Debates of Sept. 23rd, 1998

Competition Act

[Some hon. members]

Agreed.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, it is a real privilege to lead off the debate on Bill C-20 for the government in co-operation with the member for Ottawa Centre. This is a case where the government is standing aside to give some backbench MPs an opportunity to tell the House and the world that these backbench MPs have had a chance to introduce amendments to Bill C-20 that are of a substantial nature and which are going to have a very important impact on Canadian society.

I will now speak to my two amendments. Getting these amendments into the legislation was not easy as I had to convince the officials of the competition bureau and the justice department that amendments could be created to address the concerns I had. I had the encouragement of the industry minister throughout. When it came to committee my amendments and the amendments of the member for Ottawa Centre passed unanimously.

The first amendment to Bill C-20 changed the definition of business in the Competition Act to include the raising of funds for charitable or other non-profit businesses. This is a huge leap forward in addressing the terrible problem all across the country where various organizations are preying on Canadians, chiefly senior Canadians, by making all kinds of promises to raise money for charitable purposes.

Everyone has a horror story with respect to charitable and non-profit organizations and sometimes organizations that are neither. They get on the telephone or send out direct mail solicitations and ask for money in return for promises they cannot keep and sometimes promises they know are not truthful.

I will give just one example of the type of telemarketing pitch that seniors are being subjected to. I will condense the script from a telemarketer in Toronto called Univision Marketing Group.

The person calling whose name is whatever says “I am calling for the Children's Emergency Foundation. I will only keep you for a short minute or two. By the way, do you have children or grandchildren or your own? Well, our foundation was started by a group of Canadian mothers who wanted to do something about the state of child poverty and hunger right here in our own country and our province”.

The caller continues “We think as Canadians we have a responsibility to look after our children, so we started supporting child feeding programs in Ontario and across Canada. These take place in schools at breakfast or lunch, in community centres and in housing projects where some 5,000 are already being provided with hot nutritious meals each day”.

We wonder whether that is so, but this is the real catch. “In the light of the shocking facts of child poverty right here at home, would you pledge a one time gift of $75 to feed 75 Canadian school children?”

That is the essence of what my amendment addressed: when organizations promise that 100%, 80% or whatever of the money a person donates to a worthy cause actually gets to that cause, while it was never intended to and will never get to that cause.

I could only trace the Children's Emergency Foundation to an apartment building. It is a charity, however. As a result of this amendment a complaint to the competition bureau will enable it to undertake an investigation. If the investigation of this type of claim shows there has been a wilful misrepresentation, the organization or individual responsible for the misrepresentation will be subject to the penalties of the Competition Act. As an indictable offence that would involve five years in jail and an unlimited maximum fine. Bill C-20 also provides for summary conviction that could lead to a fine of some $200,000.

For the first time non-profit and charitable fundraising comes under legislation that provides for real penalty where there is a deliberate attempt to get money from the public through false representation.

It is amazing to think that non-profit organizations and charities have never been subject to the Competition Act but it is true. If we split hairs it is possible to say that the Competition Act could have been applied to charities and non-profit organizations but it never has been. As a result of this amendment I suggest that it will.

Let us not make any mistake. I am not only talking about charities and non-profit organizations. There are many organizations out there which are neither and are raising money by pitching all kinds of things to the Canadian public.

I will cite an example. The International Fund for Animal Welfare is an organization based offshore. I cannot trace it as a non-profit organization in Canada but it has an address in Ottawa. This organization specializes in misrepresenting an animal rights situation somewhere in the country, for example in our north with respect to the seal hunt. The scheme is to put out all this information saying that there are people out there beating and killing seal pups and to send out beautiful literature showing bleeding white coats. The reality is that it is against the law to kill white coats. We do not do that here in Canada.

However, they have no compunction. They are known worldwide. They do the same thing when it comes to elephants in Africa and their ivory. They have all kinds of other causes. All we know about them is that they get about $36 million U.S. in revenues from around the world by falsely raising these issues and then conducting a mail out fundraising campaign showing animals suffering and asking for donations. Their slogan is something like “Remember, 80 cents on the $1 of whatever you send in” will go toward saving the dog or the cat or whatever is in their literature.

I suggest that my first amendment will address wilful misrepresentation of facts in order to fundraise. We must remember that the operative word is wilful. Accidental is one thing but wilful is another. It does not matter whether it is a bona fide organization in Canada; it still applies. Even if an individual who misrepresents in order to raise funds from the public will be caught by the Competition Act.

