduce our dependence on oil. Quebec does not produce any oil and every drop that Quebeckers consume impoverishes Quebec, in addition to contributing to global warming. The Bloc Québécois therefore wants to reduce our dependence on oil.

In 2009 alone, Quebec imported $9 billion worth of oil, less than usual because of the recession, but in 2008, oil imports totalled $17 billion. Over a period of five years, from 2003 to 2008, oil imports increased by $11 billion.

Furthermore, to reduce our dependence on oil, the Bloc has proposed substantial investments in alternative energies to create a green energy fund, launch a real initiative to reduce our consumption of oil for transportation, heating and industry, including an incentive to convert oil heating systems, and introduce a plan for electric cars.

We have to get ready, because by 2012, 11 auto manufacturers plan to introduce some 30 fully electric and hybrid models.

The objectives of Bill C-452 are clear. A bold program focused on green energies and electric cars that will allow Quebec to end its dependence on oil is urgently needed.

Until we can put an end to this dependence on oil, we must give more power to the Competition Bureau by allowing it to initiate inquiries, and by creating a petroleum monitoring agency.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, I welcome this opportunity to take part in the second reading debate regarding Bill C-452, An Act to amend the Competition Act (inquiry into industry sector).

I would like to take a moment to frame my thoughts on this bill within the broader context of the government's plan for Canada's continuing economic recovery.

As we made clear in the Speech from the Throne, this government's goal, as we move forward into our recovery, is to ensure all Canadians benefit from our agenda of providing jobs and growth.

Over the last year, our government has taken decisive steps to protect incomes, create jobs, ease credit markets and help workers and communities get back on their feet.

Moving forward, our strategy for the economy is to create the conditions for continued success in the industries that are the foundation for Canada's prosperity. Our government is committed to identifying and removing unnecessary job-killing regulation and barriers to growth. This government stands for free and open markets. Open and competitive markets are the best way to promote new dynamic, innovative products and ideas.

Having set out this broader perspective on the government's priorities, allow me now to the turn to the details of the bill.

On its face, the bill appears to be quite straightforward. It proposes a single amendment to the Competition Act. If adopted, it would provide the Commissioner of Competition with additional power to commence a formal inquiry under the act.

To be clear, the act already allows the commissioner to start a formal inquiry into the conduct of a company, or companies, whenever she has reasonable grounds to believe that the act has, in some way, been violated. The amendment being proposed now would add to that authority. It would allow the commissioner to start an inquiry into an entire industry sector at large.

There is an important distinction between what exists today and what is being proposed.

Under Bill C-452, there would be no requirement to show any evidence that the enforcement provisions of the act might, in some way, have been contravened.

It is important to understand the consequences of such a change. The commencement of a formal inquiry is a serious step in the investigative process. Once at the stage of inquiry, the commissioner is able to apply to the courts for permission to use the investigative powers of the Competition Act to subpoena oral and written evidence from any party who may have relevant information regarding the matter under investigation. This is reasonable power for the commissioner when she is examining business practices that she has a basis for believing violate the enforcement sections of the act.

The commissioner must have access to modern and sophisticated investment tools to allow her to determine, in an unbiased fashion, whether the law has been violated.

At the same time, this is an authority that imposes both considerable and complicated obligations for those under investigation and significant public and private costs to ensure the obligations are met. Failure to comply raises the risk of being found in contempt and the possibility of fines and imprisonment.

The position of the Commissioner of Competition demands the exercise of prudence and good judgment. I have every confidence that the Commissioner of Competition does, and will continue to, exercise her authorities with the utmost care and responsibility.

However, the Office of the Commissioner requires direction. The introduction of this type of power proposed by the bill would put at risk the reputation of the commissioner and the staff she directs. The authority to inquire into an entire industry sector without any evidence of wrongdoing would open the commissioner to criticism that she is engaging in a costly fishing expedition.

