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.
Commissioner of Competition, Competition Bureau, Department of Industry
From our perspective, I would say it's an essential tool for us to have as we look at abuse of dominance in general.
Conservative
Colin Carrie Conservative Oshawa, ON
Okay. Unlike the CRTC, the Competition Bureau can only intervene in an ex post fashion. It means you can't prevent the anti-competitive behaviour and you can only sanction it after it happens. Do you think the bureau has enough teeth to prevent the abuse of dominance in the market?
Commissioner of Competition, Competition Bureau, Department of Industry
Well, it's certainly one of the reasons we believed it would be good to have a greater deterrence through the potential implication of AMPs on anti-competitive behaviour. We believe the tools we have are quite appropriate for abuse of dominance, because you have to remember this type of behaviour is often very pro-competitive.
The types of complaints we get that are related to abuse of dominance often relate to aggressive pricing in the marketplace. For example, allegations of predatory pricing would be something that we'd handle under the provisions of abuse of dominance. Predatory pricing can also just be extremely aggressive low pricing.
It's why I was saying to Mr. Crête that when we look at the marketplace to try to get a handle on the competitive dynamic, we often look at the cost structures of companies. To the extent you have a more efficient entrant in the marketplace or at least an entrant that has similar types of cost structures, you will anticipate that prices will be driven down through the competitive process. We believe it's a good thing for consumers.
Conservative
Colin Carrie Conservative Oshawa, ON
Realistically speaking, how fast do you think you would be able to act if this is put in place?
Commissioner of Competition, Competition Bureau, Department of Industry
Do you mean with respect to a type of complaint of abuse of dominance?
Commissioner of Competition, Competition Bureau, Department of Industry
This would assume that there is forbearance and that these companies are now subject to our jurisdiction and not the CRTC. It would again depend on the resources we have at that particular time, but Richard has made a priority of getting ready and prepared for the telecommunications sector.
I can cite the example of Air Canada, where we were certainly very focused on the complaint and completed our process of investigating within a five-month period. We were then able to take it forward to the tribunal.
In these cases, they often end up in settlement negotiations. We may not have to proceed all the way through to enforcement actions before the tribunal. The parties may choose to settle with us.
Conservative
Colin Carrie Conservative Oshawa, ON
Thank you very much.
What do you think of the cabinet's decision to maintain quality of service requirements for incumbents in the proposed variance of the forbearance decision?
Commissioner of Competition, Competition Bureau, Department of Industry
I think you're straying a bit from our area of expertise. I suspect the telecommunications experts might be better placed to talk to you about that.
Our view is that our test has six elements that relate more to rivalry, cost structures, and what not. We didn't see that it was necessary to maintain that in the test we put forward, but whether or not it's absolutely essential in the telecommunications sector might be something you want to ask them.
Conservative
Colin Carrie Conservative Oshawa, ON
In your opening statement you said the bureau has advanced several guiding principles over a period of time that you believe provide an effective framework for deregulation. In the sixth one, it says: “The period of transition, where some market participants are regulated while others are not, should be no longer than necessary.” Why do you feel the urgency there?
Commissioner of Competition, Competition Bureau, Department of Industry
Well, in many cases you will have additional obligations that remain on the company being deregulated. Our advice has always been that one should very carefully look at the objective the regulator is pursuing, have the least interventionist restriction in the marketplace, and move as quickly as possible to full reliance on market forces.
Now, that being said, we recognize that there are other appropriate objectives in society one wants to pursue, other than competition; health and safety would be obvious ones. The CRTC will almost certainly be retaining those sorts of regulations that deal with the social side of their jurisdiction.
But to the extent you're looking at economic regulation and trying to deregulate, all we're saying is remove the obstacles as quickly as you can. Some examples of that would be the restrictions, for example, on win-backs and promotions. It would be an example of trying to move out of that regime and into one that fully relies on market forces.
Conservative
Colin Carrie Conservative Oshawa, ON
You brought up win-back, and I thought maybe we could bring it up as well. In the proposed order, one of the major promotional restrictions imposed on the ILECs is that the win-back role would be eliminated in every telecom market in Canada. This role prohibits the incumbent providers from directly contacting former clients who have switched to a competitor for a period of 90 days.
