Thank you, Mr. Chairman.
Honourable members, I am Pierre Beauchamp, chief executive officer of the Canadian Real Estate Association. At my side is Allison McLure, legal counsel regarding the Competition Act.
The Canadian Real Estate Association is one of Canada's largest single-industry trade associations, representing more than 97,000 real estate brokers and agents who work through our various real estate boards in Canada, provincial associations, as well as one territorial association.
While strongly in favour of efforts to improve the act, we feel that it is extremely important to ensure that any amendments do not have significant negative and unintended consequences.
The amendments to the Competition Act should be dealt with as a separate bill. The amendments to the Competition Act proposed in Bill C-10 are substantial, and we believe that they deserve to be studied in depth.
In 2008, Mr. Chairman, the competition policy review panel considered amendments to the conspiracy provisions of the act, the introduction of AMPs for abuse of dominance, as well as an increase of AMPs for deceptive marketing practices. Responses to the panel at that time of the panel's report were split, with half of the submissions supporting the amendments and half of the submissions speaking against the amendments. This is hardly a consensus and does not represent justification for including these amendments to the Competition Act in this bill. We propose that they should be divorced from the budget and be dealt with in a separate bill.
With respect to conspiracy provisions amendments, Bill C-10 proposes the creation of a two-track system that would define per se illegal agreements to be prosecuted criminally without a competitive effects screen such as the current “undueness” element in section 45 of the Competition Act. Removing the undue lessening of competition requirement would render the resulting provision overly broad. Without the qualification of “undue”, a very wide range of agreements would fall within the scope of the offence. Surely this is not the intent of the amendments. Unfortunately, though, it is probably a likely result. For example, a real estate broker's office policy regarding commission rates charged by the broker's agents working in the same office may fall under the proposed section 45 even if the broker and his agents do not have market power. The agents and broker could be considered competitors within that same office, and there is no exemption that would clearly apply to an agreement between a principal and his or her agents.
Brokers need to have the ability or the right to set policies on commissions within their own offices with the confidence that they are not violating the law. The new law may force brokers out of business since they will not be able to operate using their existing business models. The increased potential for their agreements to fall under the scope of section 45 and the increased threat of criminal sanctions could result in a chilling effect. We strongly recommend that the current provisions relating to conspiracy be maintained, and we further submit that should this dual-track system be adopted, an exemption should be added to both the criminal provision and the civil provision for agreements between principals and agents in a manner that clearly exempts brokers and their agents.
We believe that the proposed AMPs for abuse of dominance would be punitive in nature, which is not appropriate for conduct that is not inherently anticompetitive, and in fact, is usually procompetitive and efficiency-enhancing.
We do not believe there is any demonstrated need for additional deterrence for the reviewable trade practice provisions. As for increasing the AMPs for deceptive marketing practices to a maximum of $15 million, we feel that the risk of such a large AMP could cause a small-business person to be excessively cautious and therefore less informative in their advertising. Accordingly, the issue of increased AMPs is a significant concern, since the majority of our members, again, own and work for small businesses. As such, we strongly suggest that the amendments regarding AMPs not be accepted, not be adopted. At a minimum, there should be at least a grace period before the AMP sections enter into force.
Thank you, Mr. Chair.