Debates of Sept. 21st, 1998

Competition Act

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, it is nice to see you and all other members in the House after the summer vacation. I have been looking forward to the opening of the session to hold the Liberal government accountable. But today in the next 10 minutes I will be kind to it.

I rise on behalf of the people of Surrey Central to speak against the proposed Bloc amendments to Bill C-20, an act to amend the Competition Act and to make consequential and related amendments to other acts.

The official opposition supports this bill. We agree with the objective of this bill. My colleague from Edmonton—Strathcona, our new industry critic, has very eloquently expressed our support for this bill.

When the bill was introduced in the House earlier the Reform Party put forward certain amendments to the bill before we could support it. The government has accepted all those amendments. Therefore we approve of the efforts by this government to modernize the Competition Act.

The Reform Party supports vigorously measures to ensure the successful operation of the marketplace. This includes promoting competition, competitive pricing and strengthening and vigorously enforcing competition and anti-combines legislation. We support severe penalties for collusion and price fixing. In a competitive marketplace which serves the consumer well, it is reasonable to expect freedom from deception or collusion or any other anti-competitive practice that would inhibit the successful operation of the marketplace.

I can deal with the four groups of amendments as a whole because the official opposition opposes all four groups of amendments. In Group No. 1 the first motion and the third motion are unnecessary. They only seek to change the structure of the bill and do no affect the contents of the bill. Motion No. 2 would change the intent of the bill by removing the words “knowingly” and “recklessly”. The motion would counter the creation of the new civil law framework meant to deal with deliberate and flagrant telemarketing frauds.

The second group of amendments would expand Bill C-20 to include Internet communications.

Bill C-20 is aimed at addressing the telemarketing industry. This bill will also address the potential psychological coercion during person to person telecommunication or telephone conversations. The Bloc amendments do not account for the fact that the same level of coercion recognized in telephone communications is not present in Internet communications.

Internet communications allow one to simply point and click in order to delete and put an end to this solicitation, whereas person to person live communication is not as easy to terminate. It is more interactive. No doubt there is a need for some rules to be applied to Internet communications. We can appreciate what the third party in the House intends to accomplish with Motions Nos. 4 through 8.

Bill C-20 is not the appropriate vehicle and cannot accommodate the inclusion of Internet communications. In the third group of amendments, Motion No. 6 would include a prohibition against offering a statement, warranty, guarantee of performance, efficacy or length of life about the product without adequate and proper test thereof. This amendment wrongly places the onus on the telemarketer to ensure that the service provider or manufacturer claims are accurate. While telemarketers must act with due diligence in their relationship with the manufacturer or the service provider about the quality and efficacy of the product or the service as supported by the manufacturer's claim, it should be the responsibility of the manufacturer and not the telemarketer.

The legal framework provided in the bill offers enforceable guidelines for professional conduct among telemarketers. Furthermore, section 52 as amended by Bill C-20 is reasonably broad so as to include false claims concerning warranties, et cetera.

In Group No. 4, Motions Nos. 9 and 10 ask that a single private individual over the age of 18 be allowed to bring a case to the commissioner for investigation. The current procedure requires that at least six individuals submit a complaint. This is a mechanism to help to ensure against frivolous and vexatious submissions to the commissioner. All complaints that fall under the Competition Act are investigated by the commissioner and, where deemed appropriate, are placed before the tribunal.

Motion No. 11 requests that a single individual be allowed to bring a matter directly before the tribunal, removing any direct involvement of the commissioner. Again, it is more desirable to have all complaints that fall under the Competition Act investigated first by the commissioner and then, where deemed appropriate, placed before the tribunal.

The purpose of this bill is twofold.

[Jim Jones, Progressive Conservative, Markham, ON]

Mr. Speaker, I rise on a point of order. I believe we are to be talking on this go around only on the first three amendments. I notice the last two speakers have been covering all 11 amendments put forward by the Bloc. We should be addressing only the first three.