The amendment will also address partly the terrible problem that has been in the news lately which has led to comments from the solicitor general where we know there are certain charitable organizations in the country that have become fronts for terrorist activities abroad. We do know that this is a growing problem and has been a problem for some time. Charitable organizations or non-profit organizations raise funds for one purpose in Canada and they turn out to be financing conflicts in other parts of the world.

General legislation is needed to address that problem but at the very least if organizations pitch one thing and then finances something else abroad like terrorism they would come under the Competition Act and would be subject to prosecution. If is a partial first step.

I cannot stress enough that this is the first tool for the government and the taxpayer to protect the consumer from people who would misrepresent the way the money they are raising will be spent abroad.

The second amendment deals with using foreign direct marketers and telemarketers to market into Canada. What the amendment states is that the act will include permitting a false representations to be made. It addresses a problem whereby hundreds of charities and other non-profit organizations in Canada use foreign for profit marketers abroad, usually in the United States, to do telemarketing or direct marketing in Canada.

I will give a little example. I have two fundraising letters in my hand. The first one is from the Ontario Society for the Prevention of Cruelty to Animals and the second one is from OXFAM. If we examine these letters we see that they are printed on exactly the same paper even though they are very different organizations, have the same type face and the same ink. We also see that the bulk mailing number on both envelopes is 05110874. In other words, they have the same account with Canada Post.

What is really happening is that the account is with a for profit marketer that is doing this service for them. The reason we have to make sure that the Competition Act catches organizations that use offshore direct marketers to fundraise in Canada is to make them responsible when these offshore fundraising organizations misrepresent into Canada. This again is an enormous step.

I will give an example of the problem. As is often with these organizations in Canada, they do a deal with a direct marketer in the United States for a profit. The idea is that the for profit company, in exchange for using the name of the organization, fundraises in Canada at no expense to the organization until it has created a donor list that is so large that a profit is created and all the expenses are met of the for profit fundraiser. Then the balance goes back to the charity or non-profit organization.

My first amendment will catch organizations that are doing fundraising by using telemarketers and direct mail services and are saying that the money is going to charity when in fact the deal is that 100% of the donated money for which they are getting tax receipts is going to the for profit organization in the United States. None goes to charity until the for profit direct marketer in the United States finally meets its expenses. Then a bit of money goes to charity.

It is another abuse that exists in the charitable sector which will be addressed by the first amendment and by the second amendment where the for profit marketers in the United States misrepresent in Canada, when they overstate how much money is going to charity and when they overstate the facts in any way. Again the operative word is wilful. Where an organization allows this to be done in its name wilfully in the United States, the Competition Act penalties will apply.

I do not want to be too long because I know the hon. member for Ottawa Centre wishes to speak. However, just to give an idea of the dimensions of the problem, I have here a list of organizations in Canada which are using a for profit direct marketer in the United States, which means they are getting telemarketing services and direct mail from the United States: $1000+ Lifetime Members of a TV Ministry representing 12,000 people, the Agnes McPhail Foundation, AIDS Committee of Toronto, the Alberta Lung Association, the Alzheimer's Society of Ontario, Amnesty International, the Animal Alliance of Canada, Arctic Society of Canada, Arthritis Society, Asthma Society of Canada, B'Nai B'rith, the Barbra Schlifer Clinic, BC Association for Community Living and the BC Lung Association.

We must remember that they are giving to for profit telemarketers and direct marketers in the United States the privilege and the opportunity to earn money selling the fundraising into Canada.

The list continues: Big Sisters of Ontario, the Canadian Abortion Rights Action League, Canadian Association for the Deaf, Canadian Blind Sports Association, Canadian Centre for Victims of Torture, and Canadian Christian Heritage Donors involving 53,000 people. I am sure they would like to know the for profit marketer in the United States that has their names has to give them literature which at least is honest.

I will continue: the Canadian Civil Liberties Association, Canadian Corporate Donors, Canadian Diabetes Association, Canadian Environmental Defence Fund, Canadian Federation of Humane Societies, Canadian Hearing Foundation, Canadian Hemophelia Society, Canadian Hunger Foundation, Canadian Liver Foundation, Canadian Paralympic Committee, Canadian Paraplegic Association, Canadian Parks and Wilderness Society, Canadian Peace Alliance, Canadian Wildlife Federation and Canadian Mental Health Association. Why in heck can they not do their own fundraising, for heaven's sake?

