Debates of March 16th, 1998

The Late Mr. Alfred Hales

[The Deputy Speaker]

I want to thank all hon. members for their contributions.

Government Response To Petitions

[Peter Adams, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 10 petitions.

Interparliamentary Delegation

[Charles Caccia, Liberal, Davenport, ON]

Mr. Speaker, pursuant to Standing Order 34(1), I have the honour to present to the House, in both official languages, the report of the delegation of the Canada-Europe Parliamentary Association to the session of the Council of Europe's parliamentary assembly, which was held in Strasbourg, France, from January 26 to 30, 1998.

Employment Insurance Act

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

moved for leave to introduce Bill C-377, an act to amend the Employment Insurance Act, 1997.

Mr. Speaker, I am pleased and honoured to table this bill, which is the result of thorough consultations with all the groups protecting the unemployed and with all Bloc Quebecois members.

The bill includes the Bloc Quebecois' proposed amendments to the Employment Insurance Act, which we feel should be made at the earliest opportunity.

(Motion deemed adopted, bill read the first time and printed)

Export Development Act

[Charles Caccia, Liberal, Davenport, ON]

moved for leave to introduce Bill C-378, an act to amend the Export Development Act.

Mr. Speaker, the purpose of this bill is to require the decisions made under the Export Development Act to be made in accordance with the principle of sustainable development. I welcome the seconding by the distinguished member for Etobicoke North.

(Motions deemed adopted, bill read the first time and printed)

Canada Elections Act

[Charles Caccia, Liberal, Davenport, ON]

moved for leave to introduce Bill C-379, an act to amend the Canada Elections Act.

Mr. Speaker, with the support of the distinguished member for St. Paul's, I am glad to introduce an amendment to the Canada Elections Act, the purpose of which is to give voters the option of indicating on their ballots that they choose not to support any of the candidates listed on the ballot.

(Motions deemed adopted, bill read the first time and printed)

Interest Act

[Sarkis Assadourian, Liberal, Brampton Centre, ON]

moved for leave to introduce Bill C-380, an act to amend the Interest Act and an act to amend certain laws relating to financial institutions (mortgage prepayment and consumer disclosure).

Mr. Speaker, it is my pleasure to present this bill in the House today. The purpose of the enactment is to ensure the right to redeem a mortgage by a payment of no more than three months interest penalty or a percentage of the principal outstanding as has been previously agreed to by the parties, even if the term of the mortgage is less than five years. I look forward to a debate on this subject very soon.

(Motions deemed adopted, bill read the first time and printed)

Petitions

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to present a petition to the House which is signed by a number of Canadians, including constituents from my own riding of Mississauga South.

The petitioners draw to the attention of the House that police officers and firefighters are required to place their lives at risk on a daily basis. When one of them loses their life in the line of duty, the employment benefits do not often provide sufficient compensation to their families. The public also mourns that loss and wishes to support, in a tangible way, the surviving families in their time of need.

The petitioners therefore call on Parliament to establish a public safety officers compensation fund for the benefit of families of public safety officers who are killed in the line of duty.

Questions On The Order Paper

[Peter Adams, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I suggest that all questions be allowed to stand.

[Guy St-Julien, Liberal, Abitibi, QC]

Mr. Speaker, in early December 1997, I tabled my questions about an RCMP detachment that was being built to the tune of several million dollars just to accommodate one secretary in Rouyn-Noranda, but the 45-day period has long gone by.

Will I be receiving answers to Questions Nos. 53, 63 and 64 anytime soon?

[Peter Adams, Liberal, Peterborough, ON]

Mr. Speaker, I can only apologize to the member. He has been very persistent and patient in his own way waiting for this reply. Again I assure him I will do my very best to produce the reply as soon as possible.

[The Deputy Speaker]

Is it agreed that all questions stand?

[Some hon. members]

Agreed.

The House resumed consideration of the motion that Bill C-20, an act to amend the Competition Act and to make consequential and related amendments to other acts, be read the second time and referred to a committee.

Competition Act

[The Deputy Speaker]

Going into oral question period, the hon. member for Mercier had the floor. She now has 19 minutes left to complete her speech.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, just before oral question period, I was saying that Bill C-20, an act to amend the Competition Act and related amendments to other Acts, introduces a new criminal offence relating to fraudulent telemarketing.

The Minister of Industry described in great detail why this new offence and the clauses in the bill which relate to it had become necessary. I added that we would be pleased to support the bill, if this were all it contained.

I pointed out, however, that the bill before us, although stressing—as do those defending it—the clauses relating to fraudulent or abusive telemarketing, in reality conceals numerous other clauses with which we cannot agree. Not all the other clauses, but a sufficiently large number to prompt us to ask pressing questions and to disagree with the principle of the bill.

