House of Commons Hansard #25 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was competition.
Dominic LeBlanc LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, I have the honour to present a number of order in council appointments made by the government.
Department of Social Development ActRoutine Proceedings
Avalon Newfoundland & Labrador
Liberal
R. John Efford Liberalfor the Minister of Social Development
moved for leave to introduce Bill C-22, an act to establish the Department of Social Development and to amend and repeal certain related acts.
(Motions deemed adopted, bill read the first time and printed)
Department of Human Resources and Skills Development ActRoutine Proceedings
Avalon Newfoundland & Labrador
Liberal
R. John Efford Liberalfor the Minister of Human Resources and Skills Development
moved for leave to introduce Bill C-23, an act to establish the Department of Human Resources and Skills Development and to amend and repeal certain related acts.
(Motions deemed adopted, bill read the first time and printed)
Art Hanger Conservative Calgary Northeast, AB
moved for leave to introduce Bill C-286, an act to amend the Criminal Code (child sexual predators).
Mr. Speaker, I am pleased to reintroduce this private member's bill entitled Carrie's guardian angel law. The intent of the bill is to get tough with pedophiles, many of whom serve days or months in jail for preying on children while the damage caused to the victims often lasts a lifetime. The bill refers to the victim as a person under the age of 16.
Carrie's guardian angel law carries a minimum sentence of life imprisonment in cases of sexual assault on a child that involves repeated assaults, multiple victims, repeat offences, more than one offender, an element of confinement or kidnapping or an offender who is in a position of trust with respect to the child.
Under the provisions of the bill an offender would be ineligible for a parole for 20 years.
It is time that those who harm our children are locked away for a long time.
(Motions deemed adopted, bill read the first time and printed)
Jay Hill Conservative Prince George—Peace River, BC
Mr. Speaker, I rise again as I have almost every day since Parliament convened this fall to present yet another petition, this one signed by citizens of Windsor, Ontario. The petitioners wish to draw to the attention of Parliament the fact that families living in military communities in on base housing have access to services that address their specific needs; however, many of those living conditions are substandard and yet they see their rent rising all the time. Therefore, they call upon Parliament to immediately suspend any future rent increases for accommodation provided by the Canadian Forces Housing Agency until such time as the Government of Canada makes substantive improvements to the living conditions of housing provided for military families.
I am pleased that in a conversation yesterday the Minister of National Defence indicated that he is in agreement with these petitioners and that he is lobbying the President of the Treasury Board to make the necessary changes.
Dominic LeBlanc LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
I ask, Mr. Speaker, that all questions be allowed to stand.
Questions on the Order PaperRoutine Proceedings
Some hon. members
Agreed.
(Bill C-19. On the Order: Government Orders:)
November 2, 2004--The Minister of Industry--Second reading and reference to the Standing Committee on Industry, Natural Resources, Science and Technology of Bill C-19, an act to amend the Competition Act and to make consequential amendments to other acts.
Jean Lapierre Liberalfor the Minister of Industry
moved:
That Bill C-19, an act to amend the Competition Act and to make consequential amendments to other acts, be referred forthwith to the Standing Committee on Industry, Natural Resources, Science and Technology.
Jerry Pickard LiberalParliamentary Secretary to the Minister of Industry
Mr. Speaker, it is with great pleasure that I open the debate on Bill C-19, an act to amend the Competition Act. I am looking forward to working with all members of the House in considering this vital piece of economic legislation.
As mentioned in the Speech from the Throne, the government wants to ensure that the up to date legislative framework for business is put in place, and some of the amendments in the Competition Act are deemed to move in that direction.
Bill C-19 would strengthen Canada's competition framework in a global economic partnership to benefit consumers, as well as businesses, both large and small. These amendments would also create a greater symmetry between our competition regime and those of our major trading partners we deal with on a daily basis. That is good for business, which is increasingly multinational, and it is also good for our economy.
Bill C-19 implements a number of key recommendations from the industry committee's comprehensive report, “A Plan to Modernize Canada's Competition Regime”. The legislation before us today will strengthen the act by: providing restitution for consumer loss resulting from false or misleading advertising; introducing a general administrative monetary penalty provision for abuse of dominance in any industry; removing the airline specific provisions from the act to return it to a law of general application; increasing the level of administrative monetary penalties for deceptive or misleading marketing practices; and decriminalizing the pricing provisions.
In recent years we have taken an incremental approach to changing this complex legislation. We have always been careful and measured and move forward with amendments to this bill with no exception. Bill C-19 balances the interests of businesses and consumers in a number of ways.
On the business side, for example, it moves us toward a law of general application by removing the airline specific provisions, as advocated by the industry committee's recommendations that have come forward. It also decriminalizes the pricing provisions in response to the committee's recommendations and long-standing requests from various business groups.
On the consumer side, for example, it ensures that Canadians will have access to remedies similar to those in other states we do business with. When they have lost money as a result of misleading representations, they have a chance to reclaim those losses.
Consumers need to have faith in the marketplace and it is to our advantage to make sure that faith is there. They expect to be reimbursed for losses resulting from false claims, and they should be. The proposal for restitution would add an important additional remedy for the courts in cases where consumers have lost money as a result of false or misleading representations.
The Competition Bureau regularly receives complaints from consumers who have lost money buying products that simply do not work. Based on advertisers' false or misleading representations, they lose their investment. Those who engage in such practices can gain an unfair advantage in the market as well. That is bad for our marketplace. It is bad for our consumers. A restitution remedy is an appropriate tool to address this situation.