The list continues: Candlelighters Canada, Care Canada, Channel 17 Public Broadcasting, Child Find, CNIB, Council of Canadians, Covenant House, Crohn's and Colitis Foundation of Canada, CUSO, Cystic Fibrosis, David Suzuki Foundation, Developing Countries Farm Radio Network, Doctors Without Borders, Earthroots, Elizabeth Fry Society, Energy Probe and Epilepsy Canada.

It does go on and on. There is nothing wrong with using these organizations but it is useful for members of the public to know that when they get this mail in their mailboxes it is coming from a for profit direct marketer in the United States. We can go on. Friends of Canadian Broadcasting. One would think they would be able to do it on their own. Greenpeace Canada, Heart and Stroke Foundation Ontario, Help the Aged, Homemakers magazine, Horizons of Friendship, the Humane Society of Canada, the International Planned Parenthood Federation.

The International Fund for Animal Welfare. They do not even do their own work on their own. Interval House, Kidney Foundation, Kids' Help Foundation, learning disabilities, Leukaemia Research of Canada, Lupus Canada, Match International, McMichael Gallery, Media Watch, quite a group, Multiple Sclerosis Society, NAC, which I think is the National Action Committee for the Status of Women. I note it only has 5,000 members with this organization in the United States, which is a little bit different from what we are given to understand.

The National Association of Women and the Law, the National Gay and Lesbian Rights Supporters, North York Women's Shelter, Ontario Association for Community Living, Ontario March of Dimes, Ontario SPCA, Ontario Special Olympics, Osteoporosis, Outil de paix, OXFAM, the Pet Savers Foundation.

Planetary Society, Planned Parenthood Federation of Canada: Pollution Probe, Project Ploughshares, the Red Cross of Ontario, Ronald MacDonald House, Save the Children, Schizophrenia Society, Scouts Canada, select Canadian religious donors. That is not a charity. There are some 22,000 of them.

The Sierra Legal Defence Fund, Sistering, Ski Patrol, Society for Manitobans with Disabilities, SOS Childrens Village, Spina Bifida, St. John's Ambulance, St. Stephen's House, Toronto Dance Theatre, Toronto Disarmament Network.

Toronto Humane Society, TV Ontario, UNICEF, United Nations Association, United Way of B.C., United Way of Greater Toronto. It is interesting that only these two United Way organizations appear. I guess other United Way organizations deal with other direct marketers in the United States.

Voter Education South Africa

Canada, Whale Adoption Fund, the White Ribbon Campaign. We remember that. It was up here a few years ago. Wildlife Preservation Trust Canada. That is enough.

[Mac Harb, Liberal, Ottawa Centre, ON]

Mr. Speaker, I rise to speak briefly on Bill C-20. In particular I would like to speak on a whistleblowing amendment which the committee was dealing with.

Before I do that I want to pay tribute to my colleague from Nickel Belt who has been working with me on this issue for quite some time. If not for his excellent work on this issue in the very early stages, I do not think we would have been able to see this amendment before the House as part of Bill C-20, legislation which will hopefully sail through the House of Commons early this afternoon.

I want to thank him because I know his constituents will be as happy as my constituents and consumers all across the country when they see that the government has taken action on important issues dealing with consumer rights. It deals also with the question of the ability of the consumer or a member of a corporation or an organization to speak out when they see something wrong taking place in their place of work or within their organizations.

The amendment deals with everything under the Competition Act. Any organization already covered by the Competition Bureau or by a federal statute, this amendment deals with them.

The motivation behind it really has to deal with the question of gasoline prices, the oil industry across the country as well as with people who either work or have anything to do with those types of industries.

It has three components to it. It is a whistleblowing amendment. In other words, an employee or a retailer can speak out when he sees something wrong.

In the past when we had a consumer, a worker or a retailer who wanted to speak out they went before the Competition Bureau, which remained confidential up to a point.

At some point in the process that confidentiality cannot be maintained because they will have to bring the name of the individual forward before the court.

This legislation makes it imperative that the identity of the individual who brings forward information to the Competition Bureau remains confidential.

The other element of the proposal deals with prohibition. In the past many retailers or employees of companies feared reprisal. They were afraid that if they were to speak out and if their employer found out these individuals would take action against them and would at some point let them go.

This amendment prohibits employers or contractors from dismissing or retaliating against someone who speaks out if that person is under the belief that something wrong or something illegal has taken place.

There is a third component to this proposal which deals with offence and punishment. This amendment would make it a criminal offence for an employer or a contractor to take action against an employee because this employee or retailer has spoken out.

