House of Commons Hansard #45 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was industry.

Topics

Fairness at the Pumps ActGovernment Orders

4:40 p.m.

Liberal

Brian Murphy Liberal Moncton—Riverview—Dieppe, NB

Mr. Speaker, the member answered his own question and I agree with him 100%.

Lyle Hogan has operated a small place on St. George Street in Moncton for 40 years. He was with the big chains but is now an independent. He mentioned in our talk that this would be harder on him than it would be on the major service stations.

We have to figure out whether we as parliamentarians represent the little guy or whether we just represent the big companies, not only in gasoline distribution but in many sectors of life.

I think we could all agree that there is a growing concentration of ownership and a lessening of concern for individual workers and customers. If we cannot do something about that by at least agreeing, on a non-partisan basis, that information should be marshalled and publicized by the government, what are we doing here if we cannot at least do that?

Fairness at the Pumps ActGovernment Orders

4:40 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, I have been looking forward to asking my question of a government member but I have not been able to find one to speak to this bill over the last couple of days. However, I know the member is a rather good lawyer and I am sure he will be able to answer my question.

I referred a question a couple of days ago to legislative counsel about whether Bill C-14 would inadvertently increase the fines for odometer rollbacks, which members know has been a big issue in this country for many years. People are not discouraged from rolling back odometers because the fines have been too low over the years. Clause 27 of this bill deals with the altering of odometers. The government has brought in increased fines, which is just great, but it also covers the rollback of odometers. I am just wondering why the government is not taking credit for that.

Why is there no mention whatsoever of all this good news for consumers in any of the government's press releases? Does the government even know it has done it?

Fairness at the Pumps ActGovernment Orders

4:40 p.m.

Liberal

Brian Murphy Liberal Moncton—Riverview—Dieppe, NB

Mr. Speaker, as a good lawyer I would not respond to something I have no idea about.

On the issue of rolling back odometers and consumer safety, this is something we have addressed in this House. It is very important. It goes along the theme of measuring and being honest to consumers, which is what this bill is all about.

Frankly, if this bill had been proposed as a minor and positive change, that would be fine, but I fear that sometimes in this game that we play we leave people with the impression that we have fixed the issue of gouging at the pumps. For most people, the issue of gouging at the pumps is the high price they pay. It is not the 3% of the time that they pay $1 extra. It is the higher taxes at the pump that the Conservative government said that it would address. The Conservatives ran on the platform that they would address excise tax. They had an opportunity to do that but they did not.

The other issue that they need to address concerns the ownership concentration of the few setting the price for the many. There has been no action on that from the government. It does not seem to care about talking to big business about how to help little business.

The government will make announcements at Tim Hortons, which is a fine establishment, but it is not the little guy either. The little guy is the mom and pop coffee shop. Maybe it is symbolic. As much as I like Tim Hortons, it stands for the mid to large to larger to Goliath industry representatives and not the little guy like Lyle Hogan.

Fairness at the Pumps ActGovernment Orders

4:45 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, I am pleased to speak to Bill C-14, An Act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act.

It has been termed the fairness at the pumps act but it is actually a series of different measurements for a series of different products. This is an attempt at a smokescreen by the government to try to appear tough on the oil and gas industry, in particular to the retailers in this instance, who are not the culprits at the end of the day in terms of high pricing. That comes from other parts of the industry.

It is important to note that we will not be supporting this to go to second reading because this is really about de-regulation, less accountability and would cause greater problems for the Canadian public as opposed to fixing the current system under Measurement Canada, and penalties that could be done as well.

My colleague who spoke before me was speaking out about the upcoming Memorial Cup. I can say that the Spitfires will be returning as champions. We will continue that debate another time. However, I wanted too ensure that he did not have the last word, as he thought. He was wrong on that and he is wrong on his predictions as well.

This particular bill comes about in a very interesting way. It was actually a number of years ago that there was a challenge to the industry through Measurement Canada. That information was gathered a number of years ago and did not go public. A freedom of information request by the press broke the information and the story opened. It then led to some interesting discussions.

I would remind the House that on May 12, 2008, my leader, the member for Toronto—Danforth, asked the then minister of industry at that time, who has since been punted to another department, about this issue and whether or not the government would do anything on it.

In the response to my leader, the minister at the time said:

Second, I have instructed regulatory changes to be prepared. These will increase the onus on gas retailers. Fines will be increased from $1,000 per occurrence to $10,000 per occurrence.

Meanwhile, it took approximately two years for this to happen, and it was under another minister.

The government was very clear about trying to distance itself from this issue by not acting on it. It is rather perplexing because what it has offered are some modest changes in terms of accountability. I do want to run through some aspects of this bill, which is very important, and some of the background to it. I will also tackle some of the deficiencies of the bill and why it is just a smokescreen for an attempt to appear accountable to Canadians about this industry when the government really is not.

As I mentioned, a media story appeared in the Ottawa Citizen after an investigation was done by Measurement Canada which found that 5% of the 200,000 fuel pumps that it investigated between 1999 and 2007 delivered less fuel than reported on the pump display. The government inspection data showed that about one-third of Canada's gas stations, about 14,000, had at least one faulty pump.

We had a chronic situation with regard to that and it was uniform. There was a big story in my paper in Windsor West because we had some of the worst pumps in my riding. What that means is that people are not only getting ripped off by what they are paying at that time to the company, but they are also paying tax on phantom gasoline.

Despite having put this bill forward and despite having that information over all that time, the government did not use any of the available tools to either do one of two things: to fine the companies for doing that, which it could have been doing; or attempting to restore, from its own coffers, the theft from Canadians when it actually took taxes on phantom gasoline.

That is important because it just shows the lack of respect in terms of fixing the problem. We do not have a study that goes for nearly a decade which finds a significant problem across the board and then wait for a couple of years to introduce legislation. Ironically, this legislation would lead to the industry self-policing itself. Basically, it would be a wink-wink, nod-nod approach to accountability that would allow the industry to actually grow itself.

I will get into it later, but the inspectors who would be part of this process would likely come from those very companies. They would be creatures of the companies. As the testing, the equipment, the measurement and all those things are very specialized, it would be very difficult for independent companies to get into the market.

Measurement Canada would end up going to the administration of fines and penalties as a sole responsibility. It will probably be a lot less busy because it will probably get a lot less evidence about the actual situation. I have no confidence whatsoever that consumers would benefit from the particular changes outlined in this bill.

I mentioned that the bill is about other issues and I want to read them off. This is about measuring devices for a series of things: retail petroleum, downstream or wholesale petroleum, dairy, retail food, fishing, logging, grain and field crops, and mining. We are going to have deregulation in all of those elements as well. We do not accept that as a process to move forward.

I would point out that this industry has already gotten off enough with lack of regulation by not having the significant strength of a competition bureau. It does has some tools to it. In fact, a find was levied on a company just a little while ago today. It can happen but they are still not sufficient in terms of having an ombudsman office or the accountability monitoring that has been recommended since 2003.

I know the member for Pickering—Scarborough East, who has done terrific work on this file, will remember the days of coming here in the summer to have hearings and have the industry basically rule the roost and once again put this issue on the back burner. Unfortunately, we still have not seen accountability, although that member has done terrific work on this file.

I want to follow up now with the issues related to this that would change. It is important to notice in legislation that we can refer this to committee, and that is sometimes a reasonable approach to take. For ourselves, however, we will not do that because we do not want to see the use of private sector authorized service providers being activated by this legislation at the end of the day. The risk is far too great.

