Debates of April 5th, 2000

Competition Act

[Pierre Brien, Bloc, Témiscamingue, QC]

moved:

Motion No. 1

That Bill C-276, in Clause 1, be amended by adding after line 29 on page 2 the following:

“(2.1) Subsection (1) does not apply in the province of Quebec to an enterprise that provides or sells a new service in Quebec.”

Madam Speaker, today we are debating Bill C-276 on negative option marketing. This refers to the fact that, when there are new television channels, consumers are charged for them, and if they do not wish to receive the new channels, they must say so, otherwise they will have to pay for the service.

Its objective is, in principle, a most praiseworthy one, but we have a number of problems with it, which is why we have proposed the amendment. In Quebec, we have the Consumer Protection Act, which prohibits this kind of practice.

It is not as widespread a practice as some might think. It was used mainly when new specialty channels were introduced to promote a greater penetration rate. There was some public outcry around that.

Obviously, when we indicate we no longer want to receive these channels, the subscription fee is very different from what it would be if we wanted the service.

When new channels are introduced, for cultural reasons, to help French channels achieve greater penetration, it may happen that these channels be part of a package. This kind of approach is helpful to reduce costs and increase penetration.

A lot of people have criticized this kind of approach, arguing that banks do it, among others, but we must dispel the myth. Some people, and I am thinking of a number of Liberal members, are saying that certain practices will no longer be allowed with this bill, but it is not so.

For example, banks sometimes have a promotion. One can get free life insurance or any type of insurance for three months. Anyone who signs a loan contract or any other document also gets that other service, whatever it is. It is free for three months. The initial contract says that charges will start to apply after three months unless the company is notified. That is not negative option billing.

The bill will not prevent this kind of practice because consent was given in the initial contract. Therefore, it must be clearly understood that the bill will not solve this kind of problem. The negative option marketing cases we have seen were mostly in relation to the introduction of new channels.

The other aspect is that there is still a possible exemption procedure, but the decision would be left in the hands of political officials instead of the CRTC. The Minister of Canadian Heritage will now have the authority to allow licensed services to use that practice. Very strong political pressure from the minister will be brought to bear on the CRTC, which we would like to be much more independent.

For all kinds of reasons, we do not support that and our amendment is designed to exempt Quebec. It is not because we want Quebec consumers to be protected against that practice generally, but because they are already under the Consumer Protection Act. We do not want another piece of legislation that will introduce different definitions and different recourses.

At present, we have the Consumer Protection Bureau. In Quebec, anyone who feels he has been wronged may call on the Consumer Protection Bureau. This bill will give powers to the Competition Bureau, which is governed by a different act and has a different approach. The offence leads to different sanctions, whether it is an offence against the Quebec act or against this new federal legislation, if passed.

It must be remembered that issues related to contracts, local trade and consumer protection are provincial jurisdictions under section 92.13 of the constitution. It is under this section that Quebec passed its consumer protection act, which prohibits negative billing in paragraph 230( a ), which reads as follows: a ) No merchant, manufacturer or advertiser may, through any means, demand any money for a product or service provided or sold to a consumer without the latter having asked for it.

Thus, the consumer protection act makes it very clear that this kind of practice is prohibited. Some people will say yes, but this bill applies to federal institutions, banks, telecommunications and so on. For those who might say this does not apply to federal institutions, I will quote some court decisions, such as the one in Attorney General of Quebec v Kellogg, which says in part:

The Kelloggs are not exempt from the application of restrictions on advertising practices because they chose an advertising instrument under federal control.

An individual who discloses defamatory material is not exonerated under provincial law because the publication instrument is under federal control. Moreover, this individual could be prohibited from publishing any new material.

I believe that the Kelloggs are in a similar situation regarding these regulations. They cannot justify a behaviour which has become illegal by saying that they are using television.

Provincial legislation is not about television but about consumers, trade and advertising. We are applying the terms of the act.

We believe the same thing applies in this case. The supreme court decided, in Attorney General of Quebec v Irwin Toy Limited, that, and I quote in part:

There is no doubt that television advertising is a vital part of the operation of a television broadcast undertaking. The advertising services of these undertakings therefore fall within exclusive federal legislative jurisdiction. It is well established that such jurisdiction extends to the content of broadcasting and advertising forms a part of such content.

However, ss. 248 and 249 of the Consumer Protection Act do not purport to apply to television broadcast undertakings. Read together with s.252, it is clear that ss. 248 and 249 apply to the acts of an advertiser, not tothe acts of a broadcaster.

Cable television companies themselves have acknowledged that they were under the jurisdiction of Quebec legislation. It is precisely for that reason that some companies recently undertook to abide by the decision of the Consumer Protection Bureau regarding the establishment of new specialised channels.

We believe that this new federal legislation will complicate measures available to consumers to obtain redress complicate determination of what really applies to protect them, especially since no one in committee was able to give a definition of new service prescribed in the bill. Everyone had his own interpretation and a different definition of what a new service is. The bill purports to prevent those areas from applying to new services.

Some people, including representatives of the Canadian Bar Association and others, said “You are going about this in the right way to achieve your goal. We already have a Bank Act, a Broadcasting Act and a Telecommunications Act. These acts already include means to prevent this type of practice and they would be much more appropriate”.

Even those who would like to see federal legislation are saying “Start by using the existing legislation, do not create new legislation that will only complicate the process and the capacity to implement it”. It is all very nice to make a show, to make believe that we are doing something for Canadian consumers, but if, at the end of the day, these people are not better protected than they were before, we have not achieved much.

There is one last issue that I want to raise because I know that time is flying. We are extremely concerned about the politicization of the exceptions that could be given to the bill. Each of the ministers in his or her own area of jurisdiction, be it finance, industry or heritage, will be in a position to grant exemptions by virtue of an order in council. This means that it would not be an organization like the CRTC, independent from the government, that would evaluate this anymore.

