Mr. Speaker, I am very pleased to have the opportunity to address this House on Bill C-67, an act to amend the Competition Act and another act in consequence.
The subject we are discussing today deals with a fundamental element of the economic framework governing business in Canada. Indeed, the free play of market forces is the very basis of our politico-economic structure and shapes all relationships between Canadians and companies doing business in Canada and abroad.
Canadians, whose quality of life is the best in the world, base their economic relationships on the principle of competition. It is through competition that productivity, efficiency and innovation are improved, thereby enhancing Canada's competitiveness, our prospects for growth and our standard of living.
The Competition Act plays an essential role in ensuring that this system continues to flourish. The Competition Act applies to all economic sectors and to all types of trade in Canada. It is the legislative framework by which Canadian society, through Parliament, ensures that businesses compete on a fair basis.
The Competition Act is also an important means of ensuring protection of the public interest in deregulated industries. It responds well to this government's desire to adopt less costly solutions for Canada by avoiding direct intervention in these economic sectors.
The amendments we have introduced seek to improve the code of conduct that defines the parameters for business conduct in Canada. With this bill, we can continue to promote a climate of vigorous competition while protecting consumers against deceptive or misleading practices. These changes will contribute to a healthier marketplace, and ultimately, to a better environment for economic growth and jobs.
In our discussion of the need for a healthy marketplace, we must make particular reference to the role of consumers. I would like to take this opportunity to consider the relationship between healthy competition amongst businesses and the effective protection of consumers' interests.
Experience has shown that, where international and domestic markets exist, consumers enjoy lower prices, a greater choice of products, better quality goods and services, and better information about these products.
As a result of the continued rivalry within markets where competition has free rein, manufacturers and merchants must innovate to anticipate consumers' needs. To keep its market position, each business must earn and renew consumers' trust daily. The most competitive markets are those where consumer information flows without restriction and options are avidly sought out before goods and services are offered.
When markets are competitive, consumers are more apt to inform producers and suppliers of needs and expectations. They are better informed of the choice of products, services and prices so they acquire greater power vis-à-vis producers and suppliers that must vie for their business. That is why the free play of market competition needs to be preserved and promoted. After all, restrictive practices that lessen competition are profitable only to the businesses that engage in them. They also decrease the overall welfare of society which is the reason we must be sure to keep vigilant and put an end to such practices.
A thorough revision and update of the Competition Act was last carried out in 1986. We want this key element of business law to continue to operate effectively. Accordingly, there is a need after 10 years of experience with the current model to ensure the legislation keeps pace.
The amendments we are considering today are not intended as an in depth reform of the act which is generally serving Canada well. They will however clarify the law in certain areas, promote voluntary compliance and provide a better and more effective variety of tools to the Competition Bureau. This is a balanced and focused package of amendments that result from broad consultations with consumers, businesses and experts. It reflects a high degree of consensus.
I will now deal with the main amendments we are proposing to show how they will promote healthy competition and lead to the faster and more efficient resolution of problem situations. To put the proposed amendments in context, I should first indicate that the current act contains provisions on criminal matters as well as those of a non-criminal nature. The criminal offences it deals with include price fixing, bid rigging, predatory pricing, retail price maintenance, misleading advertising and other deceptive marketing practices. In these matters the onus is on the crown to prove beyond a reasonable doubt that an offence has been committed.
The non-criminal or civil matters by contrast may be reviewed by the Competition Tribunal of Canada. These include mergers, abuse of dominant position, refusal to deal, consignment selling, monopoly tied selling, market restriction and delivered pricing. For reviewable matters the bureau may apply to the tribunal for a remedial order.
The bill before us builds on this foundation of enforcement tools and remedies, supplements the criminal provisions with a new offence related to deceptive telemarketing and creates a new civil approach for most instances of misleading advertising and deceptive marketing practices.
The bill also improves existing provisions relating to merger pre-notification, prohibition orders and ordinary price claims. The common denominator reflected in these amendments is a focus on clarifying the law for business and improving enforcement efficiency and effectiveness.
Telemarketing is a legitimate method of product promotion. However, when we refer to deceptive telemarketing, we are focusing on the use of deceptive representations and abusive tactics in the course of telephone promotions. Deceptive telemarketing has defrauded victims of large sums of money in the process. It has tarnished the reputations of honest telemarketers. Cleaning up this industry could be an asset to business and consumers.
Small and medium size businesses are also frequently targets of deceptive telemarketing. The Competition Act should not allow dishonest undertakings whatever their modus operandi to increase criminal operators' profits at the expense of honest businesses.
Currently the act prohibits the use of false or misleading representations for the purpose of promoting the supply or use of a product or promoting any business interest. The act also contains provisions relating to promotional contests. However, the existing law does not specifically forbid certain practices that have come to be associated with deceptive telemarketing. These need to be addressed.
This bill will create a specific new offence relating to these practices. The maximum penalty on summary conviction will be a fine of $200,000 or a year in jail or both. On indictment the maximum penalty will be a fine at the discretion of the court or jail for up to five years or both.
This new provision will apply to situations involving use of interactive telephone communications whether initiated by a telemarketer or by potential customers. The telemarketer will have to provide certain important information at the outset of the telephone conversation. Also, a number of deceptive practices will be prohibited.
To close on this subject, let me just add that another amendment will make it easier to obtain interim injunctions from courts to quickly put an end to the activities of deceptive telemarketers. These injunctions will also be available against third parties to enjoin them from providing products or services to deceptive telemarketers.
These amendments represent a considerable improvement in the current law. They address the most problematic practices that have been identified. They also incorporate penalties that will provide better deterrence.
In this area of competition law, the proposed amendments will be of great benefit to all stakeholders, consumers as well as businesses. As I have already mentioned, the current law contains provisions relating to misleading and false representations. Violations of these provisions are addressed solely through the criminal law process, prosecutions in criminal courts. Advertisers can avoid being convicted if they establish they have acted with due diligence.
Under the proposed amendments there will still be a blanket prohibition of deceptive advertising and marketing practices. The Competition Act will offer the bureau two avenues, criminal prosecution or civil resolution, to rectify conduct which though problematical has occurred unintentionally. Under this new civil regime most of the deceptive practices now prohibited will remain practically unchanged but will become reviewable matters.
The bureau can call upon a judicial member of the tribunal, the federal court or provincial superior court, and redress can be obtained through court order or by way of consent. Orders to publish information notices as well as to pay administrative monetary penalties for individuals may be issued. Last, consent orders may be entered into and will then be legally binding.
Measures such as these will expedite decision making and ensure that it is done consistently and by a specialized body.