We have habitually seen abuse from this industry upon nations and upon customers, which is one of the reasons that we have to get off our dependency on oil and find other alternatives. We just have to look at the Gulf of Mexico right now where once again the industry was able to get its way. For those who say that it did not, that it is nonsense, because we all saw the political campaigns of the United States that said, “Drill, baby, drill”.

That has all evaporated right now but what has not evaporated is the hundreds of thousands of gallons of crude that is threatening the ecosystems that affect not only the United States but also Canada. We have asked questions about that and the Conservative members have heckled us saying that we are in Canada and not in the United States. However, those ecosystems are shared by a number of different species that have a connection to Canada. We also know that some of that oil can eventually reach into some of the international streams and eventually, if it is not plugged, reach into our own system here

This is a very serious issue and deregulation and letting industry self-police has led to that problem over there. When the “drill, baby, drill” campaigns were going on during the presidential election, the end result was that even the Obama administration loosened up standards to allow for more offshore drilling. The Americans have now put a moratorium on that, but there was enough of a penetration to open that up.

On the Canadian side, we have seen a whole debate over a number of years about the taxation policy of this issue. The taxation policy of this issue in this chamber has happened for many years and that is because there is basically a breakdown of our taxes into three taxes: the crude oil cost in terms of the price at the pump; the gross profit margins for retailers and refiners, which is around 16% to 18% for marketing; and taxation at 38%. Canada's taxation on this comes from royalty taxes, excise taxes and sales taxes.

I do not want this debate to be forgotten in terms of what members have previously said here when they talked about the cost and the price at the pump. I think the minister pointed to the cameras and warned the retailers that they were coming after them for the amount of money that they might have been scamming from not having the proper pumps fixed right, either knowingly or unknowingly.

There have often been government and opposition members talking about the cost of this to Canadians, that it is really important for our lifestyle, important for our environment and important too for how we use our natural resources.

I want to read a quote from the House of Commons on May 12, 2004:

Mr. Speaker, the Prime Minister will know that across the country Canadians are struggling with record gas prices. Canadian businesses are being hurt. Canadian consumers are burdened with the difficulties this is causing, but the government itself is rolling in record gas tax revenue.

Will the Prime Minister finally do the right thing and agree to lower gas taxes for Canadians?

The member who said that was the current Prime Minister. It was the current Prime Minister who was advocating for the reduction of taxes on gasoline, something that the government really has not done.

When they tried to do that by removing the GST, there was no accountability in that for the system. What we have seen is the coffers of the nation suffer with the reduction of gasoline taxes at the pump from the GST without the savings being measured and paid back to consumers.

That is a real problem because the companies are getting record profits, record tax cuts and also extra revenue now from the taxation policies that were never followed up with proper accountability. That is because we do not have an ombudsman office. We do not have a system in place that ensures the policies are going to be fulfilled by the actual objectives and that was unacceptable.

I will read another quote:

...when all is said and done, the government seems content with high gas prices. The reason is the government does not want to reduce gas taxes, so it actually wants high gas prices....

Will the government admit that the real reason it does not want to do anything is that $1.40 is its actual target price for gasoline?

That was the current Prime Minister who was once again advocating for a policy that he has never put in place, and that is the policy of reducing gas prices for Canadians.

We never saw any of that with regard to this announcement. We did not hear the Minister of Industry say the government was going to ensure that any of these savings are going to be passed on. In fact, the creation of this system and this regime that is being proposed could actually increase the cost of gasoline for the retailers and subsequently for Canadians. There is going to be an increase in inspections, which I argue is good in a sense, but at the same time those costs are going to be borne by the retailer, and the retailer will pass those on. The margin of profit for the retailers is very small, especially for an independent operation. They do not have the same luxuries as some of the larger ones.

When we go to our gas station, it is almost like a drug store these days. They sell chocolate bars, pop, chips, coffee, and they partner with different organizations to run small businesses out of their stations. They have a whole series of different products and services, because gasoline has such a small margin of profit that they end up having to rely on other measures.

When this issue is going to be passed on to the inspectors, when they have to pay the fees for it, it will be interesting. They will be able to set their own prices for this. They will be able to keep a system in place that will be very difficult to challenge. As I mentioned earlier, the industry will have a key advantage. Who has the training, who has the equipment, who has the knowledge, who has the skill set to be able to do the type of testing that is necessary and make a business out of it?

They will have behind them a wealth of backing in terms of loans as well as operating costs that will give them a strategic advantage over any independent business or organization that may want to bring about accountability by being independent and doing that measuring outside the realm of the industry itself.

I suspect it will be a subsidiary, or it could be a spin-off, or it could end up being relied upon to get training, equipment and a series of things that will create a dependency model. We will not see the type of innovation that we will need on this issue.

We will see a continuation of deregulation. We will see the industry police itself and it is an industry, once again, that has shown no support whatsoever to being more competitive. That is critical. When we look at supply and demand we know that right now we have a record high supply of a number of different gasoline and fuel products, yet pricing still remains above a certain level. That is unacceptable.

We also do not necessarily have to have collusion in this industry, because there is a lack of competition with the vertical integration that has taken place. I would look to the issue, for example, of the Burlington refinery station that was shut down by Petro-Canada. Instead of investing in that facility and ensuring more competition for refining, it mothballed it and shut it down and then bought Esso gasoline to put in Ontario Petro-Canada sites. So there is no competition with regard to the product and the actual use of it on the open market. It is important because it does affect daily lives for a number of people.

We have everything from low income people who are very significantly affected by gasoline prices to truckers, in particular, who are dependent upon this. We have been talking about this issue since 2002-03 when it went to committee. Many truckers have moved into more independent operations and are getting squeezed right now. There is also the rural element where they have to traverse over a greater distance and have no choice but to use private transportation to ensure getting to a destination to be able to work or whatever it may be. They also have stronger winter conditions, using more fuel for a series of things.

When we look at this act being supposedly more accountability for consumers at the gas pump, in Ontario they will wake up on July 1. I do not know why the Prime Minister and Mr. McGuinty cannot leave Canada Day alone when bringing in a new tax. This is Mr. McGuinty's second taxation date on Canada Day. First it was for health care and now it is for this. Maybe we need an act of Parliament to stop taxation from starting on Canada Day. But when the HST comes into effect in Ontario, there is going to be a windfall for the McGuinty provincial government.

I had parliamentary research do some work for me. For those out there, parliamentary research is available for all members of the House. It is a very important part of our democracy. It allows economists, lawyers and other types of researchers to do independent work for members who may want to share it later on, but it is independent from an MP's office, other members and the government, and it is critical.

I asked for a breakdown on the HST in a responsible way. Researchers looked at 13 major cities across Ontario and the average price of gasoline over a number of years, I believe five years. Under the regime right now, they expect the provincial government to bring in an additional $1.2 billion in gasoline tax, and another $500 million is going to come in, so $1.7 billion in total, just for gasoline and diesel for the province of Ontario next year. That is if the price remains just under $1 a litre.

This windfall the provincial government is stepping into is available only because the Conservative government has agreed with the harmonized sales tax, and we can quote the finance minister talking about policies on this and wanting to bring it to other provinces. Ironically, we are borrowing $4 billion to bring this into Ontario. So we are borrowing money, we are going to pay interest on that money as we are in a deficit right now and we are then going to ask Ontarians to pay an additional $1.7 billion more in taxation at the pump this summer.

