Mr. Speaker, I am pleased to speak today on Bill C-19, an act to amend the Competition Act and other related acts.
The Competition Act is a very important one. It is what we consider to be framework legislation. The purpose of framework legislation, such as the Competition Act or the Copyright Act, is to clearly outline how the government is will facilitate healthy relationships between businesses, consumers and government and thus allow the economy to allocate resources more efficiently. Any amendments to framework legislation merit a discussion of policy, and that is where I would like to begin.
In the purest economic sense, the purpose of the Competition Act is to strike down forces that restrain competition and inhibit the market from generating wealth. The act also serves as a regulator to correct areas where there is too much of a monopoly.
With respect to competition policy, the Conservative Party of Canada is guided by a belief that the best guarantors are the prosperity and well-being of the people of Canada through: first, the freedom of individual Canadians to pursue their enlightened and legitimate self-interest within a competitive economy; second, the freedom of individual Canadians to enjoy the fruits of their labour to the greatest possible extent and the right to own property; and, third, a belief that a responsible government must be fiscally prudent and should be limited to those responsibilities which cannot be discharged reasonably by the individual or by others.
The Conservative Party and its founding parties have consistently put forth the view that Canadian consumers and producers are best served not by a tribunal or by government intervention in the marketplace but by genuine business to business competition. The focus of competition policy therefore should be not to protect individuals or individual companies but to facilitate competition itself.
The standing committee on industry in 2002 spent many enjoyable hours discussing competition policy during the last Parliament. I am quite sure that the committee's future studies and report on the bill will be excellent as well.
On April 23, 2002, the committee tabled in the House a report entitled, “A Plan to Modernize Canada's Competition Regime”. The report was the culmination of a great deal of study by the committee, which included extensive hearings over a number of months. Also, during the 37th Parliament, the committee studied a private member's bill that would have amended the Competition Act to clarify the competition tribunal's powers to make or not an order in the case of a merger when gains and efficiency were expected or when the merger would create or strengthen a dominant market position.
We should recognize the hard work of various members of the House in terms of competition policy, even though we have not always agreed. For instance, I often disagree with the member for Pickering—Scarborough East on where he would go with competition policy, but I think his efforts need to be recognized. While his bill was passed by the House of Commons, it was not passed by the Senate.
I would appreciate knowing, when we study the bill, what if any plans the government has for addressing the issues raised in the bill of the member opposite and whether it will bring forward the bill that was passed in the last Parliament.
In spite of all the work that the House has completed in studying the Competition Act, it is a very complicated policy area. The government has recognized this fact, and I compliment it on its commitment to public consultations in the preparation of the bill.
With respect to the details of Bill C-19, the Conservative Party of Canada will be in favour of sending it to committee before second reading. It is an extremely technical piece of legislation that deserves the full attention of the standing committee and of legal experts in the field. However, at this time I want to clearly state that we do have a number of problems and questions related to the legislation, and I will outline them. It is my hope that we would be able to address these issues effectively in committee.
I would like to start by summarizing the legislation before us today.
Bill C-19 would provide restitution for consumers affected by false or misleading representations. The amendment would empower the Federal Court to order advertisers who contravene the false or misleading representation provisions of the act to provide restitution to consumers in an amount that would not exceed the amount paid for the products on which they were misrepresented.
The bill would create a new general administrative monetary penalty provision, a fine for what is called abusive dominance. The maximum penalty under such cases would be $10 million with $15 million for each subsequent order. The penalties would be paid to the consolidated revenue fund.
Furthermore, Bill C-19 would remove the airline specific provisions in the act, something that the previous member spoke on at length, with the introduction of a general fine to deal with cases of abusive dominance. Airline specific provisions are no longer necessary.
The bill would also increase the total amount of the fines applied to deceptive marketing practices to a maximum of $750,000 for individuals and $1 million for each subsequent order and $10 million for corporations and $15 million for each subsequent order.
Bill C-19 would also decriminalizes the pricing provisions. This type of behaviour would continue to be dealt with under the civil abuse of dominance provisions with the addition of fines.
I would like to offer a critique at this point of the legislation. The legislation does act upon some of the recommendations of the 2002 report by the Standing Committee on Industry, Science and Technology, which was supported by both the Canadian Alliance and the Progressive Conservative Parties at the time, although we did offer some helpful dissenting reports. The report recommended that the government repeal all special provisions in the act regarding the airline industry so that the act applied generally to all industries and not specifically to the airline industry. We support that provision.
Interestingly, the government has changed its position on this issue. The initial government response to the standing committee's recommendations stated, “The government believes that the Competition Act currently needs specific airline provisions.” Now the government has changed its position. I guess we should commend it for recognizing that the committee was right in its recommendation.
My understanding is that the airline provisions were also a part of the Canada Transportation Act. I would like to ensure that the amendments presented in Bill C-19 would eliminate the airline provisions as specific provisions from all government legislation.
In addition, the standing committee proposed allowing the Competition Tribunal to impose fines involving a number of sections in the act, including abuse of dominance. The government has acted in part on this recommendation.
The most contentious issue is the large fines for abuse of dominance position. This section requires further clarification because the bill does not clearly define all of the activities that might be construed as abuse. In addition, these fines could total more than any criminal fine in the act, raising the question of why these civil provisions would be more punitive than criminal provisions in the bill.
Finally, we need to ensure that these fines will not have a negative effect on investment in Canada generally. That goes back to what I was saying earlier. We have to ensure framework legislation, such as the Competition Act. Its purpose is to facilitate competition; it is not to protect individuals or individual companies.
In conclusion, we have seen repeated reports in the news of how the Competition Bureau is struggling to deliver its services more effectively. We are asking it to do more and more, but the resources we are giving it has stayed constant or in some cases has decreased.
The former commissioner of competition, Konrad von Finckenstein, stated publicly that the bureau needed more money if we were to give it more functions. On June 21, 2003 he stated that he needed “$11 million more in his budget to come up to the minimal acceptable level of funding”. He went on to say that the bureau's money shortage was hurting the country's international reputation.
We believe he was right. The Global Competition Review , a journal in the United Kingdom specializing in anti-trust policy, has recently accused the Canadian Competition Bureau of being less efficient than many industrialized nations, including the U.S., Germany, Australia and the European Union.
The OECD has also criticized the Competition Bureau. In 2001 the OECD issued a report that stated:
The desire to retain Canadian control in some sectors (rather than allow foreign investment) limits what competition policy can do to remedy problems, which leads to tolerating monopolies subject only to ad hoc measures to regulate them.
The OECD also stated that the bureau was underfunded as well.
To reiterate, we are best served by genuine business to business competition. The Conservative Party will continue to ensure that the Competition Act and the tribunal be guided by that principle rather than by the desire of some Liberal members to turn the act and the tribunal into an instrument of undue government interference in the marketplace.
Direct government interference in the economy by the Liberal Party has resulted in reduced competition and a weakened competitive advantage. In 1998 Canada was ranked 6th in competitiveness by the World Economic Forum. In 2004 it stands 15th.
The Conservative Party is pleased the government has begun to review essential economic legislation such as the Competition Act. However, there are many recommendations from the committee, on which I served, which have not been acted upon.
Therefore, the Conservative Party calls upon the government to continue to review acts, such as the Competition Act, to ensure greater efficiency in the marketplace, but to be guided in the first place by a view that we need genuine business to business competition, and the act should do that.