We must also remember that the commencement of a formal inquiry and the commissioner's use of her formal powers come at a cost to her office. Her primary responsibilities are the enforcement provisions of the Competition Act. Any inquiry into an entire industry sector would demand extensive use of limited bureau resources. Without additional funding, the commissioner would need to reallocate assets from her other priorities.

It is imperative that Parliament consider the burdens we would impose on the commissioner when we amend the legislation and establish her enforcement priorities, and the cost to Canadian businesses and consumers if we distract from that principled focus.

As I noted at the outset of my comments, this government is committed to improving job opportunities for Canadians and growing our economy. We are committed to finding and eliminating unnecessary job-killing regulation and barriers to growth. We are not here to introduce measures that would result in new barriers to growth and prosperity.

As we consider this bill, we must also remember the steps that this government and this Parliament have already taken to address the issues that lie at the heart of this bill.

With the passage of Bill C-10, the Budget Implementation Act, 2009, in March 2009, this government introduced the most substantial amendments to Canada's anti-cartel laws in more than 100 years. These changes introduced an outright prohibition on agreements between competitors regarding prices, output levels and market sharing.

[The Acting Speaker, Denise Savoie]

Order. The hon. member will have five minutes when this debate continues.

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

Pursuant to order made on Friday, May 7, the House in committee of the whole will now proceed to the consideration of Motion No. 4 under Government Business.

I do now leave the Chair for the House to go into committee of the whole.

The House resumed from May 12 consideration of the motion that Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), be read the second time and referred to a committee.

Competition Act

[The Speaker, Peter Milliken]

When this matter was last before the House, the hon. member for Niagara West—Glanbrook had the floor. There are five minutes remaining in the time allotted for his remarks. I therefore call upon the hon. member for Niagara West—Glanbrook.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Mr. Speaker, from where I left off a couple of weeks ago, a concern that I find with this legislation is the relatively broad scope of powers that it would afford with such a simple change of Canada's Competition Act.

The bill would give Canada's Commissioner of Competition unlimited powers to call an inquiry into an entire industry sector, with no evidence of any wrongdoing, and place entire sectors under scrutiny, through no fault of their own.

Not only would this investigative process cause problems by shifting the focus of a company away from its day-to-day operations to co-operating with the commissioner's investigation, it would also place a great deal of pressure upon the office of the commissioner. As I said previously, the office of the commissioner is one that exercises its authority with the utmost care and responsibility. However, with what this bill is proposing, a great deal of pressure would be placed upon the office to investigate virtually any rumour of wrongdoing by the industry sector, regardless of the grounds upon which these suspicions were made known.

I had begun to talk about our government's budget implement act in the first hour of debate on Bill C-452 and would like to finish my thoughts on that.

In March 2009 this government introduced the most substantial amendments to Canada's anti-cartel laws in over 100 years. These changes introduced an outright prohibition on agreements between competitors regarding prices, output levels or market sharing. They also significantly increased the penalties for these offences to $25 million and/or 14 years in prison. To allow business to adjust, the government also allocated a one-year period for them to review their practices and bring about compliance with these measures.

With the coming into force of these provisions on March 12, the Commissioner of Competition finally has the types of improved tools she needs to aggressively pursue and convict those engaged in the most harmful types of cartel behaviour which distort competition and undermine confidence in the marketplace.

Our government has made great strides in legislation to strengthen competition and punish non-compliance of the fundamental principle of a free market system. Broadening the Commissioner of Competition's powers from simply being investigative to the much more comprehensive level of launching inquiries may quickly prove to be ill-thought, both in terms of time and resources.

One thing our government seems to recognize more than the opposition parties is that just as anti-competitive behaviour drives up prices, so too does costly bureaucratic red tape.

In conclusion, the question that we must ask as we consider this measure is whether we as members of Parliament are willing to impose the types of burdens on businesses that would flow from this bill. Do we want to subject businesses to costly and time-consuming investigations where there is no evidence of wrongdoing? Is it appropriate to distract the commissioner's focus for enforcing the Competition Act?

