Madam Speaker, it is with pleasure that I join in this debate. I must admit the minister has made a very strong case for the legislation. In general I agree it is a good piece of legislation. It is high time. It has been on the table since 1996. I wonder why it took this long to get on to the agenda. It seems that a whole lot of other legislation took precedence.
If anybody doubts the importance of the legislation they should have watched the Goldhawk exposé last night on CTV. It was very clear in the case of a lady who had been approached by fraudulent telemarketers who bilked her for $38,000. It was no small amount for a retired lady to pay to deceptive telemarketers. That is the flagship part of the legislation. It is high time it was introduced in the House.
The specific provisions in the legislation are interesting. I support them completely. First, telemarketers must identify who they are representing. Second, they must disclose the price of the services or product they are proposing. Third, they must tell why they are calling. Those three provisions are presently omitted. A telemarketer can get along making all kinds of claims without ever saying who he represents, what the price might be or what the reason is for the call.
The minister made a point about saying how large the telemarketing business is. He referred to the joint meeting between the two heads of state, the President of the United States and the Prime Minister of Canada. In 1997 the estimate of that business was somewhere around $500 billion, with the fraudulent part of it accounting for about 10% or about $50 billion. Canada is roughly 10% of the United States, which makes it $5 billion in Canada.
The minister suggested that the cost to Canadian taxpayers is somewhere around $4 billion. I am not prepared to debate whether it is $4 billion or $5 billion; $1 is too much.
It is refreshing to see this kind of legislation before us at this time. While I support all of its good provisions, there is a significant omission to which I will refer later.
I will focus on the reason for changing the present Competition Act. The Competition Act dealt with a time when things were not as fast as they are today. A lot of things are happening today. Change is happening more quickly. Information technology has advanced dramatically. The network alluded to by the minister a moment ago would not have been feasible several years back. There is a changing world out there. Electronic commerce makes possible and makes necessary this kind of legislation.
Let us review briefly what the Competition Act actually does, not only these amendments but the act itself.
I would like to do this particularly because many of my constituents, perhaps many constituents across Canada, would like to know exactly how the Competition Act works.
First of all, a tribunal is set up. The tribunal is headed by the director, now the commissioner of competition. He deals with the aspects of the act that are not being observed by the participants or players.
The act contains both criminal and non-criminal provisions. The criminal provisions include conspiracy, bid rigging, discriminatory and predatory pricing, price maintenance, misleading advertising and deceptive marketing practices.
The issue of telemarketing falls under Bill C-20 provisions and other areas that fall under the act are reviewable matters such as mergers, abuse of dominant position, refusal to deal, consignment selling and tied selling, market restriction and pricing.
I draw attention to tied selling. Tied selling is becoming a very significant part of our economy today, particularly as it relates to financial and other institutions.
Tied selling, while not the focus of this bill, not the focus of the amendments here, will become a major issue as far as consumers and business people are concerned.
When the bureau becomes aware that there is a possible infraction or some sort of competition offence, the facts are examined, first of all, for whether there is a concern under the act. If the director believes there is reasonable grounds or if he believes that it could be committed very easily, inquiries can commence.
The minister may also initiate concern, and six Canadians may get together and complain to the director and the matter will be investigated.
Although the director can use formal investigative tools to gather information, in cases where the director believes a criminal offence has occurred, matters may and are referred to the attorney general.
The minister has just assured us that that is indeed what the intent of this legislation is and that it is one of his servants who will cause this to happen. I commend him for that. I think that is good.
Bill C-20, which we essentially support as the Reform Party, enhances the current Competition Act. It makes it stronger. We are pleased to see, for example, the issues of misleading advertising and deceptive marketing being enhanced and the issue of deceptive telemarketing being addressed in particular.
Let us go into deceptive marketing. Bill C-20 provides for a much more effective means of punishment and is an improvement in our opinion. If consumers find themselves the victims of deceptive marketing, for instance false advertising, the bill sets out new provisions that will make the system more effective both in terms of administration and cost. That is commendable.
Under the current act where infractions are committed, criminal prosecution is obligatory. That is a cumbersome, expensive and a long, drawn out process. The new bill creates a dual regime of civil and criminal offences.
In serious cases involving repeat offenders or fraud, for example, a criminal regime will be maintained. In less serious cases where an individual or corporation is unaware of the law, the amendments will allow for the infractions to be addressed through civil court by means of fines, cease and desist orders and information notices.
I can speak from personal observation of cases that I have worked on which have been worked through the previous session of Parliament that it is essential that we have these kinds of provisions in the act.
To the credit of the competition tribunal, one case that I am very familiar with was resolved in favour of the client and the persons who appealed to the competition bureau, so the competition bureau does work. This makes it work more effectively and we support that.
What about deceptive telemarketing? I have already indicated the three things a telemarketer must do if he is going to approach an individual for money.