Those who are not satisfied with the decisions made by the CRTC have legal remedy. They can submit their case to the Federal Court for example. From now on, the decisions will be political and they will or will not include exceptions. We are very concerned, especially about the heritage minister, because we know that she is very good at politicizing everything. As a matter of fact, the situation is the same with the other two ministers, because they will both be replaced eventually.

While the intention may be laudable, this is not done at the right level. As far as Quebec is concerned, we do not think it will make it easier to achieve the objective, because consumers are already protected.

In order to engage in negative option billing in Quebec, a notice or an authorization from the Consumer Protection Bureau is required. This is hardly ever done, the only exception being the introduction of new television channels, which comes under the CRTC with a whole different set of objectives.

I hope I dealt with the core of the issue. We will vote against this bill for the reasons that I explained, but we do have one hope. It may be that the other provinces want the federal government to look after their affairs. If the rest of Canada is happy to have the federal government look after that, let them give up their jurisdiction, but Quebec will not. If the amendment to exclude Quebec is adopted and it is recognized that Quebec's Consumer Protection Act takes precedence, under those circumstances, we might support the bill.

We were elected to protect Quebec's interests in this place and that is what we intend to do. We are proposing an amendment and we will see if this government, which claims to be very flexible toward Quebec and apparently recognized the Quebec society as a distinct society in a motion—we are anxious to see the real weight of that motion—will go so far as to support the amendment that would exclude Quebec from the application of the act, since Quebec consumers are already protected.

[Roger Gallaway, Liberal, Sarnia—Lambton, ON]

Madam Speaker, I am pleased to participate in the debate on the amendment proposed by the Bloc to Bill C-276, an act to amend the Competition Act. It is a sad day for consumers in the province of Quebec because the member for Témiscamingue, as a member of the Bloc Quebecois, has proposed an amendment to exempt Quebec residents from the consumer protection measures contained in the bill. It is difficult to imagine why on earth we on this side would support such a cold hearted and callous proposal from the member opposite.

The bill would protect consumers from the deceptive marketing practice known as negative option billing which occurs when a company forces its customers to decline or opt out of new product or service offerings to avoid higher fees. This practice is a perversion of the traditional buyer-seller relationship. It relies on the concept of implied consent: if the buyer does not say no or register an objection with the seller or the vendor, he or she is deemed to have said yes and to have given consent to the purchase.

It is a rather sick way of doing business because it takes advantage of consumers from all walks of life whether they are young, poor, elderly or people on fixed incomes. With the proposed amendment the Bloc Quebecois would leave millions of consumers in the province of Quebec vulnerable to such marketing rip-offs.

I often have trouble following the twisted logic of the Bloc. In an attempt to humour our friends across the way, I will try to see how their amendment would benefit consumers who reside in Quebec or any place else in Canada, for that matter.

If we look closely at Bill C-276, as amended by the Standing Committee on Industry, we see that it has been improved. I would like to take the opportunity to thank and commend members of that committee for their hard work. In a four month period the committee heard testimony from 28 witnesses, including consumer organizations, industry groups, and officials from the government departments of finance, industry and Canadian heritage who appeared not once but twice before the committee.

The committee passed a number of amendments to bring Bill C-276 in line with recent changes to the Competition Act precipitated by the passage of what was called Bill C-20. Concerns over the viability of certain specialty television channels were addressed. A change was made to deal with the evolution of electronic commerce. Changes were made but the key elements of consumer protection have remained in this bill.

The bill still applies to federally regulated banks, telephone companies and cable companies. Here we see the irony of the Bloc's proposed amendment, the politicization of their proposed amendment. They would give a green light for federally regulated banks and others to essentially rip off consumers in the province of Quebec by way of negative option marketing. I am certain the Bloc's position has nothing whatsoever to do with their recent change of heart when it comes to accepting campaign donations from large corporations. I am sure this is simply a coincidence.

In any case, perhaps we should refer to what the experts who appeared before the committee have said. At the industry committee hearing on December 13, 1999 the head of the Quebec based consumer organization Action Réseau, Ms. Nathalie St-Pierre, was questioned by the member for Timiskaming. I will quote his question:

You are a watchdog organization involved in consumer protection in Quebec. At the present time, do companies under federal jurisdiction and subject to this bill comply voluntarily with the [Quebec] Consumer Protection Act?

Ms. St-Pierre in her reply stated “They do not comply with the Consumer Protection Act”.

In a letter to the CRTC dated October 8, 1999, Ms. St-Pierre exploded the myth that Quebec consumers do not object to negative option marketing. She referred to the 1997 launch of new specialty channels by the Quebec based company Vidéotron and I quote once again from her letter:

When the channels were launched, Quebec consumer groups, the Consumer Protection Bureau and Vidéotron all received numerous complaints, particularly about the marketing method used, which was negative option billing.

As the Bloc points out, Quebec's Consumer Protection Act prohibits negative option marketing. However, the Bloc does not say that it can only apply to areas of provincial jurisdiction. What they do not say is that their act specifically exempts federal jurisdiction. It in fact says it does not apply to cable.

I can only surmise that the member for Timiskaming has finally come to his senses on this jurisdictional question. Why else did he ask a Quebec based consumer group if federally regulated companies voluntarily comply with the provincial law? The fact is that the Bloc knows that the Quebec law does not, cannot, never has and never will apply to industries like banking, telephone or cable.

Why then do Bloc members stand in this place and demand a carve out, a big exculpatory clause for Quebec consumers? Why do they stand with the Canadian Bankers Association and others who like things just the way they are? No changes.