We are very wary of imposing any new regulatory burdens on business, especially in light of today's harsh economic realities.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Madam Speaker, I would like to commend my colleague for introducing Bill C-452 with regard to the Competition Act. I would like to commend all of my colleagues for participating in the debate on this particular topic. We all, I believe, understand the value of competition.

Certainly, we in the Liberal Party value and understand the importance of competition in the market and understand that a competitive economy is a more prosperous economy. We also understand the need for protecting consumers and to ensure that the market itself is not so much protected but operated in a manner that prevents distortions in the market that may result from concentration or inappropriate behaviour.

Although the Competition Act and the Commissioner of Competition have important rights, which we value in terms of investigating particular businesses and their activities, the commissioner can only do that as a result of a specific complaint from an entity, individual or some other enterprise. In the market there are times when an individual or entity may, in fact, be hesitant for competitive, market or other reasons that we may not be aware of to raise a specific complaint with the Competition Bureau. In that sense, where those situations exist, it is important to give the Commissioner of Competition the opportunity to look at an entire industry sector.

I have no intention today of raising specific industries. My view is that this is an opportunity for the Commissioner of Competition, when it is appropriate, regardless of the industry, if there are issues that have been raised that suggest that an investigation is warranted into the industry as a whole. This is indeed an improvement to the Competition Act that would allow the commissioner to do just that.

I would like to thank my colleague for introducing this bill, which would enhance the Competition Act. Liberal members understand how important it is to have marketplace competition, but we also recognize the importance of protecting consumers by ensuring that prices and products on the Canadian market comply with the law.

There have been a number of arguments put forward in debate in this House that perhaps this gives too much discretion to the Commissioner of Competition. I would argue that this is not a situation where the commissioner would undertake an investigation willy-nilly. The history of the Competition Bureau has been one of operating with significant understanding of the Canadian market in all the different industries that have been looked at.

I would also argue that the Commissioner of Competition has had the opportunity to review certain industries as a result of investigations into particular business activities, particular activities engaged in by particular enterprises. That particular study ends up being done appropriately but too often through the back door. The addition of this provision would allow the competition authorities to engage in that larger investigation of an entire industry where warranted.

To address a concern that somehow this would provide an opportunity to go looking for problems, I completely disagree with that. The history of the Competition Bureau has been one of real understanding of the need of when to be involved and when not to be involved. I will repeat my earlier comment that up until now the opportunity has only arisen when a specific complaint has been laid.

The addition of this clause would allow the Competition Bureau to investigate an entire industry sector. That would not happen out of the blue. The entire history of the Competition Bureau would suggest that any such investigation would only happen when there was sufficient information available, whether through the market or through other indications that such an investigation would in fact be warranted.

In that regard, I have considerable faith in the Competition Bureau as an entity and in the people involved not to be engaging in witch hunts but, in fact, to take advantage the addition of a clause like this one to enhance their ability to balance the needs in the Canadian market of encouraging competition and competitive activity in this country in order to ensure the most prosperous domestic economy that we can achieve. We must also ensure the greatest level of global competitiveness that we can, all the while understanding the need to ensure that consumers in Canada are able to obtain the best products at the best prices without any undue influence in the market or any distortions in the market that may be seen in any particular industry.

I want to again thank my colleague for introducing this amendment to the Competition Act. I want to thank all of my colleagues who have participated in this debate. I have heard some of the arguments against it, but I would suggest that we should have a greater level of confidence in the Competition Bureau and the people who work in the Competition Bureau to use this to enhance their ability to encourage competition, and to ensure the best market and economic opportunities, and the protections that consumers need in Canada.

I look forward to hearing continued debate.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I am pleased to speak today to Bill C-452. I am happy the member introduced it as it is a long overdue measure in Canada. It would amend the Competition Act to authorize the Commissioner of Competition to inquire into an entire industry sector.