[The Deputy Speaker]

The hon. member for Markham is quite correct. The debate before the House is on Motions Nos. 1, 2 and 3 which have been grouped for debate. I believe there are other groupings that will be debated later.

Perhaps hon. members can confine their remarks to the motions before the House.

[Randy White, Reform, Langley—Abbotsford, BC]

Mr. Speaker, I rise on the same point of order. It must be remembered that individuals speaking to these particular issues can do so as they feel it affects the particular grouping. I do not think the hon. member should be so stringent as to suggest that they are not dealing specifically with those groups.

[The Deputy Speaker]

Occasionally there is reason to believe that discussion of other groups is relevant to the discussion of the group currently under debate in the House. It is also fair to say that general comments about other aspects of the debate are generally not permitted in the debate on a specific group of motions. I have indicated that. In any event, I am sure the House will want to hear what the hon. member has to say. He will now want to resume.

[Gurmant Grewal, Reform, Surrey Central, BC]

Mr. Speaker, the nature of the amendments is such that we could group them and discuss them in that manner but I appreciate your comments.

The purpose of this bill is twofold, to modernize the Competition Act and to respond to a changing business and enforcement environment by increasing efficiency in the administration of the act. In principle this bill deals with deceptive marketing and deceptive telemarketing. It makes criminal prohibition broader and more flexible. It streamlines the approach to merger reviews. One good thing about how this bill addresses deceptive marketing is that it will create efficiency by allowing civil offences to be addressed without lengthy court delays.

New provisions under Bill C-20 will address deceptive telemarketing practices. For example, in selling lotteries, gambling or vacations to our senior citizens, some telemarketers sell emotions and they defraud them. But high pressure selling tactics are addressed through this bill by requiring telemarketers to give fair and reasonable disclosure of information at the beginning of each telephone call. This includes the identity of the company, the purpose of the communication, the nature of the product or the business interest, the price, any material restrictions and so on. This is particularly important because more businesses like banks, credit unions, airlines, et cetera, are expanding their call centres.

This bill addresses streamlining the merger process. Under the current legislation the requirement for information is very broad and not necessarily efficient or effective. The amount of information required will depend on the complexity of the merger. The government will have time to examine the critical merger proposal thoroughly. For example, there is the controversial merger of the Royal Bank and the Bank of Montreal.

Many of us are experienced in receiving junk mail certificates that grant us millions of dollars. Some fraudulent businesses grant winning prizes while they ask for money in advance for shipment, et cetera, and keep the money. We have to stop all these practices. We must address these unfair practices and ensure fair competition. That is what all members of the House should be doing. We should work toward fair competition in the marketplace.

The official opposition believes in a competitive market arena that serves consumers well. It must be free of deception, collusion or any anti-competitive practice that inhibits its successful operation. On behalf of the people of Surrey Central and other Canadians, in particular senior citizens who need immediate adequate protection against telemarketing fraud, I will be voting in support of Bill C-20. I will have to vote against the amendments we are considering today.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, I begin by complimenting the Parliamentary Secretary to Minister of Industry and the minister for these amendments to the Competition Act. Especially in the area of telemarketing scams, one cannot believe the amount of damage and harm being caused in this nation to many of our seniors. This is the type of bill I am sure all parties would want to put through the House as fast as we can. I am sure there is not a member in the House of Commons who has not had a phone call from a son or a daughter of a senior citizen to try to get us as parliamentarians to amend the Competition Act to provide not just the Competition Bureau but the various police forces in Canada with the necessary tools that will enable them to do their jobs in shutting down these deceptive telemarketing scams.

My understanding is that the amendments the minister and the parliamentary secretary have brought forward provide for a new criminal offence for deceptive telemarketing, much stricter disclosure requirements, a more effective and quicker resolution for misleading advertising and deceptive practices, and an investigative tool that will allow the police forces to close in on the organizations that are using these price-fixing, bid-rigging and deceptive telemarketing systems.