We are proposing a general administrative monetary penalty regime, or AMPs, for abuse of dominance. This provision would be applicable to all industries and would ensure a level playing field among all participants, including the airline industry.
AMPs are used in a specific way to encourage compliance with the law in a number of jurisdictions. In fact, our act is one of the few in the world that does not allow a financial remedy in such cases. The introduction of AMPs for cases of abuse of dominance will make our competition regime more similar to its counterparts in other jurisdictions, including our major trading partners. The maximum penalty would be $10 million, and $15 million for each subsequent order under the new provisions.
In other words, we are proposing a balanced approach to improve the remedies available in this particular section of the act.
We are also proposing to remove the airline specific regime consisting of provisions found in the Competition Act and the airline regulations. The airline specific provisions were introduced in 2000 and 2002 following the merger of Canadian and Air Canada and provided the Competition Bureau with the tools regarding concerns over predatory conduct by a dominant airline.
The Canadian airline industry has changed significantly since that merger. We have seen a decline in Air Canada's dominant market share; the entry and growth of low cost carriers; the development of competing loyalty programs; the growth of the Internet as a means of distributing tickets; and the changing role of travel agents.
The current provisions are no longer required and should be replaced with the general regime which I just described. This change would have the benefit of returning the act to a law of general application, something recommended by the industry committee in 2002 and by numerous competition law experts.
Bill C-19 also proposes to increase the existing level of administrative monetary penalties, or AMPs, available under the deceptive marketing practices provisions. The current limitation for AMPs generally represents only a small fraction of the profits made by businesses through deceptive marketing practices.
The level of AMPs needs to be increased in order to encourage compliance with the Competition Act and stop deceptive marketing practices. It is appropriate to bring the limits of AMPs for cases of deceptive practices to a level that is consistent with that proposed for dominance. Accordingly, the maximum penalty proposed under these deceptive marketing provisions would be, for individuals, $750,000 and $1 million per subsequent order, and for corporations, $10 million and $15 million for subsequent orders.
Bill C-19 would also reform the pricing provisions dealing with price discrimination, geographic price discrimination, predatory pricing and promotional allowances. Bill C-19 would repeal these criminal provisions and bring them under the civil regime under the abuse of dominance provisions. This type of pricing behaviour would be best suited to a civil provision with a competition test if AMPs are available to deal with anti-competitive behaviour.
Canadians are being well served by our competition regime, which is among the most developed in the world. However, there is always room for improvement. Bill C-19 represents the latest step in an incremental legislative evolution that shows the government is committed to having a modern, effective Competition Act.
This legislative package is responsive to the recommendations of Parliament and industry, consumers and businesses. Taken together, these amendments would strengthen the Competition Act. They would effectively deter anti-competitive behaviour that is most harmful to the Canadian economy and Canadian consumers. They would promote legitimate pro-competitive business practices to ensure a competitive marketplace, one where consumers and businesses benefit from competitive practices, product choice and quality service.
Again let me say that I look forward to working with all members of the House on this. I hope everyone will look at this piece of legislation as vital to the economy of Canada and to our legislative agenda.
Paul Crête Bloc Rivière-Du-Loup—Montmagny, QC
Mr. Speaker, I am pleased to speak today to Bill C-19. The government has decided to proceed by committee report in order to consider the bill more thoroughly. I think this will be a good opportunity to verify whether parliamentary reform has actually produced results. I think that referring the bill directly to committee will permit it to study the bill more broadly and make it much more general than it was.
We just have to look at the report of the committee on industry from a few years ago. The committee had gone through the Competition Act and made a lot of recommendations in order to make it complete and reflect the new reality of competition on the global market and what we are dealing with.
Unfortunately in the bill tabled by the government, 16 recommendations in this parliamentary committee's report, prepared a few years ago, were not implemented. I hope when we are at committee stage that we will meet witnesses and be able to expand the proposed amendments to the bill. There are things that need to be added.
Of course, there are the recommendations on the table, which are in the bill, and we approve them. We will vote for referring this bill to the committee. However, it seems important that we be able to broaden the debate.
I will give just one example. In the committee report, recommendation No. 3 said that the government should empower the court with the right to impose administrative penalties on anyone found in breach of section 75, on the refusal to deal, section 76, on consignment selling, section 77, on exclusive dealing and market restriction, section 79, on abuse of dominant position and section 81, on delivered pricing.
Of these recommendations, the government only agreed with the one relating to abuse of dominant position. The approach in the committee report was really much more comprehensive and general, and we do not find it in the current bill.
During the study in committee, I hope that we will be able to add to the bill. This is not simply consideration at second reading, where we agree on the principle of the bill before referring it to the committee to try to improve it in detail. Instead, we want it to be referred to the committee to broaden the study of it. I think that many people would be interested in testifying in order to bring about much more thorough changes.
In this sense, I wanted to give an example that affects us all, namely, what we have experienced in recent years concerning the price of gas. I remember that the Standing Committee on Industry held hearings where representatives of the oil industry were called in to justify price increases. Finally, it came to the conclusion that it could not really prove that there was collusion. However, it agreed that the commissioner of competition should have enhanced powers. This is not in the bill.
The then commissioner of competition, Mr. von Finckenstein, said:
While the Bureau's mandate includes the very important role of being an investigator and advocate for competition, the current legislation does not provide the Bureau with the authority to conduct an industry study.
