Mr. Speaker, it is my pleasure to speak on private member's Bill C-221 as introduced by my colleague representing the riding of
Lambton-Middlesex. I congratulate and thank my colleague for the work and research she has put into this bill.
This bill proposes to amend the Competition Act by making it a criminal offence to prohibit manufacturers and distributors of motor vehicles and farm equipment from engaging in certain marketing practices with their dealers.
As I understand it, the purpose of the bill is to improve the efficiency of dealer operations. The view has been expressed by my colleague that restrictive arrangements between manufacturers and dealers prohibiting the the practice of dualling may result in inefficiencies for dealers in the sales and servicing of motor vehicles and farm equipment.
The objective of increasing efficiencies is a valid one in the context of competition legislation. Promoting efficiency and adaptability of the Canadian economy is specifically cited at section 1.1, the purpose clause of the act, as one of the principle purposes of the legislation. The provisions of the Competition Act have been created with this objective in mind.
The second objective addressed in Bill C-221 is to protect and encourage franchise dealers operating throughout the country by allowing them greater opportunity to realize gains in efficiency in their operations. Small and medium size businesses are at the very heart of our country and their success is key to the growth of the Canadian economy.
Accordingly, this objective is equally as important and noteworthy and is also recognized in existing competition legislation. It is recognized throughout the specific provisions of the Competition Act, which have been created with this purpose in mind, and more specifically in the purpose clause which provides that the purpose of the act is to ensure that small and medium size enterprises have an equitable opportunity to participate in the Canadian economy.
While the objective of the proposed legislation to control the anti-competitive consequences of prohibitions against dualling is worthwhile and should be supported and encouraged, the proposed bill is not the most appropriate for ensuring this objective.
A provision which addresses the very same objectives and conduct as the proposed bill attempts to address can already be found in section 77 of the act. This section deals with the issues of exclusive dealing. In order to understand why the existing provisions are more appropriate than those found in Bill C-221 to address the conduct complained of, it is important to consider the Competition Act and the structure under which it has been created.
The current legislation is a framework law of general application. It applies with some notable exceptions to all sectors of the Canadian economy, namely manufacturing, resources and services. The law touches on the everyday life of all Canadians by maintaining and encouraging competition in the marketplace with the objective of providing consumers with competitive prices and a variety of choices in the goods and services they buy.
Competition policy is a fundamental element in the government's economic framework aimed at fostering efficiency, adaptability, innovation and growth in the Canadian economy.
Bill C-221 would create criminal offences punishable on summary conviction or on indictment with the possibility of a fine in the discretion of the court or imprisonment for a term of up to five years. It is important to remember that criminal law is a powerful legislative tool, one that ought to be used with restraint.
In particular, this is a legislative tool that ought to be invoked in limited circumstances. It should be invoked in respect of conduct that gives rise to clear, serious harm and in respect of types of conduct that are likely to be harmful across a wide variety of economic conditions and business circumstances.
This is why the Competition Act has been drafted to include both criminal prohibitions and civil reviewable matters. Criminal law should be reserved for the most serious acts where it is clear that a particular conduct should be outlawed. Offences of the act which fall into this category include conspiracy and bid rigging.
On the other hand, the Competition Act contains other matters which are not criminal prohibitions but are categorized under the legislation as matters that may be reviewed by the competition tribunal, an administrative body under a civil standard of proof.
The tribunal may make remedial orders to overcome the effects of such practices but penal consequences are not imposed for a violation of these provisions.
Bill C-221 would create an absolute prohibition and declare certain conduct undesirable in all circumstances without recognizing that circumstances may equally exist which would make the conduct pro-competitive or competitively neutral.
This issue will certainly be raised in committee when we discuss the amendments to the Competition Act once they are introduced.