We can all attest to the telemarketing industry, somewhat ruefully perhaps. I wonder who in this House has not had dinner or some other part of their day interrupted by a telemarketer wishing to sell a product or a service. It might even happen twice during supper.
In my case I am thankful that we have an answering machine. When supper time comes the answering machine takes over. Let the telemarketer talk to the machine if they want. There is no way they are going to interrupt my supper hour.
Whether we appreciate the work of telemarketers, it is a legitimate business. It is the fraudulent use of telemarketing we are objecting to. The serious concern is in that area.
There are rules of logic which we should all follow in the buying and selling of products over the phone. For instance, it is wise to be suspicious of anyone who might offer money or a grand prize over the phone for a small fee. “You can have a prize if you give me money”. We should all be suspicious if someone says something like that.
We should also be suspicious if someone asks us for our credit card number. Some people have advised us to never give anyone our credit card number over the telephone.
I recall, rather interestingly, wishing to make a hotel reservation not too long ago. I wanted the assurance that the room would be available for me without my having to give them a credit card number. I said “I do not want to give it to you”. They said “then your room will not be there for you”. Who will win? It is a very interesting question which we need to look at.
More and more we are using the telephone to conduct our activities. We have e-mail. We have electronic commerce. The whole question of the decryption of messages becomes a very significant issue. The old rules simply do not apply any more. In many cases there are no rules.
Is it any wonder that many consumers are confused? Do I or do I not provide my credit card number? Do I or do I not talk to this individual?
The only solution is to ensure that laws exist to address unscrupulous practices. That is what this bill attempts to do.
In order for both the industry and the consumer to benefit the consumer needs assurance that the marketplace is being monitored to ensure fair and legal practices. Where telemarketing is concerned a sound competition policy not only means a confident consumer, it requires an educated consumer. If it was ever necessary for consumers to educate themselves about what is going on out there it is today. By setting out what is required to conduct fair telemarketing practices Canadians will know they can demand from any person who is conducting a financial transaction over the telephone who it is that is calling, on whose behalf that person is calling, how much it will cost and why they are calling.
I wish to move into a broader context and address the entire area of competition. I mentioned earlier that it is important to keep discussion on competition open in order to ensure its effectiveness and efficiency. However, the issue of competition has taken on a broader context over the last few years. Global competition now plays a direct role in determining the economic policies of Canada.
Competition has become the mantra of the 21st century. Governments around the globe promote its merits and its value in generating wealth and contributing to innovation. Competition dictates policy in everything from free trade in softwood lumber to the information highway and whether we have direct to home television.
If we look closely we will see that competition is the reason given by governments to explain many things, including why they must spend money on business subsidies and infrastructure programs, for example. It seems the notion of competition has dominated every policy paper, federal budget, government initiative, piece of legislation, committee report, study and the countless conferences which we have seen since this government came to power. The emphasis is always on the need to become competitive.
Sometimes, it has to be said, this is the umbrella under which are hidden euphemisms for political patronage and vote buying.
This bill has been pushed aside. Since 1996 other bills have taken precedence and amendments to the Competition Act have had to wait, and yet competition is the thing which drives our economy.
It must be very confusing to the average consumer if this is the case. They ask questions. Can competition be good if the result is downsizing and the loss of jobs? Can competition be good if it means lower wages? Is competition good when the success of the new Wal-Mart means the closure of the local business down the street?
Is all competition good? Is uncontrolled competition good? Obviously not. That is why we need an act of this type. The average consumer should not apologize for being confused, or for asking questions, or for feeling some anxiety. For too long voters have been left out of the economic process. The answer that it is good for competition hardly suffices in their attempts to understand which government policies are sound.
The truth is that fair competition is a good thing but notice there is a very significant adjective there, fair. Competition in and of itself as an end in itself is not sufficient. Fair competition is integral, however, to sound economic policy.
The Reform Party is a strong supporter of the competitive marketplace. However, we are very aware that competition alone is not enough to ensure economic stability, nor will it alone create the kind of marketplace that builds strong industries and businesses and protects the consumer.
Reformers do not accept that in order to have competition it must come at the expense of the taxpayer. Reformers believe in competitive strategies that have substance. We believe that there are ways in which we can increase competition by allowing the taxpayer to function freely in the marketplace without compromising the interests of the consumer or create costs to the taxpayer.
In fact, our definition of a competitive Canada would not only save the taxpayer money but provide economic stability. For the sake of good and fair competition, we would take the politics out of economic decision making in Canada. We would not use competition as an excuse for the unreasonable waste of taxpayer money spent on business subsidies. We would eliminate grants and subsidies to businesses. Businesses would be able to survive, as businesses should be able to survive, on their own merits. Taxpayers should not support inefficient and ineffective businesses.
For the sake of good and fair competition, we would support the removal of all measures that insulate industries, businesses, financial institutions, professionals and trade unions from domestic and foreign competition. That would mean dropping Canada's internal trade barriers once and for all.
