Industry Committee on Oct. 31st, 2017

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Masse, you have seven minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

The presentation is clear—and I think it's obvious, too—that with the additional responsibilities the Competition Bureau has been provided over the last decade, if we want to have a more serious allocation of some of the laws in place, then the resources need to be there for it. It's going to become more robust in terms of the complications to do so, especially internationally. The treaties we've signed over the last number of years haven't included some of the things probably necessary to keep up to speed with some of the issues you deal with. In fact, they've been missed opportunities with many of our agreements. They don't have these as internal components, which they could.

That aside, how do we rank with our G7 partners, in terms of protecting competition in Canada, in terms of your counterparts in the United States, Australia, and others? Where does Canada rank with this?

[Josephine Palumbo]

Well, I believe our record speaks for itself, quite frankly. I've given you some examples of consent agreements. The resolutions have yielded $26 million in administrative monetary penalties, $25 million in consumer restitution, and $1.5 million paid to charities. That's—

[Brian Masse, NDP, Windsor West, ON]

I know all that. But how do we rank? I would say that our protection for consumers and enforcement needs to be equal to that of, for example, the United States, where we have reciprocity in many respects but we don't get the same for consumers, let's say.

I'll give you the quick example of Toyota, and now Volkswagen, where consumers get less protection in Canada for a variety of different political decisions and even legislative reasons. Where do we compare in terms of consumer protection but also competition, for the fair companies, with our American counterparts and other G7 nations? I know what you have here, but what I'm looking for is how we compare with others. We have very much an integrated market in consumer societies with the G7. Where do we rank with regard to competition protection and consumer protection?

[Josephine Palumbo]

I think we're doing a fairly good job in what we have and in the legislation that we have before us. In the Volkswagen matter, we resolved the case as well with respect to the 2.0-litre engines—$15 million in administrative monetary penalties and $2.1 billion in restitution to Canadian consumers, as well as costs. I think we're faring quite well, quite frankly.

[Brian Masse, NDP, Windsor West, ON]

That's still not comparable to the United States in terms of Toyota and what they received; and Volkswagen, we still haven't seen that over here.

[Josephine Palumbo]

We work well with our American counterparts as well. We collaborate with the FTC as is necessary.

[Brian Masse, NDP, Windsor West, ON]

Your presentation here indicates that you need more resources to do more. I'm asking, quite frankly, how your resources...and how you actually play out with the United States with regard to comparables. You're referencing Amazon and, for example, a 10-year remedy for $1 million. That affects other competition when a company is allowed to have a position that provides for an advancement of their market share. There's been a restitution here, but for Amazon, that's not a lot of money over a 10-year period. The reality is that when it's an international company that needs to be examined like this, how do you compare with the United States? That's what I'm trying to find out. Are we as robust in our protection and our fines and our penalties as the other G7 countries are? That's what I'm interested in.

Your presentation here does say that you...and you've tried to recite the numbers here. I'm looking to find out whether it's comparable to our other G7 nations.

[Josephine Palumbo]

I believe we are. I think we're working within the confines of our law, and our resolutions reflect those realities.

[Morgan Currie]

It's somewhat difficult to measure because of the scale of the economics, the scale of populations. There's no doubt that two of our most important partners, the U.S. Department of Justice and the Federal Trade Commission, are enormously well resourced. We all know that. We are certainly part of the conversation and work collaboratively with them in several law enforcement partnerships that we are engaged in across Canada and internationally.

On the consumer protection side, we have the International Consumer Protection and Enforcement Network. Within that group, which is well over 40 countries, New Zealand, Australia, the Federal Trade Commission, the U.K., and us are considered the big five. We're the ones that collaborate. We're the trailblazers. We're the ones that are more likely to work collaboratively to address such global scourges as subscription traps.

On the criminal side of our law, with cartels—at the Competition Bureau, for example, with bid-rigging—our partner, the U.S. DOJ, is enormously resourced. There's a lot of collaboration there. Could we do more with more resources? As we always say, as a law enforcement agency, most certainly we could.

[Brian Masse, NDP, Windsor West, ON]

That's what I'm trying to ascertain here. I don't believe that consumers get reciprocity. For example, when you look at legislative things, even the automotive sector, you see that Toyota's settlement with the United States was quite different from that with Canada. In fact, it included investment into their facility development for safety, and plant development as well.

I'll leave it at that. There are other legislative things that have taken place, like proceeds from crime going to different agencies and different things. It seems to me, though, that your presentation is suggesting that you need more resources to do more, but at the same time— that's why I'm asking for comparables with other G7 nations—you say you're doing fine. So I don't know what the message really is at the end of the day.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Perhaps when you go back you can take a look, answer that question, and submit something.

[Josephine Palumbo]

We can certainly come back with more detailed data that might help position Canada vis-à-vis other law enforcement partners.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

[The Chair, Liberal, Dan Ruimy]

If you could submit it to the clerk, that would be good.

[Josephine Palumbo]

Very good.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Baylis, you have seven minutes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you.

Thank you for being here.

One of the points you make is that the Competition Bureau is looking after ensuring that we have a competitive and innovative marketplace, and that this in turn delivers lower prices and more product choice. We've heard some philosophical arguments against CASL, saying that it favours the companies that are already implanted, because they have made those electronic relationships that they can then build upon, whereas new entrants don't have that opportunity to advertise and get into the marketplace.

We've heard philosophical arguments saying that CASL is going to reduce competition and innovation. In your role, do you have thoughts on that?

[Josephine Palumbo]

We apply the rules or the law as set out in the Competition Act. We look at representations. We don't carve out, for example, a charity. We don't carve out members of Parliament. We apply the law as it speaks.

When we look at a representation, we look at it in the context of whether it's false and misleading in a material respect in order to promote a product or a business interest. We look at it with respect to the conduct, the materiality, the general impression that's conveyed. If it's false or misleading in a material respect, we will enforce as an independent law enforcement agency should and does do.

[Morgan Currie]

What we've seen as we've moved into the digital economy becoming the economy is that in many cases, the same actors that were once on the phone and engaged in telemarketing have moved their activities online. Our piece of CASL, through these minor amendments to the Competition Act, really hasn't changed the profile of what we see in the marketplace in terms of the false and misleading representations. We're vigilant in trying to detect it in both the civil and the criminal side of our law.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

With the very malicious activities, as you said, the same people who were doing the phone scams have now moved on to the Internet scams. However, you've had some strong wins against some very big, legitimate companies. Is that an ongoing thing, or have you set a bar to let people know that if they behave in this way, they're going to be dealt with as per previous examples?

[Josephine Palumbo]

Let me start by saying that reviewable conduct is civil. An offence that has the element of “knowingly or recklessly” will tip you into the criminal behaviour. The cases you have before you, the Avis and Budget, the Amazon, and the Hertz cases, were all resolved under the civil reviewable conduct provisions of the act. No deliberate mens rea, knowingly reckless; doesn't exist there.

In terms of what those consent agreements have done, though, you'll notice that Avis, Budget, Hertz, and Dollar Thrifty are all in the rental car industry. Generally, because our resources are limited, when we invest in a particular industry, we focus and hit on the bigger players. From there, we engage in outreach, some advocacy and education, to try to level off the playing field. That's what we're really trying to accomplish.

Those resolutions are public. If it's a consent agreement registered with the Competition Tribunal, there are websites, so other companies or other enterprises become aware of what the standard is, of what the rules are, and what they should and shouldn't be doing. It disciplines the industry, to a certain extent.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You discipline an entire industry.

[Josephine Palumbo]

Exactly.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I'll pass it over to my colleague Mary.