With 90%?
Evidence of meeting #41 for Industry, Science and Technology in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was crtc.
A recording is available from Parliament.
Evidence of meeting #41 for Industry, Science and Technology in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was crtc.
A recording is available from Parliament.
4:50 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
Market share is the first indicator we examine. Then we consider market conditions and rivalry between people. With regard to the abstention process, we proposed to the CRTC that the cost structure be compared. That's what in fact creates the competition dynamic in the market. It will be possible for the second competitor to reduce his price because he also has a competitive cost structure.
It's our impression that that is what in fact happened in the market. In the past 18 months—and Mr. French cited the figures—we've seen the arrival on the market of a competitor, which is rather interesting and which leads to a drop in prices.
4:50 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Given your criteria, was the CRTC decision to wait until these entities achieve 25% market share a wise decision?
4:50 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
We made a case against that decision during the public hearings.
We strongly recommended that the CRTC not adopt this kind of thing. That's our position, because according to our expertise in the area of competition, market share is just the first question to be asked in order to determine concentration. Thereafter, one examines barriers to entry into the market, rivalry, the competitive dynamic. So, we were against that decision.
4:50 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
In your opinion, is Bill C-41, which gives you the power to impose sanctions, sufficiently in keeping with the recommendations of the Telecommunications Policy Review Panel or is this a power that's given to you piecemeal? Are there other points in the review panel's recommendations that seem essential to you?
4:50 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
It's a step in the right direction, there's no doubt about that. The members of the review panel said that greater reliance should be placed on market forces, on having a well-defined regulatory framework and encouraging effective competition. That is the gist of the recommendations. From that standpoint—
4:55 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
But the review panel recommended that this power be given to the CRTC and not the Competition Commissioner.
4:55 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
No. It recommended that power be given to the CRTC for work that remains subject to CRTC powers—
4:55 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
—and that we be allowed to impose pecuniary sanctions when it is deregulated.
From what we can see, Bill C-41 is supposed to follow deregulation. So it is indeed in keeping with the report.
There were no sanctions for the CRTC, but this was limited to the regulatory period. So the fact of giving us the power to impose pecuniary sanctions as soon as the market was deregulated was part of the recommendations contained in the report.
4:55 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Yes, but Bill C-41 was tabled before the market was deregulated.
4:55 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
They go together. There are three parts, if I can put it that way. There's the directive, there's Bill C-41 and there's the change.
4:55 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
The minister announces a directive. Then he tables Bill C-41 during the consultations. Maybe this doesn't come under your purview, but it seems to me that that's putting the cart before the horse.
4:55 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
It's not up to me to determine what procedure should be followed. Bill C-41 is perfectly in keeping with the recommendations of the review panel, because it recommended—
In fact, they referred to Bill C-19, presuming that this would become law. They felt that the CRTC should have the same kind of system of sanctions as they did, presuming that C-19 would pass. That's one reason why that part was repeated in Bill C-41.
4:55 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
So, what you're telling me is that with what was put in place by the minister, the power of correction for a citizen who feels negatively affected by competition, for example in Montmagny or some other city, will be exactly the same as if there had been regulations, since the CRTC continues to do this until there's a 25% market share.
4:55 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
I'm not at all familiar with the market conditions. I don't know which cable company is present—
4:55 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Telus probably has 105% of the market.
4:55 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
Do you want me to answer?
We would have to determine who's the telephone company and who's the cable company, and make a comparison. And if the large cable companies that are established, such as StarChoice, also have advantages that allow for competition in the marketplace.
As Mr. French said, as a matter of fact, it's a matter of twinning services.
4:55 p.m.
Conservative
4:55 p.m.
Conservative
Colin Carrie Conservative Oshawa, ON
Thank you very much, Mr. Chair.
I thank you very much for coming before us today.
I have a simple first question. Do you agree with the principle set forward in the policy direction the minister brought forward?
4:55 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
The general policy direction is based on greater reliance on market forces, and that would absolutely line up with our statutory mandate.
4:55 p.m.
Conservative
Colin Carrie Conservative Oshawa, ON
Okay, thank you very much.
I'd like to talk a little bit about the proposed Bill C-41. One of my colleagues brought up abuse of dominance, and I think that's something we're all concerned about.
If Bill C-41 is adopted, will it help prevent abuse of dominance in the market?
4:55 p.m.
Commissioner of Competition, Competition Bureau, Department of Industry
Well, we certainly hope so, and I hope I'll have the chance to come back and speak to you again when Bill C-41 comes before this committee.
What I can say for now is that we've clearly been on the record supporting the introduction of administrative penalties relating to abuse of dominance in the marketplace. We believe this has an important deterrent role to play, as well as providing the opportunity for the Competition Tribunal to address the anti-competitive behaviour in a financial way, if indeed it proceeds that long. But we trust it will have both this deterrent effect, so there will be less of this activity in the marketplace, and provide us with tools to address the situation, if indeed the anti-competitive behaviour takes place.
4:55 p.m.
Conservative
Colin Carrie Conservative Oshawa, ON
With the tools you have today, if you compare it to Bill C-41, is an amendment like that really necessary?