In conclusion, we need to have real accountability. We do not need deregulation in this industry. We need to make sure it is going to be held accountable. Every time anything is brought up, the government claims foul, that there are no issues, but I can say there is an issue and it is that Canadians have been getting hosed at the pumps not only by the retailers having poor equipment but also by the government's not living up to what it said when it was in opposition and introducing policies that increase taxation on people.

Fairness at the Pumps ActGovernment Orders

5:05 p.m.

Conservative

Daryl Kramp Conservative Prince Edward—Hastings, ON

Mr. Speaker, I listened quite carefully to the hon. member's comments today and he was literally all over the map. One would assume he was talking about a complete national energy program rather than the bill that is before the House, to which he could and should be addressing his comments. Admittedly, this bill will not cure every problem associated with consumer pricing, but it is a bill that deals with one element of a problem and that is why I ask him to be specific.

After 30 years in the retail sector, I have a bit of knowledge of what I am saying. Whether one is talking about slippage, theft or fraud, the fact remains that it can and does and has gone on. It is an issue that has to be dealt with if we believe we have a duty to protect and save the public dollars. That is what this bill does.

As to the onerous costs, it takes about two minutes to do a pump test by weights and measures. It is simple. Someone puts 22.4 litres into a can, measures it and dumps it. Is it there or is it not? The pump is calibrated and adjusted. Either a seal goes on that it is accurate or it does not. It is not a cost that is going to be borne by the masses. It is a very simple cost.

As a retailer, I did not mind doing it because I wanted to ensure my customers were getting value for money. What is wrong with saving the customer money?

Fairness at the Pumps ActGovernment Orders

5:05 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, I would agree with my colleague that he has a bit of knowledge on this. My comments were inclusive and certainly in order about the overall industry. It is the prerogative of members to point out that, when a bill is introduced that is so scoped and does not have the proper strategy behind it, it leads to other consequences and they all match together. I do not apologize for that. It is critical to connect the dots on this.

In specific answer to his question, yes, the process might be really short but, once again, where is the competition for measurement of this process going to come from? People in that industry are going to demand a profit for service and delivery and they are going to have to do it over different geographies, and that cost will be borne by the consumer.

Fairness at the Pumps ActGovernment Orders

5:05 p.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

Mr. Speaker, I was glad to hear the hon. member for Windsor West speak on this matter. We have worked on this issue over a number of years.

I certainly know the hon. member will recognize that what happened 30 years ago in the gas industry was very different from today. The comment made by the previous questioner demonstrates that even temperature compensation did not exist in those days and it takes a lot more than two minutes, using a proper prover and clinical requirement, to ensure that there is in fact an appropriate and accurate calibration.

The hon. member's riding is very close to the U.S. border. In the days of the NEB there was a made at home Canadian price. Now we are subject to international prices and it has become alarming not just with what happened last Friday, with a 1,000 point decline in the stock market, but the hon. member will probably know better what has happened with Goldman Sachs, its commodities and the fact that there has been a significant involvement of swap dealers, hedge traders, funds.

I am wondering if the hon. member would like to comment on the fact that it means that today, as we pay for another increase in the price of fuel, the price of fuel may in fact be overrated by some 30% to 40%. Because the Enron loophole has not been closed and we have subjected ourselves to international pricing, consumers in his riding and mine are now being badly affected, to the tune of not 1% of 1 in 25 pumps but, in fact, 30% to 40% of the actual cost of fuel regardless of where one is in the country.

Fairness at the Pumps ActGovernment Orders

5:05 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, my colleague is absolutely right. I left that part out of the debate and it is an important part.

At some of the hearings we heard that more paper barrels of oil change hands in some of the markets than are pulled out of the ground each day. With hedge funds, in particular, speculation affects the price and it is completely counter to a productive society that requires this fuel source to be part of its market-based system.

One of the things that needs to be examined again is the effect of the sale and trading of these products on our overall economy. It makes little sense for us to continue to fight over these tiny scraps like the 5% of pumps. It is a serious issue that people should get what they pay for and accountability should exist, but when the overall industry is at about a 30% price inflation right now, they are still going to get hammered far more significantly.

Fairness at the Pumps ActGovernment Orders

5:05 p.m.

NDP

John Rafferty NDP Thunder Bay—Rainy River, ON

Mr. Speaker, the price of gasoline in northern Ontario remains a huge issue. This past weekend it was $1.08 a litre. With HST coming shortly, it is going to increase even more.

There is one thing missing in this bill and I wonder if my colleague would like to comment on it. There is no refund or restitution on the taxes that have been collected on so-called phantom gasoline purchases. I wonder if he would like to comment on that.

Fairness at the Pumps ActGovernment Orders

5:10 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, it is an important point of fairness. From 1999 to 2007, citizens discovered this equation of gasoline not being provided to consumers. No attempt was made to measure that and either refund Canadians or, alternatively, create a petroleum monitoring agency or enhance the resources of the Competition Bureau.

The government could have done a series of things with the money it gained. It was an absolute theft. The government knows it has resources in its taxation policy to cover products not provided to the customer. There could have been a way to redirect some of those funds, either directly to the consumer or, if that was too costly, through competition issues to ensure there was more accountability.

Fairness at the Pumps ActGovernment Orders

5:10 p.m.

Liberal

Jean-Claude D'Amours Liberal Madawaska—Restigouche, NB

Mr. Speaker, I would like to ask my NDP colleague a question. He referred to the comments by the member for Prince Edward—Hastings, that is, that verifying the accuracy of the measurements takes two minutes.

I think the Conservative member forgot to say that those checking the pumps will not be doing so on foot. They are definitely not going to walk with their little bucket and measuring tool from one gas station to the next. They have to travel fair distances, which results in transportation and equipment costs. In rural areas such as mine—a riding with an area of 10,000 km2—some gas stations can be 100 km apart.

I would like my NDP colleague to respond to the comments by the member for Prince Edward—Hastings, who said that it only takes two minutes to check the accuracy of measurements. Given the distances that must be travelled, it takes more than two minutes. What does he think?

Fairness at the Pumps ActGovernment Orders

5:10 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, we have not been provided any evidence on the duration of the process for testing. I cannot imagine it being two minutes. I take the member at his word with regard to the process.

My colleague is correct. All kinds of equipment will be required as well as storage facilities and transportation to get to those locations. We will be dealing with hazardous materials so there will have to be some regularly requirements and training elements, which are critical. A whole series of infrastructure will be required.

I do not believe there will be competition in this business. I do not believe there will be three or four operators in the city of Windsor West who will do the testing. It will probably be done by one operator out of the general region who will have close connections and ties to the industry.

A number will be assigned to the retailer and the retailer will have to pay for it. What are they going to do? Are they going to then try to bring somebody from the Toronto area to come down and test, or some other area if the operator is in the North or in Quebec. There will be vast jurisdictions where one person will cover off a whole series of things, literally driving hundreds of kilometres to get to those sites. People charge a per diem do those types of things.

Moving it out of Measurement Canada is a mistake, in my opinion, because it will pass on to the consumer those extra costs. Also, it will be too close to the industry to bring it the accountability that is necessary, which the minister purports this will do.

Fairness at the Pumps ActGovernment Orders

5:10 p.m.

NDP

Jean Crowder NDP Nanaimo—Cowichan, BC

Mr. Speaker, I am pleased to speak to this bill. I acknowledge the good work the member for Windsor West has done on this. I know many members in the House have probably followed his conversation on this over a number of years. However, I want to highlight the fact that back in 2008 the member for Windsor West raised this issue a number of times, including in question period.

A report was done on this and then a lot of media coverage followed. I will touch on some of the media coverage of a moment.