It is important to point out that the bill decriminalizes a number of former offences. Although the bill introduces a new regime which could be termed civil, it in fact creates new provisions, some aspects of which are questionable to say the least.

After an investigation has been conducted under several provisions of the act, after the case has gone before the competition tribunal, it may be determined that the business has engaged in reviewable conduct.

For the purpose of hearing such a case, the competition tribunal would be made up differently: you would not have a judge, a counsel and other interested parties, so to speak, but just a judge.

When the conduct of a business has been determined to be reviewable, this business may be ordered what to do or not to do, depending on the offence and the evidence. It would face what constitutes, as far as I and the individuals and lawyers I consulted know, a new penalty called an administrative monetary penalty, which is similar to the penalties imposed previously under criminal law, but which seems to be a new, civil version of what the government no longer wants to do.

There is no doubt that the evidence rule has been changed. What paragraph 74(1) provides is that evidence should be considered as convincing prima facie, which, on the face of it, is surprising. The least we can do is to question this.

But there is a more serious concern in that the current director of the competition bureau is the only one authorized to investigate the businesses and ask the tribunal or another court of his choice to make a determination of reviewable conduct.

This is to say that this is a complex bill, but behind this complexity is the concentration of power in the hands of the competition bureau and its director, who actually becomes a commissioner under this bill.

These provisions are also intriguing to say the least. In Quebec, the consumer protection act contains provisions similar to those found in the Competition Act with respect to misleading advertising, to conspiracy, and Quebec, which took action in civil matters, is doing quite well in that area. What will businesses do? Will they not, in Quebec at least, be subject to two systems? Are they compatible or not? These are certainly important questions that need to be answered.

The bill is touted as providing the courts with new means of dealing with crime through orders on consent and orders including prescriptive terms upon what I described earlier as prima facie convincing evidence.

As I have said, these means cannot be requested except by the commissioner, who has total discretionary power. One could assume he will choose to go before the Competition Tribunal.

Moreover, it was stated during the inquiries and committee sittings that the Competition Tribunal has limited means at its disposal. It is, therefore, not surprising that only the commissioner can act in this connection.

The cost of this decriminalization is that powers are centralized in the hands of a commissioner who is, and I must again emphasize this point, a federal public servant answerable only to the minister.

When the commissioner applies for an order from the competition tribunal, he gives the person whose conduct is to be reviewed 48 hours' notice. This in fact allows plenty of time for an out-of-court settlement to be reached. During these 48 hours, the commissioner and the party may reach an agreement on the terms of the order, including the possibility of their being taxable. The order will be filed for immediate registration.

We are moving from a system of criminal offences to one that is not only decriminalized but can end up completely sidestepping the criminal system with out-of-court settlements.

Some may argue that this is more efficient. What must be asked is whether this system includes everything necessary to ensure that the spirit of the Competition Act is respected by all businesses, not only small and medium-sized ones, but large ones as well.

I will close by saying that one addition was made on deceptive telemarketing after introduction of the first bill, C-67. Deceptive telemarketing—and this may be essential, but was not included in the first bill—may, under sections 45 and 47, be subject to electronic surveillance. This was not in Bill C-67.

The Canada-U.S. report on deceptive telemarketing, dated November 1997, recommended that the matter be studied in greater depth before a decision was reached on the use of electronic surveillance to gather evidence on major offences related to deceptive telemarketing.

A number of questions need to be asked in connection with the application of this bill.

For instance, according to the Parliamentary Research Branch, deceptive telemarketing costs consumers $60 million. That is serious.

It is far from the losses that the same research branch estimates at $40 billion in the United States.

The reason we must target deceptive telemarketing is that this misleading advertising by telephone is generally aimed at defenceless people, including the elderly, who stand to lose a lot of money. We have seen tragic cases of people who lost just about all their savings.

The advisory committee was not in a position to make concrete recommendations, but it agreed that the bill should go ahead with this provision.

This bill includes worthwhile, innovative provisions, but its review of the Competition Act does not fully satisfy consumers—in the broad sense used by the industry minister this morning, which includes businesses as consumers. Indeed, based on the consultations I have held, the administrative monetary penalties may very well be challenged. Some practising lawyers and others in the education sector told me that, on the face of it, they were practically convinced that this provision would be challenged before the courts.

Since we have just started second reading, we will have to insist in committee on finding out what kind of studies were conducted. In addition, the potential for duplication and overlap with Quebec consumer protection legislation is extremely troubling and warrants considerable attention.

Finally, there may be some concern over decriminalization aimed at centralizing powers in the hands of one official. I have no quarrel with that person's ability. However, he will have absolute discretionary power opposable only by the minister, to whom he is accountable.

