Mr. Speaker, I am rising to speak to Bill C-14. The short title is the fairness at the pumps act. One would presume that fairness at the pumps refers to consumer protection and that we are talking about fairness to consumers generally.
Although there are some good measures in the bill, I would say that, generally speaking, consumers are at risk in any number of areas. The NDP has consistently called for a number of initiatives to protect consumers more broadly. These initiatives include having a minister responsible for consumer affairs; strengthening the Competition Bureau, tackling credit cards independently, not just through voluntary measures that credit card companies put in place; putting health and safety measures in place that protect consumers from imported goods; and finally, improving labelling so that consumers know when they are buying genetically modified products.
With respect to fairness at the pumps, I think this is a small measure to adopt in attempting to protect consumers.
I want to place the reason for this legislation in context.
Back in May 2008, an article called “Hosed at the Pumps” appeared in the Ottawa Citizen. The article said that the federal government was aware that there were any number of violations at the pumps. It stated, “A Citizen investigation shows that between Jan. 1, 1999, and Aug. 28, 2007, nearly 5% of gas pumps tested in Canada—about one pump in 20—failed government inspections by dispensing less fuel than they should”.
This relates to consumer fairness in that Canadians were going to the gas pumps and paying more for the product, because they did not receive the amount that they should have received.
The article goes on to state:
And while some faulty pumps give out more fuel than they charge for, more often than not it is consumers--not the retailers--who get hosed, government inspection records show.
The problem of faulty pumps appears to be an industry-wide phenomenon. About 30% of all gas vendors tested have had at least one pump flunk an inspection by shortchanging consumers, according to the inspection reports.
There is a lot more detail here, but I want to go on a little further in the article. It said that sometimes consumers are shortchanged, sometimes they get a benefit; there are fluctuations, and there is a limit set for acceptable fluctuations.
The article further states:
The small fluctuations might be less of a concern if the measurement errors evened out. In theory, consumers who come up short on slow-running pumps should be balanced by those who benefit from extra gas from fast pumps.
But the inspection reports reveal a puzzling trend: Canadian consumers are squeezed by faulty pumps far more often than vendors. When a gas pump fails a measurement test, 74% of the time it is the motorist who is disadvantaged by the error, and not the retailer, according to the inspection data.
Odder still, the results of pump inspections in the U. S. seem to run counter to the Canadian numbers. Newspaper reports on state government inspection of gas pumps suggest that consumers and retailers in the U.S. tend to be affected by pump errors in roughly equal proportion, with motorists getting a slight advantage in some states.
Not so here in Canada. Here, consumers end up on [the] short end of the nozzle three times as often as retailers. “There is no realistic possibility of these errors being so slanted against consumers just by chance,'” said Richard Shillington, a statistician with the economic consulting firm Infometrica, who reviewed the numbers on behalf of the Citizen.
“It's off the scale. It's one in billions,” he said of the odds of this happening. “But that does not mean,” he adds, “that the errors are necessarily attributable to unscrupulous vendors. There could be procedural or mechanical reasons that would make more pumps run slow rather than fast.”
In the article's conclusion it states:
By using the most conservative figures, pumps that fell outside the tolerance zone would have shortchanged consumers by at least $17 million annually if projected across the entire industry. At the same time, however, fast pumps would give out $8 million in free gas. On the small percentage of pumps outside the tolerance zone, consumers would come out about $9 million behind.
That was in 2008.
We are now at the end of 2010, and we are still looking at legislation that addresses fairness at the pumps.
I want to touch on the response to that report. The article refers to government inspections carried out between 1999 and 2000. For a number of years, government inspections continued to demonstrate that Canadian consumers were being short-changed at the pumps.
It is 10 years later, and we are talking about these old numbers, and we are finally dealing with legislation in the House. That is unacceptable.
I want to acknowledge the good work that the member for Windsor West has done on this. He has been on this file for a number of years. Whether it is gas prices or the unevenness of measurements at the pump, he has been looking into what is required for consumer protection.
Bill C-14 is an act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act. The short title is “fairness at the pumps act”. According to the legislative summary, the aim of the bill is to amend certain provisions of the Electricity and Gas Inspection Act and the Weights and Measures Act to provide greater protection for consumers from inaccurate measurements at gas pumps and other measuring devices.
The bill seeks to achieve this objective by introducing administrative monitoring policies for contraventions under the acts, increasing maximum fines for offences, introducing a new fine for repeated offences, introducing mandatory inspection frequencies for measuring devices, and proposing the appointment of non-government inspectors to be trained and certified by Measurements Canada to conduct mandatory inspections of measuring devices.
I want to talk a little about the administrative monitoring policies. Many see this as progress. The administrative monitoring policies allow for a more flexible and proportionate response to instances of non-compliance. There are varying degrees of these classifications, from minor to serious or very serious, with specified maximum penalties for each level. It allows for a rapid response to these violations, as opposed to having to go through the process of laying criminal charges.