An article from May 12, 2008 Ottawa Citizen, entitled “Hosed at the pumps”, says, “Across Canada, about one gas pump in 20 shortchanges consumers”.

It goes on to talk about the fact that they were looking at a May long weekend and during that period of time:

—fuel prices scraping up against their all-time highs, and some will pay for more gas than they actually put in their tanks. An 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.

And while some faulty pumps give out more fuel than they charge for, more often than not, it is the consumers -- not the retailers -- who get hosed, government inspection records show.

The government clearly identified that there were some serious problems at the pumps. The article goes on to say:

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.

Based on those rates, motorists who fill their tanks at different pumps each week were, on average, likely to drive off with less gas than they paid for at least twice a year. And those who gassed up at the same pump every time could have been hit far more often.

Most of the pump errors were small - between 30 and 60 cents' worth of gas on a fill-up at today's prices. But some pumps have shown far larger failures. Last year, a pump at a station near Chatham, Ont., was caught shortchanging consumers by 1.5 litres on a 50-litre tank, which is common to most average size cars. Drivers who visited one pump on Corner Brook, N.L., would have had to buy an extra two litres to top up their tanks. And at a certain outlet at Yarmouth, N.S., a fill-up would have cost about $2.25 more than it should have.

This is a very lengthy report, but it goes on to say:

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 inspection data.

In its conclusion, it says:

On more than 1,100 occasions since 1999, inspectors have shut down pumps altogether because they were giving out as much as nine per cent less gas than the consumer paid for. Although the measurement mechanisms inside pumps are sealed to prevent tampering, Measurement Canada has found cases of suspected fraud more than 100 times. The agency can refer cases to the police if warranted.

In 2008 a government report identified some serious problems. The member for Windsor West raised it in the House of Commons and in other venues. Of course we had no response. We are now in 2010.

The bill outlines some cases of increased fines, introduction of administrative monetary policies, mandatory inspection frequencies, use of private sector authorized service providers and so on. I know the member for Windsor West has raised some concerns about this process, but I will talk a little about why this is so important to Canadians.

The government side says that we have been through an economic recession and that we are in a recovery. However, this kind of initiative is very important for consumers in Canada. Part of the reason for that is many families in Nanaimo—Cowichan and in other parts of the country still suffer the impacts of the recession.

I point to a report from Citizens for Public Justice, titled “Bearing the Brunt: How the 2008-2009 Recession Created Poverty for Canadian Families”. These are the very families who will often fill up at these pumps. Some may say that maybe a $1 or $2 is not that big of a deal. However, when people are cash-strapped and wonder whether they can feed their families, that $1 or $2 makes a difference.

I point out that many of these families are still bearing the effects of the recession. In this report, it states:

THE 2008-2009 RECESSION created poverty and economic insecurity for Canadian families. While we have to wait until 2011 for most published measures of poverty to show the recession's impact, there are a number of key economic indicators that already show the trends of increased poverty and economic insecurity throughout the recession....

Evidence from the last two recessions demonstrate that recessions can have a long-term detrimental impact on the poverty rate and well-being of low income Canadians....

Between 2007 and 2009, there was a significant increase in the poverty rate and the child poverty rate. This increase mirrored the considerable rise in unemployment, caused by the recession. The number of EI recipients increased, but so did the number of unemployed Canadians not receiving EI benefits. In fact, despite the steep plummet in employment, the rate of EI coverage only increased to 51%. This meant that social assistance had to fill in the gaps created by EI, leading to mounting welfare caseloads.

Those in low wage jobs who were most vulnerable before the recession began were the most likely to lose their job, but those lucky enough to keep their job or find a new job were not untouched by the recession as the proportion of precarious jobs increased.

In ridings like mine in Nanaimo—Cowichan, many workers, for example, forestry workers, fishing workers, are in and out of work. I hear consistently from forestry workers in my area that the way the employment insurance scheme is set up, they get less weeks than the unemployment rate in our area demonstrates they should get. Therefore, we have long-term workers in a particular sector who are struggling to pay their bills. When we have those kinds of things happening at the gas pumps, that has a direct impact on their ability to raise their family in a reasonable way.

This report goes on to talk about unemployment. It says:

Job losses during the recession disproportionately affected those most economically vulnerable, as 1 in 4 workers making $10 an hour or less lost their job....It took almost 8 years after the last recession for unemployment to decline to its pre-recession rate. Without a concerted government effort, it could take years for unemployment and poverty to decline to their 2008 rate.

It goes on to highlight a number of other details around what happens post-recession.

The kinds of initiatives that have been proposed could go a long way toward closing that gap. However, as the member for Windsor West points out, part of these inspections and those kinds of things are outsourced to private companies and what we have is another system that does not give any degree of confidence to consumers that their rights will be protected. This follows on in kind of a legacy we see from the Conservatives.

On May 12, 2008, in the 39th Parliament, the member for Toronto—Danforth raised the issue around the Ottawa Citizen report. 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 response from the minister of industry of the day was that the government would not create the position for ombudsperson to look at what had happened to consumers and whether they were protected. This is an ongoing pattern.

I want to touch on other consumer protection issues, because this is all part and parcel. New Democrats have consistently been calling for consumer protection, whether it is gas pumps, whether it is product safety, whether it is credit cards or cellphones. It goes on and on. A number of matters have been raised in the House about protection for Canadian consumers and they have been completely ignored or paid lip service to by the members of government. It is pretty shocking.

I will touch on credit cards. The member for Sudbury has raised this issue a number of times. I will talk a bit about the time frame.

On November 24, 2008, New Democrats were the first to raise the alarm bells over Canadians being gouged by outrageous credit card rates. We see a bit of a pattern here. The member for Windsor West raised the issue around what is happening at the gas pumps, and the member for Sudbury raised what is happening with credit cards.

On March 27, 2009, a nationwide poll showed a whopping 82% of Canadians with credit cards support tighter rules for the credit card industry.

On April 27, 2009, listening to Canadians, New Democrats passed a motion in Parliament calling on the government to protect consumers from credit card gouging. The New Democrats' plan called for legislation to end abusive fees and interest rate hikes. We are protecting young people and those who pay their bills on time. A majority of MPs voted in support of the New Democrat motion.

On May 8, 2009, the Conservatives introduced their own credit card reform, which turned out to be little more than an information campaign to better show Canadians just how they are getting gouged.

On June 30, 2009, the Senate committee report recommended that consumers have their pockets picked even further. The report suggests that merchants be allowed to charge an extra fee to consumers who use premium credit cards.

On October 27, 2009, the deadline set out in the New Democrat credit card motion came and went with no action from the government. Consumers were again left out in the cold by a government that puts banks and credit card companies first.

On November 19, 2009, the government once again sided with its corporate friends by passing a toothless voluntary code of conduct for credit and debit card industries as a way of consumer protection.

We see a pattern here. The private sector will be doing the inspections for the industry that are outlined in Bill C-14. There is a credit card voluntary code of compliance, which we know has no teeth. I am continuing to hear mainly from small businesses in my riding that they have no guarantee when somebody pays with a credit card that they are not going to pay some outrageous sum as a credit card transaction fee. They cannot tell by looking at the cards. These businesses often operate close to their margin and simply cannot afford to pay that extra charge.

Financial literacy workshops are happening across this country. Working families and poorer families in my riding say that they do not know what the government is hoping to achieve with a financial literacy workshop. Their problem is that they only make $10 an hour. They are financially literate with that $10 an hour. They know how to stretch it so that they can pay their rent, feed their children and maybe if they are lucky, run their car. They do not need a financial literacy workshop to tell them how to manage their finances. What they need are decent paying jobs. That is where the Conservative government has fallen down.