In this period of worldwide economic upheaval, the negotiations on the multilateral agreement on investment are worrying many people. While the underlying intentions are laudable, there are other intentions that are of huge concern, and it is not clear that even Canada will approve, given the exceptions sought, in the field of culture, for example.

When negotiations of such importance are being conducted, it is vital the government reassure the people that competition will be maintained. Too many small businesses and thus consumers could be deprived of opportunities and, worse, heavily penalized. We must take a hard look at mergers and doubtful and fraudulent business practices, and consumers must be assured that the minister and the commissioner will not be tempted to enter into agreements that will result in two justices: one for ordinary individuals and one for businesses, including major corporations, that would always put them above suspicion.

For reasons of overlap and because of questions about the spirit of the Competition Act and its application, the Bloc Quebecois cannot support the bill in principle at second reading.

[Chris Axworthy, NDP, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, I am pleased to rise to participate in the debate on Bill C-20, an act to amend the Competition Act. It is important to recognize what this piece of legislation is intended to do and then to assess the changes which have been proposed in that light.

The purpose of the legislation has been, for a long period of time under whatever name the legislation has had, to ensure that the Canadian marketplace is as competitive as possible in the interest of consumers. It ensures that consumers have a wide range of products available at competitive prices in circumstances in which sellers do not use practices which are unacceptable, misleading and deceptive to attract sales.

It is in the interests of consumers to ensure that various assertions about the quality a product or a service might possess, about the price at which that product or service might or might not have been sold in the past and about various qualities of that product or service be truthful. In that way consumers know what it is they are comparing so they can make efficient and sensible consumer decisions.

It is also plainly in the interests of competitors to ensure that all businesses within the marketplace abide by the same rules and pursue honest, clear and open business practices. If a competitor is able to generate a sale as a result of a misleading practice, then competitors who are adhering to proper and honest business practices will suffer losses accordingly.

It is in both the interests of consumers and the business community that we have effective competition policy. In that regard the legislation approaches these practices in the marketplace in both criminal and non-criminal ways. It deals with conspiracy, bid rigging, discriminatory and predatory pricing, price maintenance, misleading advertising, with which many people are familiar, and deceptive marketing practices.

The courts have the power in those areas to impose fines, to order imprisonment and to issue orders to stop the practice in question. They also have the power to issue interim orders to stop the practice in question and to administer a wide range of remedies.

In addition there are issues which at first blush are not so close to home to consumers but which have a significant impact covered by the act. These primarily deal with restrictions on competition, mergers, the abuse of a dominant position in a marketplace, refusing to sell to someone because of some of their selling practices and essentially dealing with the more macro issues rather than the ones that affect consumers precisely.

This legislation and legislation before it sets out the rules and regulations of the marketplace. This piece of legislation can be divided into two or three segments.

The first deals with deceptive telemarketing. With the growth of telecommunications and the reduction in price of telephone services, by using the telephone it is now very easy and inexpensive for a marketer in one province or country to sell to a buyer in another country or province. As a result we have seen a growth both in legitimate and illegitimate telemarketing. In order to protect those who pursue this activity legitimately, it is necessary to deal with those who bilk millions and perhaps billions of dollars from Canadian consumers. It is also important to protect those Canadian consumers.

This bill should be applauded in that it sets out much more explicitly what the crime of deceptive telemarketing will be. If enforced effectively, the legislation will serve to reduce the abuse of Canadian consumers across the country.

As every member of the House will know, the kinds of people who have been the target of telemarketing are very often those who are most vulnerable in society. Seniors, at least in my estimation, are trusting. They generally believe that people are telling them the truth because that is the way they conduct their affairs. If the evidence is correct, and I believe it is, they tend to believe what telemarketers tell them. When they are offered the $10,000 prize, if they would only send $500, $600, $700 or $800 to cover taxes and other incidental expenditures, they believe they will in fact receive the $10,000 prize.

To many of us it is an incredulous idea, but we know from the evidence that maybe hundreds of thousands of Canadians and perhaps millions across North America have been taken in, in this way, and for significant amounts of money. I have met many Canadians who have been tricked in this way.

Part of the bill is very significant. We have done little about this criminal activity, this defrauding of Canadian consumers, mostly older Canadians, to the order of $4 billion. Making something a crime is only part of the story. We have to be sure that we can enforce the sanctions which flow from making deceptive telemarketing a crime.

To date there is a very small police department headquartered in North Bay, Ontario, called Operation Phonebusters. At last count it had one person who knows the area intimately, Staff Sergeant Elliot. He has done a terrific job on this question. Many of us in the House will have spoken to him and to his very small staff attached to that operation in North Bay. They are dealing with a criminal activity which is costing the most vulnerable Canadians perhaps $4 billion a year.