I do not know the answer to these questions, but I do see a ray of light over the Bloc members. It is the member for Portneuf, their official critic for Canadian heritage, who recently launched a public campaign against the distribution of a French language educational channel, TFO, which wanted to broadcast in the province of Quebec and was made in the province of Ontario. The member for Portneuf broke ranks with his pro-business colleagues and stood up for consumer rights and explained his views in a TFO interview which aired on October 28, 1999.

The member is going to try to shout this down, but I want him to hear what his colleague said. I quote:

Look, I have no objection if a Quebecer wants to subscribe to TFO. I have a problem with the CRTC, which is a federal organization, forcing all Quebecers who get cable to pay for TFO, whether they want it or not. That's wrong. That is not what I would call a free market practice.

If the—

[The Acting Speaker (Ms. Thibeault)]

Order, please. The member who has the floor is right next to me, and I can hardly hear him. I ask all members to show a little respect.

[Roger Gallaway, Liberal, Sarnia—Lambton, ON]

Madam Speaker, I have very little time left, so I would say in conclusion that this bill has its roots in the consumer revolt of January 1995, but has its eye clearly on the future.

On a daily basis we are bombarded with the marketing campaigns of these federally regulated businesses. With the explosion of information technology, it is becoming far easier for these companies to bundle packages and increase the number of services provided.

Why must we as consumers remain ever vigilant to avoid paying higher fees for their additional services?

By defeating the Bloc's amendment and passing Bill C-276, we can protect all Canadian consumers from future negative option rip-offs.

[Charlie Penson, Reform, Peace River, AB]

Madam Speaker, I would like to advise you that I will be speaking for seven minutes in the hope that there will be a few minutes left at the end for my colleague from Surrey Central, who has a keen interest in this area and I know would like to have the opportunity to speak.

This is report stage of the private member's bill, Bill C-276—

[The Acting Speaker (Ms. Thibeault)]

Is the hon. member asking to split his time?

[Charlie Penson, Reform, Peace River, AB]

No, Madam Speaker.

[The Acting Speaker (Ms. Thibeault)]

Very good.

[Charlie Penson, Reform, Peace River, AB]

Madam Speaker, as I was saying, this is report stage of this bill. My understanding is that the Bloc amendment would not address the issues that the member for Sarnia—Lambton just alluded to, that these are federally regulated industries which are involved and therefore it is necessary to provide protection, even in Quebec, to have this bill apply in the way in which it was intended.

It is our position that in principle we agree with the philosophy involved here, which is to put the onus on companies, the providers of services, to obtain the consent before offering a service or starting to bill for that service. That is a reasonable proposal to use and therefore we are supportive of that concept.

We understand that there may be some problems with it and I will talk about that in a moment, but currently the negative option procedure as we know it puts the onus on consumers to advise suppliers of a service, for example a television company offering a cable service, that they do not want that service, otherwise it would continue and the consumer would continue to be billed.

In principle I think it should be the other way around. I know that is the intent of this bill. This would apply to federally regulated industries and therefore banks and telecommunications companies would be involved. We know that there may be some consequences in requiring these institutions to obtain that consent.

I do not think that it would be a serious matter. There are new methods, including electronic options through the Internet and various other ways available to those companies to obtain consent, but in the event that it is too onerous on these companies and provides too much of a problem, the member who proposed this private member's bill has built into it a section which says that if that were to be the case, for example if a bank were not able to do this without incurring a tremendous amount of debt to provide that service, there is a provision to exempt those particular areas out of the bill.

The minister involved in that particular category, who might be, for example, the Minister of Industry or the Minister of Canadian Heritage in regard to telecommunications, will be given the power to exempt those companies in the event that it is too onerous on them.

The bill is in proper balance. What it means is that the minister involved would have to justify before the Parliament of Canada why that exemption is being given. I think that is a good check and balance which will be used very rarely. It seems to me that the onus will then be on the company to try to obtain this consent. That is a very good provision in the bill.

The negative option part of it would be reversed and it would be up to the companies to obtain the consent necessary before they expanded packages and provided that service.

Why would the Bloc be opposed to this and why would any consumers in Quebec be opposed to the idea? I have difficulty understanding that, although I understand the member saying that it is provided right now. I have the counterbalance from the member for Sarnia—Lambton who says that is not the case.

In case the member for Sarnia—Lambton is right, I think this should apply to Quebec. If it is already covered in its legislation, what is the argument involved?

Although it is a free vote on a private member's bill, I am supportive of this as the critic for industry. It seems to me it is a good bill and should be considered. I will be voting against the amendment put forward by the Bloc at report stage.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Madam Speaker, I am pleased to join in the report stage debate on Bill C-276, a private member's bill proposed by the member for Sarnia—Lambton, which would curtail the use of negative option marketing in industries subject to federal jurisdiction.

The bill is remarkable for several reasons. First, it has survived so long in one form or another in spite of all of its numerous attackers, detractors and opponents. More on that later.

Second, it took a backbench member of parliament to introduce a piece of legislation protecting consumers. In my time as a member of parliament, I do not recall a single piece of consumer legislation coming directly from the industry minister himself. We have not seen any kind of progressive consumer legislation come from the government. It has always been from private members like the member for Sarnia—Lambton.

Most Canadians do not realize that the department of consumer and corporate affairs was long ago renamed the Department of Industry, reflecting quite well the concerns of this Liberal government and the Mulroney Conservatives before it.

Except for the member for Sarnia—Lambton, the Liberals care only about industry and care nothing for consumers as we have seen over and again, whether it is gas prices or all kinds of other issues. Liberals are shoulder to shoulder with millionaire hockey players and millionaire oil company execs to protect their particular situations.

Consumer affairs is now a little branch tucked away in the corner of the industry department. The consumer affairs minister is the industry minister, not that one would notice.

