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.

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

Thank you, Mr. Chair.

Good morning, ladies and gentlemen.

My first question is for Mr. Janigan.

You said that the OECD recommended that we institute a power to implement market studies. If I am interpreting your comments correctly, that means that the Competition Bureau currently does not have the power to implement market studies.

Does Bill C-452 address the OECD's recommendation, in other words, does it have a provision that would give the commissioner the power to implement market studies?

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you very much.

First of all, thank you for taking the time from your busy schedules to be here today and for the role you play in a good public discourse about public policy and law. We certainly do appreciate that.

I'm going to ask three questions up front, primarily to the Canadian Bar Association. As you know, I only have five minutes, and I'd like for you to wrap them all up at the end.

First of all, in the letter to us from the Canadian Bar Association, you talk about Bill C-452 proposals to amend subsection 10(1) of the Competition Act to mandate the Commissioner of Competition to cause an inquiry to be made whenever the commissioner has reason to believe that grounds exist for making an inquiry of an entire industry sector.

We had Mr. Bilodeau before us last week. He's the acting assistant deputy commissioner of the Competition Bureau—that's quite a title—and he says that in effect the commissioner now has access through the legislation to new and powerful provisions that clearly strike at the heart of this legislative matter. As you indicated a few moments ago, if the power exists, then the expectation is that it will be used.

My first question speaks to this issue. If the new provisions that were given to the commissioner eight or nine months ago in effect give them this power, why are you concerned that clarity or surety around those powers is a detriment? That's the first question.

The second question goes to jurisdiction. The committee has been told that jurisdictions like the United States, the United Kingdom, Australia, and the European Union all have similar provisions. Yet in Canada there's a concern—and you're expressing it quite clearly—around this.

Could you talk about why it is in Canada that we would be concerned about having this when other jurisdictions, partners of ours in global trade, would have the provisions that are being proposed in this bill?

The third question goes to what I'm going to call frivolous or vexatious types of investigations. You're saying it might be costly to do the investigations. Are there safeguards to ensure any investigation that's done is required? If we do move forward with this type of provision, based on the fact that the commissioner already has these provisions and that other jurisdictions have them, is there anything you could suggest to ensure there would not be any frivolous actions taken?

I'll leave those three questions to you to answer. I'd appreciate it.

[Serge Cardin, Bloc, Sherbrooke, QC]

Let's refer to an example, then. In the construction sector, for instance, the commissioner can launch a public inquiry or a police investigation. They can be similar.

Let's consider a specific sector. Say I am the commissioner, and I see what is happening in the construction sector. I will try to identify any competition that could possibly exist in that sector, and not just in Quebec, because I get the sense that is how it works everywhere. Even though it imposes costs, as you say, the fact remains that, in this situation, there are certain things that suggest the bidding up of prices. Some stakeholders could have agreements to increase costs by 30%, which represents billions of dollars. Therefore, it would be beneficial to invest a few million so the commissioner, who wants to look into the matter more closely, could conduct an inquiry in order to determine exactly where competition stands in a particular sector and find a solution.

So, Mr. Janigan, under Bill C-452, could the commissioner decide to conduct an examination of the state of competition in the construction sector, in an efficient and effective manner, of course?

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chair.

Ladies and gentlemen, good morning and welcome to the committee.

Last week, we heard from Richard Bilodeau, Acting Assistant Deputy Commissioner. He said that Bill C-452 was unnecessary because, at the end of the day, the commissioner had all the power she needed. This is what he said in his brief:

Whenever the commissioner has information that indicates that one of the enforcement provisions of the act has been or is about to be violated, regardless of the source of that information, section 10 of the act provides the commissioner with the authority to commence an inquiry into any matters she considers necessary.

According to him, the bill is definitely not necessary, because the commissioner has the authority to begin any inquiry she sees fit. But, according to you, that does not seem to be the case.

So I would ask the two of you whether you think the commissioner currently has the same authority to conduct an inquiry.

[Shuli Rodal, Vice-Chair, Legislation and Competition Policy Committee, Competition Law Section, Canadian Bar Association]

Thank you, and good morning.

My name is Shuli Rodal. I am a partner in the competition and anti-trust law group of Osler, Hoskin & Harcourt in Toronto. I'm appearing today on behalf of the competition law section of the Canadian Bar Association.

I would like to begin by thanking you very much for the invitation to appear on Bill C-452.

The CBA section does not believe that amending the Competition Act to provide for an industry sector competition law inquiry power is necessary or appropriate. The CBA section believes that it is highly preferable for inquiries to continue to be carried out on a targeted basis, as is currently provided for, where there is a concern about anti-competitive conduct by one or more market participants.

For full detail, I refer you to the CBA section's letter of September 14, 2010, but by way of summary, the inherent difficulties in the use of a market inquiry power can be illustrated by the fact that it is difficult to conceive of a market inquiry that would have a positive outcome.

First, it is possible that the conclusion of an inquiry may be that the sector in question is sufficiently competitive. If this is the outcome, the commissioner and the Competition Bureau would be vulnerable to legitimate criticisms about the significant costs in terms of the bureau's resources, private sector resources, and disruption to business just to confirm that a market is in fact competitive.

The second alternative is that the conclusion of the inquiry may be that the sector is not sufficiently competitive, that this is due, for example, to the structure of the market and not to conduct that offends the Competition Act.