What this government is doing is sending a very strong message across the country to those who are thinking about playing around with the consumer and also to those who know of someone who is doing something illegal. This government is telling those who are trying to do something wrong that it is a criminal offence and the government will take action against them. This government is telling consumers and retailers who might be speaking out that it will defend their right to speak out.

It is a great day for our democracy because now, for once and for all, we can say we have another loophole that we have closed. In the past we had many people who phoned our offices and told us they could not speak out because of fear. This amendment deals with this.

At the same time this amendment sends an unequivocal signal from coast to coast to say that we want to see fairness in the marketplace, we want to see transparency in the marketplace and we want to see consumers protected in the marketplace.

This amendment would not have seen the light of day if not for the assistance of my colleague from Nickel Belt as well as the parliamentary secretary, the staff members of the department who have co-operated at every level and the people in the Competition Bureau who came forward and responded to questions that were posed to them by members of the committee.

I want to say how delighted I was to have been able to join the industry committee which has adopted this amendment unanimously. I thank every member, including the chair, for a job very well done. It crossed all the boundary lines of both sides of the House and every one of my colleagues has supported it.

To that extent I want to say it is excellent news and I want to tell my colleague from Nickel Belt congratulations, felicitations and good luck. It is my hope that this bill will become law very quickly, go to the Senate and receive royal assent so we can get on with the business of this House to deal with other issues.

[Rahim Jaffer, Reform, Edmonton Strathcona, AB]

Mr. Speaker, I am pleased to rise again on Bill C-20, an act to amend the Competition Act and to make consequential and related amendments to other acts.

My predecessor and colleague from Kelowna has given the bill substantial consideration and has deemed the legislation to be worthy of the support of members of this House. As the bill has been on the table since 1996, I look forward to being a part of facilitating its long overdue passage.

Given the bill's broad support within this House and among the members of the business community, I do not consider it necessary to use my full allotted speaking time.

The most important element of this legislation deals with telemarketing. It is the protection of consumers against telemarketing deception that has captured my interest in this legislation.

As telemarketing fraud is so often directed at seniors and other vulnerable members of society, it is imperative that the government act to provide the legal framework for dealing with fraudulent telemarketers.

This bill provides very clear guidelines for professional telemarketing conduct. First, telemarketers must identify who they are representing. Second, they must disclose the price of the services or products they are selling. Third, they must tell why they are calling. Without these provisions a telemarketer is given complete license to mislead the consumer.

By providing these guidelines legitimate telemarketers can be given some protection against those deceptive telemarketers whose conduct has brought their industry into disrepute. The telemarketing business in Canada is a billion dollar industry. Without adequate protection against fraud this industry will not continue to grow. Legitimate telemarketers will not continue to operate in an environment ruled by outlaws and frauds.

While I support the initiative to create a civil and criminal law framework for telemarketers, I am very dubious about the Competition Act. The Competition Act rests on the assumption that the government can meddle and regulate its way into a free market.

In his recently published book entitled

The Myths of Antitrust

author Armentano wrote that trades of private property are either voluntary or they are not. One cannot legislate the free market or create competition. To have a free market, the government must leave the markets alone. To have the state make markets free is again a contradiction of terms.

Leaving the markets alone does not mean that the government should ignore its duty to create laws that protect against fraud, for instance as Bill C-20 does with regard to telemarketing. It does not mean that the government should not work to build a criminal and civil law framework that protects private property and to ensure the integrity and sanctity of contracts. That is exactly the role that government should play in a free economy.

Only if the government entrenches property rights in the constitution will Canada's business environment strive. Only when the cost of the regulatory burden is lifted from business will new players be able to enter the market, creating more competition. Only when the banking industry is deregulated will new and innovative companies be able to find the financing and the challenge those companies with substantial market share. Only when the tax burden is reduced will companies think of innovating and expanding.

These are some of the very fundamental problems that must be addressed if Canada is going to foster a competitive marketplace. These problems should be addressed before the government creates more cumbersome and costly regulations.

I am reminded of the Nobel prize winning economist Dr. Friedman who wrote that a monopoly can seldom be established within a country without overt and covert government assistance in the form or a tariff or some other device.

This government is a disease on the economy masquerading as its own cure. It is the cause of uncompetitive markets, not the solution. For instance, the government has created an environment in Canada that has encouraged the creation of a banking oligarchy. Instead of deregulating the banking industry to allow for competition, it meddles further into the banking industry with the Competition Act.

