Madam Speaker, Bill C-6, which is the old Bill C-54 from the last session of parliament, is a bill largely about the future. The government is trying to catch up with technology to regulate for reasonable order and safety, much like governments did as they tried to keep up with the emergence of the motor car, airplane, travel, telephones, radio broadcasting, television and now a universe of information transfer and monitoring never imagined by the writers of our constitution passed in 1867.
Form continues to follow function and I am sure that the present bill will be subject to much amendment in future years as society attempts to respond to issues of sovereignty, rights, protection and general order. Maybe it could be said that Alvin Toffler was right that social change accelerates and we all struggle to deal with future shock, even governments.
The future is now, and the bill is written to support and promote electronic commerce by protecting personal information that is collected. used or disclosed in certain circumstances by providing for the use of electronic means to communicate a record of information or transactions and by amending the Canada Evidence Act, the Statutory Instruments Act and the Statute Revision Act.
Part 1 of the bill establishes a right to the protection of personal information used in commercial activities in connection with the operation of a federal work, undertaking, or business or interprovincially or internationally. It establishes principles to govern the collection, the use and disclosure of personal information. It deals with accountability, identifying the purposes for the collection of personal information, obtaining consent, limiting collection, limiting use, disclosure and retention, ensuring accuracy, providing adequate security, making information management policies readily available, providing individuals with access to information about themselves and giving individuals a right to challenge an organization's compliance with these principles.
It further provides for the privacy commissioner to receive complaints concerning contraventions of the principles, conduct investigations and attempt to resolve such complaints. Unresolved disputes relating to certain matters can also be taken to the federal court for resolution.
Part 2 sets out a scheme by which requirements in federal statutes and regulations that assume the use of paper do not necessarily expressly permit the use of electronic technology, may be administered or complied with in the electronic environment. The bill grants authority to make regulations about how these requirements may be satisfied by using electronic means. Part 2 also describes the characteristics of secure electronic signatures and grants authority to make regulations prescribing technologies for the purpose of the definition of “secure electronic signature”.
Part 3 amends the Canada Evidence Act to ease the admissibility of electronic documents, to establish evidentiary presumptions related to secure electronic signatures and to provide for the recognition as evidence of notices, acts or other documents published electronically by the Queen's Printer.
Part 4 amends the Statutory Instruments Act to authorize the publication of the Canada Gazette by electronic means, which will certainly be thanked by many.
Part 5 amends the Statute Revision Act to authorize the publication and distribution of an electronic version of the consolidated statutes and regulations of Canada. This is a democratizing barrier removal for all citizens.
We have been at the Canadian democratic experiment at least since 1867, 132 years or more, with our evolution to responsible and accountable government from dependent colonialism.
I am here in parliament as a Reformer in part because it is too evident that we still have a lot of work to do on that score to take up the job of expanding the boundary of democracy, of implementing needed change. Sadly it is a quest that the old reformers forsook, those who became the true Grits, for the Liberals who have long forgotten about being the repressed underdog in governance, for they are now so smugly superior, secretly plotting to avoid real public political accountability. In view of what happened, it could be reasoned that the Reform Party are the liberals of the 21st century, for we are now the agents of change, struggling against an entrenched establishment party that is reluctant to let go of privilege and power.
It is an ideological gap that I am talking about. With Bill C-6 they are playing catch-up. As in commerce, Canada has a long way to catch up politically, even reforming this very parliament.
Canada started with a constitution that was rooted in certain basic principles and was written by some incredibly brilliant people who understood that times would change, the definitions of fundamental things of governance would change and that circumstances would require people to rise to the challenges of each new era by applying old values in practical ways.
It is recognized that as Canada changed from being an agricultural to an industrial society that the laws made under simpler conditions of living could not handle the complex relations of the modern industrial world, and now even the cyber age.
While the bill attempts to deal with some technological matters that have gone way ahead of governance, Reformers also work for the day when we can bring this creaky institution of parliament into the cyber age of political accountability, using technology to more fully obtain political consent from an informed electorate who watches, engages and decides, often through electronic means.
It is present day Reformers that seek to move the boundaries between old and new. We might even get TV cameras in the Senate some day and have more committees televised. Parliament needs to get fully plugged in, turned on and really connected to the people it is supposed to serve.
Reformers of old, it must be remembered, fought hard to adapt our institutions to new realities, to update vital protections for our citizens, to expand the developing notions of the right to privacy which has become most valued by our present culture.
We are in the midst of another vast social transformation. Once again the law needs to govern fluid markets, documentation and legal exchange. They are so dynamic they could not have been imagined in the British North America Act of 1867 when it enumerated responsibilities. But the pace of change is very different, not just the nature of change but the very pace of it. Once again we have to respond, applying our oldest values and practical ways that allow them to be preserved and enhanced in modern times.
