Mr. Speaker, I am very pleased to speak to Bill C-452, An Act to amend the Competition Act (inquiry into industry sector).
I commend my colleague, the member for Shefford, for bringing forward such an important amendment to the Competition Act. I am happy to say that the New Democratic Party will be supporting this vital legislative initiative.
In essence, this bill seeks to change the current law, which says the Commissioner of Competition can only launch an investigation when there is a concern about one or more market participants. While the bill appears to have originally been tabled to deal with the retail gasoline sector, the broad amendment makes the proposed legislation applicable for all industry sectors, including communications industries.
This is particularly important at this time, as the banking disputes over competition have been increasing over the past few months, whether it is in relation to the oil and gas sector where consumers are being gouged at the pumps by abusive practices which hurt the wallets of ordinary working and middle-class Canadians, or some other issue.
I heard my hon. colleague from Winnipeg North talk about the gas prices in his riding. I believe he said it cost $1.20 a litre. In Sudbury right now it is close to $1.30. My colleague from Algoma—Manitoulin—Kapuskasing said the price in Wawa and Elliot Lake is $1.30 in some cases.
The dispute over usage-based billing demonstrates that we need this tool to widen the scope to encapsulate not just the oil and gas sector, which we are talking about, but other major sectors of our economy as well.
In the oil and gas sector there is clearly a lack of refining capacity in Canada. Coupled with vertical integration, this basically leads to a formula that is a recipe for disaster for Canadians and their pocketbooks.
It is interesting that when the government lowered the GST with regard to oil and gas, the companies did not pass the reduction on to consumers. Prices and profits have risen significantly and not even one single organization or company has taken advantage of the opportunity to pass the 2¢ reduction on to consumers. The companies took it and put it in their own pockets. That is shameful. More important, that 2% has a large impact on working and middle-class families who are being financially squeezed during tough economic times.
Therefore, it is only fair that we 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.
In terms of the telecommunications sector, we have the entrance of new players into the Canadian market with regard to telecom and that means more communication devices, cellphones, BlackBerrys, iPhones, and wireless service providers that are being expanded in Canada. There are those who feel there is no competition in that sector and relatively similar pricing that makes it very difficult for consumers to get a better benefit. These companies have also been receiving record profits and are quite lucrative. Almost all of the groups and organizations of the big telecommunication companies have done extremely well.
Both the current CRTC chair, and Sheridan Scott, the former commissioner, have advocated for the authority to conduct market studies during their tenures as the head of the bureau. This amendment to the Competition Act is therefore obviously something which the regulators of our telecom sector deem necessary for bringing Canada's telecommunications regime into the 21st century. We have seen there are flaws in this regime and this bill is an important step in redressing these shortcomings.
Another issue raised often with regard to this issue is credit cards, something I have been talking about quite often. New Democrats have been calling for a number of credit card reforms. I have been pushing this issue to the forefront. The Minister of Finance is in favour of 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.
This voluntary code is not sufficient. We need something with the necessary teeth to oversee the credit card industry. I feel this amendment would provide an extra layer of protection for ordinary Canadian consumers, as well as small and independent businesses which are routinely encountering major issues with the predatory practices which are being employed by credit card providers. This is an area where we need 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 collusion where there are brown envelopes changing hands and information being wired back and forth to predetermine the actual cost of items and passing it on to consumers. There just has to be a general acknowledgement that they will stay in a certain field of play and compete in that field of play. That is not real competition.
Small and independent retailers are facing a similar dilemma in regard to the anti-competitive practices. The big issue for retailers is the influx of premium cards, for instance, and those that offer generous air miles. Consumers are lured to those cards because they offer a chance to collect points faster and reap the rewards such as free flights, electronics and jewellery. The use of these premium cards has risen dramatically since they first hit the market in 2008. That high end plastic, such as the Visa Infinite or the World Elite MasterCard, cost more for retailers to process than other standard gold or platinum cards.
Consumers do not know that their demand for those freebies from the credit card companies is actually squeezing profits from these small businesses, because it is the merchants who really foot this bill. Ordinarily the cost per transaction ranges from 1% to 3% of every sale, whether the customer pays cash or pulls out a card. Premium cards require much more than that, considering the razor-thin margins the competitive market demands, and $5 billion is a lot.
Family debt is on the rise. The debt carried by the average Canadian household has hit $100,000, up about 78% from two decades ago. The debt to income ratio stands at a record 150%, meaning for every $1,000 after tax income, Canadian families owe an average of $1,500.
In summary, Canadian families cannot wait much longer. They are being gouged because of anti-competitive practices in every facet of their lives, be it gas, cellphones, the Internet and their credit card bills.
Bill C-452 is a very, very important first step in curtailing these abusive practices, and I call on all members of the House to support my colleague's bill.