The commissioner himself recognized that the legislation did not provide adequate authority to get to the bottom of the matter. He also said that if the legislation was not amended, a neutral body should be created at least to make a thorough examination and permit investigation in the industrial sector, without collusion having to be proven first.
I would have liked to have this type of argument in the bill before us. In the end, this bill seems to go along what big business wants, because it had feared the set of recommendations would require it to treat the consumer with much greater respect. That is not to be found in the bill as it stands right now.
If, in committee, we can manage to give the bill more clout, and have it deal with more issues, I think we will have done a good job.
As to the oil companies, it seems that every time they have been the subject of complaints under the Competition Act, no charge has been laid. Maybe this is because there was no case for an charge, but it is also obvious that the competition commissioner does not have all the tools he needs to do his investigative job properly.
When we are presented with arguments such as the increased cost of gasoline, the instability in Iraq, the hard winters, taxes, a new one crops up every time to justify the price hike. So we have trouble analyzing the situation in depth.
With the hearings all held, and all the testimony heard, we thought the government might have been encouraged to correct the law to allow an in-depth investigation. This has not been possible so far. The commissioner himself acknowledges that the Competition Act lacks backbone. We are in the process of examining amendments to that act which the government has proposed.
A Liberal committee even addressed the matter in 1998 and admitted the lack of competition in the oil and gas industry. It stated:
However, the committee also believes that the wave of mergers in the past ten years has made the industry overly concentrated, and the normal interplay of supply and demand cannot explain the wide price fluctuations.
A number of recommendations made by the Standing Committee on Industry, Science and Technology were not heeded by the government. They were intended to provide us with an amended act that would bring about certain improvements. A number of other recommendations are still waiting in the wings for the action they deserve.
For example, there was a recommendation for “questions of law to be considered by all the members sitting in a proceeding.” That was one of the recommendations. There was also a group, numbers 12 through 15 which stated:
That the Government of Canada amend the Competition Act to create a two-track approach for agreements between competitors. The first track would retain the conspiracy provision...for agreements that are strictly devised to restrict competition.... The second track would deal with any other type of agreement between competitors in which restrictions on competition are ancillary to the agreement’s main or broader purpose.
Hon. members can see that this is a major hang-up, a place should be changed. It would have given the Competition Bureau more leeway to properly deal with everything relating to conspiracies that might not be so much a criminal matter, yet create complications for proper application of the principle of competition.
So, we have this type of recommendations. The government did not follow through on several other ones. The government may say that the bill before us today improves somewhat the current act, however it could have done a lot more. It is hard to understand how the government can say that it took the time to analyze the work of the Standing Committee on Industry, Science and Technology advocating an indepth rework of the bill. Today we only have some of the amendments we would have expected to put more teeth into the Competition Act and give the Competition Bureau the tools it needs to investigate and give consumers what they want.
While markets across the world are evolving, it would be very important to provide the Canadian Competition Act with relevant tools. For instance, last year in California the oil sector was taken to court for alleged price fixing.The current act does not give the Commissioner of Competition the means to be present in court and follow the case closely to see whether it might have any implication in Canada.
There is a whole series of examples showing that the government bill will indeed improve the act, but not to the extent it should. The Bloc Québécois will support sending the bill to committee. In committee, Bloc members will push not only for the bill to be improved in its clauses but also to broaden the scope of the reform. We need a bill that truly reflects the reality of the market place in this 21th century.
Bev Desjarlais NDP Churchill, MB
Mr. Speaker, I want to acknowledge my colleague from Windsor West who is a bit under the weather today and wanted the opportunity to speak to this piece of legislation that he has been working on for some time now. I want to acknowledge the work that he has done.
Discussions on the Competition Act have been going on for some time now. When I was on the industry committee, we spent a fair amount of time on the Competition Act and issues relating to competition, lobbying the industry, and a whole number of areas. It is interesting to note that the one particular matter within Bill C-19 that is being put back to the way it was is the issue relating to airlines.
I was the transportation critic at the time when the Minister of Transport requested the removal of the airline industry from the Competition Act. It was a terrible period of time. I was not happy with the route that he took. I was not happy with the fact that airlines were being removed from the Competition Act. I was not happy with the fact that the competition commissioner would be the person setting out the deal that would merge Canadian Airlines and Air Canada. As a result, there were ongoing disputes within the industry among workers and others. I was not happy with that process.
Bill C-19 is the product of several years of consultation. The industry committee released a report in 2002 on modernizing our competition regime. The ministry reviewed the report's recommendations and limited public dialogue was initiated through a public policy forum. The Competition Act is intended as a framework law that would apply to all businesses in Canada. It has civil and criminal law provisions. Its objective is to protect the process of competition and not individual competitors.
The Competition Bureau enforces and administers the act through the commissioner and is an independent law enforcement organization. The purpose of the bureau is to attempt to ensure that Canada has a competitive marketplace and that all Canadians enjoy the benefits of competitive pricing, product choice and quality service.
The Parliamentary Secretary to the Minister of Industry has indicated that Bill C-19 is essentially a bill that would not accomplish all that it could. Many other changes were recommended in the 2002 parliamentary committee report that are not dealt with in the bill. The fact that the bill falls short of its potential is no reason to oppose it, but we are disappointed that over two years have passed and this is the best that the government has come up with.
As is apparent now, my colleagues in the NDP will be supporting the bill because it does provide several minor changes to the Competition Act that we believe are necessary. It does provide to some extent the Competition Bureau and the commissioner with more teeth to protect Canadians' interests.
