Mr. Speaker, I am pleased to rise to speak to Bill C-248, an act to amend the Competition Act.
I want to thank my colleague, the hon. member for Pickering--Ajax--Uxbridge, for his constant efforts on behalf of all Canadians to ensure that the objectives laid out in the purpose section of the Competition Act are fully achieved. In particular, he dealt with the role of the act in preserving and enhancing competition in order to ensure that small and medium size businesses get a fair opportunity to take part in the Canadian economy and to ensure that consumers get competitive prices and a choice in products.
The bill before us today addresses directly those objectives and the way gains in efficiency are dealt with in the review of merger transactions.
We have found that there is considerable support in the House for the principles of this bill, the purpose of which is to clarify the clause in the Competition Act concerning the argument of gains in efficiency. The bill stipulates that consumers should benefit from a merger which results in gains in efficiency but that these gains should not be used to justify a merger which will result in the creation or strengthening of a dominant market position.
This bill was triggered by the acquisition of ICG Propane by Superior Propane. The Competition Bureau challenged the merger because it would have created a monopoly in several local markets, particularly in rural and northern communities. The competition tribunal recognized that this would markedly reduce competition, and at the same time that the anti-competitive impact of the merger was offset by the gains in efficiency cited by Superior Propane, such as savings in delivery costs and the operation of client information centres.
It has been pointed out by several members just how contradictory it seems for a act of parliament aimed at encouraging competition for the benefit of consumers to be used to enable Superior Propane to establish a monopoly or semi-monopoly in several markets on the grounds of gains in efficiency.
We ought perhaps to examine more closely the underlying intention of Bill C-248. The bill would not allow gains in efficiency to be used to justify a merger or proposed merger which, and I quote:
—will result or is likely to result in the creation or strengthening of a dominant market position.
This is an attempt to disallow scenarios where a merger would result in a monopoly.
We must be cautious when making reference to businesses with a dominant market position. Dominance pertains to the situation of a competitor within a market, and not its behaviour. It is too tempting to make a connection between dominant and large, and between large and bad. Abuse is the exception, not the rule.
The Competition Bureau examines proposed mergers and attempts to predict future effects based on specific factors. It examines market share, concentration, existing competition, and accessibility of the markets in question to new competitors.
Dominance is not, in itself, a problem under the act. Let us not forget that anti-competitive behaviour is addressed separately under civil provisions. The Bureau does not oppose mergers merely on the conjecture that the merged entity might engage in anti-competitive behaviour. However, anti-competitive behaviour will most definitely be contested under civil provisions.
Our economy is not always able to sustain a great number of competitors. Such is our reality. This compels us to ask whether it is more important to have more competitors or more competition. There is a difference between the two.
Regardless of their size, competitors are always welcome to our markets, on the condition that they act fairly and respect the rules. A merger must not be prohibited on the grounds that it will create a bigger competitor. Size and success is a characteristic of a competitor; it does not mean that it is guilty of anything in terms of competitive behaviour.
The purpose of Canada's competition policy is to protect competition, rather than protecting individual competitors, in order to ensure for Canadians the many benefits that come from fair and healthy competition. Among these benefits are greater choice, lower prices, better service and increased innovation.
By now, those who are listening have probably concluded that this is a very complex subject. Efficiencies play an important role in assessing mergers. Our colleagues on the Standing Committee on Industry, Science and Technology spent a great deal of time and effort in understanding how efficiencies are treated and assessed.
The issue now is one of timing. The Competition Tribunal finished its hearings in October 2001, and is now in the process of reviewing its decision based on the instructions given by the Federal Court of Appeal. The tribunal's upcoming ruling will outline clarifications on how to deal with gains in efficiency. However, it will be important to continue to examine the issue. Regardless of the tribunal's findings, I believe that we have heard convincing arguments for a full and careful analysis of this very complex question. The results may prove that the Competition Act requires clarification.
I would like to thank the hon. member for Pickering--Ajax--Uxbridge for his tireless support in helping improve our Competition Act. He has once again highlighted the important and difficult issues involved in competition policy.
I would invite my fellow members to vote to have Bill C-248 referred it to the Standing Committee on Industry, Science and Technology for a more thorough examination.