For the past 100 years, we have had a situation that is not necessarily peculiar to the gasoline industry but it is an industry that the average consumer can relate to. For many years consumers have been phoning their politicians and telling us that there is something wrong in the gasoline retailing industry. When one gas station raises the price, the one across the street raises it a couple of minutes later, and then when one lowers it, the other lowers it as well. They work in concert.

Over the last number of years numerous studies have been done on price-fixing in the gasoline retailing industry. After about 150 studies, many feet thick sitting on the desk of the minister, the conclusion is always the same. We know something is going on, we know someone is doing something but we do not know how they are doing it and we cannot prove that they are doing it. That is why we have not made progress.

From 1988 to 1999, I was the consumer critic in the opposition in Manitoba and among the many issues that I dealt with as the consumer critic, one of them was the area of prices increases. We looked at the regulation of gas prices in the Maritimes and concluded that was not the way to go because the regulations seemed to be always going up to the highest price. The minister of the day, Jim Ernst, had a very open mind on this issue. He was not taking the side of the industry but he was prepared to let things go as far as they could. He commissioned a study at the time and once again the same conclusion was that the law had to be changed, that we were not catching the industry because the law was not broad enough.

That is a federal responsibility. The member is a federal member and he is doing what has to be done in this situation.

The government said that it brought in new changes in its omnibus budget bill last year, and I applaud it for the changes, but the member who just spoke for the government said that we should stop there because we do not want to give the Competition Bureau unlimited powers. It could go on a wild goose chase and tie up the companies in red tape and cost the economy a tremendous amount of money on some sort of whim.

I do not know where the member got his notes on this subject but the fact is that having tough laws are what prevent businesses from doing exactly what we are trying to prevent, which is price fix and collude.

In terms of price-fixing, we always think of large industries. We think of the gasoline industry, the credit card industry and other major industries but price-fixing and collusion can happen with small entities as well.

Price-fixing can appear in very small businesses. In a small town, two real estate firms could get together and decide that commission rates will all be 5%, 6% or 7%. Travel agencies in a small market could get together and collude. Until the Competition Bureau laid down the law a number of years ago and sent out promotional videos that indicated to the industry that this would not be tolerated, many businesses were unaware that it was even against the law. In other words, there was a law but the businesses were not aware of it.

However, once the Competition Bureau became proactive and started to chase the travel industry and the real estate industry, little businesses became aware that it was against the law and if they were doing it, and some were, they stopped doing it. We need very stringent laws, strict fines and we need promotion so that businesses do not get involved in it.

A year or two ago, no lesser a company than Sotheby's, the big worldwide auction firm, we saw two major auction houses in England come together and set prices for auctioning off items at Sotheby's. This practice went on for two or three years until one of the customers who was auctioning his store of art decided to investigate and started to make complaints. Eventually, one of the employees of Sotheby's or the other firm went to the authorities and gave all the information. Can anyone guess what happened? As a result, one of the firm's owners went to jail for a few months and, if he did not go to jail, he certainly paid very big fines, but the company is back to competing again. There was an end to the price-fixing.

However, that only happened because a customer was motivated to investigate, make the complaints and the charges to get things done.

In this House, we had the Liberals in power for 13 years. I have read the speeches in Hansard on this bill and others, and the Liberals have absolutely no credibility on this issue. They were the government all those years and there is only one member of the entire Liberal caucus who has any credibility on this issue at all and that is the member for Pickering—Scarborough East because, while the Liberals were the government, he was the lone member who actually attacked his own government and said that it should take off the blinders, that price-fixing was going on in the retail gasoline business and that something needed to be done about it. What did the Liberals do to him? They simply moved him back a couple of rows and ignored him.

The Conservative government has made some tentative steps, and I applaud it for that, but it is important for the member's bill go to committee where we can call in witnesses and discuss at length the matter of adding on extra powers for the Commissioner of Competition to inquire into the entire industry sector, which is what we want to do.

