Industry Committee on Nov. 18th, 2014

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

I never thought I would frighten Mr. Warawa to that extent. Clearly, that is not something to be proud of, but here is something that would be good.

[Mark Warawa, Conservative, Langley, BC]

On a point of order, Mr. Chair. We were restricted to four minutes each in the interest of everyone having an opportunity to ask a question, and I see Mr. Sandhu has not been given that opportunity.

[The Chair, Conservative, David Sweet]

No. He has given his time to Mr. Côté.

Please proceed.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

My sincere thanks to Mr. Warawa for caring about my very esteemed colleague's fate. If he took the hand offered by the opposition, in terms of splitting such a monstrous bill or agreeing to review the opposition's proposed amendments, we could probably very easily speed up the process of passing government bills.

That being said, there is a situation in the riding of Beauport—Limoilou that is a bit similar to the one presented by Mr. Rowlinson. When the White Birch Paper mill in Stadacona was taken over by American Peter Brant, it had 1,600 employees. After a long labour dispute or after a lockout that lasted over two years, it barely has 200 people now.

The lockout took place when the company was placed under the protection of the Companies' Creditors Arrangement Act. Unfortunately, in that dispute, retirees were held hostage and lost most of their pensions. Actually, the company forced a restructuring and a transfer of funds to a new fund under a different form. In addition, Mr. Brant sold White Birch Paper mill to an American investment fund of which he is a shareholder. He sold his own company to himself.

I often find that my government colleagues are a bit naive. It would be touching if the consequences weren't so tragic. The reality is that employees and retirees were harmed. I am constantly in contact with the president of the Stadacona retired workers association. Many retirees have passed away without receiving their due, and even their loved ones will probably not receive the benefits.

The Investment Canada Act is an important act that could have a slightly broader scope. Above all, it could create a climate of trust for all the company's partners. We are talking about the trust of investors, and you were right in saying that investors must be able to trust in order to plan to settle in Canada. However, I would like to check whether you also think that the trust of other members of Canadian society plays just as important a role in helping us build a strong economy.

[Mark Rowlinson]

Thank you very much for the question.

That is exactly what we are saying. Indeed, when the legislation has an impact on foreign investment, the government and investors are not the only ones who need to be consulted; the community, workers and retirees also need to have the right to participate in discussions.

Although the agreement between the investor and the government was made public, that does not mean that all the information provided to the government also needs to be released, be it for White Birch Paper or even Rio Tinto.

For instance, when Rio Tinto forced a six-month lockout on our members at the Alma plant in Quebec, just after buying Alcan—another fairly similar situation—it would have been desirable to know what the agreement between the investor and the government entailed.

At the end of the day, if a multinational does not do what it said it would do, there should be a remedy for workers and the community. Multinationals should make investments as agreed. That is what we are calling for. We believe that this is not only in the best interests of the government and investors, but to a greater extent in the best interests of the community as well.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Rowlinson and Monsieur Côté.

That's the end of our time.

Please note, colleagues, that the Conservative side was shorted one question, so I will be giving them preference on time in the next panel.

We'll suspend now while we change panels.

[The Chair, Conservative, David Sweet]

Colleagues, we're back.

Before us right now is the Canadian Radio-television and Telecommunications Commission, Christianne Laizner, senior general counsel, and Christopher Seidl; the Canadian Wireless Telecommunications Association, Kurt Eby; the Public Interest Advocacy Centre, John Lawford; and the Competition Bureau, Martine Dagenais and Roger Charland.

To be kind to witnesses last time, I actually shorted my colleagues. I just wanted to ask you if you could try to maintain the four minutes per group, so that I could make sure that they get the time.

We'll begin with the CRTC.

[Christianne Laizner, Senior General Counsel, Legal Sector, Canadian Radio-television and Telecommunications Commission]

Thank you, Mr. Chairman.

My name is Christianne Laizner. I'm the senior general counsel and executive director of the legal sector of the Canadian Radio-television and Telecommunications Commission. With me today is Chris Seidl, who is the CRTC's executive director of telecommunications.

We are here today to answer your questions concerning Bill C-43, the budget implementation act 2, which proposes to grant the CRTC expanded tools and responsibilities.

The CRTC is an independent, quasi-judicial tribunal that regulates Canada's telecommunications and broadcasting sectors. We operate in a transparent manner, and with the goal of upholding the public interest, so that Canadians have access to a world-class communication system. Our decisions are based on the evidence provided to us by the individuals, companies and organizations—including some on this panel—that participate in our public proceedings.

Mr. Chair, we recognize that this committee must complete its review of Bill C-43 quickly, and we are happy to accommodate its schedule. We would ask the committee, however, to keep in mind that our responsibilities as a regulatory body set us apart from the other members of this panel.

