Transport Committee on Dec. 7th, 2006

[The Chair, Conservative, Merv Tweed]

Good afternoon.

This is the Standing Committee on Transport, Infrastructure and Communities, meeting number 30.

The order of the day, pursuant to the order of reference of Thursday, September 21, 2006, is a study of Bill C-11, an act to amend the Canada Transportation Act and the Railway Safety Act and to make consequential amendments to other acts.

Joining us again are people from the department. We welcome you. I don't think introductions are necessary.

When we left off in the committee the other day, we were dealing with clause 13. Mr. McGuinty had put forward an amendment, which is on page 14. It is amendment L-2.

At that time, Mr. Jean introduced what was proposed to be a subamendment, but the discussion that followed suggested that it was too much of a change from the Liberal amendment and would have to be a stand-alone amendment.

What we're deciding right at this point is that if Mr. McGuinty's motion succeeds, then the motion by Mr. Jean would move off the table, and we would move either to (2.1) or on to the other clauses.

Mr. McGuinty, can you give us just a quick briefing on where you are with amendment L-2? Then I'll ask Mr. Jean or the department to discuss theirs, and then I think we can make a decision.

[David McGuinty, Liberal, Ottawa South, ON]

I think I've presented.

[The Chair, Conservative, Merv Tweed]

Have you? Okay.

[David McGuinty, Liberal, Ottawa South, ON]

I think I did so the last time around.

[The Chair, Conservative, Merv Tweed]

Ms. Borges, do you want to comment, then, on Mr. Jean's...either one or both of you?

Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I actually have reservations as well. It appeared we had some compromise that another party was interested in. It simply addressed the need for flexibility, in essence for information only. But I'd be interested to hear what the department has to say about both of them and what the outcome would be.

[The Chair, Conservative, Merv Tweed]

Ms. Borges.

[Helena Borges, Director General, Surface Transportation Policy, Department of Transport]

If I was hearing correctly the last time we were here, there was some concern from some of the members about whether we had consulted with the Competition Bureau on this provision. I can assure you that this whole provision was done in very close consultation with the Competition Bureau. In fact, before anything goes before cabinet, the ministers have to agree to it. I can tell you that in having this bill tabled, the Minister of Industry, who is the minister responsible for the Competition Bureau, was around the cabinet table. It was part of the approval of this bill.

What we try to do, to address Mr. McGuinty's concerns, is to provide flexibility in terms of what will be developed as part of the guidelines for the public interest, to make sure we cover everything. It's not our intent to duplicate what is in the Competition Bureau, and it is fully our intent to work with them in developing our guidelines to try to minimize that duplication. I think you read in the submission from the competition commissioner that there will have to be a little bit, but the objective is to minimize it.

Our focus—the Minister of Transport focus—will be on the public interest. The competition commissioner's will continue to be on the competition issues, and she or he will follow the process that they follow today. They will come together in the end with one recommendation to cabinet. So there is no intent to duplicate efforts here.

[The Chair, Conservative, Merv Tweed]

Monsieur Laframboise.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

I have reviewed and reread the government's position. I understand the purpose of Mr. McGuinty's proposal.

The criteria that he wants to make public would be different from those set out under the Competition Act. The last time, you seemed to be saying that this would not be possible, because the criteria are basically the same.

Mr. Langlois, would it be possible to propose criteria, as Mr. McGuinty has done, that are completely different from those set out in the Competition Act?

[Alain Langlois, Legal Counsel, Legal Services, Department of Transport]

That would be the ideal situation. Now, is it possible to draw a clear line between public interest criteria and criteria related to reduced competition? It would probably be very difficult to draw a clear line between the two.

Our problem with Mr. McGuinty's motion is that the wall would be pretty well impenetrable. It would be impossible to have public interest criteria that would affect criteria or factors already taken into account by the Commissioner of Competition.

In a perfect world, no public interest factor would duplicate what the Commissioner of Competition is doing.

If you read what the Commissioner of Competition has said, you will see that he himself recognizes that, ideally, conflict should be avoided. However, that will not be possible in all cases.

In a perfect world, there would not be any.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

I was inclined to support the government's motion, but to add, after line 1, that the guidelines referred to in sub-section (2) shall be established in cooperation with the Commissioner of Competition.

However, if I were to do that, the Commissioner of Competition would have his hands tied. Since he would have taken part in developing the criteria, he might no longer be able to pass judgment independently, depending on the cases brought to his attention.

Is that the correct interpretation?

[Alain Langlois]

The Commissioner of Competition can always take part in establishing guidelines. Whether it says so or not, I don't think that is a major problem. I would be surprised if the minister did not get in touch with the Commissioner of Competition when establishing these factors, in order to avoid duplication.

Indeed, I don't think the Commissioner of Competition's participation in developing the criteria affects his mandate. He will still be the master of his own destiny as regards procedure, which is set out in the Competition Act, and he will render a decision of which he will have to inform the minister, in accordance with the Act.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Fine, thank you.