We only need to look south of the border to see how things might be different. There the U.S. attorney general is prepared to take on a giant company like Microsoft and win. They have anti-combine legislation which actually protects consumers. They have competition legislation which actually encourages competition.

We have an act which the Liberals have misnamed. They call it the Competition Act. From all experience seen under that act, everyone I know calls it the lack of competition act because there is no competition this particular act encourages. It encourages large, wealthy corporations to do whatever they want at the expense of consumers.

In Canada, when the banks come calling, the finance department and its various political flunkeys in the Liberal Party fall over themselves to co-operate and basically they cave in. It did not work, however, with this bill at the industry committee but it will be interesting to see how the junior finance minister, and the member for Etobicoke North, who both supported Bill C-276 at second reading, vote on it at third reading. I would hope they will support it as they did at second reading.

Will they vote for the bankers or will they vote for the consumers? I suspect the bankers will be first on their priority list, as they always have been, but we will be watching very closely.

I say to the member for Sarnia—Lambton that I was not always able to be at the industry committee hearings on this bill since I was also responsible for Elections Act amendments which were in committee at the same time in the procedure and House affairs committee. However, I followed the evidence and various amendments proposed, some of them constructive and some destructive, and I speak on them today as consumer affairs critic on behalf of my party.

As I said at second reading, banning negative option billing is a way to tell enterprises that where there are consumers involved, yes means yes and no means no. There is no implied consent in silence.

If they want customers to pay for a new service, they have to ask first, nicely. They just cannot ram new fees down customers' throats or sneak them in through the back door. Every consumer I have spoken with agrees with this statement.

This bill follows similar legislation adopted by the NDP government in British Columbia and by the Parti Quebecois government in Quebec.

The bill, as now amended by the committee, changes negative option marketing from a criminal to a civil reviewable offence. This amendment comes at the suggestion of the Competition Bureau which would be charged with administrating the Competition Act as amended by this bill.

There are arguments in favour and against. The criminal route has stiffer fines and can include every industry, but has a much higher evidentiary threshold and so is harder to enforce. The civil route amounts to a slap on the wrist, but it can be administered more quickly and, one hopes, very publicly. Given the public outcry against the cable companies back in 1995, we have some good evidence to believe this can be effective.

Our party reluctantly supports these changes so as not to let the purpose be the enemy of the good, but there is another unfortunate consequence. While the criminal law can apply to all industries, the civil reach of federal legislation extends to only those industries under federal jurisdiction. This limits us to the banks, the cable companies and the phone companies. Unfortunately, the insurance and trust companies and the credit unions have been dropped from the application of the member's bill.

That is what is so confusing about the latest report stage amendment being tabled by the Bloc member for Témiscamingue. The Bloc wants to exempt the province of Quebec from the bill. It claims the bill is not constitutional because it relates to commerce and other fields which come under provincial jurisdiction. If so, why does it not just exempt the whole country? Why exempt just Quebec? This approach is quite outrageous.

With all respect to my progressive colleagues in the Bloc, I do not know how in all good conscience they can oppose this bill which protects consumers in their own province. They apparently believe in the fiction that federally regulated companies comply with provincial legislation. I do not think they should rely on that when push comes to shove, especially not with the banks.

Even the Quebec consumer group, Action Réseau Consommateur, which testified at the Standing Committee on Industry, sees the need for this bill in Quebec. The Liberal government will sacrifice consumers at the altar of industry. The Bloc Quebecois will sacrifice common sense at the altar of ideology. That is appalling and, needless to say, we will oppose that amendment as the New Democratic Party as I am sure all other federalist parties will.

The banks could not defeat the bill in committee. The Bloc will not defeat it in the House. But what about the other place, the Senate, where friends of the Prime Minister are appointed to ensure that the rich and powerful have veto over common sense legislation which protects consumers?

In the last parliament the cable companies effectively sabotaged an earlier version of this bill in the Senate. This time we can expect the banks to take another try at it, unless of course we can abolish the Senate before the bill gets there.

My party believes there is substantial merit in even this modified version of the member's bill so we hope he has enough friends in the chamber of so many second thoughts. We wish him luck in the Senate.

In summary, the New Democratic Party will be opposing the Bloc's amendment and supporting the member's bill at third reading.

[Jim Jones, Progressive Conservative, Markham, ON]

Madam Speaker, it is with pleasure that I rise today to address Bill C-276, an act to amend the Competition Act with respect to negative option marketing. It is also with pleasure that I commend the efforts of the hon. member for Sarnia—Lambton. His tireless work on this file is a testament to his character and his commitment of upholding the interests of the Canadian consumer, all of this despite intense pressure from members of his own caucus and, in particular, from his party's front bench.

Negative option marketing is a practice in which enterprises offer clients new goods and services that clients must expressly refuse in order to avoid being billed. If clients do not expressly refuse the offer, they are deemed to have accepted it and are therefore charged. It is usually common practice for goods or services to be provided for a free trial period, after which a charge is automatically levied, unless the vendor is contacted directly and told to discontinue the service. Often the free product is bundled with other services the customer has already ordered.

Before proceeding to discuss the merits of this bill, I would like to address the motion brought forward by the hon. member for Témiscamingue.

It is certainly no secret that the member's party has opposed this bill since it was first tabled. Last spring during the debate in which the Bloc opposed this bill, the party argued that French language broadcasting services need the protection of the CRTC given the smaller market in Quebec.

However misguided, the Bloc believes that the French language is under fire across Canada and that its viability is increasingly threatened. I will not go into the numerous reasons why the Bloc's reasoning is flawed in this regard because there are countless groups, organizations and political parties like the PC Party, which are forcefully committed to ensuring the continued vitality of the beautiful French language from coast to coast to coast. Despite the PC Party's articulated pledge to uphold the rights of all Canadians, the Bloc feels that the French language must be protected and promoted as much as possible.