Let me now turn to Bill C-43. As you know this bill proposes to amend the Broadcasting Act and the Telecommunications Act to expand the powers of the CRTC. We believe that three of these amendments will greatly enhance our ability to achieve the objectives that Parliament has entrusted to us.

The first would allow the CRTC to issue monetary penalties to any company that violates the rules of the Telecommunications Act. Mr. Chair, this is an important addition to the CRTC's tool kit. By granting us the power to issue monetary penalties, Bill C-43 would give us a new tool that would act as a deterrent to anyone wanting to breach the legislation or our regulations.

Let me be clear on our use of monetary penalties. It is not our aim to turn to these penalties first. Our experience enforcing the national do-not-call list and Canada's anti-spam legislation reminds us that the best enforcement approach should be determined by the particular facts of the case. Sometimes education or a warning may bring about compliance and other times a more forceful approach is needed. The option to use monetary penalties to promote compliance gives us greater flexibility to tailor the right enforcement approach to each situation.

I'll now ask my colleague, Mr. Seidl, to address the other proposed amendments.

[Christopher Seidl, Executive Director, Telecommunications, Canadian Radio-television and Telecommunications Commission]

Mr. Chair, I would like to begin by discussing the proposal to give the CRTC the authority to impose conditions on companies that resell telecommunications services provided to them by other carriers. Currently we do not have direct jurisdiction over these companies to require them to, for example, provide emergency 911 services. We impose public interest regulatory requirements on carriers whose services they resell and we look to the Canadian carriers to enforce these requirements with respect to the resellers. Bill C-43 would allow us to regulate these resellers directly. As an important change it means that the CRTC can extend the same safeguards to Canadians across the country regardless of the type of service provider they choose.

Bill C-43 would enable us to disclose the commercially sensitive information we receive to the commissioner of competition. By giving the commissioner access to confidential information he and his staff will likely be able to participate more meaningfully in our public proceedings. This would give us a more complete public record upon which to base our decisions.

The CRTC takes great pride in the role it plays in regulating Canada's broadcasting and telecommunications sectors. We're ready to apply the new responsibilities provided to us under Bill C-43 to further uphold the public interest.

We would be pleased to answer your questions. That being said, there are a number of ongoing proceedings before the CRTC. Mr. Chair, I hope the committee members will understand that, depending on the question, our answers will necessarily be limited in order to maintain the integrity of those proceedings.

Thank you.

[The Chair, Conservative, David Sweet]

Fully understood, Mr. Seidl.

Now on to Mr. Eby, four minutes, please.

[Kurt Eby, Director, Regulatory Affairs, Canadian Wireless Telecommunications Association]

Thank you, Mr. Chairman.

I'm Kurt Eby. I'm the director of regulatory affairs and government relations at CWTA. Bernard sends his regrets.

I'll be brief. I'm here to talk about one specific aspect of Bill C-43, and that is the amendments to the telecom act that would impose a prohibition on charging for paper bills. We just have a couple of things we wanted to talk about on that and answer questions.

Basically, this industry has been trying to move to electronic billing like many other industries. The government, for example, is phasing out paper cheques by April 2016. It's the same kind of principle, and we're facing the same challenges that were faced when companies went to direct deposit payments and we implemented automated teller machines. A number of practices have been tried to entice people to move to electronic billing. These include credits, discounts, offering reward miles, donations to charitable causes, and of course, charging to receive a paper bill. Bill C-43 proposes to remove that particular option, of course, and we just have a couple of comments and requests for the committee regarding some amendments to the bill in that respect.

The first one is about to whom this prohibition would apply. We think, as the government has stated publicly, that this should apply to individual consumers and not to businesses. Our request is that particular clause, clause 194 in the bill, be amended to read:

Any person who provides telecommunication services shall not charge an individual or small business subscriber for providing the subscriber with a paper bill.

Right now, it just says “subscriber”.

That definition of “small business” is already used by the commissioner for complaints about telecommunications services, and is used in the wireless code by the CRTC. The definition is that a small business is a business whose average monthly telecommunications bill is under $2,500. Businesses above that, corporate accounts, we think have the power and the ability to negotiate the full extent of their agreement, which would include how they receive a bill or invoice, and what goes on in that manner. We think this bill, as the government has stated, this proposal, which is to put more money back in the pockets of hard-working Canadian families, should be limited to families and individual accounts.

Our second request is regarding the coming into force period. A couple of weeks ago Industry Canada told this committee it had not undertaken consultation with the telecommunications industry with respect to how ready they would be to implement this. Our members have confirmed to us that it would be difficult if not impossible to effectively coordinate all of the IT system changes necessary to comply with this by, basically, January, when it could come into force. They have indicated that March 31, 2015, which is slightly more than five months from when the bill was introduced, would be an appropriate time to make sure that everything came into effect effectively and reasonably, and everyone would see that change uniformly.