Let us match that with the resources we spend across the country, province after province, to deal with drivers who speed, with people who break windows and with street crime. The mismatch of resources attached to and applied to this kind of criminal activity is so obvious that we have to ask the solicitor general and the government to make sure they commit adequate resources to deal effectively with this matter. It is not enough to have a small joint OPP-RCMP force in North Bay to try to deal with these cases across the country.

Without that commitment the legislation will mean very little to ordinary Canadians who have been bilked and are likely to continue to be bilked if the kinds of people that engage in deceptive telemarketing, those who are not likely to stop just because the House says it will be a crime, carry on in the way in which they have been carrying on.

We absolutely need a commitment from the government. Maybe the Parliamentary Secretary to the Minister of Industry will be able to commit today to ensuring that the legislation is effectively enforced. It is important to recognize and to support the government in acting on the telemarketing fraud that exists.

Much of this fraud is centred in Montreal. A small number of people are using very sophisticated telephone and marketing techniques across the country into my province, my district in Saskatoon—Rosetown—Biggar, on a regular basis, making billions of dollars off other Canadians.

We must ensure that Quebec authorities effectively deal with this question even when a loss has not occurred in the province of Quebec. We have to make sure we co-ordinate activities across the country to put an end to this kind of activity.

Let me summarize that point by saying that I support the government in its measures in this regard. I hope it will commit resources to make sure that the legislation is adequately enforced and that Canadians are adequately protected.

We need to do a little work on informing consumers. Last year, faced with complaints in my riding, I provided a telephone security tip brochure which people could put by their telephones telling them what not to do and what they might do to protect themselves from telemarketing scam artists.

Let us see some commitment on the part of the government to enforcing the legislation. Although it is late, I think we should congratulate the government for introducing the legislation.

On another part we have some serious questions which arise as a result of what I indicated in the beginning. The legislation is designed to ensure we have a competitive marketplace in Canada. Separate from issues like health care and education which we and Canadians believe should fundamentally be largely outside the markets and administered in a separate way in the public interest, things should be bought and sold in the marketplace in a competitive environment. The actors in the marketplace, the sellers and the providers of goods and services, should also act in a competitive way.

We can also support dealing with changes to trade practices and misleading advertising to provide the government with a number of different ways to approach this problem. Making something criminal is not the only way to attack an issue. That has been made clear. We need a mixture of criminal, civil and administrative measures to ensure that consumers and competitors are best protected.

Let me come to the point where I have some difficulty, the merger part of the legislation. Canada has one of the weakest anti-merger pieces of legislation in the world. Of any developed country we have not treated the question of larger mergers seriously. Only one has perhaps ever been seriously called into question.

We are now faced with merger mania, with big banks merging and with big insurance companies merging. I believe we are just at the beginning of merger mania. Many of our large corporations will be telling us that it is in their best interests to have less competition in Canada so that they can compete in the world economy.

I am sure members have heard in their ridings that Canadians simply do not buy that argument. They do not want big mergers to take place. They do not want the Royal Bank and the Bank of Montreal to merge. They do not want big insurance companies to merge. They do not want their fellow Canadians to lose their jobs and they do not want to have less competition. They want to have more choice, not less.

What does this merger legislation do with regard to these questions? Essentially it does not do anything. It leaves our whole structure, our whole process, pretty darn weak. It does not ensure that we will have serious review of bank mergers, insurance company mergers or any others.

Does anybody seriously think that the merger between the Royal Bank and the Bank of Montreal is anything other than a foregone conclusion? Is there any expectation across the country that because of the power of those two big banks and our weak merger legislation this merger will go ahead? We would be foolhardy to think this was not essentially a foregone conclusion. We can work as hard as we can to stop it because Canadians do not want it. Many of these mergers are not in the public interest.

Because of the legislation, because of the approach the government takes and because the approach of the Conservative and Reform parties and those parties that tend to support big business, there is unlikely to be anything significant in this regard without a major change of heart.

We see The Bay and K-Mart merging. Is anybody going to ask any questions about whether it is in the public interest? I do not think so, from those three parties I mentioned. Indeed the public interest seems to be the last thing anybody cares about in pro-business parties with regard to mergers.

Canadians want better, deserve better and should have better. They should have merger legislation which puts proposed mergers to the test. It would require those who want to merge to show why it is in the interest of Canada that they do so.

Nothing in the bill requires any accounting by the Bank of Montreal and the Royal Bank. We know jobs will be lost. The presidents of those two organizations have made sure they will not lose their jobs, but the cashiers in the branches in our communities will not be there and the branches will not be there because of the merger. That is not good enough.

Passing legislation of this sort is an opportunity to beef up the legislation so the interest of Canadians can be protected, so we have an economy that is getting more competitive and not less, and so we have an economy that acts in the interest of Canadians and not just in the interest of large banks, large insurance companies and large retailers. It is unfortunate that the government did not take the opportunity to do what it philosophically says it wants to do, that is enhance the competition inherent in Canada's marketplace.

