I think it's important, and I'm going to try not to use up your six minutes, although I would like to provide a fairly comprehensive answer to this question, because it does come up fairly frequently, and I'd like to try to be as clear as I can about the types of behaviour that we might be looking at and where we believe the act is sufficiently strong and where we believe it is not.
The complaints that we often receive from consumers—and many of those that are directed to MPs and are sent on to us to look at as well—frequently deal with price gouging and not price fixing. Price gouging refers to a rapid rise in price in response to a scarcity of supplies. That's how we generally see price gouging, and it's often what people believe they're experiencing in the gas industry. A good example of clear price gouging would arise, for example, in the context of the ice storm, when the price of generators skyrocketed. There's a scarce commodity, and many consumers are interested in purchasing it.
This is an issue that can arise, as well, in the oil and gas industry, and you'll certainly be hearing from the NRCan representatives on how those prices might move in response to scarcity in the supply of gasoline, which we have been experiencing this fall.
In terms of our ability to deal with price gouging, these are not teeth that we think are missing from our act. We don't believe it is appropriate to have prohibitions against price gouging contained in the Competition Act, and there are a couple of reasons for this.
First of all, we believe that trying to control those sorts of price movements can frustrate the operation of market forces and might indeed be contrary to the aims of the Competition Act, because frequently the rise in prices is a response to actual or anticipated shortages by suppliers.
More importantly, having jurisdiction to wade into issues of price gouging would require us to determine either the proper rate of return to a company or what a specific reasonable price would be. Our view is that it would be difficult, if not impossible, for us to carry that out. It would be work that would be difficult, if not impossible, for us. It's certainly akin to the regulation of an industry, so it would also raise issues about whether this would fall to the provinces rather than to the federal government; the federal government has jurisdiction in times of national emergencies to regulate prices, but not to regulate prices for commodities on a day-to-day basis.
Some provinces have actually decided that they should regulate rates; they do it to smooth out rates, as opposed to determining what a reasonable price is. Certainly it does that, and consumers appreciate it, but it does not lead to lower prices in the marketplace. Indeed, a recent study published in Nova Scotia a couple of months ago indicated that their regulation of gas prices has led to slightly higher, rather than lower, prices. Then you would have to take into account the cost of regulation as well, and that comes out of taxpayers' dollars.
These are a number of matters for you to consider, but our net view on price gouging in particular is that this is not something that is missing from the Competition Act, nor would it be appropriate to include something like it in the Competition Act.
I'll just identify for you what the other issues might be for us. There are other aspects in our act dealing with, for example, abuse of dominant position or price fixing. In this connection this committee, in fact, in 2002 suggested that some changes could take place, and that those changes might assist us in being more flexible in intervening in the gasoline market as well as in a number of other markets. If you're interested in our perspective on those, I'd be happy to add, but I suspect your constituents are mostly concerned about the price gouging issue.