We all know that technology and competition have revolutionized the financial services industry. I think most of us believe that by and large these changes have been very good. But many people do not have the knowledge to properly evaluate what is truly a dizzying array of options. Some are falling victim to new abusive practices. Others are being left out of the financial marketplace altogether. That is why we have to deal with these things in parliament, to give all Canadians both the tools and the confidence they need to fully participate in the thriving but highly complex 21st century economy that will often be focused in the world of electronic commerce.
The term electronic commerce refers generally to commercial transactions, involving both organizations and individuals, that are based upon the processing and transmission of digitized data, including text, sound and visual images, and that are carried out over open networks. Although much media attention is focused on online merchants selling books, wine and computers, the vast majority of products marketed electronically business to consumer are intangibles such as travel and ticketing services, software entertainment such as online games, music and gambling, as well as banking, insurance and brokerage services, information services, legal services, real estate services and increasingly health care, education and government services.
In view of these realities there are some principles that must be regarded. The first thing we have to do is to protect every Canadian's financial privacy. There has been analysis to identify where privacy is at risk and finance certainly was the first obvious area of great concern.
The technological revolution now makes it easier than ever before for people to dig into and collect our private financial data for their own profit. Some private financial information is protected under existing federal law. One's banker, broker or insurance company could still share with affiliated firms information of what one buys with cheques and credit cards or sell this information to the highest bidder.
We need better laws to give Canadians the right to control their financial information, to let the consumer decide whether they want to share private information with anyone else. They need to know where it goes and why.
To enhance financial privacy we must also protect the sanctity of medical records. With a growing number of mergers between companies, financial institutions and lenders potentially can gain access to the private medical information contained in insurance forms or from government subcontractors. We need to severely restrict the sharing of medical information. People should not have to worry that the results of their latest medical physical exam will be used to deny them a home mortgage or a credit card. The possibilities must be carefully anticipated for protection.
It should be understood that our basic privacy is at stake. As electronic commerce develops, the volume and the nature of personal data such as name, address, interests and records of all purchases can be disclosed on networks during electronic activities and these transactions certainly will increase.
New methods for processing the vast accumulation of data such as data mining allow the creation of customer profiles that combine demographic data, credit information, usage patterns and minute details of transactions. If consumers do not have control over the collection and use of their personal data, electronic commerce must facilitate the invasion of their privacy. But if consumers are in a position to either decline or to give informed consent to the collection and use of their personal data, electronic commerce will not be too much different from traditional commerce.
In today's world, consumers may participate in what we call fidelity or loyal shopping plans, or choose to exchange their privacy for something they value such as lower prices, convenience or personalization. Businesses and consumers will have to help adjudicate the tradeoff between protecting privacy and obtaining the benefits of electronic commerce that both value. Education on this issue is therefore of primary importance.
The question has come up about illegal and harmful content. There has been much public concern about the content of some of the information distributed and accessed on the Internet. Disagreeable or detrimental content is not more prevalent on the Internet than beneficial content, but the people who distribute and access disagreeable or detrimental material on the Internet enjoy the same advantages offered by the Internet as others do. The positive elements are vast in terms of opportunities for electronic commerce, community development, communication and access to information.
The reality is that with those benefits come the difficulties of coping with content judged to be detrimental. The development of electronic commerce could potentially be impeded by illegal and harmful content issues where users fear unwanted content and where network service providers fear the liability they will take on if they are expected to be responsible for the content that flows across their systems. Although traditional methods for addressing these issues may not be as feasible in the electronic environment, advances in technology are offering new ways to resolve some of these issues.
We must require greater public disclosure and enhance every consumer's right to know. Consumers received millions of credit card solicitations last year. Some offers contained new traps for the unwary. For example, sometimes credit card companies advertise low interest rates known as teaser rates to reel in consumers who are then surprised with unexpected interest rate hikes.
Millions of consumers have also found out the hard way that making only minimum payments rarely helps retire debt and almost always results in very large interest payments. We should require clear notice of how long and how costly repayments would be if the consumer makes only the minimum payment.
We have to do more to combat consumer fraud. It is remarkably easy now for a thief to take out huge loans in someone else's name, run up enormous credit card debts and tap into bank accounts. We have now heard at least twice this year in the Commons that the RCMP do not have the basic resources to attack consumer commercial fraud. Consequently capacity creates its own demand and it will only flourish if the government is not minding the people's business.
We need to give priority to cases involving identity theft, particularly those involving organized crime groups with the goal of increasing the number of prosecutions. It must be made harder to steal someone else's identity in the first place. Telephone long distance fraud is also rampant and the millions lost is reflected on my telephone bill.
