Mr. Speaker, I wish to speak today about some of the amendments to the Competition Act proposed in Bill C-19 currently before this Parliament.
In particular, I would like to discuss two aspects of the bill. The first is the amendment providing for an administrative monetary penalty for companies that have been found to be abusing their dominant market position. The second removes criminal provisions regarding predatory pricing, price discrimination, geographic price discrimination and promotional allowances.
Before addressing the specifics, I would like to review some of the larger objectives behind these changes. The goal of the Competition Act is to establish business conduct rules that are fair and transparent. Such a system does not just discourage unfair competition, it also supports and encourages those who want to compete honestly. The honest players can see what is required of them and recognize that the rules apply to everyone. In such an environment there is an undeniable and positive incentive to play fairly.
That, in turn, gives us balance. Today there is a growing consensus that a fair market benefits everyone. Businesses recognize that they are consumers too and we consumers know that businesses are essential to creating the wealth we spend. Consumers also know that competition gives us better services and products for our money.
Canada is fortunate to have an effective and strong Competition Act. It got that way because it has been improved cautiously and incrementally over the years. The two amendments I recommend today are good examples of this kind of approach. I am equally certain that we can make other improvements, and we will do so in the future, but we will only do that once they have been subjected to the same careful review and broad consultations, as were the amendments we have before us today.
The first and most important of the two amendments I will discuss provides for an administrative monetary penalty, or AMP, when companies have abused their dominant market position. The general thrust here is simple. The government is amending the act to give more force to civil provisions in this area.
Abuse of dominant position is a dangerous occurrence because a company behaving in this manner can seriously injure its much smaller competitors in relatively short order. In these cases it is not always enough to be able to say the abuse has taken place. The competition tribunal should also have the option of backing that up with a sanction that is proportionate to the seriousness of the abuse.
The AMP makes civil actions against such players more effective. As a consequence, it encourages them to refrain from acting unfairly in the first place.
At the same time, a civil action is much more flexible than a criminal prosecution. The burden of proof attached to a civil action is lower than that required for criminal actions. They are also less disruptive than criminal actions. Attaching a sanction to this option encourages companies to ensure they are complying with the act rather than depending on government action to force them into line.
AMPs are a proven approach as well. A number of other advanced industrial nations have used AMPs to very good effect. These proposed amendments would bring Canada's Competition Act into line with the approaches used by our major trading partners.
It is no secret that big businesses do not unreservedly welcome sanctions. Companies understand that, at minimum, sanctions necessarily have some impact on honest dealers as well as dishonest ones. However firms also raise a legitimate concern that overly intrusive rules can have a chilling effect on otherwise legitimate competitive behaviour. The government shares these concerns and has taken them into consideration.
As is the case with all proposed amendments to the Competition Act, the AMP is being instituted in a way that will minimize its impact on the market as a whole. The AMPs are targeting abuse of dominance cases where the negative impact of the behaviour on the economy is potentially the most significant. I would also remind the House that the competition bureau will continue to publicize guidelines on the act's provisions so that companies know what they have to do to comply.
I will now discuss a second issue covered by the proposed amendments, that being the decriminalization of provisions regarding various pricing practices. As I do so, I would like to point out that the two amendments are not unrelated. The government is proposing to eliminate certain criminal provisions in part because the AMP I have just been discussing can be used to deal with the same practices in a less onerous but more effective way. These amendments would repeal the criminal provisions regarding price discrimination, geographic price discrimination, predatory pricing and promotional allowances. This type of behaviour would continue to be dealt with under the civil abuse of dominance provisions with AMPs.
The simple truth is that there have been few cases in which these provisions have been used. The standard of proof for criminal prosecution is high and, of course, it should be. In addition, for the purposes of protecting small businesses from unscrupulous competitors, criminal proceedings have serious limitations. The criminal provisions are a difficult to use instrument and, at the same time, a blunt one.
The proposed AMP gives competitors an incentive to act in accordance with the act and gives the commissioner a more flexible means to pursue dominant competitors that are engaged in pricing behaviours that cause injury to competition.
For all those reasons, and by way of conclusion, I want to advise the House that Bill C-19 is a good bill and should proceed with the concurrence of all members. I would hope that there would be general support in the House for this very important initiative.