Thank you, Mr. Chair.
Ladies and gentlemen of the committee, Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), would give the Commissioner of the Competition Bureau the authority to make an inquiry into an entire industry sector if the commissioner believes grounds exist. Bill C-452 aims to fill an important gap in the Competition Act, giving the Competition Bureau more teeth. The objective of this bill is to give the Competition Bureau the authority to start inquiries without having to wait for complaints from citizens in order to act. Bill C-452 would give the Competition Bureau the authority it needs to take action against corporations and people who are trying to take advantage of Canadian consumers.
A brief look at past legislative reform of the Competition Act shows us that the MacQuarrie Committee review, in 1952, brought about several amendments to the Combines Investigation Act, including a provision that provided for research inquiries. At that time, the Restrictive Trade Practices Commission, the RTPC, acted as an adjudicative body that also conducted investigations and research inquiries.
After minor amendments were made in 1976, the research inquiry section provided that the director upon his own initiative may, and upon direction from the minister [...] carry out an inquiry.
Officially, the goal was to ensure that the new Competition Tribunal (the tribunal) would be a strictly adjudicative body.
A Competition Bureau of Canada publication titled Market Studies: A Contextual Overview states that "There have been no inquiries related to competition issues starting under the Inquiries Act since section 47 was repealed in 1986." The reason is simple: the Competition Bureau had lost its authority to make inquiries.
How then, can the Competition Bureau make inquiries? The commissioner cannot begin to investigate until a judge is satisfied by information on oath or solemn affirmation that an inquiry is being made under section 10 of the Competition Act, and that a person has or is likely to have information that is relevant to the inquiry.
The Competition Bureau would be much more effective and credible if it had real investigative powers. It is difficult for all of the current conditions to be met.
Mr. Konrad von Finckenstein, former commissioner of competition and current chairman of the CRTC, made the following statement: "While the Bureau's mandate includes the very important role of being an investigator and advocate for competition, the current legislation does not provide the bureau with the authority to conduct an industry study."
The Competition Bureau certainly does not hesitate to intervene when it discovers proof of price fixing. In 2008, the bureau uncovered a price-fixing agreement between gas retailers in four Quebec municipalities. In mid-April 2009, several individuals and companies pled guilty. The investigation is still ongoing.
However, the bureau needs a sworn statement before it can begin an inquiry. Furthermore, the commissioner has access only to information that is available to the public or that is provided voluntarily by the industry.
During our committee meetings, the key question that came up was how this issue was approached in other countries. Here are my findings. In the United States, these studies can be started in three ways: when Congress exercises its legislative authority and calls on the Federal Trade Commission to do a specific report; when members of Congress or Congressional Committees, without using legislative authority, ask the FTC to conduct a study; and when the FTC decides to launch an investigation on its own.
In the United Kingdom, the Office of Fair Trading carries out market studies in various sectors of the economy, including the liability insurance market, new car warranties, private dentistry, taxi services, store cards and pharmacies.
The OFT is also able to make a market investigation reference when it suspects that a feature, or combination of features, of a market prevents, restricts or distorts competition.
The European Commission may conduct its inquiry into a particular sector of the economy "where the trend of trade between member states, the rigidity of crisis or other circumstances suggest that competition may be restricted or distorted within the common market". This authority, while used in a limited extent in the past, has been used more frequently since 2005.
In January 2005, two sector inquiries were launched, one into competition in the energy sector, specifically gas and electricity markets, and another into the financial services sector.
In Australia, the Australian Competition and Consumer Commission can conduct general inquiries in all sectors of the economy. The inquiry can be opened by the commissioner.
Some people would tell me that Bill C-10 gives the Commissioner of the Competition Bureau more authority. I would have to disagree.
These are the key elements of Bill C-10: increasing applicable sanctions; redacting certain criminal provisions on price-fixing practices; creating a more effective mechanism for criminal cases; introducing a mechanism to investigate mergers; giving the Competition Tribunal the ability to impose administrative fines on companies that abuse their dominant market position.
Based on the history of the Competition Bureau, particularly as regards the repeal of section 47 in 1986, and the minimal efforts made by the current government to improve the legislation, and based on what goes on in other countries, I believe that we must pass Bill C-452 and reinstate the Competition Bureau's authority to make an inquiry into an entire industry sector. To close, I still question how gas stations can all have similar prices without consulting each other. I'm now ready to answer questions.