moved that the bill be read the third time and passed.
Mr. Speaker, it is my pleasure to take the floor in this third reading debate, which will wrap up the efforts of my political party and myself to convince the hon. members of the House of the merits of Bill C-452, An Act to amend the Competition Act (inquiry into industry sector), which continues to be a current concern. The bill would give the Competition Bureau the requisite powers to carry out its investigations.
The price of a barrel of oil was in free fall at one time, but because of the situation in Libya, the price shot up last week. The price of a barrel of oil has skyrocketed, and that has repercussions on prices at the pump. That is the problem.
The Competition Bureau could conduct an inquiry. Consumers are not clueless and they are not idiots. They are aware that the gasoline sitting in underground tanks at service stations was bought at a much cheaper price. Even if the price of a barrel of oil has risen to $104 or $120, there should be no direct increase at the pump because that gas cost much less. It is easier for the oil companies and service stations to raise the pump price as soon as there is an increase. People feel they are being taken hostage by the oil companies.
I will give one concrete example. There is a Canadian Tire with a service station near where I live. On Tuesday, the price at 7 a.m. was $1.17. Three hours later, at the same service station, it was $1.25. What happened between 7 a.m. and 10 a.m.? I have no idea, but the price rose by 8¢. Twenty-four hours later, the price was back down to $1.17. How does one explain to the population that the price of gas can fluctuate in 24 hours even though nothing has happened? The retailer has pocketed 8¢ a litre, and I think it is the consumers who lose out. That is why consumers want a bill so that the Competition Bureau can conduct inquiries into the petroleum sector.
When I speak of the petroleum sector, it is not just the price at the pump. We already know that when the price of a barrel of oil goes up, the cost of refining goes down, but the opposite happens as well. When the price of a barrel of oil goes down, the cost of refining goes up.
I asked that question of the Competition Bureau and in the committee. I was told that the oil companies do not talk to each other, but how can it be that every Monday, without having talked, all the refiners in Quebec and Canada have the same prices at the pump? If the refining price is set at 8¢, the following month it is 13¢, 15¢ or 16¢. We do not see a change in the price at the pump because the oil companies are different. That is what we think, but that is not the case. In fact, the oil companies all buy from the same place. The refiner's gas and the gas in the underground tanks at the service station come from the same place. So how can the refining price be the same?
There used to be one refinery in Montreal and one in Quebec City, but they were owned by two different companies. Yet, every Monday, the price at the refinery was the same. Consumers would expect that each Monday there will be a disparity between the two oil companies or brands at the gas stations.
How can the price be the same if they are not talking? How can the same litre of oil be refined at the same price? I asked the Competition Bureau that question, but it was confused and did not understand why the price was the same. I asked if it would investigate, but it said no. It claimed to have enough investigative powers. But what kind of investigative powers? Personally, I do not think that it has any. The bureau said that it had conducted an investigation in the Sherbrooke area and that it was able to prove that there was collusion among the oil companies to fix prices at the pump. But they needed an informant.
Someone had to phone the Competition Bureau and tell them he had received threats to force him to increase his price at the pump. That is when the Competition Bureau launched an investigation. In order to get an investigation going, someone must act as an informer. I tried it myself. The Competition Bureau said we could call to complain about the price of gas in our city or town, if it was higher than in the neighbouring city or town, and if we did not understand why gas was so expensive at the pump.
Many people in my riding complained to the Competition Bureau, asking for an investigation. However, it never did, because there was no whistle-blowing. The Competition Bureau was not provided with all the evidence required to start an investigation.
Do people know what competition means for oil companies? It is not competition between companies but, rather, between municipalities. If a municipality is large, gas will cost a lot more, because the population is much larger. Conversely, if a municipality located 10 kilometres away is much smaller, the price of gas will be much lower. Oil companies say that this is competition. People living in the larger municipality should fill up in the small town. That is what they call competition.
It goes even further. In Montreal, some streets are busy and the price at the pump is much higher than it is four or five blocks away, where there is less traffic. Again, that is what oil companies call competition. However, for consumers that is not competition, it is gouging.
We have to put gas in our car. Oil companies make billions of dollars in profits every year, but I think they take the money directly from our pockets. And I am not the only who thinks so. If one were to ask people from each and every riding in Canada whether they think they are getting taken by oil companies, I am sure their answer would be yes.
Is it so hard to give the Competition Bureau an investigative power? We often hear political parties wonder whether that is done elsewhere, and whether we would be the only ones to do so. The fact is that, at one time, the Competition Bureau had a power to investigate. It had it until 1986, when the Conservatives of the day came to office. They took that investigative power away from the Competition Bureau, and said it was because that industry had already been investigated.
An investigation can be carried out into any industry. We could also talk about the construction industry in Montreal, where there is talk that bids may have been rigged. The Competition Bureau can investigate; however, at present, it cannot do so on its own initiative. There has to be an informer. Because of this, pressure from industry lobbies resulted in the government of the day taking away the investigative powers of the Competition Bureau.
Do other countries have investigative powers like those we want to give to Canada's Competition Bureau? The answer is yes. In the United States, this type of study can be initiated in three ways: Congress uses its legislative authority to ask the Federal Trade Commission, the FTC, to draft a specific report; members of Congress or of a congressional committee, without using its legislative authority, ask the FTC to conduct a study; and the FTC initiates or conducts an investigation on its own. There are no formal criteria limiting what kind of research and policy inquiries the FTC can undertake.
We would also like to point out the situation that exists in the United Kingdom with the Office of Fair Trading.
The OFT has carried out market studies of various sectors of the economy, in particular liability insurance, new car warranties, private dentistry, taxi services, proprietary credit cards, and pharmacies.
...The OFT may also make a market investigation reference to the Competition Commission if there are reasonable grounds for suspecting that any feature, or combination of features, of a market prevents, restricts or distorts competition.
Hence, the United Kingdom can conduct its own investigations. Also, the European Union has the following provision:
When the trend of trade between member states, the rigidity of prices or other circumstances suggest that competition may be restricted or distorted within the common market, the Commission may conduct an inquiry...
Thus, the European Union can also initiate an investigation.
Canada is often compared to Australia. In committees, we often ask what Australia is doing, perhaps to follow its lead. In Australia, the Australian Competition and Consumer Commission can conduct general investigations into all sectors of the economy. The commissioner can conduct investigations on his own initiative. We want to do the same thing.
In 1998, when the CITT Act was passed, Canada conducted four inquiries. However, as I said earlier, there have been no inquiries related to competition issues under the Inquiries Act since the repeal of section 47 in 1986. It is important to mention that even the Commissioner of Competition, Konrad von Finckenstein, described the flaws in the Competition Act in his testimony before the Standing Committee on Industry on May 5, 2003. He said:
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.
In the United States, a study on oil companies was conducted to determine whether the refineries had tried to increase the price of gas at the pumps for consumers. It is also important for consumers in Canada and Quebec that a similar study be conducted by the Competition Bureau.
I want to refer you to an article about a report. On Saturday, May 25, 2002, the magazine Les Affaires reported that refiners had tried to drive up gas prices at the pump in the U.S. by deliberately reducing supply.
I can say right now—even today we have heard stories about oil companies—that since the closure of the refinery in Montreal, the price of gas is much lower. That is why it is important for the Competition Bureau to have the authority to investigate.