Industry Committee on June 15th, 2010

[Serge Harnois]

Approximately 30 corporate stations and 140 affiliated clients are members of our network. In order to be able to renew your petroleum licence, to be able to sell fuel, in Quebec, every two years, a series of criteria have to be met, including pump calibration. You have to hire and pay a certified inspector. They inspect the inventory balance, to make sure that deliveries and sales coincide and that there are no leaks. They make sure that retention tanks are under the pumps, to prevent pollution. They inspect pump calibration.

I won't give you the list of all the points that are inspected but if a retailer does not meet one of those criteria, then they do not get their licence. If the pumps are not calibrated every two years, they do not get their licence to sell fuel. It's a rather simple system that works very well. Calibration is done every two years but for bigger businesses that are pumping seven or eight million litres a year, as opposed to two million litres, calibration is done every year.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Fine.

I'd like to know if Bill C-14 should be withdrawn in order to avoid this overlap.

[René Blouin]

Your question should probably be put to a legal expert rather than a witness here. In my opinion, if consumers are well served and the province is ensuring that retailers comply with rules that go beyond what is in this bill, you need to make sure that there won't be two rules or two series of rules that will have to be met.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

We'll have to make sure there aren't two rules and that Quebec and the provinces' rules take precedence when regulations are implemented.

[René Blouin]

Exactly, given that the system already works well.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Mr. Blouin, you said that you support the goals of Bill C-14. Does that mean that if Quebec and the provinces took precedence, given that these rules already exist, you would support the bill?

[René Blouin]

We support the goals of the bill because its purpose is to make sure that people get their money's worth. The problem is that it is implying that individuals are almost acting deliberately to not give them their money's worth. It's not acceptable to introduce that kind of bias in the debate.

Basically, establishing a monitoring system to make sure that people get their money's worth is like apple pie: everyone supports it. Furthermore, these criteria do not exist in several provinces in Canada, as the officials already explained to you. They were withdrawn in the 1980s. In some areas of Canada it is felt that it would be safer for consumers to re-establish that system. Regardless, the system already exists in Quebec.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

I don't know who spoke about Bill C-14's title. What do you think the title should be?

[René Blouin]

Ms. Savage made a suggestion that we support.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

What do you think the connotation of the bill's title should be?

[Jane Savage]

The current short title of the act, Fairness at the Pumps Act, certainly sends a connotation that there is no fairness today. And I think that is not the case. Measurement Canada has been clear in their testimony and in other activities they've taken on that there is fairness at the pumps today.

Also, the short title unfairly singles out one sector, whereas this bill is clearly designed to cover many measurement sectors, from food to natural gas to electricity to lumber, and many other things. So to single out the gasoline industry is truly unfair. It's also nasty and really unjustified.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

This question is for anyone who wishes to respond.

Do you think that if Bill C-14 were passed with amendments preventing overlap, consumers would have more confidence in retailers? Would there be greater trust in businesses and retailers?

[René Blouin]

I don't know how many consumers in Quebec are aware that pump calibration is regulated. I don't think they know. Will consumers have greater trust? I think that when things are done properly, when people are serious and support fairness—and there are no studies that show there is a lack of fairness—I think we need to make sure that there is an accurate perception on the part of consumers.

For my part, I don't think that consumers who are filling up their tanks think they're not getting their money's worth, even though they may think it's expensive. I don't know. Obviously if there are campaigns that are casting doubt on this, they are going to start doubting and believing that retailers are not honest, when this is false. That's what has to be avoided. It is fine to adopt preventative measures that ensure that there is fairness for consumers. However, it is not appropriate to lead people to believe that retailers are dishonest.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Blouin and Mr. Bouchard.

Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair.

Thank you to the guests for being here today.

I'm not sure where to start on a couple of things. The ten-percenter question is interesting. We're not the appropriate committee to be dealing with ten percenters, but if you want to go down the road of tabling ten percenters, I have a ten percenter I could table as well from a member of the opposition of this committee. So if we're going to get into the cost of ten percenters and things like that...if I can find it. Anyway, I think that issue has been discussed. It's one of the areas we actually came together to resolve. It's not a road we need to go down now.

Ms. Savage, it sounds as though the only thing you would change about the legislation is the name. Is that accurate?

[Jane Savage]

Yes, it is accurate.

I also want to emphasize that the regulatory component of this, the development of the regulations, is going to be a very important part, because the legislation as it is today does not define a violation. The Library of Parliament's legislative review rightfully points out that there are offences that are criminal and there are contraventions that are non-criminal. In the legislation, a violation is currently defined as anything that contravenes the act and can be defined in the regulatory phase.