We sit here and draft legislation on a continual basis, but sometimes we forget the human factor that generates the legislation we are drafting. In the case of these telemarketing scams that deal mostly with senior citizens, I am sure we all realize that very rarely will a senior citizen call his or her MP and say “I have been had” because most of the senior citizens who are victims of these telemarketing scams feel embarrassed that they have been had.

In fact there are incidents, and I have heard this from some of my own constituents, where sons and daughters go into their parents' homes and suddenly see different items, such as paintings, rubber boats and different sorts of trinkets. They will ask their mother or father where they got these things and the parents will slough it off. The parents do not want to tell because they feel embarrassed. It is almost an inadvertent experience that it will be discovered that the senior citizen is being had by these vicious, deceptive telemarketing scams. God only knows the thousands and thousands of senior citizens who are victims who may not have living children. We never hear about those cases.

I do not want to take up a lot of the House's time on this issue today, but I do want be on the record as being forcefully supportive of Bill C-20 which will amend the Competition Act. I urge all members of the House to push this through in a speedy way so that the various enforcement agencies can shut down these operations which are active in every province of our country.

[Jim Pankiw, Reform, Saskatoon—Humboldt, SK]

Mr. Speaker, I would like to preface my remarks today by commending the hon. member for Kelowna for the job he did as the chief industry critic in our last session. I would also like to congratulate the hon. member for Edmonton—Strathcona who took over where the hon. member left off as the chief industry critic. I am sure he will do just as good a job. I look forward to working with him over the course of the next year.

In keeping with the request of the hon. member for Markham, I will restrict my comments to the group 1 amendments. All I really have to say is that I oppose the amendments.

This bill will maintain the criminal prosecution of deceptive marketing practices, but in less serious cases, for example where an individual or a corporation is unaware of the law, there will be an opportunity to deal with those cases through fines, through cease and desist orders or by means of information notices. That is preferable because it just provides much more flexibility in dealing with those types of cases.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question is on Motion No. 1. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And more than five members having risen:

[The Deputy Speaker]

The recorded division on Motion No. 1 stands deferred.

The recorded division on this motion will also apply to Motion No. 3.

[Antoine Dubé, Bloc, for Mrs. Francine Lalonde]

moved:

Motion No. 4

That Bill C-20, in Clause 13, be amended by replacing line 16 on page 10 with the following:

“means the practice of using the internet or interactive tele-”

Motion No. 5

That Bill C-20, in Clause 13, be amended by replacing line 26 on page 10 with the following:

“internet or telephone communication, of the identity of”

Motion No. 7

That Bill C-20, in Clause 13, be amended

(a) by replacing line 40 on page 11 with the following:

“must be made during the course of an internet or a telephone”

(b) by replacing, in the English version, line 3 on page 12 with the following:

“was not requested during the internet or telephone com-”

Motion No. 8

That Bill C-20, in Clause 13, be amended by replacing lines 41 and 42 on page 11 and lines 1 to 4 on page 12 with the following:

“communication.”

[The Deputy Speaker]

The hon. member for Lévis-et-Chutes-de-la-Chaudière.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, in fact, it is still the riding of Lévis, except that, in one of the last bills we passed before adjourning for the summer, “Chutes-de-la-Chaudière” was added in recognition of the fact that it makes up half the federal riding of Lévis. In fact, Chutes-de-la-Chaudière is a separate provincial riding and there is even a regional county municipality by that name. That is why this change was made. We will get used to it. This is not so bad considering that some of my fellow MPs represent ridings with four names. Chaudière Falls are the most beautiful in the world after Niagara Falls.

The various proposals made in connection with the motions in Group 2 relate essentially to the word “Internet”. We feel the government was mistaken in not including the word “Internet” in this bill. After all, the Internet and telemarketing may be considered closely related since more and more people are connected to the Internet at home, and companies readily use the Internet to promote and, if possible, sell their products.