The bill, as proposed, does a few small but important new things. It would provide the competition commissioner with the ability to seek restitution for consumer loss in case of false or misleading representation, for example, false advertising offers, those types of issues.
The bill introduces general administration monetary penalties for abuse of dominance in the industry. It would remove the airline specific provisions that were part of the act as a result of the Canadian Airlines and Air Canada merger thus returning the act to a law of general application. The legislation would increase the level of administrative monetary policies for deceptive marketing practices and decriminalize provisions in the act relating to pricing.
I want to mention the workings of the Competition Bureau and the struggle it is under in trying to do its job. The Competition Bureau is one of the smaller sectors in Industry Canada but has a very large mandate. At recent count, it employs just under 400 employees with an operating budget of $43.7 million in this fiscal year. Employees of the bureau and the commissioner are to be commended for their excellent work in dealing with record numbers of complaints this year. Consumer groups are confident and appreciative of the work that the new commissioner has been doing and we share their opinion. However, we have concerns as to whether the bureau will receive sufficient resources to do the job it is required to do with the new mandate assigned to it by the proposed legislation.
Officials at the bureau were upfront in their briefings. They have received budgetary relief to the end of 2006 to perform their duties, but additional responsibilities such as the administration of the new penalties as a result of decriminalization will cost money. If the government takes the issue of protecting consumers through a competition watchdog like the bureau seriously, it must make serious commitments to the bureau and provide adequate, sustained, long term funding.
I would like to mention a little bit in regard to consumer protection versus competition protection. Much of the language around the proposed bill is how these changes would benefit consumers. Most consumer groups agree that these are good changes. During the briefing on the bill officials from the competition bureau identified the problem of funding for consumer groups and the fact that it was difficult to do a good job protecting consumers' interests.
The Office of Consumer Affairs at Industry Canada is minute compared to even the relatively small competition bureau. The Office of Consumer Affairs employs only 23 people at this time with a budget of $2.6 million annually, where $1.7 million is for contributions to consumer interest organizations.
The federal government used to take protecting consumers' interests much more seriously. Prior to 1993 there was a department of consumer affairs. The department was folded up in government restructuring in the nineties. The department was reduced to a branch of Industry Canada in 1993 and, before the reduction in status, the federal government allocated $68 million and 968 person years to the bureau.
The government has plenty of opportunities to protect Canadian consumers from things like credit card gouging, giving full protection to the food we eat, endless telemarketing calls, protecting pensions and investors, and price hikes on cable and telephone bills. The competition bureau does not always have the mandate to follow up on this and even if it does, consumers should have access to one stop shopping, dealing with the issue of protecting their interests.
We look forward to the opportunity to discuss the bill further in committee. Where changes can be made to strengthen the bill we certainly intend to do so.
Lynn Myers Liberal Kitchener—Conestoga, ON
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.
Marc Boulianne Bloc Mégantic—L'Érable, QC
Mr. Speaker, I am pleased to rise this morning to speak to Bill C-19, an Act to amend the Competition Act and to make consequential amendments to other Acts. But first, I would like to congratulate my hon. colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, who summarized earlier the position of the Bloc by highlighting the flaws and omissions of the bill as well as the improvements that could be made. It is important to understand what is going on.
Before moving on to the subject at hand, that is, the bill before the House, I would like to talk about the principle of competition itself. Competition is not a bad thing. Competition is about a free market based on the free movement of goods and services. Our whole economic system relies on the classic economic theory of supply and demand. Therefore, for our system to work well, businesses must be free to produce the goods they want to produce. And they must also be free to sell their goods under various conditions, and consumers must be free to accept the goods. Of course, that leads to competition among businesses fighting for customers.
The problem in our market economy is not competition but rather the cases of abuse of competition as clearly defined in the bill. It deals with cases of abuse of dominant position and deceptive marketing cases. To smother or get rid of a competitor, businesses have no qualms about relying on deceptive marketing practices. We see it every day. Advertising is all about unfair competition.
There is also price discrimination. It is common practice that competition can still be distorted through pricing. There is also dishonest promotion. We are submerged by it every day. Moreover, geographic discrimination is such that competition hampers the free circulation of goods and services. The consequences of a unfair competition can surely be dramatic for a business and for clients, but also for a region. Every time I have an opportunity to talk about it, I obviously talk about my region, the asbestos region. Our resource, chrysotile asbestos, has been suffering for several years from unfair competition on the part of businesses which have replacement products. All means are used. There are international conspiracies to annihilate an economy and a region through unfair costs, which have become commonplace. In a system where competition is distorted, not only companies, but regions can be destroyed.
A careful look at the wording of Bill C-19, reveals, as my colleague was mentioning, that improvements have been made and that some very positive things are to be found in the bill. Besides, sanctions are in place to compensate people who have been misled. I think usual and a good thing in the proposed legislation. There are even sanctions including an injunction to block the distribution of some goods.
Let us look more closely at the summary of the bill. It amends the Competition Act, first providing authority for the commissioner of competition to seek restitution—as I said earlier—for consumer loss resulting from false or misleading representations.
That is obviously the minimum a bill would need to be effective. If there are no sanctions, why bother having a bill? Here, too, it would increase the level of administrative monetary penalties. I think that will discourage quite a few. These administrative monetary penalties will be imposed for deceptive marketing practices. Thus, there is considerable work to be done on this.