If this is the result, the reality is that there is nothing the commissioner can do, and this can be expected to result in significant frustration. This is because the Competition Act is focused on protecting the competitive process through enforcement action against potentially anti-competitive conduct.

The mere existence of dominance or market power obtained by legitimate means does not violate the act and cannot trigger enforcement action by the commissioner. The Competition Act is not intended to regulate markets or to cast the bureau in the role of a regulator that proactively engineers competition. In the absence of anti-competitive conduct, there is nothing the commissioner can do.

The third alternative is that the conclusion of the inquiry may be that the sector is not sufficiently competitive and that this is due to conduct that offends the act. At this stage, the commissioner would then have to consider whether to proceed with enforcement actions against one or more persons based on information gathered during the market inquiry despite the fact that the success of the bureau's case may be, as a matter of law, considerably weakened and potentially undermined on account of due process concerns that could legitimately be raised about the manner in which evidence was collected.

In particular, serious questions may arise regarding rights against self-incrimination, where information is compelled from a person for purposes of a market-wide inquiry and then later used in enforcement proceedings against that person.

In conclusion, the CBA section remains of the view that in addition to potentially imposing significant costs on the business community unnecessarily, expanding the commissioner's mandate to undertake formal sector inquiries raises serious due process issues and is inconsistent with Canada's approach to competition law enforcement.

Accordingly, the CBA section recommends that this power should not be reintroduced into the Competition Act.

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

As Mr. Vincent is the sponsor of Bill C-452, I would like him to make some brief concluding remarks and to add any points that he was unable to raise.

[Richard Bilodeau]

To be quite frank with you, Bill C-452 doesn't give parameters or limits, or indicate what grounds we would have to commence an inquiry into that entire industry sector, so I'm not sure how I can answer your question.

I can tell you that we currently have the power under the act to investigate crown corporations that conduct business. That change was made in 1986, or maybe a bit later than that. But there's a bit of a lack of information in Bill C-452 on the triggers, grounds, and scope. Is it an entire industry, or a subsection of that industry? What does industry really mean? So I'm having a bit of trouble answering your question.

[Robert Vincent, Bloc, Shefford, QC]

I think that citizens expect the Competition Bureau to be able to do an adequate job. An adequate job means two things to me. Moreover, he clearly mentioned that several times during his appearance.

First of all, a complaint must be launched, but the person calling in must be asked more questions. Does the complainant have the information required to undertake the investigation, in other words, does he have something concrete? Let's look at the example of the price of gas. Imagine a retailer calling you to say that someone has asked him to change his price at the pump. That would be concrete. The Competition Bureau would therefore have something serious enough to take to a judge and to investigate on this issue, but at present, he cannot initiate an investigation himself.

What powers are set out in Bill C-452? As Mr. Bilodeau said earlier, there is a shortage of funding and resources. Why don't they want additional investigation powers when that's what is lacking? How will they be able to do the job without money and resources? That's where the problem lies.

I think he did a good job of explaining it earlier. The culminating point when we examine bills, the question that is always asked at committee meetings is if that is done elsewhere. Is that done in other countries. It was in place before but no longer is. What more can we do? With these powers, we could save even more money because investigations could be undertaken immediately without there having to be an in-depth analysis and a judge involved.

[Bruce Stanton, Conservative, Simcoe North, ON]

So you don't think that the tenets of Bill C-452 are necessary, then?

[Richard Bilodeau]

It does not have to be a complaint. And we don't need a judge to sign off on initiating an inquiry. That is a power that's been invested by the Competition Act, by Parliament, in the Commissioner of Competition.

But no matter how an inquiry is started--regardless of whether the minister is instructing us to do it, six residents have asked to do it, or we're doing it of our own volition or through a complaint--if we want to use formal powers, we have to go before a judge. By formal powers I mean the ability to seek document production or have witnesses compelled to provide us with oral testimony. So whether it's under the current legislation or even under Bill C-452, we will still have to go before a judge to have subpoenas issued to companies under investigation. That is something that is in our act. It's section 11 of our act.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you very much.

Again, thank you both for being here today.

Thank you, Mr. Vincent, for bringing forward this legislation.

As I understand it, Bill C-452 would empower the Commissioner of Competition to initiate investigations. I think that's the key wording here—“initiate investigations”—and to be able to take action.

My first question is to Monsieur Vincent. Are you concerned, or can you think of any safeguards we may want to bring forward to ensure that there are not any, as I'm going to call them, frivolous complaints brought forward? We're strengthening the powers of the commissioner and allowing that commissioner to have those powers to act as well. Are you at all concerned that we may need safeguards to make sure that the complaints are actually founded?

[Richard Bilodeau]

That is one of the concerns. There are no specific triggers in Bill C-452 to dictate to us or to tell us when we should open up an inquiry, but--

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

So what concerns do you have about this proposed trigger in Bill C-452?

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

Are there any proposed powers in Bill C-452 that you do not currently have?

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

Thank you, Mr. Chairman.

I thank all the witnesses for being here today.

Mr. Vincent, I thank you for sponsoring Bill C-452.

Mr. Bilodeau said that there had been some changes in March 2009. Mr. Vincent, I would like to know what Bill C-452 now has to offer with respect to what Mr. Bilodeau mentioned.