What we are talking about here, of course, is fraudulent telemarketing. We cannot and should not prevent companies from conducting operations that are conducted properly, honestly and efficiently, but it seems to us that not mentioning the Internet in today's context is a serious mistake. That is why we stress the word “Internet” in each motion in this group.

There is also a notion which we did not have time to really examine earlier, but which is essentially the basis of the speech made by the parliamentary secretary. I am referring to the word “knowingly”.

How can we prove that someone does something knowingly? The legal provisions that deal with this issue are often challenged in court.

I am not trying to be funny, but are we going to rely on a lie detector to determine whether someone did something knowingly? A company employs a number of people. The manager may do something knowingly, but is it also the case for the employees? This is very much a grey area. I think a better definition is in order.

In our opinion, section 52 of the Competition Act was more precise and included the word “knowingly”. I think that the government and the other parties have good intentions. Everyone is in favour of combatting fraudulent telemarketing. No one can oppose virtue. However, if an act or a provision can be legally challenged because it is very difficult to prove someone's intentions, we could end up with a strange and paradoxical situation in that we may not be able to do what we sought to do because the legislation cannot be enforced.

In the five years that I have been here, a number of members have dealt with the question of what constitutes good legislation. We all know that an act must be fair and equitable, but we must also determine whether it is enforceable.

If the best legislation in the world cannot be enforced, it will be useless. All of us in the House of Commons and all those involved in the legislative process want to make a useful contribution. We want our work to produce results. We do not want to take futile measures.

This is what we are concerned about. This is why the Bloc Quebecois feels that the word “knowingly” should be removed, since that notion is impossible to prove. We are not trying to oppose this legislation, but to improve it and make it even more effective, more enforceable. We must try to make it easier to enforce.

As for the Internet, I think it goes without saying. As we approach the new millennium, I do not think there is any need to demonstrate that this means will be used increasingly. Many companies will do business through the Internet. This is already possible, but it will be done on a larger scale. The purpose of the amendments in the motions in group 2 is to add the word “Internet”.

[Walt Lastewka, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, Motions Nos. 4, 5 and 7 would effectively add the Internet communications, even where they were not interactive, to the ambit of the provisions covering deceptive telemarketing. The Internet issue was raised and dealt with by the committee, which accepted Bill C-20 wording. The telemarketing provisions are designed to focus on the use of abusive, high-pressure tactics during interactive telephone communications where the victims are vulnerable and have little time to reflect on the proposal.

The member for Broadview—Greenwood has expressed many times in the House the concern about the high-pressure tactics that are used on senior citizens, and we heard that again this morning. These particular problems do not apply to the Internet and for that reason, it is not appropriate to include the Internet in section 52.1.

Representations made over the Internet and by means of electronic commerce are subject to the same laws as other representations and would be covered under the Criminal Code and section 52 and the proposed section 74.01 of the Competition Act.

In fact, the Competition Bureau has already had some success in relation to pursuing Internet situations under section 52. We believe that the Internet issues are most effectively dealt with by the co-operative enforcement initiatives at the international level. These are being actively pursued.

It is too soon to tell what competition problems may arise in relation to the Internet. This situation will be kept under review for further amendments as and when necessary. This discussion was held at the industry committee.

Motion No. 8 would remove the possibility for legitimate telemarketers to streamline their business by providing all the necessary information concerning their product to the customer by some other means, for example by direct mail or in a catalogue prior to the telephone call. Customers may also appreciate or even prefer the savings on their time if the required information is provided in some written form ahead of time.

I have difficulty supporting this motion. The existing disclosure requirements in Bill C-20 are tailored to elicit a reasonable level of disclosure while balancing the burden to be placed on legitimate telemarketers. I must emphasize that we do have legitimate telemarketers.

This proposal does not benefit consumers significantly if at all, but could significantly increase the burden on business. It is for that reason we speak against the motion.

