Evidence of meeting #43 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was research.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Gilles Saindon  Director General, Research Branch, Department of Agriculture and Agri-Food
John Carey  Acting Assistant Deputy Minister, Science and Technology Branch, Department of the Environment
Jacqueline Gonçalves  Director General, Integrated Business Management, Department of Fisheries and Oceans
Karen Dodds  Assistant Deputy Minister, Health Policy Branch, Department of Health
René LaRose  Chief of Staff, Office of the Assistant Deputy Minister of Science and Technology, Department of National Defence
Geoff Munro  Associate Assistant Deputy Minister and Chief Scientist, Department of Natural Resources
Dan Shaw  Committee Researcher

12:40 p.m.

Bloc

Paule Brunelle Bloc Trois-Rivières, QC

Yes.

So, Mr. Chairman and colleagues, as I was making my way here this morning, I was wondering how to present this motion and possibly convince you to revisit your decision. In actual fact, I am not the one asking to expedite passage of the competition bill; rather, the people of Canada are.

You know as well as I do that, in our ridings, everyone is having problems. Whether it is because of increased prices for food or other goods, everyone is experiencing difficulty because of the spike in the cost of gasoline. I am not naive enough to think that the Competition Act will solve all of our problems, but it is certainly a tool and a beginning.

An emergency debate was held in the House last Monday, and I realized, in light of what I was hearing as people spoke about the bill, that there wasn't really any opposition to it. The discussion was really between the Conservatives and the Liberals and had to do with a carbon tax, and so on.

So, it seems to me it would be very positive signal to send to the people of Canada that the Standing Committee on Industry, Science and Technology is a committee that is working hard in a non-partisan spirit. It often submits reports, but at the same time, it is often lacking in terms of concrete actions. This, however, would be a concrete action—a way of telling people that we are not just a group of MPs on the Hill who forget about what is below the surface, who forget about the people. In my opinion, it would send the right signal, and you could go back into your ridings with that decision from the Standing Committee on Industry, Science and Technology, which could be very positive.

So, the motion basically says that the Committee would hold an additional meeting on Monday, June 9. We would proceed with clause-by-clause consideration of the bill at that time, with a view to completing it no later than June 10.

That is my motion. I would be interested in your feedback.

12:45 p.m.

Conservative

The Chair Conservative James Rajotte

Merci, Madame Brunelle.

We'll go to Mr. McTeague, please.

12:45 p.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

I just want to say that I fully understand the intent behind Ms. Brunelle's motion. It is important to let the public know that we are making progress and that we are looking at what is a very important issue for the vast majority of Canadians. It is no accident that, when we were in the Prairies, we saw that prices are much higher there than in Ontario, Quebec or British Columbia. And yet, these are the oil-producing regions of the country.

So, I think the Committee could certainly look at this, even though I believe there is an even more important matter we have to act on.

If I could be permitted, Chair, and I won't be long on this, many of the proposals in Bill C-454 were ones that I have fought for over the years. That's also one of the reasons why those are near and dear to my heart.

The reality is that the current price structures we're seeing go through the roof--not just for oil and natural gas, but for all sorts of other commodities--are very much the product of a problem at the investor end, the stock market end. It is not at the downstream at this point; we can deal with that.

But I think if you want to give real expectations and give an answer to consumers, to Canadians, on why the prices are where they are and where they're going, if anything, this committee should be spending every spare minute it has--and I don't think it has any--looking at the question of energy market manipulation and at how commodities markets have been used, not in a malicious way, but certainly as the focus for numbers that consumers now have to pay, with no end in sight.

My colleague Mr. Eyking had a Maclean's magazine, and on the front cover it said, “Life at $200 a barrel. You won't be able to eat, travel or live as you do now. Say goodbye to the age of plenty.”

This is not to quash what Madame Brunelle has said, but as I suggested before, there is a bigger issue here that we are going to have to confront one way or another. It is that the excuses of supply or the problems around the world can now be magnified and distorted beyond recognition.

I'm suggesting to the committee, as I have...and Madame Brunelle, I think I made this available to several of the members of the committee in their travel last week. These are the inventory stats from the United States, which consumes 52% of all the transportation fuel of the world. Add Canada to that and it's 58% of the world's transportation fuels. Supply has been in a fairly good position over the past five years and demand is down. On that basis alone, normal commodity markets would reflect that and the prices would be at $75 a barrel, not $125 or $126, whatever it was just a few minutes ago on Bloomberg.

I'm not quashing the idea, but I think the idea that you have in your bill here is a little late, and having fought for many of those things, I'd suggest that if the committee wants to do something pragmatic and deal with something that is contextual to the problem today, the actual problem, if we're going to spend any time, we ought to be looking at the concerns that are being raised about the adverse effects of an unbridled futures market in which capital investors who have no business being there...when neither producers nor consumers are driving the price up beyond oblivion.