When Canadian small businesses cannot get adequate funding for new innovations that will foster competition the government justifies the need to create another government program called the Small Business Loans Act. We can see how one government intervention leads to many more until we are so far removed from the free market that we cannot begin to understand the potential for market based solution to public policy problems.

If the government ran a house cleaning service it would bill us for air fresheners when all it needed to do was take out the trash. If our house was cold the government would subsidize the costs for new sweaters when all it needed to do was close the door and shut out the draft.

The funny thing is the minister actually expects a pat on the back every time he sprays around a little air freshener or buys a few new sweaters. I will start patting the minister on the back when he starts taking out the trash and closing the doors. I will start patting him on the back when he starts understanding the fundamentals of a strong economy.

If we examine it carefully, the mandate of the Competition Act is a little strange. The entire purpose of being in business is to drive your competitors out of business. Every entrepreneur wants to capture more and more of the market share by providing a better product at a better price than his competition. This according to the Competition Act is illegal. It is called anti-competitive pricing and dumping.

Entrepreneurs eager to obey the minister should not try to outdo their competitors by providing consumers a better price. They should keep their prices and services at the same levels as their competitors. Sorry, that too is against the rules. It is called collusion.

Entrepreneurs should raise their prices far above their competitors so that they are not guilty of anti-competitive pricing or collusion. Wrong again. It is called price gouging.

Our competition laws are an unenforceable mess of contradictions. I think if the members of this House give these laws some honest consideration, they too will come to this conclusion.

The Reform Party believes that the creation of wealth and productive jobs for Canadians is best achieved through the operations of a responsible, broadly-based, free enterprise system in which private property, freedom of contract and the operation of a free market are encouraged and respected.

Economic competition and the resulting prosperity will come only as a result of a deregulated market and cannot be achieved by government intervention.

As the critic for industry, I will be working with the private sector to identify those obstacles to business being successful and will not let this government continue to get the fundamentals wrong with impugnity.

The minister will tell us that he is just trying to protect Canadian consumers. This is simply not true. The minister refused to remove the 6% tariff on imported automobiles and parts despite the unfair burden this places on Canadian families.

He has helped to create a regulatory burden in Canada that costs the equivalent of 12% of our GDP. That is money that comes directly out of the pockets of average Canadians in the form of higher prices for goods and services. The minister is an old friend of the Canadian consumer.

I would also like to touch briefly on the amendments to merger regulations. Again, while I question the legitimacy of the Competition Act as it currently stands, I do support this bill insofar as it simplifies the process by which uncomplicated mergers can be processed.

This aspect of Bill C-20 makes a bad piece of legislation better and it therefore has my qualified support. In fact, Bill C-20 achieves its goal of working to modernize the Competition Act. I think this should be the starting point for reforming the act rather than an end point.

I would like to conclude my remarks by reminding this House that there are real people outside these walls who are affected by what we do. There are consequences, seen and unseen, that these people will have to contend with if we do not engage in thorough and thoughtful debate.

It is the standard of living of Canadians that I will keep in mind throughout my term as opposition critic for industry. I will never remain silent while this government uses the pay cheques of Canadians to play politics. I will never remain silent while this government solely creates an environment in Canada that is stifling and suffocating for small and large businesses.

Bill C-20 makes some very important amendments to the Competition Act and, while I have some very serious concerns with the act itself, the amendments put forth in this legislation deserve our support.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, as the Bloc Quebecois representative on the Standing Committee on Industry, I am pleased to take part in the debate on third reading of Bill C-20.

The position I present today has been drawn up in conjunction with the hon. member for Mercier, who also sits on that committee. As many are aware, she has analyzed the matter in great depth and looked at every aspect of this bill, which as a number of hon. members have admitted, is a highly complex one and not very accessible to the average citizen.

Let us recall that the purpose of Bill C-20 is to amend the Competition Act and to make consequential amendments to other acts, yet all those who have spoken on it have focussed on deceptive telemarketing. Why? Because Bill C-20 contains a number of technical proposals which would not particularly fascinate the general public, with the exception of the ones on fraudulent telemarketing, because telemarketing is a sign of our times and a timely topic.

We are becoming aware of the increasing frequency of fraud in this area, not only in Canada, but pretty well everywhere else in the world. Now that there is cut-rate long-distance calling, telemarketing can be done across borders.