We think that definition is very important, particularly in this environment of the press that has surrounded this piece of legislation. There seems to be a bit of an atmosphere of witch-hunting or “gotcha”, which we certainly don't expect to be translated into anything by Measurement Canada, other than what is absolutely necessary to ensure the confidence of consumers. We want to make sure of that during the regulatory phase, and we'll be working closely with them to ensure that's the case.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

As we consider the name--it's always a tricky thing to name legislation in a way that consumers, Canadians, will understand what the legislation is doing, and of course this is an example, probably the most prominent example within measures taken in the bill, of the issue of fairness at the pumps. That's the issue that probably resonates most with Canadians. There haven't been many articles written about green bean measurement or anything like that. We don't receive a lot of letters about the measurement of green beans, but we do receive letters about the measurement of gas and fairness.

To be fair, the word “fairness” isn't really implying one thing or another, other than that we want to ensure fairness at the pumps and fairness in all measuring devices.

[Brian Masse, NDP, Windsor West, ON]

It's not Unfairness at the Pumps Act.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

It's not Unfairness at the Pumps Act.

I think the point you make about retailers having integrity is an important point to be made. I think the whole point of legislation like this is to protect the vast majority of retailers who are operating with integrity, to protect their names. As you mentioned, most of them are not going to have any problem with this act and with the requirements of the act, because they're already following the rules and they want to make sure their pumps are accurate.

But in terms of the numbers that did come out and the numbers that have been presented, how is it that twice as many of the pumps that are measured are outside the appropriate range, are not in range, to the benefit of the retailer, as opposed to the benefit of the consumer? I think that's something that is of concern to people looking at this, that when the pumps are inaccurate, twice as often it's to the benefit of the retailer.

Why is that?

[Jane Savage]

The data that was presented in the Ottawa Citizen article, Measurement Canada's data, has what we call in the statistical world a data skew from what you would expect from a normal distribution. So you would expect that 50% of the time the pump would fail or wear in favour of the consumer and 50% of the time in favour of the retailer.

In the data that was presented--I've heard two different numbers--the Ottawa Citizen said 74% rather than 50% were in favour of the retailer. Measurement Canada has since told me the number is 65%. So it's something more than 50%. So there is a skew of somewhere between 15% and 24%, depending on that data.

The question is why, and it's a good question.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Just to clarify, the skew is 15 points or 25 points; that's a big difference from saying 15% or 25%.

[Jane Savage]

Excuse me, yes. It's .15.

It's between 50%, where you would expect it to be, versus 74% or 65%. So 50% points to the centre of the normal distribution.

The reason for that skew, in other words, the reason for there being more pumps favouring the retailer than the consumer in that data, is curious, and we do not understand the root cause of that skew. We have asked Measurement Canada for their assessment of whether the data is accurate--and they have confirmed it is--and their assessment of why the data is skewed, and they have not offered an explanation, either publicly or to me directly.

The most important thing about data is whether it's statistically representative. That's the first thing that all data has to be established and vetted for. So there are many possible sources of this variance, which is, in my view, not anything close to what has been represented in the press or by others as being a deliberate attempt to manipulate. For example, were those sites that were sampled indeed random, or did they come from customer complaints where there may have been a problem in the calibration? Was it very close to the inspection cycle? Was it two weeks before the inspector was due in and the pump may have worn to the point where it was at that level, versus being inspected halfway through the inspection cycle? Were there already suspicions about some of the retailers who were being assessed by Measurement Canada, and did they target specific retailers in their audits, in their so-called random assessments?

Pumps are mechanical devices. At least one of the popular kinds of pumps in Canada, the Gilbarco pump, wears in favour of the consumer, not in favour of the retailer. The other type of pump, Dresser Wayne, I'm not sure about. We haven't been able to gather that data, but there is a pump, the Tokheim pump, which is no longer being manufactured but is still in place. Those pumps wear in favour of the retailer.

So again, was the data statistically sound, in that was it representative?

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Lake and Madame Savage.

Monsieur Blouin.

[René Blouin]

Mr. Chairman, I'd like to add some information in response to the very interesting question that member raised. We were also wondering where that two-thirds, one-third came from, that is that in two-thirds of cases it's unfair for consumers and in a third of the cases it is. As Mr. Harnois pointed out, our experience has shown that it's approximately 50/50.

When we read Measurement Canada's testimony, we noted that there are two kinds of inspections: one kind is done when a complaint is received and another involves random inspections. We assume that when there is a complaint it's because a consumer thinks that they have not been given their money's worth. Perhaps it is because Measurement Canada undertakes inspections when they receive complaints that that ratio is different and that the statistics end up showing that consumers are unfairly treated in two-thirds of cases and fairly treated in one-third of cases. That's the only explanation for this we could see. Otherwise, the numbers do not reflect the reality.

[Serge Harnois]

When we give too much there aren't any complaints, but there are complaints when we don't give enough. So it's normal that if an inspection is undertaken when we haven't provided enough, the statistics will change. That's a hypothesis.