New Democrats bring things forward. They talk about credit cards. They talk about the need for a financial plan for Canada. They talk about gas prices and the gouging that goes on at the pumps. What we get from the government is a financial literacy consultation process, or we get a voluntary compliance on credit cards. That will not put food on the table for people in my riding of Nanaimo—Cowichan.

What we need is some meaningful action. What we need is the kind of reform we have been talking about in terms of providing income security to people.

Who gets hurt by high gas prices? I have talked a little about the low income families. I have talked about working families, some of whom have seasonal employment, like many of the forestry workers in my riding and some who are in low wage jobs and are trying to make ends meet, but I have not talked about seniors. Many, many seniors in this country are on fixed incomes. Many seniors in this country had investments or perhaps they were lucky enough to have a pension plan. However, there are seniors who have been collecting their pensions from companies that they thought would be in business forever and they are watching those companies go bankrupt.

I was at a heartbreaking meeting a number of weeks ago. I will not mention the company, but a large company in my riding is teetering on the edge. I met with a roomful of men who were between 65 years and 70 years of age. They had worked their entire life for that company and they are wondering if they will have enough pension left. One man said to me, “I am 70 years old. How can I go out and find a job to support my wife?” That is an important question for that 70-year-old man who had worked in forestry all his life.

I urge the government to put in consumer protection programs, whether they be programs to provide credit card protection or pension protection for workers, so that we do not have to work with pensioners to find a plan that will enable them to support their families in their declining years.

I was pleased to speak to this bill. I am hopeful that members of the House will take to heart what the member for Windsor West said when they are considering this bill.

Fairness at the Pumps ActGovernment Orders

5:30 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

The hon. member for Nanaimo—Cowichan will have four minutes remaining when the House returns to this matter.

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Competition Act (Inquiry into Industry Sector)Private Members' Business

5:30 p.m.

Bloc

Robert Vincent Bloc Shefford, QC

moved that Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), be read the second time and referred to a committee.

Mr. Speaker, the purpose of Bill C-452, which we will be debating today, is to give the Competition Bureau more powers.

In my speech, I will talk about oil companies, but the same applies to banks, whose interest rates are practically identical.

In 2008, those poor oil companies made mind-boggling profits. That year, Exxon Mobil raked in record-breaking profits for an American company: $45.2 billion.

The oil giant's net profits fell by over half in 2009 to $19.3 billion. So far in 2010, Exxon is making up lost ground. The company was hit by plummeting crude prices last year, but now recovering prices have netted the company a first-quarter profit of $6.3 billion.

They lost money because of the economic crisis triggered by commercial paper, but I think that they themselves played a part in the crisis. Allow me to explain.

The price of a barrel of oil rose steadily. In June 2007, it was $51 a barrel; in January 2008, $99; and in July 2008, $150. The price at the pump skyrocketed for all consumers and businesses. Companies raised their prices to compensate for the cost of fuel, and that pushed prices on consumer goods through the roof.

Bank losses combined with rising prices on consumer goods triggered an economic crisis. That is why the parliamentary committee needs to study the possibility of giving the Competition Bureau more powers.

The parliamentary committee will have to look at the price of crude oil, the refining margin, taxes and the retail margin.

The retail margin is the difference between the price retailers pay for gas and the price they sell it for. In Quebec, the retailer margin is not really a problem because it is usually between 3.5 and 6 cents per litre.

Even if some find that the taxes are too high, they do not vary much and certainly cannot account for the fluctuations in the price of gasoline. Most of these taxes are set and do not vary. Taxes are not the cause of increased gas prices; oil companies are.

To lower refining costs, oil companies have shut down a number of refineries and increased production capacity. The gap between supply and demand has narrowed, and so the slightest weather-related or technical problem leads to a price increase to maintain the balance between those two factors.

Long weekends and vacations are not unforeseen events. However, oil companies never seem to be able to prepare for them. They have nothing in reserve, and they tell us that the price increase is due to scarcity.

Can we imagine a small businessperson failing to keep any inventory in the lead-up to Christmas, and then claiming scarcity to raise prices? Yet the oil companies do it. Because they sell an essential product and there is little competition, they profit from our dependency.

The Bloc Québécois moved a motion, asking that the Standing Committee on Industry, Science and Technology pass it quickly and in full so that it would be in force by the summer since prices tend to increase during summer holidays. But the Liberals and Conservatives were opposed to it at that time.

This was the motion:

That, in the opinion of the House, the government should move an amendment to the Competition Act so that the Commissioner of Competition have the power to initiate investigations of the price of gas and the role of refining margins in the determination of the said price.

We can conclude that the inability of the refining industry to deal with the slightest unforeseen event is responsible for recent increases. Is that situation intentional or not? We do not know, because the Competition Bureau does not have the tools that would enable it to carry out a serious, complete investigation; and that is the reason for Bill C-452 today.

One thing is certain, however: the structure of the oil industry encourages sudden price increases, and that is why it must be monitored.

However, I should note that some increases in the refining margin are hard to explain. For example, the refining margin increased slightly in January and February 2009. Since this happened in the middle of winter during a global recession, the traditional short-term or even long-term factors do not seem to apply. Winter is typically when the refining margin is at its lowest.

Furthermore, the data clearly indicate that Canadian demand for gas decreased in late 2008 and the first half of 2009. We can surmise that use of refinery capacity was probably not a factor in the increase in refining margins in January and February.

Gasoline price crises may be the result of the lack of competition in the oil industry. The three largest refiner-marketers have 76% of the market share. The five largest account for 90% of the market.

The Competition Act must have teeth. Measures have been proposed to discipline the industry, and that includes strengthening the Competition Act. At present, the Competition Act has shortcomings. The Competition Bureau cannot conduct an investigation on its own initiative. It can only respond to complaints or a request from Industry Canada. The Competition Bureau is sorely lacking in powers when it conducts a general review of the industry: it cannot summon witnesses and offer them protection to encourage them to speak out. It cannot require the disclosure of documents.

Without these tools, it is virtually impossible to prove collusion or other anti-competitive practices. Even when competitors reach an agreement, the burden of proving collusion is on the bureau.

Near the end of its mandate, the Liberal government introduced Bill C-66, which was for the most part inspired by a comprehensive plan tabled one month earlier, but never adopted.

When the competition commissioner, Konrad von Finckenstein, appeared before the Standing Committee on Industry, Science and Technology on May 5, 2003, he identified shortcomings in the Competition Act:

...while the bureau's mandate includes the very important role of being investigator and advocate for competition, the current legislation does not provide the bureau with the authority to conduct an industry study....

It seems to me that it would be preferable to have a study on the overall situation carried out by an independent body that would have authority, that would be able to summon witnesses and gather information. It should also have the power to protect confidential information that someone is not necessarily going to want to share, but which would be vital in order to reach a conclusion based on the real facts.

I stated at the beginning of my speech that it is important for a parliamentary committee to examine the Canadian oil industry. The reason is simple. A similar study was conducted in the United States and the resulting report by the U.S. Senate dealt with whether or not refiners attempted to raise the price at the pumps.

So it is important for consumers in Canada and Quebec that the Committee on Industry, Science and Technology conduct the same study here in Ottawa,

An article in the May 25, 2002 issue of Les affaires refers to the report I mentioned. On page 16, François Normand said that from 1999 to 2001, refiners tried to drive up gas prices at the pump in the U.S. by deliberately reducing supply.