For the Liberal government, this bill offers an opportunity to pull a fast one, to cover up one more incidence of interference in provincial jurisdictions, those of Quebec in particular. We have our own Civil Code and the Government of Quebec has already put into place a number of legislative and regulatory means, the Office de la protection du consommateur in particular, to protect the consumer from this type of abuse.

Voting against this bill puts us at risk of being seen as opponents of any regulation of fraudulent telemarketing, something that already affects thousands of people who are not well-off, the elderly in particular.

Voting for Bill C-20 means that we are making radical changes to the Competition Act, and in our opinion the consumer will suffer as a result.

I believe a number of MPs have fallen into this trap, with the possible exception of the NDP members. For that I congratulate them. They looked at the interests of consumers in establishing their position. I thank them for supporting most of the amendments we have proposed.

To avoid having to make an impossible choice, the Bloc Quebecois proposed amendments such that any progress in the control and criminalization of deceptive telemarketing would not be to the detriment of other aspects of competition.

As usual, the Liberal government has declined to support them, probably so that its representatives would not look like they were remiss. I again pay tribute to the support of NDP members.

I will quickly review the various motions. Yes, we are in favour of a legislative framework for telemarketing activities so that the reputation of this kind of commercial activity does not suffer because of a few dishonest individuals.

To that end, we think that Bill C-20 should revert to section 52 of the present Competition Act. Although at first glance the amendments contained in Bill C-20 appear minor, closer examination reveals that they represent a major change in the scope of the Competition Act.

The criminal provisions in section 52 would now apply only to representations that were false or misleading in a material respect—in this regard, I would point out that there has been no legal definition of what is meant by a material respect—, but which will now have to be proven to have been made knowingly or recklessly.

Is such a provision evidence of any real desire to have this legislation protect a swindled consumer? It means that the requirements for establishing guilt are no longer the same. How are we going to tell the elderly that, even if they continue to be badly served by this law, there is ultimately nothing we will be able to do, because it will often be impossible to prove that the false and misleading representations were made knowingly and recklessly? Will a lie detector be used to determine whether individuals' intentions were bad or whether they were perfectly aware of the consequences?

In a telemarketing operation, for instance, the bosses may know, but do the employees? These are sometimes large outfits. At this level, the case law on similar provisions in other legislation shows that it is very difficult to prove.

When it is impossible to prove the intent to mislead, the person who intended to mislead may not be cleared, but they are not charged and there is no follow-up. This is a serious and significant problem. Legislation has to be good. We know it has to be fair and equitable, but it must also be enforceable.

We think this law will be hard to enforce, since it involves intent. It is paradoxical. The focus on intent is a bit of a snow job, since in practice it is just about impossible to prove somebody's bad intentions.

Bill C-20 permits judicial authorization for unapproved interceptions of private communications in the course of an investigation in cases of conspiracy, bid-rigging and deceptive telemarketing. This opens the door a little more to electronic bugging. The issue here again is intent. When it is thought that an individual is guilty, more sophisticated bugging is carried out.

There is some contradiction in the fact that the bill permits the competition bureau to have this powerful investigative tool while it decriminalizes many of the offences under the act, in order, it appears, to lighten the system. They want to decriminalize these offences so they can impose fines, which are not specified in the bill but will no doubt be spelled out in the regulations.

I note that the new commissioner—since the director of the competition bureau will now be called a commissioner—can, on his own, determine whether an individual must appear in court and set a 48 hour time frame. Within this period, businesses can reach an agreement with him. This is another aspect we cannot accept: the considerable powers given the new commissioner.

We also wanted to include the Internet in the provisions of the law to avoid its becoming quickly outdated. We were told that the Internet is less interactive and therefore people contacted can easily cut short communications.

There is, however, one thing I do not understand. Does false and misleading information that causes an individual to buy a product become excusable because it is transmitted on the Internet? Unfortunately, by rejecting the inclusion of the Internet in the scope of Bill C-20, the Liberals are preventing this bill from being enforceable or effective.

I must, however, state that I did note some degree of receptivity on the part of the parliamentary secretary at the report stage with respect to our amendments. I hope he was sincere about the possibility of bringing in corrections with future legislation, and I believe he was.

When one thinks that the standing committee spent half its time last year focussing on the Year 2000 bug, it is difficult to grasp that no thought has been given to the Internet, which is going to be more and more a part of everyone's daily life.

The hon. member for Portneuf, a specialist in computers and all telecommunications matters, has just been telling me that, according to his information, 30% of Quebec families, and probably of Canadian families as well, are already connected to the Internet. This is already a reality.