That's all. I'm happy to answer any questions on that.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Eby.

Now to Mr. Lawford.

[John Lawford, Executive Director and General Counsel, Public Interest Advocacy Centre]

Thank you, Mr. Chair.

My name's John Lawford. I'm the executive director of Public Interest Advocacy Centre. We're a non-profit charity that specializes in representing consumer interests, and in particular vulnerable consumer interests concerning important public services. We're commenting today on Bill C-43 and notably on the power to levy administrative fines and monetary penalties for non-compliance with the Broadcasting Act, Radiocommunication Act, and Telecommunications Act.

Our message today is that it is necessary to have such penalties, and the amounts proposed are appropriate. However, the bill also does away with paper bill fees for telecommunications and broadcasting invoices, and that is a matter on which PIAC wrote a report and a result we have worked very hard to achieve, first through the CRTC and now here before you. We'll also speak briefly to the other two points that Mr. Seidl raised.

The AMPs provisions in the bill are proportionate to the job to be done and are necessary. On the CRTC side, this addition is necessary as the regulator transitions from price regulation towards policy-based framework regulation. In short, the CRTC has forborne price regulation and relies upon market competition. It no longer has the enforcement stick of denying requested price increases until a certain regulatory outcome is achieved. In addition, other legislation has already provided the CRTC with AMPs power in the national do-not-call list enforcement and now Canada's anti-spam legislation. So it is incongruous that the CRTC does not have a monetary penalty power for its core jurisdiction of setting conditions of service.

One of the framework measures that the CRTC is now tasked with overseeing and that is close to our heart is the wireless code. At the moment, should a company take a systematic and wrong interpretation of the code to heart, the CRTC can only make an order to stop that conduct in the future and perhaps register it with the Federal Court of Canada for enforcement. However, the telecommunications provider in question can reap any monetary gain from such a breach of the code until such time as it is asked to stop, with no monetary downside. The AMPs provide the CRTC with both the power and the appropriate tool—a monetary fine—to quickly discourage such behaviour.

We note the amounts in question—up to $10 million for a corporation and $15 million for a repeat offence—are identical to the CASL penalties and also the false advertising penalties under the Competition Act. This level of fine is necessary to deter very large corporate service providers that may make many millions more by ignoring a CRTC or Industry Canada interpretation of statutes.

Our second point is about paper bills. PIAC's report on paper bill fees estimated that the cost of only telecommunications and broadcasting service fees to consumers was nearly half a billion dollars a year. As part of this report, PIAC collected the views of consumers through an analysis of a telephone survey. Of Canadians asked, 74% disapproved of the practice of charging people extra for paper bills, 71% approved of offering consumers a discount for electronic billing, and 83% believed receiving a paper bill in the mail is part of the cost of a company doing business.

This legislation became necessary when the CRTC was unable to convince the telecommunication and broadcasting providers to do the right thing and stop charging such fees. We fully support it and we do not support any delays of the kind Mr. Eby has mentioned.

We wanted to note that the information sharing between the CRTC and the Competition Bureau during formal and less formal proceedings will, in our opinion, assist the Competition Bureau in its advocacy work and allow the CRTC to make better decisions in a competitive marketplace.

Lastly, we just wanted to point out that the addition of the new reseller provision Mr. Seidl referred to, while welcome, does hide a jurisdictional issue that this committee should at least publicly air. We'd be happy to answer questions about that.

Thank you.

[The Chair, Conservative, David Sweet]

Thank you very much.

We now go to the Competition Bureau and Mr. Charland.

[Roger Charland, Associate Deputy Commissioner, Legislative Affairs and Planning, Competition Bureau]

Thank you, Mr. Chair.

My name is Roger Charland and I am the associate deputy commissioner responsible for legislative affairs and planning at the competition promotion branch.

I am accompanied today by my colleague, Martine Dagenais, associate deputy commissioner, who is responsible for economics and advocacy.

Thank you for inviting us to appear to discuss Bill C-43, particularly with respect to the proposed amendments to the Telecommunications Act.

Before my colleague, Martine Dagenais, speaks to the bureau's interest in Bill C-43, I propose to begin with a brief overview of the Competition Bureau's mandate and role in promoting competition.

The Competition Bureau, as an independent law enforcement agency, ensures that Canadian consumers and business prosper in a competitive and innovative marketplace. Headed by the commissioner of competition, the bureau is responsible for the administration and the enforcement of the Competition Act and three labelling statutes.

The Competition Act provides the commissioner with the authority to investigate anti-competitive behaviour. The act contains both civil and criminal provisions, and covers conduct such as bid-rigging, false or misleading representation, price-fixing, or abuse of dominant market positions.