Where does Canada stand in that regard? That's a good question.

Are the pension funds that are being accumulated in this country at unprecedented levels part of the problem? Are the mutual funds that are being generated in this country and around the world part of the problem? Those are questions we would have to address.

I'm suggesting to Madame Brunelle that I won't support this, simply because I don't think it is proper and I think it gives false expectations to Canadians that this is going to somehow help address the more fundamental issue of a stock market...of energy markets that are now the subject of speculation. If we don't address that, we're going to continue to talk about tinkering at the other end.

The problem is not the downstream. The problem is even before the upstream; it is those who are distorting the markets. I would suggest that this committee--and I want this on record--at its earliest opportunity do give consideration to the far more fundamental and crucial part.

I know I've said a lot, Mr. Chairman, and colleagues, thank you for this. But I think it's important that we get this on the record and that at least someone who is out there listening recognizes there is a far more fundamental problem that we have to tackle.

12:45 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. McTeague.

We'll go to Mr. Stanton, please.

June 3rd, 2008 / 12:45 p.m.

Conservative

Bruce Stanton Conservative Simcoe North, ON

Thank you, Mr. Chair and Mr. McTeague, for certainly an interesting issue, which we would clearly have to take a look at as to how we might proceed in the future. I think it's a separate issue but one that might be deserving of this committee to consider.

However, the item in front of us is the proposal that has been put forward, really, to give Bill C-454 essentially one day of review, line by line, on a bill that has potentially broad-reaching implications on an act that is a fundamental piece of legislation for business in our country. In the interests of trying to simply do something quickly to somehow satisfy an expectation that Parliament is responding to the particular circumstances that gas prices happen to be fuelling--sorry for the pun--and the angst that has been created in society about gas prices, I think it would be misleading to suggest that a one-day review of this bill would in any way satisfy that. At the same time, it might have the potential, without proper time to review it, to have other unintended consequences for business, and we would be stepping into that trap by doing so, so quickly.

I similarly don't favour doing this as the motion has suggested, with the greatest of respect. I suggest we continue to get our study wrapped up, continue to forge ahead on S and T. All of these other suggestions for committee business in the future I'm sure the subcommittee will take in stride and bring forward some suggestions as we move ahead into the fall.

12:50 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Stanton.

We'll go to Monsieur Vincent, Monsieur Arthur, and then Ms. Nash.

12:50 p.m.

Bloc

Robert Vincent Bloc Shefford, QC

Thank you, Mr. Chairman.

With all due respect for Mr. McTeague, who has been a member of this Committee for quite some time and has participated in many of the studies it has conducted—and I believe the Conservatives agree with the one he is suggesting—we may as well just start our own TV program and call it “Talking For The Sake of Talking”. In fact, speculating about speculation is not going to change a thing. Just because people say that a barrel of oil should cost $75 does not mean that pension funds will not be investing money to make profits when the price of a barrel of oil hits $200.

If Mr. McTeague or anybody else believes that, through a study such as this, the Committee will discourage people from thinking about making money, well, we will be wasting our time for months on end. In my opinion, there is absolutely no point in carrying out such a study, because ultimately, it will change absolutely nothing.

Second, the only way for us to really change things is to take action in our respective areas of jurisdiction. And, what is our area of jurisdiction? Well, we have the Competition Bureau.

Let me give you a specific example. In 2006, the price of a barrel of oil was $83 and gas cost $1.05 a litre. The price of a barrel of oil then went down to $70, but gas was still selling at $1.05 a litre. That is a problem. Why is the profit margin the same when the cost of a barrel of oil goes down? Because the profit margin for refining has gone up. It went from 7¢ to 28¢. If there isn't collusion happening between oil companies when the price of fuel remains the same, even though the cost of a barrel of oil has dropped… That's why we have to give some teeth to the Competition Bureau, so that it is in a position to investigate.

Why are all the oil companies increasing refining costs? Could someone explain that? If you are able to explain that to me in two minutes, we won't need to ask the Competition Bureau to conduct a serious investigation into this. If you convince me, I will support you. On the other hand, if you are unable to convince me and you tell me that the Competition Bureau has already done investigations which yielded absolutely nothing, my reaction will be to say that this is perfectly normal, since the Bureau has no power. Yet we are here to give it power; we are here to make changes.

From what I can see, no political party is interested in changing anything at all. Yet, all the political parties are saying that the cost of gas is horrendous. They all go into their ridings bemoaning that fact and telling their fellow citizens they will do something, although in actual fact, they don't do a thing and are not interested in doing anything. I'm telling you, you are going to be raked over the coals, and it won't be pretty!