At least that was the main finding of the Permanent Subcommittee on Investigations of the U.S. Senate in a report entitled Gas Prices: How are They Really Set? The report was released in late April 2002 by the subcommittee chair, Democratic Senator Carl Levin from Michigan.

To reduce supply, refiners kept inventory very low. This also had an indirect impact on Quebec. Low inventory in the northeastern United States, one of the areas the report focused on, drives up market prices in New York, which refineries in Montreal use to set their rack price.

The Senate subcommittee looked at the practices of refiners in three areas of the U.S.: the west coast, especially California; the Midwest, particularly Michigan, Ohio and Illinois; and the east coast, particularly Maine and Washington D.C.

The subcommittee used statistics, such as wholesale and retail gas prices, which it got from the Energy Information Administration and the Oil Price Information Service.

Some refiners and pipeline operators also had to provide stacks of documents—103 boxes containing about 265,000 pages—on their refining and marketing activities from 1998 to 2001.

The subcommittee made some troubling findings. For example, an internal BP memo mentions a series of actions that could help keep prices high in the Midwest, including shipping gas to Canada and limiting gas coming into the area.

Testifying before the subcommittee, BP marketing vice-president Ross Pillari stated that the recommendations in the memo were inappropriate and that the company had not acted on them.

Let us talk about the decrease in the number of refineries. The American oil industry, which has been on the defensive since the report was released, acknowledges that inventory is low, but claims that there is no collusion—which would be a crime—between refiners to keep inventory low. According to the industry, there are two reasons for the low inventory: the decline in the number of refineries and the growing demand for petroleum products in the 1990s.

The subcommittee noted that mergers in the oil industry and the closing of many refineries over the past 20 years have increased the concentration in the refining industry. It also noted that during this period, the margin between supply and demand became tight. The subcommittee stated that higher retail prices, for example, in California, were the result of having a highly concentrated market.

The subcommittee did not discover any evidence of collusion among the oil companies to reduce supply in order to drive up prices. However, Senator Levin pointed out that the industry was so concentrated that collusion was not necessary to artificially impact supply. That is why it is important that the House of Commons examine this issue.

However, we have other options available to us, such as creating a petroleum monitoring agency. In its November 2003 report on the price of gas, the Standing Committee on Industry, Science and Technology proposed the creation of a petroleum monitoring agency.

It is quite incredible that, while the oil industry supported this initiative, the Conservatives were against it. The Conservatives are even more inflexible than the oil companies when it comes to defending the interests of the oil companies. They really do not need lobbyists, when they have the Conservative government.

To make it look as if it was doing something, the government set up an Internet site that gave the price of gasoline in major cities. It was just an Internet site. It did not conduct any studies on the oil industry and was unable to recommend any course of action. In other words, it achieved nothing. It takes a real office to monitor this industry.

We have to redistribute resources in order to stop the oil industry from making our society poor. We have to impose a $500 million surcharge on the oil companies' profits. We have to repeal the accelerated capital cost allowance for investments in the oil sands, when the price of crude exceeds a threshold of somewhere between $40 and $50. The government announced this measure in its last budget, but it will not come into effect for another three years. We have to make the oil companies pay for the environmental damage they cause by establishing emissions caps, together with a carbon tax and a permit trading system.

On December 9, 2009, I invited some officials from the Competition Bureau to my Ottawa office to explain to them that Bill C-452 would give them more investigative powers but, to my surprise, they told me that they did not want more powers.

This is why I think it essential that this bill be carefully examined in parliamentary committee, and I hope my colleagues will allow that to happen.

Competition Act (Inquiry into Industry Sector)Private Members' Business

5:45 p.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

Madam Speaker, I would like to commend and congratulate the member for having introduced this bill. I know he cares deeply about this. He has worked very hard on this matter.

There is one thing that will be raised in the debate if this bill is referred to committee—and I hope it is—namely, is the authority to conduct inquiries really a good idea for the Competition Bureau, which can usually conduct investigations? That is why I am asking him if it relates only to the inquiry itself or if it is also a question of ensuring that the laws and regulations in the Competition Act are strict enough.

If, after an inquiry, it is determined that the Competition Act has some shortcomings and does not meet the requirements for strong competition, as we have raised many times in this House, will this process end up not having the impact that is expected of this bill?

Competition Act (Inquiry into Industry Sector)Private Members' Business

5:45 p.m.

Bloc

Robert Vincent Bloc Shefford, QC

Madam Speaker, I thank the hon. member for his question.

Let me be clear. The Competition Bureau does not want additional powers. As a first step, the Standing Committee on Industry, Science and Technology should investigate. I believe the committee has the authority to actually conduct an investigation and not merely call witnesses. We have already done this kind of thing. We need to be able to go into refineries and look for documents. We could draw up a list of all the documents and know how it works.

Imagine for a moment that the executives from all the oil refineries, whether in Montreal, Ontario or New Brunswick, sit down in their offices at the beginning of every month and set the price of a litre of refined gas and imagine that, by coincidence, the executives all come up with the same price.

Competition Act (Inquiry into Industry Sector)Private Members' Business

5:45 p.m.

Some hon. members

Oh, oh!

Competition Act (Inquiry into Industry Sector)Private Members' Business

5:45 p.m.

Bloc

Robert Vincent Bloc Shefford, QC

I hear the Conservative member shouting across the floor. He can verify this if he does not believe me. He should go see what happens. He will see for himself.

Competition Act (Inquiry into Industry Sector)Private Members' Business

5:45 p.m.

NDP

The Acting Speaker NDP Denise Savoie

The hon. member for Elmwood—Transcona. There are two minutes left, so he has one minute.

Competition Act (Inquiry into Industry Sector)Private Members' Business

5:45 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Madam Speaker, I want to congratulate the member for bringing in a real consumer bill. Perhaps the Conservatives could learn by this member's example. I think it will certainly be groundbreaking, particularly in view of the fact that he has reported that Exxon earned a record $45.2 billion in 2008.

The consumers are not unaware of this. They know what is happening with the gas companies and how they are being hosed at the pumps. They know that over the last number of years, 125 studies have shown over and over again that there is price fixing, but we cannot get to the bottom of it because we require changes to the Competition Act.

That is what this bill is all about. I want to congratulate the member. I encourage all members here to vote for this bill to get it to committee. We will see where we can go from there.

Competition Act (Inquiry into Industry Sector)Private Members' Business

May 12th, 2010 / 5:45 p.m.

Bloc

Robert Vincent Bloc Shefford, QC

Madam Speaker, I want to thank my colleague.

That is precisely what we want to do. I think that the people of Quebec and Canada shake their heads when they go to the pump to fill their gas tank and see the price of gas. There are people who earn minimum wage and when they put $60 of gas in their tank that is a third of their weekly pay. It is wrong. At some point someone needs to sit down and figure out why the oil companies are acting this way.

I mentioned this in my speech. The oil companies often keep gas in Canada and transfer it when there is a shortage in the U.S. in order to jack up the price. This then has an impact on the price in Montreal, but the prices are supposedly set here. That is how it works and we have to do something about it.

Competition Act (Inquiry into Industry Sector)Private Members' Business

5:50 p.m.

Edmonton—Mill Woods—Beaumont Alberta

Conservative

Mike Lake ConservativeParliamentary Secretary to the Minister of Industry

Madam Speaker, I rise today to speak to Bill C-452.

The bill would give Canada's Commissioner of Competition the power to launch broad based studies of market conditions in entire industry sectors¸

Competition in our economy is of enormous importance to both consumers and their employers. The Government of Canada has recognized that fact by taking significant steps over the past two years to modernize Canada's competition regime and to align it more closely with the competition laws of our country's major trading partners.