The act also grants the commissioner the authority to make representation before regulatory boards, commissions, or other tribunals to promote competition in various sectors.

To advance the bureau's enforcement objectives and our mandate to advocate market-based solutions before regulatory bodies, we continuously strive to strengthen our relationship with our domestic and international law enforcement partners and counterparts, as well as with key government departments and agencies. These partnerships allow the bureau to enhance the impact of its competition, compliance, and promotion work for Canadian consumers and business alike, both in Canada and in our export markets.

As part of these efforts the bureau has entered into cooperation agreements and memoranda of understanding with a number of key agencies, including the signing of a letter of agreement with the CRTC in September of last year. The bureau and the CRTC each play an important role in the telecommunication and broadcasting industries, and the agreement provides a framework for cooperation and assists both agencies in the delivery of their respective mandates in the sector.

I will now invite my colleague, Martine Dagenais, to speak to the bureau's interest in Bill C-43.

[Martine Dagenais, Associate Deputy Commissioner, Economic Policy and Enforcement, Competition Bureau]

Thank you, Roger.

Good morning, Mr. Chair.

As my colleague Roger has mentioned, the Competition Bureau has a role in informing regulators and policy-makers on competition matters, and we take this role seriously. In the past two years, the Bureau has made submissions to the CRTC in connection with its wireless code of conduct, as well as its reviews of broadcasting and television services, wireless roaming rates, and wholesale mobile wireless services, among others. These are important sectors of the economy, and a focus of the Bureau's competition promotion efforts to bring about more choices, lower prices and higher quality goods and services for consumers.

Accordingly, the Bureau is pleased by the amendments to the Telecommunications Act proposed in Bill C-43 that would allow the CRTC to share confidential information with the Bureau when that information is relevant to competition issues that the CRTC is considering. The amendments will bring the Telecommunications Act into line with federal legislation that regulates other industries, such as legislation governing matters before the Canadian Transportation Agency or the Canadian International Trade Tribunal.

This information sharing would enhance the Bureau's ability to analyze telecommunication markets and result in more substantive submissions to the CRTC on competition matters. The CRTC would therefore be able to make more informed decisions in telecommunication proceedings on issues relating to competition.

The Bureau understands the importance of competition in the telecommunications market to consumers, and it will continue to advocate in this area for the benefit of all Canadians. We believe the amendments proposed in Bill C-43 will further the objectives of both the CRTC and the Bureau with respect to this important sector of the economy.

Thank you again for inviting us today. We will be happy to answer your questions.

[The Chair, Conservative, David Sweet]

Thank you, Ms. Dagenais.

I will now give the floor to Mr. Daniel for four minutes.

[Joe Daniel, Don Valley East, CPC]

Thank you, Chair.

Thank you, witnesses, for being here.

I personally think that it's important that there are monetary penalties to enforce government policy on wireless policies. But in a sense I think we've talked about the penalties being as low as $10 million to $15 million. Compared to the billions they're spending on wireless acquisition, etc., this seems really low.

Can any of you comment on what you feel about how much the penalties should be?

[John Lawford]

I'd like to start, if I may. The AMPs also apply for the Radiocommunication Act and spectrum, as you're speaking about. The kinds of violations I believe this is aimed at are, for example, failure to roll out in an area, so if someone is sitting on spectrum in a certain area, they can be asked to get moving. It's a poke, but to take away the licence for that particular area might be a much larger effect, and so this gives an intermediate tool to Industry Canada to encourage compliance with the conditions of that licence. It's a good midway point. You're right, the spectrum overall is worth billions, but in each sector that might be a good example where it's appropriate.

[Joe Daniel]

Would somebody from CRTC like to comment on that?

[Christianne Laizner]

Yes, Mr. Chairman, the administrative monetary penalty regime is a civil remedy and it's on a continuum. The purpose is to promote compliance with the regulations and the act, and, in that way, penalties up to $10 million for the first violation and up to $15 million for the second violation are still substantial amounts for any corporation to incur. There is also a naming and shaming aspect of that as well, because the CRTC would publish the names of those who violated the rules. We found in our other enforcement areas, such as the national do-not-call list, for example, that it is an effective tool in the tool kit.

[Joe Daniel]

Thank you.

Mr. Eby, have you any comments?

[Kurt Eby]

I definitely agree with what the CRTC is saying. Because this is new and we haven't had this before, it would premature to say that these aren't high enough or stiff enough penalties. I'm not entirely sure what violations have been going on up to now that have not been enforced appropriately, so I wouldn't say that we would need stronger penalties than $10 million to $15 million.

[Joe Daniel]

Mr. Charland, have you any comments?

[Roger Charland]

I don't have a particular comment.