You want to sit here at this table, but have no interest in taking concrete action to help the people you represent. People are mistaken if they think that speculating about the price of oil will result in anything useful. If you have reasons for saying that you don't want to intervene in an area where it could make a difference, where we have some influence, where we can do something at the Committee level and for Canada as a whole, then tell us what we can do to try and resolve this problem. At the very least, let's give the Competition Bureau some real powers, so that it can do something. However, if you are saying that you are not interested in taking any action, then say so publicly rather than just sitting back on your chairs and making those comments in Committee. If you say publicly that you, Conservatives and Liberals, are not interested in taking any action to bring down the price of gasoline, then I will support you, but just say it. Don't stand up in the House of Commons and say you want to lower the price of gasoline and that you are tackling the problem head on. We're not talking about the same thing; we're not speaking the same language.

Thank you.

12:55 p.m.

Conservative

The Chair Conservative James Rajotte

Merci, monsieur Vincent.

I have three more. I have Monsieur Arthur, Ms. Nash, and Mr. McTeague, and then hopefully we can take the vote.

Monsieur Arthur.

12:55 p.m.

Independent

André Arthur Independent Portneuf—Jacques-Cartier, QC

Thank you, Mr. Chairman.

I would like to begin by thanking Ms. Brunelle and Mr. Vincent for their candour. Indeed, they expressed exactly what they are feeling. We go into our ridings, and because people are fed up, we feel we have to do something, or at least, show them we are doing something.

There is a politician in Quebec by the name of Mario Dumont. He wants to show people he is doing a lot. He spends all his time talking about things he knows little about, and he ends up disappointing people.

The US government has just announced that it intends to conduct an investigation into energy price manipulation in North America. If we are so nonchalant as to believe that we can show leadership in this area, when this is a global problem, then we run the risk of disappointing the voters, who have high expectations of us. My feeling is that, when we start to see the results of the US investigation, we may realize that unacceptable behaviour has taken place in Canada and that US investigators are the ones who brought it to light. And, it won't be the first time that has happened. A fellow by the name of Conrad Black broke the law in Toronto, but is in prison in the United States. It will not be the first time that an American investigation has allowed us to find out what is going on in Canada.

However, I believe that it is our duty, because this matter is of interest to all of us, not to make people believe that we are going to resolve the problem. In my opinion, the only honest thing we could do at this time is to admit that we are powerless. Our duty is to closely monitor the work that is starting in the United States. As soon as we hear about things that concern us, we will have to pursue them mercilessly.

However, trying to make people believe that the House of Commons, or even the Standing Committee on Industry, Science and Technology, can reassure the voters with respect to the cost of energy is pure fiction, as far as I am concerned.

Thank you.

12:55 p.m.

Conservative

The Chair Conservative James Rajotte

Merci, monsieur Arthur.

The list keeps growing. It is one o'clock. As chair, I could end the meeting now. I'm going to allow Ms. Nash, Mr. McTeague, and Monsieur Vincent--you can have less than a minute--and then I'm going to call the question.

Ms. Nash.

12:55 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

First of all, I'd like to thank the Bloc for initiating this bill and the motion, and for their passionate concern about issues of competition. We of course all share the concern about the price of oil and gas. None of us is insulated to the concerns of our constituents, who are very concerned when they fill up a gas tank or are concerned about what's going to happen next winter with heating costs. It is something we share, in terms of our concern.

The Competition Act is a significant piece of legislation. It's a complex piece of legislation that deals with competition, not just in the oil and gas sector but throughout industry, and as such we need to be careful that in trying to solve one problem we are not creating more problems. We don't know at this point whether we would be or not. And while I am completely sympathetic to the goal of Madame Brunelle in taking action, I don't want to be limited to saying we can only examine and debate this bill for one day.

I would be open to an amendment that, while it expresses urgency, allows some flexibility in the clause-by-clause examination of this bill and says that once the examination is completed, there would be a report to the House.

I don't want to say that I disagree with the intent; I just don't want to be in a position whereby, in saying we can only examine a complex bill and a complex law for one day, somehow we're opposed to examining and taking action on oil and gas prices. It's not so.

So I would welcome an amendment by the Bloc to give us a bit of flexibility in looking at this bill, with a view to achieving the same goal, but not tying our hands behind our backs and perhaps creating problems that at this point we can't anticipate.

1 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

I'll just make a point for the members that the bill has to be reported back within 60 sitting days, just for your information, which would take us to October 26 or 27. There is a possible 30-day extension that the committee can ask for.

I'm going to go to Mr. McTeague and Monsieur Vincent, and I'd like comments cut to about a minute, and then I'd like to go to the vote.

1 p.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

Chair, I appreciate the passion that Monsieur Vincent has brought to this, and I would certainly agree that giving powers to the commissioner is a good thing. But if you don't amend the Competition Act in its entirety, as I specified years ago, there's no point in giving powers for the commissioner to do something he can't do. But I think it's fair to say....