As such, the Bloc believes that negative option marketing, as for instance in the case of cable companies that use negative option marketing to introduce new French language services in Quebec, must be protected. As far as the Bloc is concerned, negative option marketing is a good thing which means that this bill is a bad thing.

The story gets very interesting as we uncover its many layers. It turns out that this past fall the Bloc member for Portneuf articulated the opposite sentiment. He complained about the CRTC, a federal organization, forcing all Quebecers to pay for a service whether they liked it or not. Translated into English, the member said “that is not right, that is not representative of a free market”. The member for Portneuf declared it is not right to force consumers to pay for something that they may not want. It is not right, according to the Bloc, to make Canadians pay for something that they have not explicitly said they want.

That is precisely what Bill C-276 does. The bill protects the rights of Canadian consumers because it prohibits negative option marketing, a tactic that forces consumers to pay for something that they may not want in the first place. This is the same kind of tactic, I might add, that the Bloc has most recently described as not right.

I do not support the motion brought forward by the member for Témiscamingue and, as we have seen, neither do certain members of his own caucus.

With respect to this bill, I offer my support to the member for Sarnia—Lambton because I realize the importance of consumer rights and I recognize the value in upholding those consumer rights. Bill C-276 protects the most fundamental of all consumer rights: consent. Bill C-276 protects the right to express consent before purchasing a new product or service. Consent, which is an individual's expressed will to accept the offer to contract, is an essential condition of contracting, one which negative option marketing disregards.

This bill, if my colleagues see the wisdom in allowing it to pass in this place, represents a large victory for Canadians. Not only does it protect all Canadians, but it is truly refreshing to see that it seeks to protect the little guy in an age where the concerns of the little guy are always deemed secondary, if not even meaningless.

I would like to take a moment to record my acknowledgement of the concerns this bill poses to the Canadian banking industry. Although, as I see it and as the banking industry itself does as well, there are no valid principled objections to this bill, there are examples which show that should the bill become law it would be very difficult for banks to abide by its provisions. I recognize these difficulties and I offer my assistance to the banking industry in identifying possible solutions to the hurdles it would face if the bill were to pass.

The bill proposes to eliminate what is known as default billing. Default billing is an insidious practice that has plagued unwitting consumers for years. If the bill does not pass, default billing will continue to plague consumers in an increasingly invasive and damaging fashion. What opponents of the bill fail to recognize is that default billing upsets the traditional buyer-seller relationship. This relationship is simple. Basically, if we want something, we inquire as to its availability and if it is available, we buy it from the seller. This is only logical.

However, some crafty and, quite frankly, cunning individuals have upset the harmonious balance in the buyer-seller relationship by instituting the practice of negative option marketing. This practice does not allow the buyer to even consider purchasing a product. It does not allow the buyer to even consider if the product or service is something the buyer needs or that would be helpful in his or her life. Rather, this practice imposes products and services upon the buyer without consent, without even asking the prospective buyer if this is what he wants. Madam Speaker, would you believe that right now it is legal to do that? Did you know, Madam Speaker, it is legal for shrewd individuals to do this in certain instances? You, Madam Speaker, could be billed for something that you did not even ask for, something for which you did not even express an interest. Does this sound fair? Does this sound right?

As my colleague from Portneuf so accurately stated, this is simply not right. Beyond the fact that this kind of tactic inconveniences and troubles average Canadians, this tactic has far reaching impacts upon those who do not represent the average Canadian. For instance, negative option tactics penalize customers who do not understand that they must cancel the service, for instance, Canadians like the elderly or the aging. It also penalizes immigrants whose first language is not English and even those who are away on vacation and cannot respond in a timely fashion to the new charges imposed on them during their absence.

These are simply a number of many specific problems the bill will address, problems I am thankful will finally be resolved.

In closing, Madam Speaker, please allow me to reiterate that consent is a fundamental tenet upon which the consumer-business relationship is founded. Here in Canada we have always thought to preserve the privileges and uphold the rights of our citizens.

We must preserve the basic principle of consent and ensure that that it continues to hold the same consequence and weight that it has for ages. How can we do this? What role can this House have in furthering the preservation of consent? We can start by passing this bill, Bill C-276. I encourage my colleagues to recognize the importance of this legislation and to look beyond our party distinctions in order to offer a resounding commitment to ensuring the security of the Canadian consumer.

I urge my colleagues to do as I will, that is to support Bill C-276.

[Antoine Dubé, Bloc, Lévis, QC]

Madam Speaker, I am quite pleased to take part in this debate. Members of the Standing Committee on Industry have discussed this bill, and today, the arguments put forward in committee have been summarized for us.

I would like to acknowledge the persistence of the hon. member, even though I do not share his view, because this is the fourth time he has tried do convince the House of the merits of this private member's bill.

The objections of the Bloc Quebecois are in the same line as the motion presented by the hon. member for Témiscamingue to exempt Quebec from this bill.

I find it passing strange that a sovereignist member like me should explain the Canadian constitution to federalist members of various parties in the House. Our objections are based on the constitution.

Some may wonder how that can be. Section 92.13 grants to the provinces the powers over questions of property and civil law. This is especially true for Quebec, because our civil code is different from the legal system in the other provinces. The civil code comes from the Code Napoléon, and it was accepted when Quebec joined confederation. Its inspiration and implementation differ from common law, which applies elsewhere in Canada.

We constantly have to remind federalist members, who should be more mindful of the Canadian constitution, of this. And it is the Bloc Quebecois members, sovereignist members, who have to do this.