[Rahim Jaffer, Reform, Edmonton Strathcona, AB]

Mr. Speaker, I got a little ahead of myself this morning. I wanted to speak against all these motions saying that they were not good for this bill. Now I am able at least to address Motions Nos. 4, 5, 7 and 8 once again to say how I believe that this is not going to help the competence of this bill in any way. They should be opposed.

Bill C-20 provides a much needed legal framework as we know for the telemarketing industry. Motions Nos. 4, 5, 7 and 8 of Group No. 2 would expand this framework to include Internet communication.

It may seem tempting to share the Bloc member's belief that this legislation would better serve Canadians if its scope were broadened. In fact it appears to make perfect sense that deceptive marketing over the Internet is as fraudulent and as abhorrent as deceptive marketing over the telephone.

However the sections of Bill C-20 that deal with telemarketing were designed with the understanding that telephone communication involves the potential for psychological coercion. That is largely absent in Internet communication.

The manipulation, the deceit, the pressure, the intimidation that unfairly mar the telemarketing industry are not as acute in Internet trade where the customer can, with the simple click of the mouse, make the offensive party disappear. It is much more difficult to hang up on a live voice over the telephone and it is much easier to be persuaded by a deceitful salesperson over the phone than on the Internet.

Furthermore, the question of how to regulate electronic commerce is one that demands a thorough investigation. I would like to remind the House that in October of this year at a ministerial conference this issue will be addressed in its entirety, at which point the industry committee can examine the legal and regulatory questions with greater understanding.

For these reasons I would recommend to my colleagues that all of the Group No. 2 amendments be opposed.

As we know, telemarketing scams hurt the poor and the vulnerable. Senior citizens are less reliant on the Internet and this therefore is not a pressing issue. Rather than confusing this part of the bill to add the Internet regulation, I think it is important that we just deal specifically with the telemarketing industry.

I would like to commend Industry Canada on this initiative. It deserves our support. Trying to add motions to this part of Bill C-20 would just complicate the issue further.

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

Mr. Speaker, I do not think adding the word Internet to this particular provision in a number of places complicates matters very much.

At the OECD the government, along with the secretary general who is a Canadian, is aggressively pursuing the very question of Internet commerce and how we deal with the abuse of it and how we deal with fraud on the Internet. We are still in the relatively early stages in dealing with the protection of the interests of Internet users in this regard. We are still not sure that secrecy and confidentiality can be fully observed but we are moving in that direction.

To suppose that there is less pressure upon the users of the Internet, the kind of pressure that we have seen forced particularly on older people to send large amounts of money to telemarketers is open to debate. It is not clear to me that the pressure is any less pressing, that we should not respond by adding the Internet in the context of telemarketing. We are talking about a fairly new type of commerce, a new type of interaction, a new type of communication and a new type of media. To walk away from the problems that are already on the Internet and the problems that we can easily foresee seems not to be wise.

I congratulate the member for Lévis-et-Chutes-de-la-Chaudière for adding the provision relating to the Internet and for drawing attention to the implications of the potential for fraud or coercive activity, for misleading representations which persuade people to engage in commerce on the Internet.

With regard to the government's commitment at the OECD level, it was odd that it would not also provide some sort of commitment locally. What does it say about its commitment at the international level that there is no provision within a piece of national legislation which is presently before the House, that the government has left it out altogether.

It is important to draw attention to this question to consider the Internet and the abuse of the Internet in not a very different way than the abuse of telephone marketing. It would be useful if we ensured that our competition policy was up to date to the extent that it was dealing with the way in which commerce is being carried on in the country today. More commerce will be dealt with over the Internet, so we had better get organized to do something about it and not wait until we find out whether or not it is more or less coercive, whether or not it is worse, or whether or not it tricks more people because we know the potential is there.

I urge that we support this provision and not in the words of the member for the Reform Party see it as something terribly complicated. It does not look very complicated to me.