We also need to crack down on fraud committed over the Internet. If we want to seize the Internet's full potential, we have to stay ahead of those who would use this open medium to manipulate stock prices, commit fraud on online auctions or perpetuate any other type of financial scam. We need a national co-ordinated approach for tracking Internet fraud and to train those in provincial and federal law enforcement how to recognize and root out these schemes.
It could be said that the law enforcement community compared to people who are doing criminal activity are like unaware parents trying to keep up with their children who go on the computer. It is an endless effort. We need to organize and systematize a continuous retraining effort and have a federal government with a vision to commit the resources needed so that we can stay ahead of the crime curve.
Investors need better information to protect themselves against online securities fraud. Complaints of Internet fraud are greatly increasing, for every new medium of exchange brings a new opportunity for criminal exploitation. Are the Liberals on top of it? I doubt it, for they have shown time and again that they are not really wise managers of the public trust.
We must provide services for those who have been denied access to the wired world and ensure opportunities for all. Technology can bring, for example, credit and banking services to the disenfranchised. We need to continue to expand the bounds of service for the aged and the challenged with low fee bank accounts and services in ways that maximize the possibility of technology yet preserve safety and accountability.
Electronic commerce dramatically reduces the economic distance between producers and consumers. Consumers can make their purchases directly without involving traditional retailers, wholesalers and in some cases distributors. They benefit from improved information, lower transaction costs and thus lower prices, and larger choices which can include products tailored to individual requirements and instant delivery for intangible services and products in digital form.
For sellers, electronic commerce also presents many advantages. Small scale manufacturers can gain access to a global marketplace with relative ease. Specialist resellers enjoy the same advantage. Neither need maintain a physical store or shop and inventory can be managed more efficiently.
Labour cost savings can be considerable. For instance, one estimate places the cost of buying software on the Internet at 20 cents to 50 cents per transaction as opposed to $5 for a telephone order and $15 our a traditional retailer. But just as electronic commerce offers new market opportunities, it will also intensify competition. It will probably make some provisions of provincial labour codes obsolete.
Government must strive to provide the opportunity for everyone to have access to electronic commerce. The key difference in having rights and benefiting from them is the degree of participation and full exchange. Anyone with access to the Internet has access to electronic commerce. Online commerce requires hardware such as computers and servers, software, and the ability to connect to the network itself which may involve access to telephone, cable TV, cellular mobile networks, satellites or broadcasting networks. Equipment costs, access charges and the complexity of the evolving Internet itself are barriers to universal Internet access. At present, regulatory structures in many countries still limit market access by infrastructure providers. This is changing with the liberalization of telecommunications.
Estimates of the number of Internet users vary between 30 million and 50 million. It is a rapidly growing population. Just three or four years ago the number of users was only in the thousands.
The number of commercial transactions made over the Internet is also rapidly growing. Nearly all analysts predict growth by factors of 10 or more and that electronic commerce will overtake the size of mail catalogue sales in the United States alone.
The networks are being built but they will likely never be comprehensive or fast enough for changing demands. Sadly, the law, protections and regulatory climate will always be behind, especially if the Liberals stay in power in Canada.
Internet communications are generally established through telephone systems which were built to carry voice, not data. These systems need to evolve. At present most customers connect to communications networks via a standard telephone line. Local telephone tariffs currently account for more than 60% of the cost of Internet access. The expansion of electronic commerce depends on speeding up data transmission while keeping the costs very low.
Increasing competition in the communications market is the best way to encourage network upgrading. One key to increasing competition is to put in place regulatory structures that encourage the creation of networks providing and supporting all types of applications, including entertainment, voice telephony and electronic commerce. However, it seems that we will always have one hand tied behind our backs in this country, because we have a Canadian policy for Luddites who vainly resist in the name of Canadian content which seems premised upon a cultural inferiority complex.
Our law must properly follow the opportunities of technology for jobs, growth and trade. By raising economic efficiency, electronic commerce will increase overall wealth. In doing so, it will impose adjustments on existing economic structures, for electronic commerce may well result in the loss of employment in traditional distribution and retailing. However, experience demonstrates that technological change will create new and better replacement jobs.
Electronic commerce is already creating new high quality computing and communications jobs linked to the development of global digital markets. Of course the NDP will rail against it and claim it needs an even more iron fisted union to stop the sun from rising, the light of new knowledge coming in, or it will want a world ruler of the Tobin tax to mitigate against what it cannot comprehend. Outdated political ideologies hurt people, stunt potential, breed poverty and perpetuate oppression and servitude. That is what the NDP ideology must be understood to bring, in light of discussing the implications of Bill C-6 and the future.
From the perspective of the firm, the cost of doing business on new electronic networks is significantly lower than the cost of traditional methods. This advantage plus the ability to offer high value, content rich products and services has led to exponential growth in the number of firms entering electronic commerce and related businesses. This is most evident in the urban North American centres but is becoming evident in other countries as well.
