Industry Committee on Oct. 5th, 2011

[Helen McDonald]

In the 2011 budget, the new IRAP received $80 million over three years.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

As it now stands, generally speaking, we are talking about approximately $50 million per year, if you include all of Industry Canada's programs.

[Helen McDonald]

About $27 million a year is available under the new IRAP, and it's between $3 million and $4 million for the Small Business Internship Program. However, I don't have the numbers for the BDC.

You are right, it's about $30 million, but that might not include certain programs. For example, I know that Public Works has a program which helps small- and medium-sized businesses to market their state-of-the-art technologies to various departments. That program has $40 million spread over two years. It is also a pilot project. I also know that Industry Canada has a website with information for small- and medium-sized businesses. I don't know how much it costs to maintain that site.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

All right. Thank you very much.

The value of online transactions stands at close to $6 billion, that's impressive. I find that interesting in a context where budgets have been cut back.

Ms. Campbell, I'd like to come back to the Competition Bureau. In particular, you've talked about enforcement. The Competition Bureau has been a lot stronger in enforcement over the last few months, and that's very impressive and important. But we're talking about e-commerce and of course we're talking about organizations and companies that are offshore. What enforcement powers, if any, do you have to go after those who are deliberately being deceptive or defrauding that are overseas?

[Lisa Campbell]

That's a good question, because the Internet doesn't operate within neat geographic boundaries, so more and more enforcement agencies like ours need to collaborate with our counterparts, for example in the U.S. We have two things happening. It can be Canadians being targeted with false or misleading representations over the Internet, and there we have jurisdiction. Conversely, we may get contacted by the Federal Trade Commission in the United States, for example, who may say that they know there's someone in Canada targeting the U.S. market with false and misleading representations and they will ask for our assistance. We have multilateral agreements with them, which allow us to cooperate in law enforcement activities.

We will take action, whether representations are made in a store, on labels, or online. If they are false, misleading, or deceive consumers, we can apply the provisions of the act.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

At this point, as far as cooperative agreements, it would only be with the United States?

[Lisa Campbell]

No, we have several around the world. We are also part of the International Consumer Protection Enforcement Network, which is a group of over 40 organizations like ours around the world who work to ensure consumer protection both offline and online.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Okay.

Can you mention those other jurisdictions briefly?

[Lisa Campbell]

Yes, if you'll just give me a moment. I'll find the tab I put that in.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

How much more time do I have, Mr. Chair?

[The Chair, Conservative, David Sweet]

You have 40 minutes. Sorry, you have 40 seconds.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I have 40 minutes? That's great. I'm going to filibuster.

[Lisa Campbell]

As an example, it in fact includes the last conference I attended, which was in the Netherlands. It includes Australia, the U.K., and newer developing economies like Costa Rica. Essentially, the purpose of it is to share best practices and highlight fraud trends that are happening around the world. What we find with the Internet is that schemes can operate from one country with funds being kept in another country and consumers being targeted in a third jurisdiction. It really is important to share information about what we're seeing in the marketplace.

[The Chair, Conservative, David Sweet]

Thank you very much, Ms. Campbell and Mr. Julian.

Now on to Mr. Carmichael for seven minutes.

[John Carmichael, Conservative, Don Valley West, ON]

Thank you Mr. Chair.

Ms. Campbell, I'll stay with you on the same idea but more local.

I have a background in my business career as part of a consumer protection agency that had its own enforcement and what not in the province of Ontario. We dealt largely with the auto industry. The biggest problem we always had seemed to be finding a way to set a common set of standards by which we could assess or appraise who was dealing truthfully and who was not.

When you talk about a sweep of advertising, do you gear your advertising enforcement more to the manufacturer or to the retailer? Or is it across the board?

[Lisa Campbell]

That's an excellent question.