Earlier, the member for Témiscamingue referred to two specific cases where section 92.13 of the constitution was used, as well as paragraph 230( a ). These cases went all the way to the supreme court, they are the attorney general of Quebec v Kellogg's and the attorney general of Quebec v Irwin Toys.

In both cases, the arguments put forward by the attorney general of Quebec were accepted. Cable companies themselves recognized that they were subject to Quebec's legislation, because legislation exists, which established the Consumer Protection Bureau and which, in section 230, prohibits negative option marketing.

After meeting with officials of the Consumer Protection Bureau, Vidéotron, Cogeco, Star Choice and ExpressVu all promised to abide by the bureau's directive that they may not use negative option marketing to sell their new package, as of January 1 of this year. Therefore, the new package is offered on a positive option marketing basis.

A lot of people do not want to hear about the constitution any more but the constitution is about the rules that govern a country, in this case the Canadian federation. If those rules are not respected, what is the use of having them?

My colleagues from the Progressive Conservative Party, the New Democratic Party and the Canadian Alliance who spoke before me used the same arguments than those used by the Liberal Party with regard to the Bloc Quebecois' objection, saying that there is nothing wrong with the federal government interfering in provincial jurisdictions.

There is something that many surveys and studies have shown and that those involved in teaching political science often talk about. For Canadians outside Quebec, the main government is the federal government. When it offers money or proposes measures they find interesting, the objections raised by their provincial government are regarded as secondary.

In Quebec, whether one is a federalist or a sovereignist, the exact opposite is true. This has always been the case, because the first government they think of is the Government of Quebec. This is also clear from voter turnout. Turnout in provincial elections in Quebec is always higher. In general, although there are exceptions, the opposite is true in the other provinces.

During my first term of office, I sat on the Standing Committee on Human Resources Development and the Status of Persons with Disabilities. This committee travelled across Canada and Quebec, and I was particularly struck by one thing. When it was a question of postsecondary education, the other provinces wanted the federal government to step in and had no problem with national education standards. Yet this is clearly a provincial jurisdiction.

The same is true for health. A debate is now going on in the House of Commons and, during oral question period, the NDP kept coming back to the charge, practically goading the federal government to step in with certain governments, such as Alberta, which wants to limit certain health criteria set by the federal government.

This important difference in perception has been noticed by many, and the motion brought forward by the member for Témiscamingue is very respectful of this reality. There are two mentalities and two cultures in this country that even honest federalists should respect until such time as Quebec becomes sovereign. We are different because we have a different past, culture, language and civil code. These are arguments that do not seem to interest the members opposite or those of other parties.

It upsets me even more coming from the New Democratic Party. I was an observer at their last convention. They were the first federal political party to recognize the existence of a Quebec people.

At the same time, it pointed out that Quebec had the right to self determination. We saw what happened with Bill C-20. At the first opportunity, the NDP changed its approach. They were in fact taken to task by their members in Quebec and those of their national executive who resigned.

People say it is always the members of the Bloc Quebecois who raise this argument. The only consumer group appearing before the committee came from Quebec, the Action Réseau Consommateur. I would like to recall the remarks of the representatives of this group. They said that the bill was a matter of provincial jurisdiction.

The group asked:

That, if this bill is pursued, it not include in it the concept of prior consent, which contravenes the spirit of the law and takes away its meaning, to all intents and purposes.

It also asked:

—for an amendment of clause 1(3), in order to prevent banks and broadcasting and television undertakings from replacing a service with another if no additional cost is charged, without the consent of the consumer.

What will happen if the bank replaces a paper service with an electronic service, when the client does not want the electronic service?

It also asked:

That for all transactions, consumers be given a hard copy contract.

None of these recommendations was heeded.

To conclude, I would like to say that, in addition to invading areas of provincial jurisdiction, this bill serves no purpose, in our opinion, since the legislative provisions already exist, especially in Quebec, and protect the consumer in this regard.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I am pleased to join the debate, and I will make my remarks brief.

When this bill was introduced in the last parliament, which died on the order paper, I supported it because it dealt with cable companies. Cable companies have a monopoly in the industry. I know that in my riding there is a certain company, and that is it. If that company sends me a letter saying it is going to add two channels at another $2 per month unless it hears from me, I find that offensive. That is why I supported the member's bill in the last parliament.

Since that time a number of things have been added to the bill. It seems to me that we should enact legislation that is not only principled, but legislation that will work.

The notion is that people should not be subjected to negative option marketing. Should that apply to the banks? The principle is the same. Members should ask themselves if it is workable in the context of banks. I would submit that it is not. I do not know why we would support something which would not be workable.

The Alliance member opposite said that there is an opting out clause toward the end of the bill by which cabinet could delete certain services. If we are parliamentarians, then why would we not put something into the bill which would work?

I will try to make the case very briefly as to why I do not think it would be workable for the bill to include banks, however attractive that might be.

First, banks are not monopoly providers. If a bank sends me a letter saying that if it does not hear from me it will change my service package, if I do not like that, then I can go to another bank.

I was very much part of the movement which opposed the proposed merger of the banks last year because I felt it would create too much concentration at that time. We did not have the competition in the industry which we will have when the government brings forward the financial services sector legislation in the next few months.

Ironically, that legislation will talk about a new financial consumer agency. It will talk about a new re-defined ombudsman, which will be more independent of the banks. Therefore, I find it strangely odd that we would bring forward this bill now to add the banks when we have this new regime coming forward which will provide much more protection for consumers and, more importantly, when the provisions of this bill would not work.

Let me give members an example to try to express my point. The Toronto Dominion Bank or CIBC or any one of the major banks might have five million to seven million customers. They send a letter saying they are going to change their service package, but it will only be done if they hear from them in writing or electronically. Guess what, maybe 90% to 95% of customers of banks will not respond. That is a reality. We can pretend it is not the case, but it is. We know from experience that surveys will not get the kind of response we want.

