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.