Our law is a law of general application. It applies across industries and across the country. For example, the Bell case I just talked about was really, at bottom, about transparency and pricing. Tell consumers what you're charging them for various services and don't hide fees that are then tacked on and which they have to pay afterwards. That applies whether it's telecommunications, retail clothing, or auto manufacturing. When I describe our enforcement approach, we do try to take targeted enforcement that will have an impact on a large industry, but also across industries, because as we know, price bundling and hidden prices are not just problems in telecommunications.

[John Carmichael, Conservative, Don Valley West, ON]

It is a huge problem. The challenge is finding a way to break it down to some kind of common set of standards that gives you access to the numbers. I'm just curious as to how you're....

As this market unfolds, with respect to Ms. McDonald's numbers, the growth in this industry is staggering and the access to it is staggering. I'm thankful I have kids that can help me find my way through there. When I think about the number of purchases that are made online today and the numbers you have validated, it strikes me that you almost have to find a common set of standards that you can apply to ensure that everybody plays by the same rules. Am I off base on that? Is that too controlling?

[Lisa Campbell]

No, I understand what you're saying. Many trade associations will in fact self-regulate and develop those standards for themselves. Our role as an enforcement agency is to make clear where the bright lines are. For example, following the Bell Canada case, Bell Canada stopped making what we viewed as misleading representations about its price, advertising a lower price than what was available to consumers. All of the other telecommunications companies watched that and brought their ads into line as well. It does have a ripple effect.

However, for trade associations, as far as setting standards, that isn't our role, but our enforcement action probably informs what they do.

[John Carmichael, Conservative, Don Valley West, ON]

As a consumer, it strikes me that we don't want a nanny state. By the same token, when you're comparing apples to apples or apples to oranges, how do you know which are the comparable numbers other than by doing tremendous research and breaking it down? That to me is a difficult part. For the average consumer that's where the challenge really exists.

[Lisa Campbell]

It is, and one of the things we are actively involved in on the Internet is false claims, of course. So for the Nivea settlement that I mentioned, we concluded an agreement with Beiersdorf, the maker of certain Nivea products. They warranted that the application of a cream would reduce a person's size. Following our settlement, they've agreed to take the product off Canadian shelves, as they did in the U.S., to pay an administrative monetary penalty, and to pay the cost of our investigation, because the claims they made weren't, in our view, supported by adequate tests.

[John Carmichael, Conservative, Don Valley West, ON]

That is interesting, and then when you take that to an international level from a domestic level, it just amplifies the problem as far as monitoring is concerned.

Thank you. I appreciate that.

[Lisa Campbell]

Thank you.

[John Carmichael, Conservative, Don Valley West, ON]

Ms. McDonald, you talked about the spectrum auctions coming up, and I'm just wondering what effect you would perceive the new market entrants are going to have on the Internet, wireless, and telecommunications industries for consumers. You talked a bit about that, but I wonder if you could just go a bit deeper on that.

[Helen McDonald]

In 2008, in an auction of what was called AWS--advanced wireless services--spectrum, the government had a set-aside, and they wanted to get new entrants in. Therefore, only very small players were allowed to bid on this. That brought in at least four, if not more, new entrants. You've probably seen the signs for WIND Mobile and Globalive. Videotron in Quebec was also a beneficiary of that set-aside.

Prices are very difficult to compare because they're usually in baskets of goods. If you're a high user of the Internet and only an occasional or rare user of the phone, it's hard to make comparisons, but on average the prices are going down. We have new players in place. They're offering packages that are attractive to people who were never cellphone owners or Internet users before. So all of that is good. The more people there are online, the more opportunity they have to benefit from education or e-commerce or other sorts of activities they can do. So that is what the government did in its past auction. We are waiting for Minister Paradis' decision on the next upcoming auctions.

[John Carmichael, Conservative, Don Valley West, ON]

That's interesting, and I guess that's going to ramp up the partnership between your two agencies, to make sure all these new entrants play by the same set of rules as far as consumer offerings go.