By bringing buyers and sellers closer together, electronic commerce will facilitate trade growth. Canadian wealth is based on international trade, but there is no help from the NDP anti-traders belief system.
What we are talking about also has consequences for taxation and tariffs. Jurisdictional rules applying to taxes and tariffs are generally based on concepts of physical geography, such as place of supply or residence of a taxpayer. As electronic commerce is not bound by physical geography, it may become difficult for taxpayers and governments to determine jurisdiction and revenue rights. For consumption taxes, there may be a need for action to avoid double or non-taxation.
The availability, reliability and completeness of commercial records generated in an electronic commercial environment, including those from electronic payment systems, are also of concern. Such records must be relied upon to ensure that taxation and tariffs have been appropriately and fairly applied.
Many forms of taxation and tariffs are levelled on physical goods. The ability in electronic commerce to create electronic substitutes like electronic books presents challenges for revenue collection and the archaic quota regimes overseen by our heritage minister.
The existence of electronic products also raises issues of fairness between taxes and tariffs imposed on physical goods and electronic substitutes. The ability within the electronic distribution channels to bypass any or all of these traditional middlemen between producer and consumer raises serious issues for the collection of taxes, particularly withholding taxes.
The use of electronic commerce technologies in the form of intranets by multinationals and collaborative groups may tend to increase the prevalence of transfer pricing and increase the difficulty of detecting such behaviour.
The predicted growth of international electronic commerce, much of which may be undertaken by smaller less sophisticated businesses, may mean the number of unintentional breaches of international revenue laws could increase.
Given the global nature of electronic commerce, it is important that the decisions taken by government continue to allow for the international flow of data. Moreover, technological tools will offer new ways to allow users to protect themselves. Some of them are mechanisms for verifying information such as labelling systems which certify that an online business meets certain good standards of business. Other mechanisms exist for notifying consumers of legal jurisdiction or venue for resolving disputes arising from a transaction. Some others allow consumers to access educational messages that describe their rights in the context of electronic transactions.
Canada certainly needs to work with the international community to provide a forum for continuing exchange of views on developing technologies and an institutional framework to support them. We also have to increase the financial and electronic literacy of the Canadian people. It is not enough to know how to balance a chequebook any more. Even those fortunate to have the help of accountants sometimes have a hard time understanding all the ins and outs of investing in an RSP, paying off credit card debt or refinancing a mortgage.
Knowledge is power and as Canadians understand technology they will use it in ways that make it accountable to them, as it enhances their quality of life. Laws and regulations must go hand in hand with an informed public if technology is to serve us rather than us serving it.
As reported in the Ottawa Citizen today, Ontario residents may soon have a single computerized card that will do everything from providing access to health care to serving as a driver's licence under a new project unveiled by the province. The smart card concept announced in the provincial government's throne speech yesterday, it is hoped, will mean more convenience for the public and less fraud. The term usually refers to a credit card with a tiny computer chip that contains lots of information about the cardholder that can replace the need for many cards. The one card will include a driver's licence, access to services such as medicare, social assistance and senior benefits.
The future is here. How far off will it be that a ton of information that can be put on one small card will simply be put on a microscopic chip under the skin on one's hand? By then the universal numbers will be assigned at birth, which can be the international drawing rights credit card, citizenship and right to vote registration for the world, and contain personal international telephone and computer access numbers. The technology seems to be coming, but are the law and society ready for these realities?
That is what we are trying to do with Bill C-6. It is an attempt to improve privacy, enhance disclosure, combat fraud, increase access and bring the transactional world of commerce and law under some semblance of control.
Members of the official opposition engaged fully in the process of the bill. We offered a number of constructive improvements which the government was rather arrogant about accepting, as old style governments usually are. Nevertheless Reformers support the bill since it is as good as we can get it at this time.
Reform recognizes the fine line between the right of Canadians to have freedom of speech and the right of privacy. The need for that balance has become acute as Canadians embrace new technologies. Therefore we support the regulation that Bill C-6 introduces.
As the world changes and the proposed act needs adjustment in the future, I hope it will not take as long to do as the years it took the hapless Conservative and the bumbling Liberal governments to update the Bankruptcy and Insolvency Act. Nevertheless the government had at least one good minister to finally get it done, the Minister of Industry.
In conclusion, the objectives of the bill are broadly similar to the ones used to harness the opportunities and benefits of the industrial revolution. They are just as vital today, if not more so, as they were a century ago. It is now time to use them to seize the enormous potential of the information revolution for every Canadian citizen.
If we work together we can help all families have the benefits of new choices and new technologies. We can help our people thrive in the 21st century. All we have to do is to remember how we got here over the last 132 years.
