Evidence of meeting #140 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was amendment.
A recording is available from Parliament.
6:15 p.m.
Director General, Strategy and Innovation Policy Sector, Department of Industry
I wouldn't have that figure to hand, but I would agree with the assertion that it's unlikely to be contested in that manner, which is why I pointed out that the other point worth noting here is that it does create a bit of uncertainty and could give pause to the—
6:15 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Mr. Chhabra, I'm not asking whether it's likely.
How many have happened in the past year, to the best of your knowledge? How many mom-and-pop operations have been challenged about advertising a price that's promoted as a discount when it's just the ordinary price? It's currently an offence.
6:15 p.m.
Senior Director, Corporate, Insolvency and Competition Directorate, Department of Industry
That's right. You'd have to ask the Competition Bureau, because it's the Competition Bureau that launches an investigation. Only when it's not resolved through a consent agreement does it go to the tribunal. There was no case at the tribunal last year for a small business.
6:20 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I bet you that I could go back several years and not find a single case in which a mom-and-pop grocery has been challenged at the Competition Tribunal over price advertising. That's just my guess. If I'm wrong, you can let me know.
It's already an offence, isn't it? The only question here is the burden, right? Any business that is selling a product right now, if it is promoting a price at a discount when it knows it's actually the ordinary price of the product, is already in violation, isn't it?
6:20 p.m.
Senior Director, Corporate, Insolvency and Competition Directorate, Department of Industry
That's correct.
6:20 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
It was the competition commissioner who came to this committee and said that he wants this changed. Are you aware of that testimony?
6:20 p.m.
Director General, Strategy and Innovation Policy Sector, Department of Industry
We are aware of that, yes.
6:20 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Now, of course, the question here is, don't you think a business is best positioned to know the prices they charge?
6:20 p.m.
Senior Director, Corporate, Insolvency and Competition Directorate, Department of Industry
That's the question at hand: Who has the burden of proof?
Right now, it's for the bureau to build the case. They will have a complaint by a citizen and they will send a mystery shopper or they will look at the website and monitor the website over a period of time. The burden to build the case is with the bureau.
This is indeed a request by the commissioner to shift the burden to say that all companies need to document, and if they don't document, then they're in the wrong.
6:20 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
No. It's my amendment. I know I'm shifting the burden.
My question, though, is this: The Competition Tribunal already has the power to subpoena all those documents, doesn't it?
6:20 p.m.
Senior Director, Corporate, Insolvency and Competition Directorate, Department of Industry
That's correct.
6:20 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
How, then, is it creating an additional risk? If you're a small business, you're already at risk of having a complaint made. If a subpoena is made for your documents, you would have to prepare for that risk and keep them. How does this change any of the business practices of a business—whether small, medium or large—to be able to justify the prices it charges when it could very well be called upon to defend that practice and have its documents subpoenaed as a result?
6:20 p.m.
Senior Director, Corporate, Insolvency and Competition Directorate, Department of Industry
It's exactly what you said: It's the burden of proof.
Right now, if the company has not kept records, the burden of proof is on the bureau to bring evidence at a tribunal that they were in the wrong, because they have kept records that the company did not. The burden of proof means that if you have not kept records....
Let's say it's that scenario: A small firm doesn't keep a price list and advertises a rebate. Right now, under the current law, the bureau has to have some external proof to win the case, because if they subpoena they will find nothing. With the proposed amendment, if the company—even if they didn't lie—didn't keep records, they will lose. In the current scenario, where there are no records, they win. In the future scenario, where they have not kept records, they lose.
6:20 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I want to just bring something back here.
The purpose of this is to protect the consumer and promote free competition. Wouldn't you agree with me? It's not to protect businesses that purposely don't keep records in case they get subpoenaed, so there's nothing to produce.
I would ask you, what kinds of businesses don't keep records of their prices?
6:20 p.m.
Senior Director, Corporate, Insolvency and Competition Directorate, Department of Industry
That is exactly the question for the committee.
There's a trade-off between the ease of enforcement versus compliance costs for businesses. Every marketplace framework law tries to get the balance right. It is a totally legitimate debate to decide where we put the balance between compliance costs and the effectiveness of the....
6:20 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I think that might be one way to put it.
Remember, though, that the whole purpose of this is to go after those unscrupulous businesses in the marketplace that are deliberately promoting a fake discount price when, in fact, it is the ordinary price. That's the mystery we're getting at. It's the competition commissioner who came here and said the burden is too hard on this.
I'll summarize.
It's highly unlikely that we're going after any small businesses. If we do, any scrupulous business would be able to keep records and probably easily show that the prices it is charging are legitimate, so it's a legitimate discount. Its documents can all be subpoenaed in any event, so the risk issue you described to me is illusory, because any business would have to be keeping its records one way or the other, whether the burden is on the business or whether their records could be subpoenaed.
Finally, it seems like the one concern that would lie in favour with the position of Mr. Turnbull—and, in fairness, the way you're answering questions—is that we need to be concerned about the business that doesn't keep any records of its prices. That would strike me as a highly unusual situation. I can't see the policy benefit of worrying about the business that doesn't keep prices so that it can't satisfy the Competition Tribunal.
I'll just throw that out.