What is the bank supposed to do? It has seven million customers. If it is lucky, it has heard from maybe 200,000 customers saying yes, they would like the new service package and to proceed. What does the bank do now? More importantly, how do consumers benefit from this?

As we know, in this age of technology banks are adapting to a very changing world where we have Internet banking, banking at kiosks or computer based banking. The face of banking is changing so radically that very often it is in the interests of consumers to have their service package changed, like more Internet banking and not so many visits to the branch. That is what is happening.

If this legislation is passed, the banks will not have the flexibility to change any of that. The irony is the banks are doing this right now. How many of the member's constituents have phoned them and said that they are really angry because the banks changed their service package? The reality is members do not hear a lot from their constituents. The banks are in a very competitive environment and have to deal with modifications to the services packages. In most cases, they enhance the service packages available to customers.

I would like to make the point that, in principle, no one would really support the fact that banks should practice negative option marketing. The question is: Is it workable? I submit that it is not for some of the reasons that I have outlined and there are many more. I hope members would not be so attracted to the politics of this that they would not recognize the practical realities that are not workable with respect to banks.

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, I wish to acknowledge the good work by the member of parliament for Sarnia—Lambton on this matter over the years.

Bill C-276 seeks to amend the Competition Act to ensure that Canadian consumers are not victims of negative option marketing. Negative option marketing offers customers products and services that the consumer is required to expressively decline or opt out of.

How do we provide this protection for Canadians, including those in Quebec? Should it come in the form of Bill C-276 or can it be achieved through market based reform? Those are the important questions. The competition law can profoundly restrict economic freedom and market efficiency and the general move toward strengthening laws should be approached with caution.

With that good note, since my time is so limited, the Canadian Alliance supports free enterprise but recognizes the important role of the government in creating an economic environment with fair and transparent rules that protect both consumers and businesses.

[The Acting Speaker (Ms. Thibeault)]

The time provided for the consideration of Private Members' Business has now expired. The order is dropped to the bottom of the order of precedence on the order paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Karen Kraft Sloan, Liberal, York North, ON]

Madam Speaker, the public consultation component of the five year review of the Canadian Environmental Assessment Act recently concluded. It now remains for the Environmental Assessment Agency to provide those comments to the Minister of the Environment who will then report to the House by January of next year.

A number of concerns were raised about the act through the consultation process. A few of these include: The review itself is not independent; the Environmental Assessment Agency should have a much stronger role in co-ordinating and overseeing assessments; there must be improved opportunities for public participation in environmental assessment; federal funding for environment assessment must be increased; more emphasis must be placed on the assessment of cumulative effects; more attention must be paid to broadening the scope of projects, and to monitoring and follow-up; and, the federal-provincial environmental harmonization accord must not be allowed to detract from a strong federal presence in environmental assessment.

In fact, it is not clear how the harmonization accord's subagreement on environmental assessment will affect environmental assessment in Canada and what implications it has for the current CEAA review.

Many have commented on the need for the parliamentary Standing Committee on Environment and Sustainable Development to have a formal role in the review of the assessment act. To date, it has none.

The committee is an important component in the parliamentary process surrounding environmental legislation. For example, it undertook a mandatory one year review of the Canadian Environmental Protect Act commencing June 10, 1994. One year later, it tabled its report in the House of Commons in June 1995.

The intensive review of CEPA 88 culminated in a report entitled “It's About Our Health! Towards Pollution Prevention”, containing 141 recommendations. Many referred to the report as thorough, forward-looking and a comprehensive and substantive contribution to environmental protection in Canada.

For reasons such as these, many feel that the committee should be formally involved in the CEAA review process.

[Bonnie Brown, Liberal, Parliamentary Secretary to Minister of Human Resources Development]

Madam Speaker, the Minister of the Environment has launched an extensive consultation process for this review.

National public consultations began on January 31 in Ottawa and will continue for several weeks in 19 cities across Canada. They will provide members of the public and interested stakeholders with an opportunity to provide their views on how environmental assessment and the act can be improved.

The minister also has an interactive website which will allow the minister to reach out to rural Canadians and others who may not be able to attend the public meetings. At the same time, parallel consultations are taking place with aboriginal peoples, the provinces, the regulatory advisory committee and with other federal departments.

The Minister of the Environment is committed to a timely, effective review of the Canadian Environmental Assessment Act. He has launched an extensive, multifaceted consultation process that will provide valuable input on how environmental assessment can be improved in Canada.

The minister looks forward to sharing the results of the review and the views of Canadians on how the act can be improved with his hon. colleagues in his report to parliament at the end of this year.

[Inky Mark, Reform, Dauphin—Swan River, MB]

Madam Speaker, the HRDC boondoggle will just not go away. The HRDC problem is the tip of the iceberg.

This debate came about as a result of a random audit to evaluate 459 projects receiving $235 million in grants and contributions from HRDC. The findings were astounding, to say the least: 97% contained no evidence of checks to see whether the recipients owed money to HRDC; 80% contained no evidence of financial monitoring; 72% did not have a cashflow forecast; two-thirds did not have a rationale for recommending the project; and 15% did not have an application form. This is unbelievable.

TJF grants are supposed to be used to create sustainable jobs. But at what cost? Here are some examples. Confections St-Élie Inc., a textile company in the Prime Minister's riding, failed to create the 61 jobs it had been committed to create but continued to receive a payment of $223,000 in 1997. A program to teach troubled youths to fix slush puppy and espresso machines received $300,000. Of the 20 who took the course, 4 found work.

Was the transitional jobs fund a slush fund? Let us take a look. In 1997, Pierre Corbeil, a key Liberal fundraiser in Quebec, was charged with four counts of influence peddling for allegedly threatening to dismiss or stall TJF grant requests unless firms donated to the party. He later pleaded guilty.