My inclination was to support the government's motion and to add that the criteria must be set in cooperation with the Commissioner, which would probably have allowed everyone to discuss these issues. Basically, I would like all the parties to be able to talk to each other. But you are really telling us that you already consult one another. Perhaps that could be added to the government's motion. That is what I was thinking of proposing.

[The Chair, Conservative, Merv Tweed]

All right. I am ready to call the question, then. We will put Mr. McGuinty's motion first, because it was on the agenda first. As I've said, the passage of his motion basically defeats the government's motion.

Mr. McGuinty.

[David McGuinty, Liberal, Ottawa South, ON]

I'm sorry; I should have intervened earlier. May I ask a question of the witnesses?

Could I ask the witnesses to turn to page 3 of the brief submitted by Sheridan Scott in the English version—I'm not sure what page it would be in French—under the title “Need for Guidelines”. If you follow me and could bear with me, turn to the bottom paragraph, which commences with “In the bureau's view”. The sentence goes on to read:

In the Bureau's view, it will be necessary to identify in guidelines clear and transparent public interest criteria that the government wishes to safeguard and which will be used to evaluate specific transactions.

Could you help me to understand how the government's new amendment would address that concern put forward by Sheridan Scott?

I'm drawing a distinction here, as does Sheridan Scott, between, Mr. Chair, “guidelines” and “criteria”, which is why the amendment I put forward speaks to criteria—publicly disclosed, transparent criteria.

[Helena Borges]

Okay.

We have looked at the Competition Act. Section 93 spells out not criteria but in fact “factors” that the Competition Bureau takes into account in its assessment. I think the words “criteria” and “factors” are being mixed and interplayed in that way, that they mean one and the same thing.

We are assuming, if you read the rest of it, that this is exactly what she is saying: we should not be duplicating the factors the bureau takes into account; that the public interest ones should be different, to the extent possible, from the competition ones.

That's why we used the word “factors”, and the factors will be spelled out in the guidelines rather than be put them into the legislation. We would like to have the opportunity to consult on those factors because, as you can appreciate, the transportation sector is quite diverse, and we want to make sure that in looking at the various factors we take into account the requirements of the various modes, the various users—even provincial governments, which have a big role in transportation as well—and we'd like to have those consultations before the guidelines are produced and published.

[David McGuinty, Liberal, Ottawa South, ON]

For the interest of all members, then, can I draw our collective attention to the wording in proposed subsection 53.1(2.1) as presented by the government, which speaks of including “factors that may be considered to determine”, whereas the amendment I'm putting forward speaks to—

[The Chair, Conservative, Merv Tweed]

Just for clarification, proposed subsection 53.1(2.1) will be considered as a separate one, just so that you know.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you.

I think it speaks, Mr. Chair, to the vote we are about to pursue. The amendment I am putting forward is asking that the “guidelines...shall be made public”—there is no difference there—“and shall specify the criteria that are to be applied by the minister in making a decision”.... Is there not a difference here? First of all, this speaks to “may” as opposed to “shall”, and I don't know whether the factors themselves—you're calling them “factors”, and I call them “criteria”—are going to be made public.

[Alain Langlois]

The problem, first of all, with using the word “criteria” is that the criterion that will be examined by the minister is the public interest. That's the criterion that's embodied in the act. The criterion that the Commissioner of Competition looks at is the lessening of competition. In determining whether that criterion has been met, factors are looked at. If you apply the same rationale to this proposed bill, the criterion that will have to be examined by the minister is the public interest. In doing so, he will be examining factors, and that's consistent with what's in the Competition Act.

[Helena Borges]

I can read what's in the Competition Act for you, if you like. The wording is almost identical.

[Alain Langlois]

Just before you do, I wanted to finish.

Just to answer the question, and I know it's not subject to discussion, I will tell you the reason we use “may” in proposed subsection 53.1(2.1). There are four other acts, as we mentioned two sessions ago, under which the Minister of Finance has the ability to approve a merger or transaction. If you look at these acts or at the Competition Act, the list of factors enumerated in these acts is not exhaustive. The intention of that is not to box in the minister if a factor that nobody had thought of at the moment a transaction is put forward comes up, and the minister can't do anything because the factors are not listed in the list. The “may” is to provide flexibility in terms of what will be put in the guidelines. Obviously the factors will be looked at, but if something comes up that no one has ever thought of because of the nature of the transaction, that factor will be able to be examined. That's the purpose of the “may”.

[Helena Borges]

I can read to you the opening caption from the Competition Act in section 93. This is how it starts:

In determining, for the purpose of section 92, whether or not a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially, the Tribunal may have regard to the following factors:

So the tribunal “may” have regard to the following factors, and then it has a list of the factors that may be considered as part of the review of the merger. In a way we're trying to replicate the same kind of approach.

[The Chair, Conservative, Merv Tweed]

Is everybody comfortable?