Does anything I've said alleviate any of your concerns?
6:25 p.m.
Director General, Strategy and Innovation Policy Sector, Department of Industry
I'm not sure I would agree that it would necessarily ameliorate the points we've raised here. It's quite true that the overall ambit or thrust of the proposed amendment, as we understand the commissioner of competition's point of view and as my colleague has already pointed out, is about shifting a bit of the burden. The ease of enforcement versus the compliance impacts to businesses is the issue at hand.
Our responsibility as officials is to raise the consideration of how this could roll out in effect and what kinds of impacts it may have. That was the reason for pointing out that there may be a category of business, likely a significant number of very small enterprises, that may not have detailed pricing records.
As my colleague Mr. Simard already pointed out, the issue here is the burden of proof and on whom that burden is placed. I certainly take the point that under a subpoena situation or in an investigation, any business would have to then be called upon to provide the records. However, because the burden of proof would rest with the commissioner in the current formulation, it would not necessarily result in same outcome as the approach that would be followed if this amendment were to carry.
6:25 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I'll just conclude with two brief points, Mr. Chair, and then I'll leave it for the vote.
My first point is just that the tribunal has discretion as to whether it wants to pursue a case. One would have to have some confidence that the tribunal would not pursue a business that is clearly acting in good faith. Rather, we would want to give the tribunal the power it has to go after a business when it really perceives deceptive practices in the marketplace.
The second thing I would say is the reason I'm being a bit passionate about this is that the businesses themselves are in the best position to know their prices and the history of what they've charged. Rather than play a game of cat and mouse whereby the tribunal has to go to extraordinary lengths, like subpoenas, getting documents and all those processes, if there's a complaint or a question about whether a price is a legitimate sale, it should be a relatively easy thing for most businesses to be able to say, “Look, this is a discount. Here's what we were selling it at.”
My next point would be on the “substantial volume” and “substantial period” issues that you raised. I think they are fair points. To me, they build in a lot of discretion, because to take in the various examples that you put in about Black Friday, etc., generally, you have to show that you were selling at a substantial price for a substantial period of time. This would give discretion to the tribunal.
Finally, the last point I will make is that I think you're absolutely right. Thank you, Mr. Simard. I think you caught the deletion of lines 31 and 32. Exactly as you said, I think it's a housekeeping matter related to the drip pricing.
I've said way too much on this, but that's my position on it. As the mover of the motion, I just wanted to be very clear about why I thought it was necessary and to respond to Mr. Turnbull's concerns.
6:25 p.m.
Liberal
6:25 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
I think it's a good amendment. There's nothing revolutionary or extreme in there. It simply limits misleading advertising. If a merchant says they are offering a $100 discount on a product and, in the end, the customer pays the list price, that's unacceptable. The amendment seeks to address such practices.
Provisions are already in place in Quebec's Consumer Protection Act to keep this kind of thing from happening, and they work. I hear all the hypothetical fears being raised, but I must say that, to my knowledge, those fears have not materialized in Quebec, where the Consumer Protection Act is in force.
Today, merchants use cash registers, and even the local snack bar has one. What's unique about these registers is that they record transactions and the prices associated with them. So we have a footprint.
Furthermore, how can a merchant advertise $100 off the list price of a product and then say they don't know the list price? I don't find that argument very strong, with all due respect. I also want to point out that sworn testimony from a merchant is admissible evidence in a court of law.
I therefore invite all my colleagues to support this good amendment. Quebec already has similar provisions and they work, so it would be good if Canada had them as well.
I understand that the bill we're studying here already proposes many amendments to the Competition Act and that the act rarely gets reviewed, but this amendment aims to improve it. Yes, there may be a lot of housekeeping to do and directives to issue. The fact remains that this amendment will improve the act, and that's why I'm supporting it.
6:30 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Ste‑Marie.
With my apologies, I have Mr. Lawrence and then Mr. Turnbull.
6:30 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Thank you very much for the debate and the comments. I am sensitive to Mr. Turnbull's and the officials' comments with respect to adding additional red tape and challenges for businesses. We all know that it's tough enough out there economically, but as many economists and many experts have said, we are in a productivity crisis. Carolyn Rogers, senior deputy governor of the Bank of Canada, said that one of the key reasons that is, when she mentioned “break the glass” in the break-glass speech, is a lack of competition. I think that's echoed by many economists and experts with great degrees of expertise. I will be voting for this, because I believe that when in doubt we should be on the side of competition and on the side of productivity, given the crisis of productivity we have in our country.
6:30 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
I've heard, obviously, the arguments of my colleagues. We've brought up our concerns, and I think there's some good discussion and debate that's been had. I would like to propose to subamend NDP-7 to just delete part (c) of the amendment. Removing (c) would essentially deal with the drafting error that we identified. I think Mr. Davies was amenable to that. Then I'm hoping we can get beyond this. Obviously, we know how the other members are going to vote.
6:30 p.m.
Liberal
The Chair Liberal Peter Fonseca
We would first have to vote on the subamendment, members.
(Subamendment agreed to on division [See Minutes of Proceedings])
(Amendment as amended agreed to on division [See Minutes of Proceedings])
(Clause 236 as amended agreed to on division)
(On clause 237)