Mr. Speaker, it gives me great pleasure to speak to this bill today. The stated purpose of Bill C-235 is to establish fair pricing for products at the wholesale level. It is also to prevent anti-competitive acts such as predatory pricing and price discounting in industries where suppliers compete with their own customers.
As some of the other speakers to this bill have commented, the existing Competition Act already deals directly with the subject matter of this bill. If members read sections 78 and 50 of the Competition Act they will see that suppliers are already prevented from doing the things denounced by Bill C-235.
One of the problems with this government is that wherever it perceives a problem it thinks that the solution is to pass more legislation to fix the problem. Bill C-235 is a perfect example of this kind of behaviour. It seems that there was a perceived problem with vertically integrated suppliers fixing the price of a commodity. In other words, there is a feeling that big petroleum companies are driving small suppliers of gasoline out of business.
Because predatory pricing, price fixing and anti-competitive practices are seen to be negative activities, and indeed they are, Bill C-235 was drafted to overcome these problems. Unfortunately, in attempting to expand on sections 78 and 50 of the existing Competition Act, Bill C-235 muddies the water and complicates the issues.
The Independent Retail Gasoline Marketers Association of Canada supports the bill, saying it will be the first step in re-establishing retail competition in the oil industry. The Canadian Petroleum Products Institute does not support the bill. It says that the effect of this bill is to create a price premium for consumers to protect them from the benefits of open competition.
Which of these positions is correct? IRGMA also says that once competition is reduced through lack of public policy initiatives by any level of government the consumer will pay in the final analysis.
Reform believes that competition is essential in the operation of a free market system. However, we do not believe that competition should be artificially created and promoted. It should merely be enforced.
CPPI makes a good point when it asks: Is the proposed legislation of benefit to consumers, and by what tests has this been determined? It is not a good idea to draft, promote and pass legislation just because someone thinks it is a good idea. There must be facts and reality behind any attempt to govern what people do in business.
It seems that everyone, whether for or against the bill, is for fair competition. What we have to determine is whether this bill stands in the way of fair competition.
There is considerable concern in the business community about the way this bill is worded. Although we understand that the bill was drafted with vertically integrated petroleum companies in mind, it is not worded with those specifics. The telecommunications industry has expressed concern that there have been no studies done on the economic impact of this bill on markets and industries in Canada. Since we already have a similarly worded section existing in the Competition Act, why are we taking risks in fiddling with the wording of these sections and perhaps undermining the intent of that act, which is to promote proper competition in the marketplace?
The bill could possibly result in wholesalers and retailers communicating and agreeing on prices in order to comply with the provisions of the bill. If this occurs, the bill could actually encourage illegal price maintenance between wholesalers and retailers, exactly the opposite of its intent. It is also possible that if companies have to go to court to determine whether the provisions of this bill are being complied with, then the courts, and not competitive markets, would be used to determine fair prices. Do we really want to see this happen?
Another possible effect of this bill might be that efficiencies resulting from vertical integration could be ignored. If efficiencies in business are ignored or discounted or discouraged, consumers fail to benefit from the savings that those companies might experience.
A summary of the bill says that it would provide for the enforcement of fair pricing. We have to look long and hard whenever a government gets involved in enforcing fairness. Who decides what is fair? How do they do this? Invariably this becomes government rewarding friends and being subject to all kinds of things, such as favouritism and influence peddling.
What is true competition? How many businesses does it take to make true competition? If the point of competition is to provide price benefits to consumers, how do we determine when this has occurred? Under current provisions of the Competition Act suppliers are already prevented from price fixing, abuse of dominant position and unfair market practices.
The petroleum industry has been investigated several times by the Competition Bureau. Currently the cost to the consumer and the retailer's profits are affected by the high level of tax that exists as part of the gas price. The consumer would be much happier to see the price of gasoline drop. We all would. Naturally, the retailer would be happier to see an increase in profits.
Realistically, these things will only happen if taxes on gasoline are reduced. The resulting positive effect on industry, business and the consumer would be a more competitive marketplace.