Perhaps some would find it odd that it has to be a social democrat who asks why we do not focus on a competitive marketplace. Why do the Reform Party, the Tory Party and the Liberal Party say they do not give a damn about competition? They would rather have these big mergers taking place. They would much rather have a policy of deregulation, privatization and monopolization, which is exactly what has happened in Canada over the last few years.

It is time we had merger legislation that is actually in the interest of Canadians and not just in the interest of those who want to merge and consolidate their own power, their own prestige and their own ability to control the rest of us.

There are good parts in the legislation. I applaud the government's move on fraudulent telemarketing. It is very important to commit adequate resources to ensure these crimes can be effectively policed and Canadians can be effectively protected.

However, on the merger part, which in an odd way is kind of combined with the telemarketing legislation, much more could have been done. The government deserves significant criticism, as do those who support this weak merger regime that we have in Canada, for not taking strident measures to make sure we have a more competitive economy in Canada rather than a less competitive one.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I thank the hon. member for Saskatoon—Rosetown—Biggar for his comments. He suggested that the Reform Party together with others were opposed to competition in the banking sector. I would like to correct the record. The Reform Party has said that it would only approve the proposed merger of the two large chartered banks if we had a more competitive banking regime.

I would like to ask the hon. member about what happened to his social democratic principles. I grew up in Saskatchewan down the road from where Tommy Douglas was first elected. As a high school student I read the Regina manifesto, the glorious socialist vision of our friends to my far left in this Chamber. It said among other things that the CCF and its progeny, the NDP, were committed to no competition in the banking sector, not to more competition but to none, to nationalizing the banking sector.

I wonder what this hon. member has done with his socialist principles. Did he lose them along with his psychedelic Volkswagen bus in 1968?

[Chris Axworthy, NDP, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, I never had a psychedelic Volkswagen bus in 1968. I always bought much more enjoyable cars than that. Maybe the member for Calgary Southeast had one.

Times change. If we look around the world, the most effective governments with regard to growth in the economy are not the governments looking back to the past, to the 19th century as the Reform Party does on economic policy, but looking forward to the 21st century.

I am sure the member is aghast at the prospects of a social democratic government in Germany. That will make 14 out of 16 developed countries in Europe with socialist governments. All of them deal with the most important issue which is to provide an economy that ensures people can earn a decent living, raise their families and look forward to the future with some kind of confidence and expectation that they will be doing better rather than worse.

Looking around at the Canadian economy and Canadian society, it is not predominantly the social democrats who take economic ventures into public ownership. There is much more public ownership of the economy in the province of Alberta than there is in the province of Saskatchewan. Incidentally, Saskatchewan also has the lowest per capita cost of government than any other province. It is much lower than in Alberta. There are significant lessons to be learned by looking left instead of looking backward.

The important element of the social democratic economic strategy is that we work in partnership. Business, governments, workers, aboriginal peoples and communities all work together to build a vision for that economy. We all undertake certain responsibilities within the performance of that vision.

It is not difficult to understand if we look at how the Saskatchewan government under Premier Roy Romanow has built that province. It has the lowest unemployment rate in the country and the best indexes of economic growth of any province because it works in partnership.

Saskatchewan is now growing in population. Only last week I learned that last year 1,000 Manitobans moved to Saskatchewan. That has not been normal in the past. We are required to bring Canadians from across the country because that economy is booming. We have full employment. We have skill shortages. We need people for existing jobs and we cannot find them.

This is a successful economic strategy. It is a modern economic strategy. Social democrats are looking forward to the next century, not like the Reform Party which is looking back hankering after and longing for the 19th century.

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, the hon. member was so eloquent about mergers when he said that he was opposed to mergers and that sort of thing. I do not think he listened very carefully earlier this morning when we talked about this. I want to leave that aside and ask the member whether he would be as opposed to the merging of co-operatives as he is for the merging of private enterprises.

[Chris Axworthy, NDP, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, it is not a question of being opposed to or in favour of mergers. It is a question of what is in the public interest. If a merger is in the public interest, then of course I and my colleagues would support it. It is not a matter of some ideological fixation that someone is automatically in favour of these large organizations, as I think the member for Kelowna would be. Neither is it a matter of being automatically opposed. In this modern world we have to be pragmatic. Socialists are as pragmatic as anybody else. We are supportive of things that are good for Canadians.