A general provision would have to be put in place to introduce administrative sanctions for abuse of dominant position in any industry. This is something we see every day, very regularly. There are cases of dominance in the industry, which interfere with the market economy and competition and which, as I mentioned, have disastrous consequences not only for clients, consumers and businesses, but also for regions.
There is also a clause that removes the airline-specific provisions from the act to return it to a law of general application.The bill also makes other amendments.
As I said, this is the minimum that should be found in a bill that aims to fight unfair competition, dishonest practices and false advertising. Unfortunately, Bill C-19 does not go far enough, as my colleague has said. It is incomplete.
A standing committee was responsible for making recommendations to improve it, to make it a complete bill. As my colleague mentioned, many additions were not included in the bill, and they are still not there today. Thus, the standing committee did not receive a positive response to its 29 recommendations.
There are at least three recommendations I want to stress. The Bloc Québécois has identified them, and in our opinion, they not only should be part of this bill, they could improve it and would be remarkably effective.
For example, we can look at recommendation No. 9, which would permit a party to a contested proceeding to refer to the Competition Tribunal a question of law, jurisdiction, practice or procedure in relation to the application or interpretation of these parts.
This is important. A party, be it a merchant or someone else, who feels that it has been wronged and that justice has not been done will eventually be able to go to the tribunal. We know that today, in the current context, unless the bill is amended, only the commissioner can bring such matters before the tribunal, or else both parties can do so, provided they are in agreement.
I think this should be included in the bill, so that no party is wronged and that it is possible and easy for either party to be heard.
There are other recommendations. My colleague referred to them earlier. I would like to focus on the one dealing with creating a two-track approach to offences, here again promoting greater efficiency. The legislation, on the one hand, deals with conspiracy and, on the other hand, with any other type of agreement with respect, for instance, to restrictions to competition. This absolutely must be well defined. Also, subject matters, purposes and proceedings all have to be clearly identified, if any positive results are to be achieved.
On the subject of conspiracy, I gave an example earlier. Conspiracies are not always obvious. They can be very difficult to prove because, very often, things are done indirectly that could not be done directly. Disinformation is used—with abandon. There are not necessarily any identifiable practices in place, making conspiracy very difficult to prove.
The consequences are obvious, however. Businesses suffer, as do their clients, consumers and the regions also, as I indicated earlier. In my opinion, and it is also the opinion of the Bloc Québécois, proper identification of conspiracies is necessary.
Another recommendation is to permit questions of law to be considered by all the members sitting in a proceeding, whereas only a judge can do so at present.
If I may make a final comment, nothing in this bill indicates that these offences will remain illegal after this legislation is passed.
Under the circumstances, as my hon. colleague said, the Bloc Québécois figures that important additions ought to be made to the bill. Therefore, the Bloc Québécois is in favour of referring the bill to committee but is reserving judgment on the substance of the bill.
Andy Savoy Liberal Tobique—Mactaquac, NB
Mr. Speaker, I would like to examine today the changes proposed to the Competition Act that are now before Parliament.
These changes reinforce the Competition Act. For almost 20 years, this act has been an excellent tool supporting an equitable, efficient and competitive market in Canada. The changes proposed in Bill C-19 take into account today's circumstances as well as comments made by consumers, businesses and parliamentarians, including the House Standing Committee on Industry. Quite simply, these changes will make this law better.
A certain amount of aspects of this legislation deserve our attention. Today, however, I will address only one of them: the proposal to repeal the provisions of the act which concern specifically the airlines. I am convinced that these changes are appropriate at this point in time and that they will improve this important instrument of economic legislation.
The changes apply to four sections of the act, which that apply specifically to the Canadian of domestic airline industry.
First, the changes eliminate the definitions of anticompetitive acts pertaining to air transport.
Secondly, the changes eliminate a series of provisions that allowed travel agents to collectively negotiate commissions with the dominant airline without the risk of being prosecuted under the provisions regarding conspiracies and price fixing.
Third, the amendments eliminate a provision allowing the Commissioner of Competition to issue cease and desist orders during an investigation on the possible abuse of dominant position in the airline industry.
Fourth, the amendments eliminate the administrative monetary penalties, or AMPs, that may be imposed on an air carrier that uses its dominant position abusively, since the proposed changes include AMPs that apply generally to all industries.
In order to understand why the government is introducing these amendments now, we must remember the conditions that initially led to the enactment of the provisions aimed specifically at the air sector.
These provisions were adopted in the wake of a series of major and unusual changes in the air transport's domestic market. First, the merging of Air Canada and Canadian International resulted in the creation of a very dominant company that generated 90% of all domestic revenues, while handling over 80% of domestic air traffic.
Later, the market was deeply affected by the September 11 terrorist attacks. All over the world, the air transport industry suffered major financial losses, because many people were afraid to fly.
That slowdown accelerated the upheaval that had already begun in the Canadian air transport industry. Canada 3000 declared bankruptcy, leaving WestJet as Air Canada's sole domestic competitor. Many experts were of the opinion that the business environment at the time was too great an obstacle to allow the establishment of new domestic discount airlines. It was felt that this was the case not only in Canada, but also in other major markets.
Now, the situation is a very different one. First, competition in domestic air transport has significantly improved. The power of dominant carriers to use their market position was offset by the efficiency and low overhead costs of discount airlines. Moreover, Air Canada's share of the market is no longer as dominant as it was at one time. In fact, in western Canada, Air Canada accounts for less than half of all domestic flights. The eastern triangle of Toronto, Ottawa and Montreal is now one of the most competitive markets in Canada.