There is an another reason we want to do this. In case there are some industries that want to continue to flaunt the laws because they do not think that even the new penalties and laws are strong enough, then we want to give the commissioner the power to initiate her own investigations and not have to take direction from the minister, which is what happened during those 13 years of inaction under the Liberals and the previous 100 years of inaction in this country.

Let us pass this bill on to committee, let us study it and let us give more power to the commissioner.

[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.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Madam Speaker, I am pleased to take part in the second reading debate on Bill C-452, An Act to amend the Competition Act (inquiry into industry sector).

As I understand it, the underlying objective of this bill is to address potential problems associated with investigating the petroleum sector. We are all concerned with high gas prices and as many in the House are aware, gasoline prices have long been a focus of the Competition Bureau.

High prices in and of themselves are not illegal under the Competition Act as long as long as they result from free market forces and are not the result of anti-competitive behaviour. The bureau does not hesitate to take action to protect both competition and consumers when there is concrete evidence that the high prices are the result of anti-competitive conduct.

In this regard, since 1972 the bureau's investigations in the gasoline and heating oil markets have led to thirteen trials involving charges of local price maintenance, eight of which have resulted in convictions. The bureau has also conducted six major investigations into allegations of collusion and other anti-competitive behaviour in the petroleum sector since 1990.

Those investigations did not find any evidence to suggest that periodic price increases resulted from a national conspiracy to limit competition in the supply of gasoline or from abusive behaviour by firms holding a dominant position in the market. Instead, they found that market forces such as supply and demand and rising crude oil prices caused the price spikes.

That has not stopped the bureau from remaining vigilant regarding the activities of this industry. In 2008, the bureau's investigation into certain cartel activities led to criminal charges against 13 individuals and 11 companies accused of fixing gasoline prices at the pumps in Victoriaville, Thetford Mines, Magog and Sherbrooke, Quebec. As of December 2009, ten individuals and six companies have pleaded guilty in this case, with fines totalling over $2.7 million. Of the ten individuals who pleaded guilty, six have been sentenced to terms of imprisonment totalling 54 months.

The same vigilance is evident in the bureau's work in reviewing mergers in the petroleum sector. In July 2009, the bureau announced that it had reached a consent agreement with Suncor Energy and Petro-Canada regarding their proposed merger. If this transaction had proceeded without the bureau's intervention, Suncor and Petro-Canada would have been in a position to restrict supply at the wholesale level, as well as to reduce competition in the retail sector in southern Ontario.

The consent agreement in this case required the merged company to sell terminal space and distribution capacity at its gasoline terminals in the GTA to an unrelated third party to ensure continued competition in the market for wholesale distribution of gasoline in southern Ontario and the GTA. This agreement also required the merged company to supply 98 million litres of gasoline to independent gasoline retailers each year during the 10-year period.

To address competition concerns in the retail sector, the consent agreement also required the merging parties to sell 104 corporate-owned gas stations in the GTA and southern Ontario.

Bill C-452 proposes a single amendment to the Competition Act. It would provide the Commissioner of Competition with the ability to launch formal inquiries under the Competition Act into entire sectors of the economy.

We need to be vigilant with respect to the duties that we impose on the bureau. Currently, the commissioner has the ability to conduct limited market studies as part of her role as an advocate for competitive markets. Studies into generic drug pricing and the practices of self-regulating professions are two recent examples where the commissioner examined the specific practices of various industry sectors and made recommendations to promote a more competitive marketplace.

There is evidence that these studies have been effective in improving competition in these sectors. The costs to business and the resource requirements within the bureau of such studies were minimal and did not interfere with the bureau's priority which is to enforce the act.

If a formal inquiry into an entire industry sector is required, the government may invoke its powers under the Inquiries Act. Such inquiries would include the authority to compel either oral or written evidence from witnesses and require witnesses to produce documents that are relevant to the matter that is under inquiry.

The government may also launch an inquiry under section 18 of the Canada International Trade Tribunal Act. This provision allows the tribunal to inquire into and report on matters of economic, trade or commercial interests to Canada. In the past, the tribunal has carried out studies on the competitiveness of the beef industry and the fresh and processed fruits and vegetables industries in Canada.