I think the minister is only too well aware of how intrusive the internal trade barriers are to trade within Canada. In order to realize fair and good competition, Reform would orient federal government activities toward the nurturing of physical and human infrastructure. We would give greater priority to the development of skills, particularly those that would provide future job flexibility within a co-operative training government. We would base physical and infrastructure spending on economic criteria rather than on the basis of artificial temporary job creation.
In order to realize a fair and competitive marketplace, we would invest in basic scientific research and ensure grassroot investment in research and development in order to keep Canada on the leading edge of innovation.
If Canada is to be truly competitive, we will see a better Canada where the entrepreneur is valued, the small business person is free to grow, where our children are educated and provided with the skills they need to succeed, where families are relieved from an unfair tax burden, where Canadians are free from worrying about their futures, each one empowered to reach out and grasp every opportunity that comes their way. Competition must mean something to the average citizen, not just the bureaucrats and the policy makers.
Canadians must see real evidence of competition in their everyday lives and feel the effects that a truly competitive society provides. That means things like direct to home satellite. It means fairer and freer internal trade. It means prudent regulation of our financial institutions. It means reasonable interest rates on our credit cards which means fair prices at the grocery store and the gas station.
I would like to now refer to another major section which I believe is an omission in Bill C-20. It should have dealt with this but it did not. It has to do with mergers.
There is a reference to mergers and there is a more sensible approach to them. However, it fails to deal with a major issue that has come to the attention to virtually every Canadian within the last six months, the proposal to merge two major banks. It is conspicuously silent about this merger.
Let us examine the details of the provisions of the Competition Act.
Section 92 of The Competition Act as it currently stands reads as follows:
Where, on application by the Director, the Tribunal finds that a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially
(a) in a trade, industry or profession,
(b) among the sources from which a trade, industry or profession obtains a product,
(c) among the outlets through which a trade, industry or profession disposes of a product,—
It then goes on to specify these. That sounds very good and that is the provision of section 92 and that is great. That must be okay.
Let us look at section 100. It is clause 24 in the proposed bill. The proposed bill says that an application to the commission certifying that an inquiry is being made under paragraph 10(1)(b) and in the commissioner's opinion more time is required to complete the inquiry of a merger, the tribunal finds that the absence of an interim order a party of the proposed measure or any other person is likely to take an action that would substantially impair the ability of the tribunal to remedy the effect of the proposed merger on competition under section 92 because that action would be difficult to reverse.
The provisions are rather clear and rather far reaching except that in section 94 of the Competition Act we read that the tribunal shall not make an order under section 92 in respect of a merger substantially completed before the coming into force of this section, or an amalgamation or proposed amalgamation under section 255 of the Bank Act or an acquisition or proposed acquisition of the assets under section 273 of the Bank Act.
Section 255 of the Bank Act is rather clear. Section 255 of the Bank Act specifically states that that section which deals with competition and with mergers states that in lieu of the relevant sections in the Combines Investigation Act, the Trust Companies Act, the Loan Companies Act, the Canada Business Corporation Act and conspicuously absent, the Competition Act.
The Minister of Finance, when the Royal Bank and the Bank of Montreal announced that they were proposing to merge, said that this will be investigated by the Competition Bureau. He may do that and I would commend him if he did. He wants the tribunal to investigate this but the competition tribunal has absolutely no authority.
There is nothing in the existing Competition Act that would allow them and direct them to investigate this. They may if the Minister of Industry agrees with his colleague the Minister of Finance, to go ahead, get resources, personnel and time to investigate. The Competition Act exempts Section 255 of the Bank Act from them considering this particular merger.
That I think is a very serious omission. Why do I think it is such a serious omission? Because a merger of a major bank will affect virtually directly or indirectly every Canadian if not now, certainly in the future.
I think there is a major issue here that should have been addressed but was not. It is not too late to bring an amendment. I hope the minister and the Minister of Finance will see fit to introduce an amendment that will bring about this kind of jurisdiction to the Competition Act. It is in the interest of Canadians that this be done.
While there is much that has been done in this particular act there is a lot of direction that we would commend.
In summary, I would like to review a couple of those. First, this act creates a new criminal offence for deceptive telemarketing, the maximum penalty being five years in jail or a fine in the discretion of the court, or both.
Second, it allows for the judicially authorized interception without consent of private communications, that means wiretapping. Neither party needs to consent to the wiretapping. The RCMP may do so to combat the most serious cases of deceptive telemarketing, as well as price fixing and bid rigging. That is a good provision.
Third, to require those engaged in telemarketing to disclose certain information, which I have already covered, and prohibit practices such as required payment prior to delivery for products offered for sale at prices grossly in excessive of their fair market value.
Fourth, the enactment of a special provision to expand the responsibility of corporations and their officers and directors to ensure compliance with the law.
These are good provisions and we would support them. The bill should pass speedily through the House. I suggest to my colleagues that there is an omission in this bill that should have been included. With that, I commend this bill to the House and would like to encourage its passage and its support with appropriate amendments.