It is important to ensure that consumers and legitimate businesses do not fall prey to illegal activity and that if they do they have the confidence that the law will be enforced effectively and that penalties are tough enough to deter future illegal activity.

Important amendments to the Competition Act became law on March 13, 2009. The amendments will help to further increase the predictability, efficiency and effectiveness of the enforcement and administration of the act for businesses and for the Competition Bureau. In turn, this will better protect all Canadians from the harm caused by anti-competitive conduct.

These amendments came about through key recommendations made by the Competition Policy Review Panel which was formed in July 2007 with a mandate to review Canada's competition and foreign investment policies and to provide recommendations to the federal government on how to make Canada more globally competitive.

The panel spent a year reviewing Canada's competition and investment policies. Its report, “Compete to Win”, concluded that in order to prosper, Canada must adopt a more globally competitive mindset. The report concluded that intensifying competition will build a stronger economy, better products at lower prices, more jobs and higher earnings, stronger firms and greater prosperity.

The recommendations made by the panel formed a key part of Canada's economic action plan and provided the basis for the amendments to the Competition Act that were introduced in budget 2009 and passed as part of Bill C-10.

The main elements of the amendments were as follows: creating a more effective mechanism for the criminal prosecution of the most egregious forms of cartel agreements between or among competitors and introducing a non-criminal review process for other forms of competitor collaborations; allowing the Competition Tribunal to award administrative monetary penalties against companies that have abused a dominant position in the marketplace; introducing a two-stage merger review process to allow for a more efficient and effective review of proposed merger transactions; increasing penalties for deceptive marketing practices; expressly empowering the courts to award restitution to victims of false or misleading representations; and finally, repealing criminal sanctions for certain pricing practices to ensure that creative pro-competitive initiatives are encouraged.

These amendments ensure that we have the tools to better protect consumers and businesses from the most flagrant types of anti-competitive conduct, while being ever mindful of the importance of not discouraging pro-competitive behaviour in the market.

I raise the government's actions in this regard because of their importance with regard to the issue we are considering today. As I have described, as part of the amendments resulting from the passage of Bill C-10, new criminal cartel and civil agreements provisions came into force on March 12, 2010. These provisions were delayed for one year to give companies an opportunity to verify that their existing or proposed agreements and arrangements did not violate the new civil and criminal provisions. During this time, companies were able to apply to the bureau at no cost for an advisory opinion as to how the bureau would view a pre-existing agreement under the new provisions.

Under the previous cartel provisions of the act, it was extremely difficult to secure a conviction. The Crown needed to prove that an anti-competitive agreement resulted in substantial harm to competition and to prove that element to the criminal standard of beyond a reason doubt.

These hurdles faced by the bureau were out of step with our major trading partners and harmed Canada's international credibility. The provision had not changed significantly in almost 120 years. The Competition Policy Review Panel recommended that this outdated law be changed and this government acted.

We introduced a two-track approach to address agreements among competitors so that the bureau can crack down on harmful conspiracies and pro-competitive agreements and joint ventures can proceed expeditiously.

Price-fixing is a criminal activity that deprives Canadians of the benefits of a competitive market, such as lower prices and choice. The new cartel provision will provide the commissioner with even stronger tools to challenge this type of anti-competitive practice.

At the same time, a new civil provision has been introduced that allows firms to combine capabilities and resources in order to lower their costs of production, enhance product quality and reduce the time required to bring new products to market, all without any fear of a criminal investigation, and this is as it should be, of course.

These collaborations may be reviewed civilly where they are likely to lead to a substantial lessening or prevention of competition. In such circumstances, the Competition Tribunal may prohibit collaboration, but that is all it can do.

Bill C-452 proposes to amend the Competition Act to authorize the Commissioner of Competition to inquire into an entire industry sector. The commissioner currently has considerable powers in her enforcement role to investigate the state of competition in the marketplace and these powers are appropriately tied to whether the Competition Act is being violated. Importantly, the commissioner investigates the behaviour of businesses and individuals where there is evidence that they may have broken Canada's competition laws.

It is clear that the issues the House must consider when debating this bill are far-reaching and very complex. I want to take this opportunity to thank the hon. member for his efforts to date and the introduction of this bill. I understand that he has noble intentions regarding this matter. However, I wish to remind him of the public and private costs associated with assigning new powers to the commissioner.

We must also recognize the very significant new powers that this government has recently provided the commissioner in order to investigate and deter the types of activities that lie at the heart of this bill. These tools are targeted directly at the types of practices that lie at the heart of the hon. member's concerns and, therefore, will be far more effective than those proposed in the current bill.

The Competition Policy Review Panel argues forcefully that it is vigorous competition that spurs a cycle of innovation, boosts efficiency and adaptability, and raises productivity. The recent changes to the Competition Act are evidence that this government will continue to take the right steps to strengthen Canada's economy and create sustainable employment. It is against this backdrop that the proposal outlined in Bill C-452 should be thoroughly reviewed.

Competition Act (Inquiry into Industry Sector)Private Members' Business

5:55 p.m.

Liberal

Marc Garneau Liberal Westmount—Ville-Marie, QC

Madam Speaker, I rise today to speak to Bill C-452, legislation designed to protect Canadian consumers. Competition in Canadian industry is essential to the health of the Canadian economy. It encourages firms to develop new products and provides consumers with improved products and a variety of choices.

The Liberal Party believes in both healthy competition in the Canadian marketplace and consumer protection. We, as members of Parliament, must support legislation that encourages healthy competition within Canadian industries while offering solid protection to consumers.

Currently, Canada's Competition Act regulates trade and commerce in respect of conspiracies, trade practices and mergers affecting competition. The purpose of the act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy and in order to provide consumers with competitive prices and product choices.

The purpose of Bill C-452 introduced by my colleague from the Bloc is to ensure that the Competition Act applies to a specific case, in other words, to an entire industry sector.

My party is prepared to support this bill in the interest of competition and in order to clearly identify a case where the Competition Act must apply.

Some people may argue that existing legislation already covers this particular case. But let us be certain that this particular case proposed in Bill C-452 is covered and let us include it explicitly in the legislation with as few conditions and extra restrictions as possible. Let us get rid of any ambiguity.

I want to explain the specific situation being addressed in this bill. As the legislation currently dictates, the Commissioner of Competition is responsible for administering and enforcing the Competition Act. He or she has the authority to launch an inquiry into individual and specific cases where there may be a violation of the Competition Act. This should include the authority to independently initiate an inquiry into an entire industry.

Currently, the Competition Bureau must receive instructions from the minister or conduct an inquiry in response to a complaint filed by a company, consumer or legal entity. This means that Canadians are left unprotected if an official complaint is not made or the minister does not issue instructions. As a result, Canadian consumers could be subjected to unfair dealings, and this could conceivably be occurring at the level of an entire industrial sector.

Bill C-452 would provide the Commissioner of the Competition Bureau with the mandate to launch an inquiry into an entire industry if he or she deems it necessary to do so. Support for this bill would ensure that the Competition Bureau is provided with the necessary authority to take action against companies or individuals that attempt to take advantage of Canadian consumers.

The bill would strengthen the Competition Act, giving the government the right to initiate investigations when there are sufficient grounds to investigate possible collusion, price-fixing or anti-competitive behaviour in an entire industry sector.

We as legislators promised to protect the rights of consumers. I encourage my colleagues to join me in supporting Bill C-452 so we can accomplish just that.