Some people may think the Internet is a complicated affair that requires costly computers and gadgets, but my colleague also told me that a person can use a little box that costs about $400 to hook up to a phone line, and then access the Internet through the television set. That is the way of the future. I know that the millennium bug is close at hand, but I think that all the problems associated with the Internet should have been addressed.

We wanted to balance the power Bill C-20 gives to the director of the competition bureau. In the bill as it stands, only the future commissioner may ask the tribunal whether someone engaged or is engaging in reviewable conduct. That is a lot of power for one person. In the past, people could file complaints and the final decision was left to the tribunal.

Now, more power is being given to the director of the competition bureau, who will now have the title of commissioner, and he, and he alone, will decide whether or not it will go to the tribunal. We think that this is leaving a great deal of power in the hands of one non-elected individual. We are not questioning his competence—that is not the issue—but we feel this leaves a lot of power in the hands of one person.

I now know why the Liberal government wanted to take this route. It wanted, of course, to protect its own interests, which is fine, but it also wanted to acquire greater powers, as I explained, over Quebec in particular, which, as people know, has a civil code, unlike the other provinces in Canada, and an agency to protect consumers with respect to such things as telemarketing.

Like members of the New Democratic Party, we think that the reason the government and Liberal members are introducing this bill has very little to do with their concerns about consumers. We think that competition should be at the heart of this bill, and we do not think that it is. That is why members of the Bloc Quebecois will be voting against the bill. It needs a lot of improvement.

We are also unhappy that all the amendments we proposed were rejected. The Liberal member who just spoke, and his colleague as well, was pleased that, after trying for months, apparently, he managed to convince the Liberal majority to pass his amendment about whistleblowers. We supported it too, but we see, and this is sometimes a bit discouraging, that the government is very reticent, even intolerant. It almost never passes amendments from the opposition parties, not just from the Bloc Quebecois, purely so that it can give the impression that it has anticipated everything, that it has analyzed all aspects of a bill and its consequences. But we do not think this to be the case, quite the contrary.

It is odd. The Liberals in opposition swore they would throw out the free trade agreement, because it was worthless. We know what happened. The free trade agreement was kept. The same thing happened with the elimination of the GST. In the words of the Prime Minister—Quebeckers will not have any trouble understanding—he talked of scrapping the GST. However, nothing happened.

I recall as well that the Liberals said they would not be going after the disadvantaged. They blamed the Conservatives for doing just that. I recall a letter from the Prime Minister, when he was the leader of the opposition, which expressed his horror at the treatment by the former Conservative minister, Mr. Valcourt, of the unemployed with cuts to unemployment insurance. However, we saw what they did later on. They made more cuts; they went even further. They paid the price, in the Maritimes, for example, as we know.

Today, however, the Liberal Party has left these concerns far behind. It too used a miracle marketing approach to permit certain businesses to profit at consumers' expense. However, the Liberal government can prove that it honoured its promises knowingly and without concern for their consequences.

This is why the members of the Bloc Quebecois will oppose this bill, whose objective was laudable, nonetheless.

The bill's lack of clarity will make it hard to enforce and, ultimately, prevent it from truly protecting the interests of consumers.

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

Mr. Speaker, Bill C-20 can easily be divided into two parts.

The first part deals with telemarketing fraud and the significant consequences which have befallen many Canadian consumers at the hands of those who would defraud them of significant sums of money through the telephone. Like all other members of this House, New Democrats fully support the thrust of the telemarketing fraud provisions. There are things we would do differently and I will raise them in a minute. As my colleague from the Bloc Quebecois has indicated, mostly it has to do with enforcement and the seriousness with which we take the enforcement of these crimes.

The second part of Bill C-20 is much more troublesome. It deals with basic aspects of competition, with offences committed by businesses to further their economic aims. This includes the various misleading, fraudulent and deceptive practices they pursue as well as some matters dealing with mergers. It is that part which falls short of what Canadians need.

I will talk briefly about the telemarketing fraud provisions. We have all had an opportunity to speak on this question in the past. I am sure we have all heard from constituents who have been cheated out of considerable numbers of dollars by these fraud artists.

I can think of one couple in particular who responded to the heavy duty pressure from a telemarketing operation. That couple handed over some $10,000 or $12,000 in response to this pressure. These senior citizens could ill afford $500 let alone $12,000.

We might ask how could that ever take place. As we know, the telemarketing fraud operators prey on the most vulnerable members of society. They make extravagant claims which we might not accept but which many others do. Those operators have made a lot of money in the process.