Bill C-14, proposes to increase the accountability of retailers for the accuracy of their measuring devices by requiring them to have their devices inspected at regular intervals. Mandatory inspection frequencies, which are common in the majority of industrial nations, for example, France, Germany, and most U.S. states, are proposed for measuring devices used in eight trade sectors: retail petroleum, downstream or wholesale petroleum, dairy, retail food, fishing, logging, grain and field crops, and mining. Other sectors will be added to this list in the future, depending on the results of stakeholder consultations.
There is much more in the bill; this is a brief summary of some aspects of it.
I want to touch on the use of authorized private sector service providers. We are going to see a shift as a result of having private-sector inspectors carry out these inspections. The government has said that this is partly because it is going to increase the number of inspections required.
The NDP feels strongly that inspections need to be done in house with government workers. In this way, we have an arm's-length, non-interested party performing these inspections.
Under this fairness at the pumps act, the Minister of Industry will have the ability to appoint non-government inspectors of authorized service providers to perform inspections. This will allow Measurement Canada to use its resources strictly to enforce its mandate.
The mandatory inspections could be conducted by authorized service providers. The Measurement Canada inspectors will continue to assess marketplace performance through independent inspections, respond to complaints of suspected inaccurate measurements, and perform follow-up inspections of authorized service providers to ensure that they are doing their jobs correctly.
The Measurement Canada inspectors will be solely responsible for enforcement actions. Fees for the independent inspection services would be determined by market forces, ensuring that there is competition in the marketplace and that retailers will be charged fairly for these services.
It is estimated that the number of annual gas pump inspections would increase from 8,000 to approximately 65,000.
Although there would be more inspections, they will be carried out within the private sector and one would question the impact on the retail sector itself at having to pick up the cost. According to this, these fees will be determined by market forces. That sounds like something that could cause some problems for some in the retail sector.
The NDP has raised a couple of problems with the bill. I know the member for Windsor West attempted to make some amendments at the committee stage of the bill and was not successful. The problems the member for Windsor West has identified are the privatization of the inspection service by mandating frequent inspections that must be carried out by the newly created authorized service provider private companies. Mandating private inspections will now increase from 8,000 per year to 65,000. I did talk about what that impact might be on the retailers.
There is no ombudsman office to evaluate problems or investigate complaints. This is a very important aspect that we have been on record about, and I will talk about when we first raised that. There is no refund or compensation for consumers who are ripped off and no refunds or restitutions on the taxes collected in the phantom gasoline purchases.
On these last two points, since 1999, we know consumers have been overpaying in a significant number of cases. However, how do we go back to consumers over 10 years and say that they overpaid their gas bills for the last 10 years? There is not even any recognition of that and there is no acknowledgement as well on the taxes that were collected on these so-called phantom gasoline purchases. We have had people paying more at the gas pumps and the government has been collecting taxes on phantom gas. Therefore, we have other problems with the bill.
In April, the member for Windsor West called on the government to take immediate action. He said that gas pump problems were exposed more than two years ago by a media investigation and the government waited far too long to respond. He said the government was allowing the thieves to keep what they stole over the past few years. The member for Windsor West is very passionate about this file.
He went on to say:
What is outrageous is that the government potentially collected taxes from consumers who were paying for phantom gasoline....The question that must be asked is whether the government earned tax revenues from this short-changing of Canadian motorists and, if so, how much?
To make matters worse, the “Fairness at the Pumps Act” will further remove the federal government from the inspection process and will essentially allow the oil industry to police itself.
We have seen this in other cases. The do-not-call list comes to mind, where the industry was policing itself. We have seen how ineffective that has been in terms of monitoring that list. We have little faith that turning this over to the private sector is going to ensure that not only are retailers protected, but that consumers are protected as well. I absolutely support the member for Windsor West calling for these inspections to be carried out with government employees.
In 2008, which is how long New Democrats have been raising this, during a question period exchange, the member for Toronto—Danforth raised the issue around this report. In his question he said:
—the Ottawa Citizen has reported that one in twenty pumps is not correctly calibrated and that consumers are paying the price. In addition to shortchanging people at the pumps, the big oil companies are not even giving people the gas they paid for. At $1.30 a litre, every cent counts. When will this government create an ombudsman position to protect consumers from the big oil companies?
The minister of industry at the time came back and said a bunch of other things that did not do much around answering the question, but he did say they would not be creating the position of ombudsman.
Although the act does put in place some measures, it simply does not guarantee the kind of protection for which New Democrats have called. One would wonder why we have not seen this ombudsperson who would give Canadians a bit more faith that their interests were being well looked after.
Perhaps we will not get one because people are afraid of what the ombudsperson will speak up about. We have seen this with Veterans Affairs. The ombudsperson has done a very good job, is well respected by veterans, but his term will not be renewed. If we do not get an ombudsperson around consumer protection, is it because people are afraid we would get a very good ombudsperson who would speak up and protect consumers?
It makes no sense that those kinds of things are not included. They would give Canadians more confidence.
Because we were unable to get the amendments we were looking for at the committee stage, New Democrats simply cannot support the bill without some of those other measures and protections in place. Therefore, we will be voting against it.