Mr. Speaker, I am pleased to speak today to second reading of Bill C-393, an act to amend the Competition Act which deals specifically with negative option billing. My caucus colleague, the member for Markham, has already spoken as PC Party industry critic on the bill at second reading.
As most members have noted, Bill C-393 had a previous life in the 35th parliament. In that parliament the member for Sarnia—Lambton introduced Bill C-216, which would have amended the Broadcasting Act. The legislation was sparked by public outrage at the cable companies imposing negative option billing through the addition of specialty channels at the beginning of 1995. As such, Bill C-216 dealt solely with cable television and passed the House despite opposition from many powerful interests.
Unfortunately for the member's efforts Bill C-216 was still under review by the Senate when the Prime Minister called the 1997 federal election. The bill was effectively killed by the member's own government, which was not under any pressure to go to the polls only 3.5 years into its first mandate. There may be some, perhaps even the member himself, who would blame the Senate for the death of Bill C-216. This is a misguided view because the Senate was playing its constitutionally mandated role to review legislation from the House.
There may have been many occasions in the past several years where the Senate has undeniably improved legislation. Correcting errors not addressed on the House side in the Liberal government's so-called Pearson airport legislation and more recent amendments to the Judges Act are but two examples. Until the Senate is either reformed or abolished we should stop attacking its members for trying to perform their mandate.
Bill C-216 is history. We are now debating Bill C-393. As previously mentioned, the bill would amend the Competition Act to ban negative option billing in a whole host of sectors, including certain financial institutions, broadcasting undertakings, telecommunications firms and insurance companies. In particular, Bill C-393 protects the basic consumer right to express consent before purchasing a new product or service. In plain language this means consumers cannot be billed for a product or service without their clear consent.
The member for Sarnia—Lambton and organizations such as the Consumers' Association of Canada make a compelling case against negative option marketing practices. Indeed I think many of us will agree that this type of marketing reverses the traditional buyer-seller relationship. With negative option billing customers are offered new products or services and are required to opt out or expressly decline these new offerings to avoid being charged for them.
From a legal standpoint negative option billing relies upon the concept of implied consent. By not responding to a solicitation the consumer is deemed to have given his or her consent. Indeed it is fair to say that negative option schemes rely on market inertia to sell new products or services to an existing client base. It is therefore a justifiable claim that negative option billing further concentrates market share with the dominant industry players instead of fostering competition in an open marketplace.
Bill C-393 applies to federally regulated businesses such as banks and cable and telephone companies. Under the law selected financial, insurance, cable and broadcasting companies would not be allowed to use a lack of consumer response to negative option billing inquiries as consent to buy. The bill wisely allows provincial governments to prohibit negative option marketing within their jurisdictions. Provinces such as Quebec have already taken steps in this direction.
While provincial governments have progressed somewhat in addressing these dubious marketing efforts, there is a noticeable lack of such consumer protection at the federal level. Cable providers are still using negative option billing in regional markets despite previous assurances to the contrary.
In August 1996 Industry Canada's office of consumer affairs warned that negative option marketing had the potential to be an important tool in the financial services sector. Examples cited in the report included the sending of unsolicited credit cards and changes in account structure made without the consent of consumers.
In 1997 the Toronto-Dominion Bank employed a negative option technique to deprive bank customers of their privacy. The National Bank reportedly used a similar scheme to sell travellers health insurance to existing customers by debiting their accounts $9.95 per month.
I am pleased that Bill C-393 recognizes that there are situations in which a consumer benefits from a negative option billing arrangement. However, for this to be the case, consumers must be able to make informed decisions and give express consent. The bill proposes certain steps to be taken for a negative option scheme to be legal and fines for those who contravene the act.
The bill has received the support of the Consumers' Association of Canada, the Public Interest Advocacy Centre and the Insurance Brokers Association of Canada. Although Bill C-393 is strong on consumer protection, the PC caucus would like to know the views of such organizations as the Canadian Federation of Independent Business, the Insurance Bureau of Canada and the Canadian Petroleum Products Institute among others.
We must always be prudent as parliamentarians not to impose an excessive amount of laws and regulations on the private sector. Our caucus has already brought forward the concerns of the private sector regarding punitive measures in the federal cost recovery program, which was expanded greatly by the Liberal government in 1994.
Although the move to more user fees for the private sector was initially welcomed by businesses of all shapes and sizes, the government's chosen structure has proven to be ineffective, incompatible and costly. As a result this program cost the Canadian economy over $1.3 billion from our GDP and 23,000 jobs, according to the 1990 report by the Blair Consulting Group. Let us always be careful in bringing in government intervention no matter how well intentioned it may seem to be at the time.
Our caucus would also like to verify that Bill C-393 would not hinder French language broadcasting in Canada. This was raised in 1997 by the chairwoman of the CRTC. I am sure all members of the House, especially bilingualism's newest friends in the Reform Party, would want to ensure that Bill C-393 does not pose a threat to French language broadcasting.
I reiterate on behalf of the Progressive Conservative Party of Canada the qualified support of Bill C-393 at second reading. The overall intent is extremely positive. The legislation would significantly increase the level of consumer protection in the country.
I urge all members of the House to put aside partisan interests and support moving the bill along to the industry committee where it can be given closer scrutiny on issues of concern.