The member raises the question of co-ops. Let us look at the Canadian Wheat Board. That has been a huge success story for Canadians. The Reform Party is opposed to it even though it works because philosophically Reformers do not like it. It does not suit their philosophy. It does not suit their 19th century view of the world. Therefore they do not like it. But it works. Canadian farmers know it works. That is the way that New Democrats across this country are approaching our economic challenges. If it works, we do it. If it does not work, we do not do it.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Mr. Speaker, in terms of referring to an actual economic philosophy based upon less debt and less tax, I actually take exception to the concept that an economic philosophy based upon less debt and less tax and putting more disposable income back into Canadians' pockets is considered to be a 19th century philosophy. If anything, over the last 10 to 15 years we have learned that governments cannot spend their money any better than individual Canadians do. The only economies that actually have any consistent growth are the ones that have less debt and less taxation.

Looking at the initiatives in other countries such as Ireland or the Netherlands, when they made substantial reductions in terms of their personal taxes what was the result? The result was more growth in their economy.

The Canadian domestic economy is at its lowest compared to the other G-7 countries. The reason is that there is not the amount of disposable income in Canadians' pockets so that they actually have an opportunity to spend money and get the economy going here in Canada. Any growth we have is based on our export industry.

Will the member at least admit that the only economies that have actually had any consistent growth among the G-7 countries are the ones based upon less debt and less tax?

[Chris Axworthy, NDP, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, I do not know whether the member for Fundy—Royal is running for the leadership of his own party or switching sides to the Reform Party, but certainly they sound pretty much alike to me.

Let me make one response to the member's question. The United Nations has said that Canada is the best country in the world in which to live. The Financial Post , not very often a friend of the New Democratic Party, said that applying those same criteria, Saskatchewan was the best province in which to live. That was the Financial Post , their buddies, not mine.

What we need in order to make our economies work is a balanced approach. If all they want to do is reduce taxes for the wealthy, that will not generate the economic growth and economic opportunities for ordinary people. They have never done that. In fact their tax policies would ensure that ordinary Canadians do not get a break at all or are in worse shape than they were before.

In addition, they might reduce taxes but what are they going to do about health care? They are going to make Canadians pay for that. What are they going to do about Canada pensions? They are going to make Canadians pay for that.

What we need is a balanced approach, one which is pragmatic, one which answers the questions Canadians are concerned about. We do not need one which is based on some old fashioned ideology which this country threw away and which most sensible people around the world threw away centuries ago.

[Jim Jones, Progressive Conservative, Markham, ON]

Mr. Speaker, it is my pleasure today to speak on a bill that is important to the success of business competition in Canada. It is a bill that introduces amendments that will modernize regulations for the Canadian business environment. The amendments in Bill C-20 strive to guide business in a fair and more equitable fashion.

The Canadian Competition Act was last substantially amended in 1986. These amendments gave Canada a powerful law that served the business community well. However with the huge changes in the technology of doing business and the rapidly evolving marketplace, the law is long overdue for revision and review.

We understand that in 1995 the director of investigation and research released a discussion paper which had been sent out to 1,000 interested parties. About 80 responses were received regarding the proposed changes to the Competition Act. We also understand that the director set up a consultative panel whose mandate was to discuss the comments made within the discussion paper and to hold indepth reviews with concerned parties.

Over a year later in April 1996 the report of the panel was released and provided the basis for Bill C-67 which died on the Order Paper in the last Parliament. Almost another year later we finally get to debate Bill C-20 which is essentially the same as Bill C-67.

However through my own consultation with concerned parties, there are segments of this new bill that are radically different than those existing in C-67. The addition of amendments that have not passed through the same rigorous debate with the consultative panel has me concerned. Is this government trying to slip these through discreetly?

There were four main amendments that existed in Bill C-67 which have not changed. These will require adjustment.

I would like to focus on these aspects of the bill: misleading advertising, ordinary price claims, pre-merger notifications and deceptive telemarketing practices.

Misleading advertising practices can and do have serious economic consequences especially when directed toward large groups or done over extended periods of time. Misleading advertising is detrimental to both competitors who follow the rules and engage in honest promotion and to consumers themselves.

Covered under the act are such promotional tricks as double ticketing, where the higher of the two ticketed prices is charged, pyramid selling, and bait and switch selling when a product is advertised at a bargain price but a reasonable supply is not available.

Proposed amendments to the Competition Act relating to misleading advertising are intended to change the focus on the misleading advertising and deceptive marketing practices provisions from punishment to quick and effective compliance.

In discussions with key members of the Canadian marketplace, I believe this amendment is acceptable. We are supportive of this amendment in philosophy. The creation of a dual criminal-civil system is expected to result in the majority of cases involving misleading advertising being dealt with through civil means, including such remedies as cease and desist orders, corrective notices, consent orders and where needed, administrative monetary penalties.

The competition bureau will then have to create a set of guidelines which clearly explains to retailers and businesses what types of misleading advertising will result in civil penalties and which will result in criminal enforcement. We strongly urge the competition bureau to have full public consultations regarding these guidelines as this issue is very important.