In light of this change of circumstances, the government believes that it is no longer necessary that the Competition Act specifically target the air transport industry. The act can now revert back to being a piece of legislation that applies generally to all types of industries, as recommended by the Standing Committee on Industry. However, as was pointed out by some parliamentarians, eliminating these provisions is not enough. We must also provide incentives that will have a real deterrent effect on anti-competitive practices.
AMPs in respect of cases of abuse of dominant position were and remain a good idea. So much so, that it seems logical to apply them not only to the airline industry but to all industries. This is precisely what the new legislation would do.
The role of AMPs is to prevent a company from convincing the public or its shareholders that it is competing fairly when, in fact, it is not. This logic applies to dominant companies in all industries. This is why, under this bill, AMPs would apply across the board.
Along the same line, it is logical to repeal anti-competitive conduct definitions relating specifically to airline industry. Airline industry conduct will be treated like the conduct of any other industry.
Specific provisions applying to relations between a dominant carrier and travel agencies have become obsolete by force of circumstances. Travel agencies now earn their income from service fees they charge to their customers, rather than from commissions on the sale of tickets. Also, customers are increasingly using the Internet to buy their tickets directly from airliners.
Finally, provisions relating to the power of the Commissioner of Competitions to issue prohibition orders under Section 104.1 have been successfully challenged by Air Canada and have been rendered inoperative by a court decision. Therefore we have to repeal those provisions.
In summary, what do we have on the table? Under this bill, the legislation would become an act of general application providing for new incentives. It repeals two aspects of the act which are no longer necessary. It also repeals another provision which has been rendered ineffective by a court challenge.
If we keep in mind that the abrogation of the provisions relating specifically to the airline industry is accompanied by a general application of AMPs, the choice is very clear. We can update the provisions relating to the airline industry while strengthening the whole act it in a more general way. Besides, my colleagues will have the opportunity to talk about other legislative improvements introduced in the House which will allow for a balanced approach where stakeholders and parliamentarians interests are concerned.
Finally, I ask the House to pass this bill quickly.
James Rajotte Conservative Edmonton—Leduc, AB
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.
Brent St. Denis Liberal Algoma—Manitoulin—Kapuskasing, ON
Mr. Speaker, I am pleased to participate in this debate on Bill C-19. As a member of the industry committee, I look forward to studying this bill in greater detail, hopefully as soon as Thursday if all colleagues are agreeable.
I listened carefully to the previous speaker, a member for whom I have great respect. I am sure the points he has raised will get good attention at the committee. We appreciate his bringing those points forward.
In addressing Bill C-19, a bill which proposes some important amendments to the act, I would like to focus on two particular provisions, both of which deal with deceptive advertising.
The first amendment would increase the administrative monetary penalties, or AMPs, that can be imposed when the courts find that a company's false advertising has had a significant negative impact on the economy. The second amendment would allow for restitution when false or misleading claims harm consumers in a manner that can be objectively quantified.
These provisions are improvements to the existing aspects of the act. AMPs, administrative monetary penalties, for false and misleading advertising already exist. The government is simply proposing to increase the amounts. Similarly, the addition of restitution is to increase the options available to courts to help consumers who have suffered losses because of deceptive claims.
It is important to remember as we consider these proposed amendments that catching and punishing flagrant violators of the Competition Act is only a very small part of what effective competition legislation allows the government to do. By way of analogy, we might think of traffic legislation. The most important function of a highway traffic act is to make it clear and obvious to everyone what acceptable driving practices are to give us all an incentive to follow those rules. Catching violators is pointless if the law does not provide that incentive.
Canada's Competition Act is effective because the major thrust of the act is to encourage voluntary compliance. This is also true of the amendments before us today. The effectiveness of the act is backed up by the Competition Bureau's work to ensure that Canadian business people know what is required of them.
The proposed amendments are refinements, not innovations. The administrative monetary penalties are already an option available under the act for some kinds of deceptive advertising as determined by the courts. Increasing the amount of penalties does of course increase the deterrent effect. That said, there is always a deterrent effect. The very fact that a company has to respond to proceedings against it has a deterrent effect.
What I would like to stress to the House is that a larger AMP emphasizes the seriousness of the deceptive behaviour. It tells people in the industry, the company's shareholders and the general public that a business has done something seriously wrong.
The second matter I would like to discuss is closely related in that it also applies to cases of deceptive advertising. It is a very unfortunate thing that few remedies under the Competition Act exist to address losses incurred by consumers affected by false and misleading advertising. This is a situation that needs to be changed.
The proposed amendment would give the courts another remedy for cases in which advertising has misled consumers into buying a product that simply does not work or meet the standards the advertiser proposes. This restitution, however, also has the ability to send a powerful message. It is only in a limited number of cases that deceptive advertising can be demonstrated to have had a measurable impact and that a case can be made for restitution. But when that happens, the message sent will be unmistakable.
I would remind the House that it is not enough to say caveat emptor, or buyer beware, when responding to some kinds of deceptive advertising. It is one thing when a consumer does not realistically assess a product. It is quite another when a company makes false claims about a product in its advertising.
Advertising is not just a way for a company to pitch and promote a product. Advertising is often a primary source of information about a product. It is not objective information. Vendors are trying to make the best case for their products, but the majority of advertisers manage to do this without misrepresentation. If this were not the case, nobody would pay attention to advertising.
Honest advertisers will naturally defend their freedom to promote their products aggressively, and they should, but this freedom needs to be balanced. Honest advertisers will recognize that some kinds of deceptive advertising call the legitimacy of all advertising into question when not actively discouraged.
