Mr. Speaker, I am pleased to speak tonight to second reading of Bill C-393, an act to amend the Competition Act as it deals specifically with negative option billing.
First, I congratulate the member for Sarnia—Lambton for sponsoring the bill. Whether one agrees or disagrees with the member's views on matters as diverse as the Senate, child custody or other topics of debate tonight, in negative option billing one cannot help but admire his determination in pursuing these issues.
We need more members like the member for Sarnia—Lambton in the Liberal caucus. We need more members who challenge the status quo, defy the establishment when need be and stand up for the interests of their constituents.
As others have attested, Bill C-393 had a previous life in the 35th parliament. In that parliament, the member for Sarnia—Lambton introduced Bill C-216 which would have amended the Broadcasting Act. The legislation was sparked by public outrage at the cable companies imposing negative option billing through the addition of specialty channels at the beginning of 1995.
As such, Bill C-216 dealt solely with cable television. Despite opposition from many powerful interests, the member for Sarnia—Lambton persevered, managing to guide the bill through first and second reading as well as committee and report stage before it passed the House.
Unfortunately for the member's efforts Bill C-216 was still under review by the Senate when the prime minister called the 1997 federal election. Bill C-216 was effectively killed by the member's own government which was not under any pressure to go to the polls only 3.5 years into its first mandate.
There may be some, perhaps even the member himself, who would blame the Senate for the death of Bill C-216. This is a misguided view because the Senate was playing its constitutionally mandated role to review legislation from the House.
There have been too many occasions in the past several years when the Senate has undeniably improved legislation, correcting errors not addressed on the House side. The Liberal government's so-called Pearson airport legislation and more recent amendments to the Judges Act are but two recent examples. Until the Senate is either reformed or abolished, we should stop attacking its members for trying to the job to which they were named.
Bill C-216 is history. We are now debating Bill C-393. As previously mentioned, the bill would amend the Competition Act to ban negative option billing in a whole host of sectors: certain financial institutions, broadcasting undertakings, telecommunication firms and insurance companies.
In particular, Bill C-393 protects a basic consumer right, the right to express consent before purchasing a new product or service. What this means in plain language is that consumers cannot be billed for a product or service without their clear consent.
The member for Sarnia—Lambton and organizations such as the Consumers' Association of Canada make a compelling case against negative option marketing practices. I think many of us would agree that this type of marketing reverses the traditional buyer-seller relationship. With negative option billing customers are offered new products or services and are required to opt out or expressly decline these new offerings to avoid being charged for them.
From a legal standpoint negative option billing relies on the concept of implied consent. By not responding to the solicitation the consumer is deemed to have given his or her consent. It is fair to say that negative option schemes rely on market inertia to sell new products or services to an existing client base.
It is therefore a justifiable claim that negative option billing further concentrates market share with the dominant industry players instead of fostering competition in an open marketplace.
Bill C-393 applies to federally regulated businesses such as banks, cable and telephone companies. Under the law select financial, insurance and broadcasting companies would not be allowed to use a lack of consumer response to negative option billing inquiries as consent to buy.
The bill wisely allows provincial governments to prohibit negative option marketing within their jurisdictions. Provinces such as Quebec have already taken steps in this direction, a point that was highlighted by the Bloc in the last parliament and also tonight.
While provincial governments have progressed somewhat in addressing these dubious marketing efforts, there is a noticeable lack of such consumer protection at the federal level. Cable providers are still using negative option billing in regional markets despite previous assurances to the contrary.
Industry Canada's office of consumer affairs has warned that negative option marketing has the potential to be an important tool in the financial services sector. The department's August 1996 discussion paper on this subject stated:
Examples include the sending of unsolicited credit cards and changes in account structure made without consumers' consent.... The new technologies could allow industry to profit by slipping new charges and services past unsuspecting customers.
In 1997 the Toronto-Dominion Bank employed a negative option technique to deprive bank customers of their privacy. The National Bank reportedly used a similar scheme to sell travellers health insurance to existing customers by debiting their accounts for $9.95 per month.
I am pleased that Bill C-393 recognizes that there are situations in which a consumer benefits from a negative option billing arrangement. However, for this to be the case, consumers must be able to make informed decisions and give express consent.
Bill C-393 proposes certain steps to be taken for a negative option scheme to be legal. The bill proposes fines for those who contravene the act. Bill C-393 has received the support of the Consumers' Association of Canada, the Public Interest Advocacy Centre and the Insurance Brokers Association of Canada.
Although Bill C-393 is strong on consumer protection I would like to know the views of such organizations as the Canadian Chamber of Commerce, the Alliance of Manufacturers and Exporters Canada, the Canadian Federation of Independent Business and the Canadian Bankers Association, among others. We must always be prudent as parliamentarians not to impose an excessive amount of laws and regulations on the private sector.
We already have the sad example of the federal cost recovery program which was introduced by the Liberal government. While the move to user fees for the private sector was initially welcomed by businesses of all shapes and sizes, the government's chosen structure has proven to be ineffective, disparate, incompatible and costly. As a result this program cost the Canadian economy over $1.3 billion from our GDP and 23,000 jobs.
Let us always be careful in bringing in government intervention no matter how well intentioned it seems at the time. Furthermore, I would like to know how the bill would impact upon the provision of French language broadcasting services.
The chairwoman of the CRTC, Françoise Bertrand, warned the Senate transportation and communications committee that Bill C-216 could result in a lack of marketing flexibility that would hurt the financial sustainability of French language services in Quebec and across the country.
I am sure that all members of the House, especially bilingualism's newest friends in the Reform Party, would want to ensure that Bill C-393 does not similarly threaten French language broadcasting.
On behalf of the Progressive Conservative Party of Canada I offer qualified support to Bill C-393 at second reading. The overall intent is extremely positive. The legislation would significantly increase the level of consumer protection. I urge all members of the House to put aside partisan interests and support moving the bill along to the industry committee where it would be given closer scrutiny on issues such as the one I have raised this evening.
Again I applaud the member for Sarnia—Lambton. We need more initiatives from Liberal caucus backbenchers.