Ordinary price claims is a powerful marketing tool used by retailers and businesses. It is the representation of significant savings by the reduction of a regular price.

Consumers often wait for items to go on sale before purchasing. Many companies will say that their product is on sale when in fact a number of these businesses usually sell that item for that price.

Section 52.1(d) currently prohibits materially misleading representation to consumers regarding the price at which items and similar products are or will ordinarily be sold. There are certain criteria which must be met for a business to claim that an item is at a discounted price as opposed to its regular price.

The current provisions in the act do not clarify sufficiently the circumstances which determine whether a retailer is making an ordinary price claim properly. The competition bureau listened to concerned members of the retail industry who asserted that a significant number of businesses could not comply with a test based on sales volume and that a time based test would be better suited to their situation.

Through discussions with the consultative panel, the competition bureau and the members of the retail industry, it was agreed that the amendments represented in Bill C-20 for regular price claims are fairer and more equitable. The test for ordinary selling price will now consist of two parts: a substantial volume of the product that has been sold at or above the claimed regular price within a reasonable period of time before or after the making of the representation, or the product has been offered at or above the claimed regular price in good faith for a substantial period of time or immediately after the making of the representation.

Although some of the terms in the testing prescriptions are ambiguous, members of the retail and commerce community which I have spoken with feel that the setting of rigid tests would not be in the interests of Canadian businesses or consumers. Stringent tests would not allow retailers to act and respond according to competitive initiatives and other market dynamics.

We are comfortable that the guidelines as they exist in the amendments will effectively eliminate some of the confusion around the regular price claims and that setting guidelines in this area will also help businesses understand the parameters for effective pricing policies, yet there is flexibility for the exercising of judgment.

The one area that should be excluded from the regular price claims arena would be the critical issue of clearance sales. We urge the government to look into this aspect of pricing and ensure that the scope of the ordinary price claims provisions explicitly excludes clearance pricing.

Pre-merger notifications is another area I would like to address. Companies are obligated to notify the Competition Bureau of a proposed merger when two thresholds set out in the Competition Act are met. However, the consultative panel and many of the business community recognize that a vast majority of transactions that are subject to pre-merger notification do not raise serious competitive issues. This concern can be mended by raising the thresholds in sections 109 and 110 of the Competition Act and by creating additional exemptions.

Raising the pre-merger notification thresholds and creating additional exemptions is now more essential than ever. As of November 1997 there was a substantial fee of $25,000 plus $1,750 in taxes imposed with pre-merger notification filings. Because so many transactions are caught due to the low thresholds, we believe that raising these thresholds would not only alleviate the number of cases the bureau would have to review, but it would also allow the thorough research of the cases that are truly detrimental to competitiveness in Canada.

The increases that have been suggested to me from key members of the business community include raising the size of parties and their affiliates' threshold in section 109 from $400 million to $500 million. I believe when this came out it was $400 million, but through inflation that is equivalent to $530 million, so $500 million is reasonable. Raise the size of transaction thresholds in section 110 from $35 million to $50 million, and in the case of amalgamations from $70 million to $100 million.

The recommended increases in the above noted thresholds are particularly warranted in view of the fact that these thresholds have caught substantially more transactions than initially contemplated.

There is little risk of substantially lessening or preventing competition by increasing the size of parties and their affiliates' thresholds because, one, the director has the ability to challenge a merger up to three years after its completion. Two, this fact clearly leaves merging parties, where there is any material overlap between their operations, to submit a significant amount of information to the bureau in support for a request for some type of comfort that their transactions will not be challenged subsequent to closing by the director. Finally, in any event, only a handful of mergers each year raises serious competition issues.

In addition to raising the thresholds, we are looking also at the possibility of reducing the burden of information that the bureau requests for pre-merger notification. The amount of time and effort it takes for a member of the private sector to prepare the pre-merger notification is not justified.

We believe that the bureau receives information not pertinent to mergers and that the filing of this information is time consuming for the companies giving notice. We suggest that this burden could be reduced by streamlining the amount of information required to be filed. This streamlining is likely to be accomplished through the joint operation of the proposed amendments of the act, which would transfer the information required currently in sections 121 and 122 of the act to the notifiable transactions regulation and the proposed revisions to the regulations. However, those revisions will substantially increase the amount of information required for long form filing imposing a substantial burden on merging parties.

Clause 31 of Bill C-20 still allows parties to have a choice between filing either a short or long term form. The commissioner, formerly the Director of Investigations and Research, would have the discretion to require a long form filing if the short form filing is considered to be insufficient. The information that is required for these filings would be set out in the regulations rather than the act, as is currently the case.

