Mr. Speaker, I rise today to speak to the hon. member for Sarnia—Lambton's private member's bill, Bill C-276, which seeks to amend the Competition Act to ensure that Canadian consumers are not unwillingly participants of negative option billing.
Negative option marketing is the practice of offering products or services while placing the onus on the customer to expressly decline or opt out of whatever is offered. If the consumer does not do that or does not know about it, then the consumer is on the hook to pay for the product or service even though he or she has not consented to the purchase.
The members of the House and many Canadians know the work that the member for Sarnia—Lambton has done with respect to negative option marketing. I wish to acknowledge his good work to protect senior citizens, those on fixed incomes and others, and all consumers who may not be aware of the consequences of negative option marketing until it affects them. We thank him for his efforts to date.
Bill C-272 is designed to prohibit the practice by federally regulated businesses such as banks, cable and telephone companies of implied consent billing. It would require the consumers' explicit consent before they could be billed for a product or service, thus putting an end to the practice of negative option billing.
Consumers across Canada demonstrated their intense frustration when cable providers attempted to automatically charge for new programs unless the service was expressly rejected. It is clear that in a monopoly market such as telephone and cable services consumers cannot easily switch to a service provider who does not engage in this sneaky marketing tactic. That is why the people of Quebec should not be denied the benefits of this legislative proposal.
The amendment we are discussing today is from the Bloc which is insisting that Quebec be exempt. I believe that Quebecers deserve to be protected by the laws of Canada and an exemption for federally regulated industries in Quebec is unworkable and unfair to the Quebec consumer. Personally I like the principle that businesses should obtain consumer consent before charging for new services.
However, the inclusion of the banks in Bill C-272 makes me wonder if the consent requirement is practical for all industries. For example, the banks tell us that only about 30% of their customers currently receive bank statements. The financial review group of the Department of Finance told the industry committee that the complaints they receive tend to be general complaints about the cost of bank service charges rather than changes to service charge packages. This reflects my experience with my constituents. I received hardly any complaints regarding negative option billing with respect to the banks. More important, there is competition in the banking industry and choices are available to the consumer.
The provincially regulated credit unions and others will not have the same obligation so there would not be a level playing field. Perhaps this issue would be better examined during a review of the Bank Act planned for this summer.
Competition laws and regulation can profoundly restrict economic freedom and market efficiency. A general move toward strengthening these laws should be approached with caution. The federal government must strive to ensure that our competition laws do not become overly intrusive and generate a muddled business environment. Competition law must balance the rights of the consumer and the aspirations of companies striving to expand their market share. We must act vigilantly to create competition through deregulation in the interest of every Canadian consumer.
Negative option billing is a practice common to federally regulated industries that enjoy market protection inasmuch as they can restrict or limit a customer's ability to seek out alternative providers of a product or service. Therefore, the deregulation of federally regulated industries would be the first step to eliminate negative option billing and other practices that do not properly serve consumers.
I would much rather have an initiative that worked to limit government regulation and increase competition. The Canadian Alliance supports limited government but recognizes the important role of government in creating an economic environment with fair and transparent rules which protect both consumers and businesses.
We differ from the Liberals in that we believe that markets serve consumers well as long as competition is permitted. This bill in a sense is a band-aid solution made necessary by the Liberals who maintain protectionist policies and regional monopolies in federally regulated industries such as cable and telecommunications, despite the fact that these policies hurt consumers. The drive for profits in a competitive and deregulated industry will give more power to the consumer to seek the most favourable terms for them. It is the invisible hand of capitalism or the market at work.
To conclude, it is clear that the Liberal mismanagement of federally regulated industries has created an economic environment in which consumers suffer the ill effects of limited competition.
I give our qualified support until such time as these industries can be further deregulated. After this deregulation, competition will ferret out those businesses that conduct their affairs in a manner inconsistent with consumer interest.