Mr. Speaker, it is my pleasure to speak on a bill that is important to the success of business competition in Canada, a bill that introduces amendments that will modernize regulations for Canadian business environments.
The Progressive Conservative Party is generally pleased with Bill C-20 and its intentions. Specifically, the time has come to aggressively respond to the ever growing problem of telemarketing fraud.
In recent years total telemarketing sales in the United States and Canada have exceeded $500 billion per year. While most telemarketing activities are legitimate, unfortunately some are not.
It is those initiatives I am concerned about. 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 United States.
It has been estimated that telefraud cost Canadians in excess of $60 million in 1995. This figure ballooned to over $75 million in 1996. Worst of all, in many cases these frauds are committed against the elderly and those who least can afford the losses.
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 $400 million annually. Studies show that those targeted are the vulnerable and the lonely in society.
Unfortunately that equates to millions of dollars from the pockets of many of our seniors, the very same seniors who are experiencing lower and lower GIC or guaranteed income supplement payments and old age security benefits.
We believe that the new crime offence of deceptive telemarketing is a proper response to this activity. The acts of these scam artists are hurting the legitimate telemarketing industry that created employment for thousands of Canadians. Today we begin fighting back. Five years in prison and fines at the discretion of the courts should be enough of a deterrent to these would-be fraudsters.
As we know the promotion of competitive markets is of fundamental importance to today's economy. Competition stimulates innovation and growth in jobs, provides businesses and consumers with competitive prices and product choices, and increases the average standard of living in society.
Without a modern competition law Canadian businesses may encounter anti-competitive barriers to their entry or expansion in their markets. They may find it difficult to source input at competitive prices or they may encounter other refrains in their ability to remain competitive.
Bill C-20 proposes amendments to the Competition Act, an act that strives to guide businesses in a fair and equitable way. It is time to bring this act up to date with contemporary business practices. Canada needs a legal framework which supports up to date competitive business practices. This framework is an essential contribution to sustaining the competitive strength of the private sector.
Bill C-20 was reviewed exhaustively by the Standing Committee on Industry. As a result of these hearings my party believes that we have an acceptable response to many of the concerns of companies operating within the Canadian marketplace.
Notably we are pleased with the intent of the bill in the area of misleading advertising. Bill C-20 represents the beginning of an important principle as it applies to misleading advertising. Specifically with this legislation the Competition Act will be stressing the importance of compliance over punishment.
The government said the criminal sanctions were an incomplete response to false advertising. On this point we agree with the government.
The drawback includes the stigma attached to the criminal process; the inability to stop misleading advertising quickly; and the cost, time and resources needed for a successful prosecution. The Retail Council of Canada believes the availability of a civil offence will result in fairer and more effective enforcement and will recognize the true nature of many of the offences which are not done with any criminal intent.
Because of this move Bill C-20 should be able to achieve its goal of a quicker and more efficient process leading to compliance. We in the Conservative Party believe that the time test and volume test provisions of the bill are a fair response to the issues of regular price claims. Retailers will no longer be able to make claims about the regular price of a product unless that price was charged on a substantial volume of sales over a substantial period of time.
Canadians have shown a preference to sales and sale priced items. The bill aims to clarify what is a sales item and how a sales price is established. Claims about regular prices and related savings can be powerful marketing tools. However, both retailers and consumer groups say that the current law is unclear on what constitutes a regular price.
My party will be supporting the bill but that is not to say we are completely satisfied with all its provisions. The business of mergers was not satisfactorily dealt with in the bill. The threshold for mergers was not raised to $500 million from the existing $400 million as has been requested by several witnesses. Simple inflation would have dictated that this was a reasonable request. It also would have brought the act in line with the Investment Canada Act which contemplates an annual increase to reflect inflation.
I have spoken to several interest parties and groups that have expressed their concern about the bill. They and the PC Party see the need to update the bill to contemporary practices. We acknowledge that there are several discrepancies.
Businesses call for change that will bring the act more into line with current market practices. They also want the intention of parliament to be clear. They stress that greater clarity regarding the intent of the law is needed by both retailers and consumers, their customers.
The definition of telemarketing should be clearer. What exactly does telemarketing constitute? Bill C-20 tells us that telemarketing is the practice of using interactive telephone communications for the purpose of promoting directly or indirectly the supply or use of a product and for the purpose of promoting directly or indirectly any business interest.
The Retail Council of Canada would like to see a clearer definition of what constitutes telemarketing. The Canadian Chamber of Commerce also wants a clearer description of the term interactive. So too was the recommendation from the Canadian Bar Association. That means putting a clear definition in the legislation. Unfortunately this was not changed in the committee process.
The Retail Council of Canada also points out that the wiretap provisions have had relatively little public discussion and were not part of the report of the consultation panel. The issue of wiretapping should be of great concern to all Canadians. There is some uncertainty as to how this might be applied.
The Competition Bureau tells us that it intends to seek permission to wiretap only in cases of egregious behaviour. However, this is a way to capture this focus in the law.
My party would liked to have seen this provision opened up to more public input. The legislation needs to include just how and what are misleading claims when it comes to telemarketing. It is simple for the government to say that telemarketers cannot make any false or misleading claims that would influence a customer to buy a product. However, stringent guidelines should be set to stop this activity.
We would like to see a more detailed plan on how the government plans to coordinate efforts with the United States on telemarketing fraud. Lack of coordination only puts a damper on effective cross-border enforcement. Co-operation and strategy, education and prevention need to be looked at. The PC Party would encourage the government not to jeopardize our relationship with our largest trading partner on this issue. Let us give this legislation all the teeth possible.
If Canadian operations are crossing borders into the pockets of United States citizens illegally, we must put a stop to it. Bill C-20 is a good first step but is not all encompassing on this issue.
Evidence shows that telemarketing fraud is a serious economic crime problem. Immediate and effective steps need to be taken. This means aggressively stopping those operators who insist on choosing targets that are out of province or in another country simply because they know police authorities have difficulty dealing with victims in other jurisdictions. Lack of coordination is an obstacle to effective cross-border enforcement.
Through education, prevention and a strong strategy, notorious operators can be shut down. As long as the government seeks to achieve this the PC Party will back it up.
I do not agree that the Internet should have been included in the bill because proper consultation was not done with all interested parties. I know that the industry minister is well aware of the high tech industry and the fast movement of the Internet. I think over the next year or so we will be looking at incorporating Internet into the Competition Act. However this was not appropriate without consultation.
In spite of its shortcomings, the PC Party will be voting in favour of Bill C-20.