A 1998 independent review by Ekos Research Associates Inc. suggested that TJF grants were approved for political reasons. In 1999 the question was raised as to whether the Prime Minister used his power to secure a federal grant for a friend, Yvon Duhaime, to expand his hotel. Mr. Duhaime, whose hotel, Auberge Grand-Mère, sits in the Prime Minister's riding of Saint-Maurice and was once owned by the Prime Minister himself, received a grant of $164,000 as well as an additional $650,000 in government loans even though federal officials had a report indicating the hotel was poorly managed and had massive debt.

There seems to be no end to the shovelgate affair. There are at least 13 RCMP investigations occurring at this time.

I will conclude by quoting the auditor's report of December 1998, the section under the heading of grants and contributions. It states:

Our audits of the management of grant and contribution programs over the past 21 years have produced a long series of consistent observations: problems in compliance with program authorities, weaknesses in program design, instances of poor controls, and insufficient performance measurement and reporting. Overall we have continued to find the same problems. There are many reasons why these problems have persisted. They range from decision-makers not following the rules governing expenditures on grants and contributions to weak management practices.

The government, over the last 21 years, has not been accountable enough to pay attention to the findings of the auditor general. It is unfortunate that the auditor general does not have teeth. Perhaps it is long overdue that the House give the auditor general some teeth. After all, the buck stops with the politicians. The money belongs to the people. People expect responsible government, not a government that tries to write off the HRDC boondoggle as no big deal.

[Bonnie Brown, Liberal, Parliamentary Secretary to Minister of Human Resources Development]

Madam Speaker, the Reform Party continues to accuse the government of having a billion dollar boondoggle.

I must say once again that there was no loss of a billion dollars in this particular situation. We had a report on poor management and poor administration. We are addressing it with a very serious six point program which has been approved by the auditor general.

The member opposite should realize that partnerships with the private sector, through which we leveraged $330 million into $3 billion worth of economic activity, also involve the same risks that private sector firms face every day. They face the ups and downs of the business cycle, and some of our projects did that too.

However, in the long run, 95% of our projects survived their first birthday, which is better than the 72% of projects that the banks managed.

On the attack that this has something to do with a slush fund, this is usually tied to the flexibility component of our program which has to do with pockets of high unemployment. If indeed it was a slush fund, how in heaven's name could it be that more than 50% of those particular projects went to opposition ridings?

Once again, those members are singing the same song but it has no basis when we look at the numbers.

[Antoine Dubé, Bloc, Lévis, QC]

Madam Speaker, on March 27, I asked a question of the Minister of Industry relating to shipbuilding and to my concerns about the lack of government intervention to change the current situation in that industry.

According to figures I had myself checked the previous week, the workforce in that industry had gone down from the 1993 total of 12,000 to 3,000, or one-quarter, 25%, of that number.

The minister's response was that the overcapacity in this industry throughout the world stands at 40%.

I find this a curious response, because the assistant deputy minister, John Banigan, told the industry committee on November 16, 1999 that, based on certain predictions, he feared an overcapacity by 2005 which could, according to his own forecast, go as high as 40%.

Reports confirm that there will be a growing demand on the shipbuilding industry because, among the world's ocean-going fleet of vessels with gross tonnage of 100 tonnes or greater, there are 85,494 ships with an average age of 19 years, and 45% that are over 20 years old.

I remind hon. members of the significance of the 20 year figure. Most industrialized countries require that vessels undergo major refitting after 20 years to be allowed to continue sailing. This is not the case in all countries. That is the problem. This is why the international fleet is extremely old and, I submit, potentially dangerous.

Everybody will remember last summer's incident in the St. Lawrence River. There were other incidents along the coast of Brittany and in several countries of Asia. When dangerous and toxic products are on board, such incidents are a great cause for concern. They constitute a tremendous threat.

The minister is not here tonight, but his representative will undoubtedly try to explain on what he relied to conclude there was overcapacity when the deputy minister of industry says that we will certainly not reach that point before 2005.

On what secret study did the minister rely to say what he said? Maybe he made a mistake? If that is the case, I forgive him in advance.

I thank the hon. members opposite who support Bill C-213, whose objective is to help shipbuilding.

[John Cannis, Liberal, Parliamentary Secretary to Minister of Industry]

Madam Speaker, let me begin by thanking my hon. colleague from the Bloc for giving me the opportunity to speak on the subject of consultation on the shipbuilding industry.

The government has a policy on shipbuilding, one that is evident in Canada's position in both domestic, let me point out, and international shipbuilding markets. However, we have remained committed always to maintaining a dialogue with industry proponents and we are receptive to evidence of changing circumstances within the shipbuilding sector.

In order for dialogue to be meaningful, we must all start from the same basis. It has become clear through my discussions with various shipbuilding representatives that all stakeholders are not dealing with the same set of facts. So far the debate on shipbuilding in the media and here in the House has been mostly an emotional discourse rather than a rational debate on the facts and issues facing the industry in Canada and, of course, abroad.

Consequently, let me point out that just last week the Minister of Industry held a meeting with the chairman of the Canadian committee on shipbuilding and policy. He will continue to dialogue with this committee and will also hold meetings with the major yardowners for example, labour representatives and other major stakeholders.

We want to work with all the stakeholders to set forth a set of clearly stated facts on Canada's shipbuilding industry. As this information evolves, all stakeholders including government and industry proponents, will be better equipped to deal with the future direction of this industry. These directions will take into account the outcome of our dialogue, but will also have to respect the realities of our domestic and international marketplace, use the economic levers currently at our disposal and be also fiscally responsible.

[The Acting Speaker (Ms. Thibeault)]

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 6.44 p.m.)