Given these existing avenues for inquiry and the range of issues that have been examined under the commission's current authority, I must say real doubt arises as to whether a new broader power is needed.

As we have seen, the Competition Bureau continues to aggressively enforce the Competition Act whenever violations occur in the petroleum sector. In addition, provisions in the act exist to ensure that action can be taken against abusive behaviour by dominant firms in any market. As well, the bureau has used its existing limited market studies authority to proactively promote constructive measures to improve competition in markets where structural problems exist.

Should Bill C-452 be referred to committee, I hope that there will be a thorough and detailed analysis of this proposal to determine whether it would truly advance the protection and promotion of competition for Canadian consumers and businesses.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Madam Speaker, I welcome the opportunity take part in the second reading debate regarding Bill C-452, An Act to amend the Competition Act (inquiry into industry sector).

I begin today by taking a moment to make a few remarks on Canada's competitive landscape and the government's plan for improving Canada's competitiveness.

A strong and competitive economy is central to the quality of life for Canadians. A strong and competitive economy means jobs, more opportunity, choices for consumers and enhanced prosperity for all. The government continues to take actions that will allow Canadians to thrive and capitalize on economic opportunities at home and abroad, while at the same time safeguarding Canada's interests.

Productivity and growth are at the heart of our standard of living as individuals, as firms and ultimately as a country. Responsibility for a better Canada rests with every individual, as well as with government, which is responsible for implementing appropriate public policies, ensuring effective management and providing strong leadership. Canada must step up its game to become more competitive both at home and abroad.

In the global economy, the pace of competition has accelerated and our competitors are becoming more successful. As a country, we must position ourselves for more wins in this new global marketplace. As a result, the government is focusing on policies that generate future growth and opportunities to boost our economic productivity. It starts with everyone adopting a more competitive mindset.

Competition in our economy is of enormous importance to consumers and their employers alike. The government has recognized that fact by taking significant steps over the past two years to modernize Canada's competition regime and align it more closely with the competition laws of our country's major trading partners. This allows for improved collaboration with other countries and facilitates more transparent and coordinated enforcement initiatives.

The Competition Policy Review Panel report entitled “Compete to Win”, released in June 2008, and the government's actions to implement the panel's recommendations reflect this government's commitment to reach a better standard of living for all Canadians. To do so, we need greater competitive intensity, which in turn yields higher productivity and growth.

The panel spent a year reviewing Canada's competition and investment policies. In its report, the panel concluded that in order to prosper, Canada must adopt a more globally competitive mindset. It concluded that intensifying competition would build a stronger economy, better products at lower prices, more jobs and higher earnings, stronger firms and greater prosperity.

The panel called on the government to reduce or eliminate legal and regulatory barriers to vigorous competition within Canada, at the same encouraging more foreign investment, and to take a series of other measures, including a tax reform, attracting and developing talent and harmonizing our competition laws with those of the United States.

The panel recognized the importance of ensuring that consumers and legitimate businesses did not fall prey to illegal activity and, if they did, they had confidence that the law would be enforced effectively and that penalties would be tough enough to deter future illegal activity. That is why it recommended a number of important amendments to the Competition Act to ensure it promoted the most effective competitive landscape for Canada's consumers and businesses.

These reforms were implemented by the Budget Implementation Act, 2009. They are all about building a better foundation for Canadian businesses to succeed and fostering increased confidence in the marketplace among Canadians consumers and all those carrying on business or considering carrying on business in Canada.

We toughened our approach to clearly anti-competitive acts, made changes to ensure that the law would not chill legitimate business activity and simplified the law in many respects. The reforms introduced tougher penalties for price fixing and other hardcore conspiracies, while narrowing this provision to ensure it did not discourage potentially positive strategic alliances.