We all know the plight of many who have been bilked for thousands of dollars and the apparent ease with which these fraud artists continue their work over and over again. They work for different companies under different names but use the same offices with the same telephone equipment. They have basically thumbed their noses at the law and at Canadians over a very long period of time.

Project Phonebusters is a relatively small operation headed by Barry Elliot, an OPP officer. It has essentially the sole responsibility of chasing after these guys across the whole of Canada. This small unit is not funded well enough of course. It does not have enough people to pursue these claims in a timely way. Consequently the situation in Canada is we have not been enforcing our laws seriously enough. Had we been more serious enforcers, we would have saved many Canadians many thousands of dollars.

It is incumbent upon the solicitor general as the minister responsible for the RCMP to take a leadership role in fighting this fraud at the national level and to ensure that there are more RCMP officers engaged in this activity. Project Phonebusters and Barry Elliot need more help to do an even better job. They have done quite a remarkable job with very limited resources.

There is an obligation on the part of the Government of Canada following the provisions in Bill C-20 which deal with telemarketing fraud to actually put some resources where its mouth is. The government should not just pass legislation in the hope that something will improve. It should rigorously and completely enforce the legislation and commit more resources to it.

I also want to commend my colleague for Lévis-et-Chutes-de-la-Chaudière for proposing to the government some significant changes which would have also protected many, many Canadians.

We know about the issue dealing with the Internet. We know that this is just the beginning of an incredibly important market for commercial transactions. Many, many people have already begun to do business on the Internet, whether it is the buying of stocks and bonds, holidays, or other goods and services. We have all probably used the Internet for these purposes.

Technological advances will ensure that the Internet is more secure and safe and that we can use our credit cards on the Internet without fear of incurring bills that we were not intending to incur. Once all of that technology is in place, and it is just around the corner, we will see a huge burgeoning of trade on the Internet.

The member for Lévis-et-Chutes-de-la-Chaudière who was trying to move the government to take this matter seriously made some very good points in proposing that the Internet be added to this section. The argument was that it did not quite fit within telemarketing.

It does not fit perfectly but it does not fit badly either. We have a new form of marketing which is based on technology. It is not all that different from telemarketing. There is the one element that a person is not on the line forcing someone to make a decision but the mechanism of the Internet also makes it very, very attractive and persuasive.

I would have hoped that the government would have taken note of these suggestions. I know the parliamentary secretary is very diligent in these matters. I hope we can do more than hope that the parliamentary secretary will help us, that we will see some movement to deal with some legislative action after proper study on the question of the Internet. He is nodding his head so I am sure that is what will happen.

The government is making a fundamental mistake regarding the competition provision. It has simply not regarded the importance of having a fair and fully competitive market so that not only consumers are protected but legitimate, honest businessmen and businesswomen are protected too. That part I cannot accept. It is not because of what is in it; it is mostly because of what is not in it. It should have been made tougher, not weaker. We will therefore be voting against this bill although we are very, very supportive of the telemarketing fraud provisions.

[Jim Jones, Progressive Conservative, Markham, ON]

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.

[The Deputy Speaker]

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 Halifax West, Aboriginal Affairs; the hon. member for New Brunswick Southwest, Health.

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

Mr. Speaker, I thank the members who spoke this afternoon and the members of the industry committee who toiled for many hours on the bill. Although we come from different parties I believe the debate was fruitful and the bill we have before us today is very valuable especially for seniors who get caught in many scams and by misleading advertising.

I thank all parties for their contributions on the industry committee with regard to the bill. It was very important to the Minister of Industry, and I thank them for their debate at first, second and third readings and when it was in committee.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The House has heard the terms of the motion. 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 yeas have it.

And more than five members having risen:

[The Deputy Speaker]

Call in the members.

And the division bells having rung:

[The Deputy Speaker]

At the request of the chief government whip, the division is deferred until 5.15 p.m. this afternoon.

[Bob Kilger, Liberal, Stormont—Dundas, ON]

Mr. Speaker, I rise on a point of order. The government is not going to bring forward any other business for the rest of this day. We would ask for consent to suspend the workings of the Chamber until 5.15 p.m.

[The Deputy Speaker]

Is there unanimous consent to suspend the sitting of the Chamber until 5.15 p.m., at which time the bells will sound for the 15 minutes required for the vote at 5.30 p.m.

[Some hon. members]

Agreed.

(The sitting of the House was suspended at 4.43 p.m.)

The House resumed at 5.14 p.m.