Some critics will suggest that there is an equally valid fear on the other side of the scale: that we have to be careful not to create a chill effect that would frighten companies away from perfectly acceptable advertising practices. Is that fear legitimate? It most certainly is. That is precisely why the government has proceeded so carefully here.
Following the industry committee's review of the Competition Act, the government studied the issues extensively and consulted widely. The changes proposed here are not far-reaching or drastic. They are careful but effective steps in the direction the government has established it should be moving.
I will sum up as follows. Yes, it is true that the majority of advertisers intends no mischief, but it is also true that the Competition Bureau hears too many complaints from consumers who have lost money because the products they have purchased simply do not work as advertised. The message the government wants to send about some kinds of deceptive advertising is more than “do not do this”. The message the government truly wants to send is “do not even think about doing this”.
The amendments we have before us today are a sensible refinement of the legislation that exists to send just that message. I encourage my fellow members to support Bill C-19. As a member of the industry committee, I certainly look forward to dealing with the bill, with my colleagues, as soon as the House is ready.
Brian Masse NDP Windsor West, ON
Mr. Speaker, it is a pleasure to rise today to speak to Bill C-19, amendments to the Competition Act. I want to preface my comments by saying that the issue we are dealing with has to do with housekeeping. There are some important changes to the act. There have been additions that I believe will benefit consumers. We will have questions at committee and the opportunity to discuss them, but overall the bill fails to address issues that were discussed in 2002 with quite a degree of public consultation.
It troubles me that we have seen a series of bills like this coming through the House already, but we want to see a greater progression of legislation and we will have to see if it carries on past that. I hope that at committee we will address some of the deeper issues.
In this bill, there is an addition of additional monetary penalties for abuses of dominance and the effects on consumers in the market. I think that is a good step. Having some type of penalty is very important, because some of the practices that are affecting consumers right now are very difficult for people to deal with, especially when they lead to the frustration that nothing will happen at the end of the day. We do not want to be in a situation where we are over-penalizing or reducing the ability of the market to be creative. There needs to be an opportunity for people to advertise and push their products in the market. At the same time, there has to be accountability.
One of the things I am concerned about, and about which I have heard of a lot of frustration from my constituents, is related to the preying on seniors. I think we should be in the forefront of that particular issue because we have an aging population and there are more opportunities for those with less scrupulous practices to prey upon seniors.
The bill would act as a framework that applies to all businesses in Canada. It now has civil and criminal law provisions, which are being discussed. The objective is to protect competition, not individual competitors. Once again, that is the way in which the bill should be moved forward. Everyone agrees on that, which is very important.
The big issue is the resources from the bureau. We know the government scaled back the bureau significantly. In the past, the government took the Competition Bureau much more seriously. Back in 1993 there was a department of consumer affairs. The department was folded into government restructuring in the 1990s and has been part of Industry Canada since then, with its budget and staffing reduced. It is very important that the staffing and the tools are available so that we can look at competition issues.
One particular example is the fact that unions, organizations and a number of interest groups brought up the issue of evergreening to the Competition Bureau. It did not have the appropriate tools to deal with the situation and had to pass it back to the government. It blocked a situation where we wanted to have an anti-competitive issue looked at because it was affecting the pricing of drugs. The Supreme Court of Canada has called the current rules draconian, while at the same time the Competition Bureau could not deal with it because it did not have the appropriate tools.
Many of the changes to the bill will be minimal, as I have noted. It is important to once again focus on the fact that we do want to have the resources available when people have complaints.
Another big issue that has been raised is the labelling of foods, an issue on which we believe the Competition Bureau should have more flexibility. Once again, consumers want to have choice. That is what it is about. They want to have the opportunity to see what is in the foods and the services they are purchasing with their money. That requires rules and regulations. If there is misguided advertising related to those products, it can affect human health and people do not get a chance to actually make the choices they want to with their money.
I will wind up quickly, because I do not believe the bill deserves much more debate at this time as it will be referred to committee and is generally just housekeeping at the moment.
We will be asking significant questions about the AMPs, the fines and such, and whether or not they will be tax deductible. A good example is that those who are fined for an environmental infraction in this country after going through a court process get back 50% of the fine as a tax write-off. It is a business related expense. I want to make sure that if there are to be fines against competitive practices, perpetrators will not be able to write off half of those fines as a business related expense. That is absolute nonsense. It is not just about the consumer being ripped off; it is about those industries and business that are competing fairly but are seeing their profits and their employees suffer because of that.
There are other issues related to that in terms of how the deductions, taxing and all those things will be related to the bill. I am looking forward to asking those questions. Hopefully we will see a further review of this act so that we will have significant changes, as opposed to this housekeeping that is happening.
Francis Scarpaleggia Liberal Lac-Saint-Louis, QC
Mr. Speaker, I am pleased to have this opportunity to speak in support of Bill C-19 which amends the Competition Act.
We know that competition is central to our economy. Our economy can only flourish if the spirit of competition is followed and if all businesses in the economic system follow the rules of the game.
Indeed, Canadians, as well as citizens in other jurisdictions, hold very dearly to the principle of accountability, not only as it applies to government institutions but as it applies to the private sector as well. Canadians want to see accountability and transparency in their dealings with private businesses as well as with governments.