Due to the information requirements being moved from legislation, which would receive full public review before amendment and being transferred to regulations, there are many parties concerned that the final wording will be decided by the commissioner alone. We have some serious concerns that we will present in the committee stage as amendments to Bill C-20 as we see fit and what has been suggested to us by those outside the Department of Industry.

Everybody is concerned about deceptive telemarketing practices. We recognize that telemarketing is now a $500 billion business in Canada and in the U.S.

In recent years, total telemarketing sales in Canada and the U.S. have exceeded $500 billion per year. While most telemarketing activities are legitimate, unfortunately some are not.

The report of the Canada-U.S. working group on telemarketing fraud highlights that telemarketing has become one of the most pervasive and problematic forms of white collar crime in Canada and the U.S. It is estimated that this form of crime accounts for as much as 10% of the total volume of telemarketing. In Canada that would mean $4 billion annually.

There is no doubt that telemarketing has seen an increase in deceptive marketing practices. However, it must also be recognized that telemarketing has its place in today's competitive marketplace.

There are some specific concerns that members of the marketplace have expressed regarding the wording proposed to define what telemarketing is. Subsection 52.1(1) defines telemarketing as a practice of using interactive telephone communications for the purpose of promoting a product or any business interest. This definition requires either a greater clarification or the addition of exceptions to ensure that the provision is not amenable to an overly broad application to entities whose services are not meant to be targeted by the legislation.

We suggest that it be made clear in the legislation that the provisions be confined to live voice communications. We would like to see the words “live voice” placed before the words “interactive telephone communications” in the wording of section 52.1.

Other changes to the current act will require the disclosure of certain matters either at the outset of the telephone communications or in a fair, reasonable and timely manner.

The item which many want to see expressed outright in the telephone interaction include the identity of the person on behalf of whom the communication is made, the nature of the product or businesses being promoted, the purpose of the communication, and in the case of price of the product being promoted and any material restrictions or conditions applicable to its delivery.

We request that there be a particular exception made with regard to instances where the price of the product cannot be determined at the time of the telephone call. For example, in the case of mutual funds and other securities whose prices may not be known until the end of the day, we ask that the required disclosure be made within a reasonable period of time subsequent to the determination of the item's price.

We recognize that telemarketing fraud is a serious crime and needs to be identified as such. We will not stand by and allow there to be $4 billion in losses a year in Canada because of this type of behaviour.

However, the competition bureau tells us that it intends to seek permission to use wiretapping in cases of egregious behaviour. There is some uncertainty as to how this wiretapping will be used. This is an extremely sensitive area for the business community and yet it has been given no discussion.

The proposal in Bill C-20 which deals specifically with permitting judicially authorized interception or wiretapping concerns many individuals, corporations and members of the retail and commerce groups across the country. This segment of Bill C-20 was never brought before the consultative panel, was never reviewed in discussion papers or made its way into any panel report. The government has decided to slip in this amendment.

Why does it exist in Bill C-20? The proposal in Bill C-20 will amend section 183 of the Criminal Code to allow wiretapping without consent of private communications in connection with investigations under the conspiracy, bid rigging and deceptive telemarketing offences of the act.

The conspiracy provisions in section 45 of the Competition Act set out two points that must be proven to convict of conspiracy. First, there must be an agreement and, second, the agreement must be anti-competitive. Wiretapping only proves the first point of the two necessary to convict under the Competition Act. However, in most cases this point is not the one that makes or breaks a case.

What must be proven for a conviction in most cases is the second point and this is not provable with a wiretap.

Most cases are lost solely on the point of trying to prove that the agreement was anti-competitive. Given the broad definition of telemarketing that currently exists, we are concerned that wiretapping powers could be used in a wide range of situations that most Canadians would not consider to be justifiable.

We need to clarify what situations will warrant wiretapping. There must be stringent administrative filters and strict legal procedures that will limit usage to what is only absolutely and undeniably necessary.

We do not feel a need to push this provision through at this time and would like to have a further round of consultation on this matter.

The amendments to the Competition Act are long overdue. I look forward to reviewing Bill C-20 in committee and working with other members of this House to come up with a bill that is practical, understandable, equitable and fair to all, a bill that does not give unnecessary and overly evasive powers to the government where private ventures are concerned.

Competitiveness is essential to a successful Canadian marketplace and the Competition Act has served all Canadians well for decades. Now we must work to keep it moderate and functional.

[The Deputy Speaker]

Before I call for resuming debate, it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Davenport, Alternative Fuels Act; the hon. member for Kamouraska—Rivière-du-Loup-Témiscouata-Les Basques, Employment Insurance; the hon. member for Bras D'Or, Cape Breton Development Corporation; and the hon. member for Beauséjour—Petitcodiac, Trans-Canada Highway.