I would like to take a moment to discuss the practical application of Bill C-452.

As I brought to the House's attention on Monday, gasoline pricing has been at the top of the minds of Canadians for many years. As we all know, and as my colleague from the Bloc pointed out, there have been allegations as well as proven cases of price-fixing at the pumps. This unjust manipulation takes advantage of consumers and threatens healthy competition.

Having spoken of one industry, this is not the only industry that this bill addresses. This bill is focused on any industry as a whole that provides a service or a product to the consumer. The current government promised to remedy this issue but we have not yet seen anything of substance presented by the government. It appears as though the Canadian government has largely forgotten about Canadians' concerns over gas pricing.

With the support of my colleagues, Bill C-452 would empower the Commissioner of Competition to initiate investigations that relate to this debacle and take action to ensure that these types of schemes do have consequences.

The amendment to the Competition Act may appear minor at first reading but the changes would ensure healthy competition in Canadian industry, including within the gasoline industry, a change which all hon. members can applaud.

I will close by reiterating that my party is prepared to support this bill in the interest of consumers. This bill should put us on the right track. We must debate it in committee to ensure that the Competition Act is clear on the issue of inquiries by the commissioner. We want to clearly identify the fact that an entire industry sector could be subject to an inquiry by the commissioner.

Finally, we must look at another important tool when we talk about the Competition Act. I am talking about the resources available to the commissioner to carry out his task unhindered. There is no use in conferring powers if the means to use them are not there. Let us take this opportunity with this bill to ensure that commissioner is given the necessary resources to do the job. We could then be sure that the Competition Act is an effective consumer protection tool.

Competition Act (Inquiry into Industry Sector)Private Members' Business

6:05 p.m.

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, I am pleased to speak to Bill C-452. The New Democratic Party will be supporting this initiative. The member should be commended for bringing this issue forward. There are those who argue that the Competition Bureau does have sufficient powers right now and does not need additional resources, but I am of a different opinion. There are a number of different products and services out there with which I will deal.

I think competition is not entirely happening the way that it should. It should be noted that the debate that will continue at committee will be very important as part of a process to review a series of sectors and I hope we can get experts and witnesses to come forward.

The sponsor of the bill made reference to the oil and gas industry in the previous debate on a government bill and mentioned the lack of competition in the oil and gas sector. There is almost a collusive element. I noted in particular the Petro-Canada situation where instead of investing in Petro-Canada refineries in Burlington, it shut down the plant and now imports gasoline from Esso and sells it in Petro-Canada stations across Ontario. So there does not necessarily have to be price fixing, but there will not be very much in variables involved with regard to trying to move into a more competitive situation.

It has always been the case, as we look at the oil and gas sector, where there is a lack of refinery capacity, vertical integration with the industry, a series of different elements that lead to basically a formula that is a recipe for disaster for Canadians and their pocketbooks. It was interesting when the government lowered the GST with regard to oil and gas, and the cost that the companies now actually get back, it was not passed on to the consumers. The prices and profits have risen significantly and not even one single organization or company took advantage of the opportunity of the 2¢ reduction to pass it on to consumers. They took it and put in their own pockets.

Because the government had no accountability whatsoever in terms of monitoring the process, or no interest whatsoever, we have lost hundreds of millions of dollars out of the coffers of this country every single year that could have gone to different things whether it be health care, or whether it be more money to the Competition Bureau to be able to examine anti-competitive practices. A whole series of things that could have been addressed are now gone, and the companies now have record profits and record tax cuts from the government which are windfalls they have enjoyed.

It is only fair that we actually examine the bill and look at the oil and gas sector as one of the variables in how it can be addressed because the bill is specifically geared to the industry sector which is a responsible way to approach it. It allows targeting to certain areas where there is a lot of interest.

We are seeing that now at committee where there are a couple of current issues that are very important. We have the entrance of new players into the Canadian market with regard to telecom and that means more communication devices, cellphones, BlackBerrys and wireless service provisions that are being expanded in Canada. There are those who feel there is no competition in that sector and relatively similar price elements make it very difficult for consumers to get a better benefit. They have also been receiving record profits and are quite lucrative. Almost all the groups and organizations of the big telecommunication companies have done well.

There are three new entrants coming into the market, so there is no question that this is timely to look at whether or not the Competition Bureau is going to be sufficient to have the independence to examine cases, have the resources to do so, and have the tools to be able to make decisions that are going to increase the competitive nature of businesses in Canada, those that are regulated and those that are non-regulated.

Another issue raised often with regard to this issue is credit cards. New Democrats have been calling for a number of credit card reforms. My good colleague from Sudbury has been pushing this issue and the Minister of Finance is basically moving for a voluntary agreement. It is clear that we have deficient credit card competition in Canada. There are some groups and organizations that are more progressive, but at the same time it is seen basically as a system that is stuck where the vast majority of credit cards have interest rates that are quite similar.

Once again, that is an area where we want to see more healthy competition, but we have not. The banks are also making record profits and we have seen the same things there. My office receives complaints with regard to how close bank fees are among different organizations.

There does not actually have to be a collusion, where there are brown envelopes changing hands and information being wired back and forth to predetermine the actual cost of items and passing them on to the consumer. There just has to be basically a general acknowledgement that they are going to stay in a certain field of play and compete in that field of play. That is not real competition.

For a few years, we used to carry out inquiries into the insurance industry as well and about the issues there. We just have to talk to people about auto insurance and a series of things, and they often find that there is not enough healthy competition or they cannot get certain services whatsoever. I know that some people are outright denied or have to pay really high fees. There are maybe only one or two companies that will provide that demographic, so the fees are through the roof with regard to costs and they really do not get into a competitive market because certain groups of people are written off altogether by these companies.

The Competition Bureau would be well-equipped to look into that because if people cannot even get quotes on insurance, they are stuck with very few recourses of action. We can just talk to young people about what they are paying for auto insurance. They in particular are scammed because I have not seen the evidence that warrants that type of behaviour.

The other issue I have been working on regarding competition is the issue with Toyota. Toyota is a company that is under criminal investigation in Japan, the United States and Europe. Yet here, the government has not even done anything, aside from having two meetings at the transport committee, which we forced the government to do.

The issue behind that is not just in regard to the safety of the vehicles. It is also an issue of competition. Did Toyota know about problems with its vehicles and choose not to fix them, to gain market share at the expense of other manufacturers? It does not matter if one makes a curling iron or a car, if one knows that the device has a problem and chooses to neglect and not fix that to gain market share, it becomes a competition issue because it runs other companies under.

I am very proud of negotiating a change in public policy here, with the Liberals at that time, a number of years ago. It used to be law in Canada that if a business was given an environmental fine or penalty, it could claim that as a business tax deduction. I viewed that as an environmental issue, health and public safety issue, but also a competition issue, and here is why.

We had a drug company, for example, which had a $10 million fine. To explain this clearly, this company was charged with something. It went to court. It was fined $14 million and at tax time, it actually got $10 million back as a business-related expense. If a company polluted the lakes, oceans and streams, and it got caught and was fined, whether it be millions of dollars or hundreds of thousands of dollars, it could claim it as a business tax deduction and get money back on that.

What was important about this change, and why I am proud of negotiating the end to it, was that the good companies were getting punished just as much as any others. They were following the law and doing the right things and they had to compete against those that were actually abusing people and the environment, and that is not right.

I welcome the member's bill here today and look forward to having the discussion at committee. I think it will be a helpful discussion at a very important time, when many products and services need to be looked at under a competitive regime.