Competition law is not something that Canadians think about every day. I would be prepared to grant that. However, the idea of competition is an ingrained concept among all citizens. All citizens, whether they understand the details of competition law, know when they are being fairly treated in the marketplace. Competition policy and law is about ensuring fair treatment. Citizens may not know all the arcane details about competition law, but they know when they are being fairly treated and when they are not being fairly treated.
Bill C-19 is framework legislation that is part of a continuing process to ensure that the Competition Act and the bureau remain effective in a rapidly changing global economy. There have been many international comparisons of competition bureaus and competition regimes across international jurisdictions. I lament the fact that our own competition regime sometimes has come up a bit lacking. I believe this bill will help to rectify that problem.
Globalization, deregulation and the growth of the Internet have profoundly affected our competition regime. We must ensure that our legislation keeps pace with these changes. Much of what is in Bill C-19 began with the recommendations of the Standing Committee on Industry, Science and Technology and its 2002 report entitled “The Plan to Modernize Canada's Competition Regime”.
The committee suggested a wholesale reform of Canada's competition policy, including strengthening the act's civil provisions, repealing the criminal pricing provisions, and returning the act to a law of general application by repealing the airline specific provisions which had been inserted not long ago as a result of a particular situation that existed in the airline industry two or three years ago. The committee recommended that we repeal the airline specific provisions and add them to a general regime with sufficient deterrence to achieve compliance. Bill C-19 does that and more.
Let me begin with the proposal for restitution. Bill C-19 would provide a restitution remedy for consumers affected by false or misleading advertisements. As a consumer I welcome this change and think it is about time Canadians had access to remedies similar to those of their American counterparts.
All Canadians are consumers; all of us as members of Parliament are consumers. We often have encounters with retailers or businesses where we feel we have not been properly treated or we feel that the service we have been given has not really justified the price we are paying for a particular product. For example, we could go to a retail store and, as happened to me recently, come back and find that the wrong product had been put in the packaging. Then we have to make the return trip to the outlet where we are given the right product. However, there is no restitution. There is no sense that we have been compensated for the loss of our time.
I believe that Bill C-19, in a parallel fashion, by instituting remedies when consumers have been the victims of false advertising, really gives consumers the sense of satisfaction that businesses are responding to them and that the economy is functioning properly.
There can be all the competition law that we want, but if consumers do not feel that at the end of the day there is some kind of restitution, then they really lose faith in the system. I think this is one of the important aspects of this bill and we must recognize it.
We are talking about the administrative monetary penalties, AMPs. In the case, for example, of misleading advertising but also in cases of abuse of dominance, it is important to realize that the competition tribunal would decide the matter, not the bureau which acts as prosecutor in such cases. Oftentimes there is confusion between the tribunal and the bureau. Having a general AMP regime in place as opposed to provisions specific to one industry will ensure a level playing field among all participants in all sectors. It would also provide a significant incentive to comply with the act.
Under this new provision, the maximum amount for an AMP would be $10 million for the first order and $15 million for each subsequent order. Bill C-19 takes a balanced approach. It includes a list of factors for the tribunal to take into account when making an order for the payment of AMPs.
Another proposed amendment is the repeal of the airline specific provisions. These provisions are no longer necessary. The airline market is much more competitive than it was two or three years ago when these airline specific provisions were included.
I wish to say again that the Canadian aviation industry has changed a lot since Air Canada's merger with Canadian Airlines. For example, Air Canada's domestic market shares have drastically declined. We have also seen the creation and growth of discount carriers, like WestJet, the increasing role of the Internet as a ticket distribution vehicle and a change in the role of travel agencies. These airline specific provisions achieved their purpose.
The 2002 Standing Committee on Industry, Science and Technology's report recommended that these provisions be repealed and replaced by a general system that would provide a sufficient deterrent to ensure compliance. This is exactly what the bill is aiming to do with the introduction ofthe AMP, or administrative monetary penalty, system.
We already have an AMP system under the deceptive marketing practices of the Competition Act. However, the existing limits for AMPs are not considered appropriate anymore, because they are not proportional to the earnings that businesses can derive from deceptive marketing practices. Bill C-19 proposes an increase of the maximum penalties to $750,000 for individuals. For businesses, it would be between $10 million and $15 million for each subsequent order.
This modification would promote compliance with the act and serve as a deterrent for deceptive marketing practices.
The last amendment in Bill C-19 relates to the criminal pricing provisions of the Competition Act. These pricing provisions deal with price discrimination, geographic price discrimination, predatory pricing and promotional allowances.
They are all criminal practices at the moment and must be addressed in the context of very high criminal burden of proof which of course is a problem because in many cases it is very difficult to prove that these practices have occurred. What is proposed here is to have these matters addressed under the civil regime of abuse of dominance. In other words, pricing complaints would be reviewed under the abuse of dominant position where AMPs, administrative monetary penalties, would be available. The industry committee, in its 2002 report, had recommended the repeal of the criminal pricing provisions and Bill C-19 reflects the committee's concerns.
Bill C-19 is a well thought initiative which is aimed at encouraging compliance with the Competition Act and deterring anti-competitive behaviour. It contains a balanced package of legislative amendments that address both the interests of consumers, and small and large businesses. For this reason, I would advise all members to join me in supporting this important legislation.
Competition ActGovernment Orders
The Deputy Speaker
The question is on the motion. Is it the pleasure of the House to adopt the motion?
Competition ActGovernment Orders
The Deputy Speaker
Accordingly the bill stands referred to the Standing Committee on Industry, Natural Resources, Science and Technology.
(Motion agreed to and bill referred to a committee)