The telecom panel in its March report said that making offers and counter-offers to the same customers is the very essence of competition, and that, in general, win-back campaigns should not be restricted by the regulator. Do you agree with the telecom panel?
Commissioner of Competition, Competition Bureau, Department of Industry
It's a reasonable observation that they've made.
We've actually given it a fair amount of thought. I would say our thinking evolved over time, if you look at our various public positionings on this. We were relatively cautious. We hadn't decided or determined our view on this yet, and we moved on to one view that said once deregulated, it probably could be safely removed.
I think if you look at our bulletin on abuse of dominance, you will see we are suggesting that as long as there is no suggestion of predatory pricing being pursued through a win-back strategy, we would be comfortable with those restrictions being removed immediately.
Conservative
NDP
Brian Masse NDP Windsor West, ON
Thank you, Mr. Chair.
Thank you for appearing here today.
Would you agree that the Competition Bureau is more of a complaints-driven process with regard to consumers making contact with your department?
Commissioner of Competition, Competition Bureau, Department of Industry
No, I wouldn't. We've just introduced an incredibly interesting triage tool that is quite proactive, and we're doing a systematic analysis. We get over 15,000 complaints, I think, from consumers, something like that. We decided that we probably don't want to be held captive to complaints. We like to be complaint informed, and not complaint driven. So we've been working for the last year on a fairly sophisticated and comprehensive mechanism that will allow us to assess in which areas we should intervene in the marketplace with respect to consumer issues, false and misleading advertising in particular.
NDP
Brian Masse NDP Windsor West, ON
Well, what proactive work have you done? Can you give me a specific case where you've gone out--
Commissioner of Competition, Competition Bureau, Department of Industry
Yes, one of our enforcement priorities and advocacy priorities at the bureau is with respect to health. We think that's an extremely important sector of the economy for Canadians. We have taken a number of our enforcement responsibilities and advocacy responsibilities and given them a health theme.
I gave a talk to a gathering of health experts put on by the Canadian Medical Association. We have quite an extensive backgrounder that will give you examples of how we proactively reached out to do enforcement action and advocacy with respect to health issues.
NDP
Brian Masse NDP Windsor West, ON
The reason I ask that is because of the concern that the degree of policing that's going to be required on this sector is huge. In previous discussions there have been concerns over whether you can have the budgetary resources to do all the things you're expected to do.
How much has your budget increased over the last few years, as a percentage?
Commissioner of Competition, Competition Bureau, Department of Industry
Let me come back to that question, because there are different parts of our jurisdiction that will be engaged by telecommunications deregulation. I was talking to you about the consumer complaints we get about false and misleading advertising. That tends to be most of our consumer jurisdiction. Issues with respect to abuse of dominance tend to be raised more frequently by business participants, rather than consumers.
Now, with respect to abuse of dominance, we don't actually receive that many complaints. Again, I may hand this off to Richard to talk to you about his workload and whatnot. He has instituted a process to move very quickly through complaints now so that we can pull apart the more serious ones from the less serious ones.
Richard, why don't you say a bit about abuse of dominance, in particular.
Is that what you're interested in hearing about?
NDP
Brian Masse NDP Windsor West, ON
Well, it's partly that, but it's also whether or not in taking on this role you have the budgetary resources necessary to carry out all the other work that's being done at the bureau. In the past, the bureau's budget actually has been cut and work has been increased--unless I'm wrong, and I don't believe I am. So what I'm worried about is whether it's going to be at the expense of other work or whether, during this most important transition time, there needs to be some budget allocation to make sure that things go as positively as possible for consumers.
Commissioner of Competition, Competition Bureau, Department of Industry
Let me just say a few words about that, and you can tell me if it's sufficient, or if you'd like to hear from Richard.
With respect to our resources in particular, you're right, over the years we've had this constant challenge of attempting to have an adjustment to our base so that we're not always going back cap in hand. That process isn't completed, but I can tell you we are getting a very warm reception wherever we go on this. I think I said this to you the last time you asked me the question, we're actually feeling relatively reassured that the gap will be addressed.
I must say we're also getting a relatively warm reception that we may need to have some temporary resources to address telecommunications in particular, for a short period of time, say five years.
It's not finalized yet, but we do get a positive feeling about it.