To summarize, the Competition Act now provides more certainty to businesses and supports the type of honest competition that benefits all Canadians. We now have robust laws that will protect and promote competitive markets in Canada so Canadian employers thrive and consumers can have confidence in the marketplace.

As we made clear in the Speech from the Throne, this government's goal, as we move forward in our recovery, is to ensure that all Canadians benefit from our agenda of providing more jobs and growth. Over the last year, our government has taken decisive steps to protect incomes, create jobs, ease credit markets and help workers and communities get back on their feet. Moving forward, our strategy for the economy is to create the conditions for continued success in the industries that are the foundation for Canada's prosperity.

Our government is committed to identifying and removing unnecessary job-killing regulation and barriers to growth. This government stands for free and open markets. Open and competitive markets are the best way to promote new, dynamic and innovative products and ideas. Businesses do not need unnecessary government oversight or new regulations to dictate how they should operate.

It is in this context that I wish to remind the hon. member of the significant new powers this government has provided the Commissioner of Competition in order to investigate and deter the types of activities that lie at the heart of the bill. These tools will be far more effective than the measures provided and proposed in Bill C-452.

[Robert Vincent, Bloc, Shefford, QC]

Madam Speaker, I am pleased to speak during second reading to ask each member to recognize the importance of Bill C-452 for the voters in their ridings.

When this bill is studied in committee, we will need to find answers to the questions being asked. I will give a few examples of questions we have in mind. The committee will hear witnesses, and I hope that we will get some clarification. I also hope that this bill will be passed soon and that we will not be debating it again.

The Conservative members are talking about amending the Competition Act and about Bill C-10. These measures provide for new legal powers, but no real powers for the Competition Bureau.

Industries and the public need to be protected, but the real problem lies in identifying the guilty parties. If the bureau does not have the authority to make an inquiry, then it cannot apprehend them. Yet the government is refusing to give it that authority. If it cannot initiate an inquiry, it cannot issue fines. But that is not all. in 1869, just after Canada was founded, the Competition Bureau was given certain powers, which gradually increased.

Did members know that in 1976 the investigative powers that we are currently asking be granted to the Competition Bureau were already included in the legislation? This is not new. In 1976, under section 47, the director of the Competition Bureau could independently launch an inquiry into the existence and impact of conditions or practices related to the product being investigated. Who took this power away from him?

This bill aims to give the director of the Competition Bureau the power to investigate. Who was in power in 1986? Brian Mulroney's Conservative government. When the Competition Bureau was restructured, that government took away some of its investigative powers. We simply want to reinstate the investigative powers taken away by the Conservatives in 1986.

There were also claims that section 47 had been repealed, at least partially, as a result of objections expressed by the business community. In 1981, the oil sector was investigated to determine whether there was any collusion among the oil companies. The Competition Bureau's power to investigate was taken away because companies complained to the government that it was too expensive, that the government was spending far too much money to protect consumers. They wanted the Competition Bureau's power to investigate to be taken away, so that industries would no longer have to worry and could do whatever they want. That is what we hope to correct with this bill.

I have three, four or five more points to raise. For instance, the price of gas is higher in some regions than in others. Why does a litre of gas cost $1.05 in Granby and only $1.00 or $1.01 just a few kilometres away? It is not complicated; the price varies depending on the population base. The more residents there are in a municipality, the higher the price of gas. The industry tries to tell us that the price is not the same everywhere and there is competition.

There is no competition. There are fewer people, so it is cheaper.

In conclusion, I hope my colleagues will vote to send this bill to committee.

[The Acting Speaker, Denise Savoie]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

On division.

[The Acting Speaker, Denise Savoie]

Motion agreed to.

Accordingly, the bill stands referred to the Standing Committee on Industry, Science and Technology.

(Motion agreed to, bill read the second time and referred to a committee)

Suspension of Sitting

[The Acting Speaker, Denise Savoie]

The House is now suspended until 12 o'clock for government orders.

(The sitting of the House was suspended at 11:53 a.m.)

(The House resumed at 12:00 p.m.)