I am going to say this in French. The cost of a barrel of crude rose from $18 to $129 over a four-year period. That is an increase of about 60¢ a litre. Rather than looking at amounts of 2¢ or 3¢ a litre… The Competition Act did nothing to prevent the refining industry's capacity from becoming non-competitive.

The essence of what our consumers are looking for, and what Canadians are looking for...they're going to say, “What is causing the prices to rise? How did it go, Mr. Vincent, Mr. McTeague, from 35¢ a litre as crude, as part of the makeup of a litre of gasoline, to 89¢ in Quebec and Montreal today?”

That disparity of 53¢, 54¢ a litre is what we should be looking at. And on the very day that Madame Brunelle proposed this motion, the U.S. acting chair of the commission on futures trading decided they were going to not only undertake an investigation, Chair, but, as you will know, I believe there had to be more transparency to see what effect this has had on distorting the prices.

I suggest this is possible, if the Bloc will accept it, to try to address that mysterious 55¢ that's been attached to the price of gasoline and home heating fuel--and wheat and soybeans, and everything right across the spectrum. If we see what the Americans have, since they trade most of the commodities here, along with a few others, we might actually get a solution that the people of my riding and his riding actually want, and that is to put a spotlight on these activities, because they're distorting the market and they're driving the price beyond anything.

If it can be $130 a barrel this year, Chair, it can be $250 next year. Until we address that fundamental point, I think we are leading a fool's errand, and we are deceiving our constituents in trying to tell them that by having this kind of conduct or this activity, or this kind of investigation or discussion for three days, we're somehow going to give them some kind of an answer. It's false hope. I want to deal with what's current. I want to deal with what we need to deal with.

1 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. McTeague.

We'll go, finally, to Monsieur Vincent.

1 p.m.

Bloc

Robert Vincent Bloc Shefford, QC

Thank you, Mr. Chairman.

I believe I misspoke earlier when I talked about pretending to take action or something along those lines. That is not what I meant. We can take some concrete steps. The Competition Bureau is an organization that exists, and we can ask that organization to take certain specific actions.

In my opinion, that is something that is done and that we can do. There is a bill. I don't know whether Mr. Arthur read Bill C-454 or whether he has looked at the references to the Competition Bureau. Mr. Arthur will be the first to ask why we, in Canada, are not capable of doing things on our own. The impetus always comes from the United States. I have regularly heard him serve up that line to this Committee. Today, however, he is making the opposite argument, saying that we should wait to see what they do in the United States before jumping on the bandwagon and taking action on our own. Are we not capable of doing something ourselves? Are we not capable of deciding something by ourselves? Why do we always have to wait for someone else to do it?

At the present time, we have a major problem, and when we find ourselves faced with that problem, all we do is sit around the table and wait for the price of gasoline to go up again, saying that it's a terrible thing and that we really don't know what to tell the people we represent. So, we just sit and wait until the price goes up to $2 a litre. And we wonder what caused that increase. But whether it's Peter, John or Jack, it won't change a thing in our own lives, because the price of gas is going to continue to go up.

The point is not to find out who is responsible for the rising price of gasoline, but rather, to look at what we can do to stabilize the price.

Can it be stabilized? Would it be possible to bring down the price of a barrel of oil? Could we do something to ensure that, at the refining stage, at the very least, the price does not go up further, so that a litre of gas at the pump does not cost even more? The only way that could be accomplished is with the Competition Bureau. It simply isn't possible for the price to increase by 28¢ a litre overnight. That's my own view, and I think the most effective way of dealing with this would be to work with the Competition Bureau. That is the only concrete tool we have at our disposal, and yet we are not using it, because there is no interest in doing so.

Thank you.

1:05 p.m.

Conservative

The Chair Conservative James Rajotte

Merci, monsieur Vincent.

We will go to the vote on the--

1:05 p.m.

Bloc

Paule Brunelle Bloc Trois-Rivières, QC

Will I be able to make a final reply, Mr. Chairman?

1:05 p.m.

Conservative

The Chair Conservative James Rajotte

You do, Madame Brunelle, but if the committee wants to continue this, we'll continue it on Thursday. The committee could continue this debate, but I've already extended it past one o'clock. So the option is, do we want to continue this debate on Thursday or have the vote now?

Madame Brunelle, do you want the vote now or do you want to continue--

1:05 p.m.

Bloc

Paule Brunelle Bloc Trois-Rivières, QC

Let's vote on it now.

1:05 p.m.

Conservative

The Chair Conservative James Rajotte

Vote now? Okay.

All those in favour of the motion?

(Motion negatived)

1:05 p.m.

Conservative

The Chair Conservative James Rajotte

We did have a question about travel. We will talk about travel on Thursday, after the services sector report.

Thank you. The meeting is adjourned.