Mr. Pierre Brien (Témiscamingue, BQ): Mr. Speaker, here we are considering one of the last bills of this Parliament, judging from the atmosphere and the number of members in this House. The bill before us is C-67, an act to amend the Competition Act.
In the speech from the throne on February 27, 1996, the Liberal government announced a reform of the Competition Act as follows:
The Government will introduce proposals to strengthen the economic framework with legislative improvements in the areas of competition, bankruptcy and copyright.Consultations followed, and then a document setting out the proposed amendments to the Competition Act was released. The Competition Act was updated in the summer of 1994.
After that, an advisory committee looked at all the proposals gathered, but the competition bureau continued parallel consultations on specific points in the law. This is the report the minister used to draft Bill C-67 aimed at modernizing the Competition Act. This bill, being debated this morning at second reading, will likely not reach the end of the process, if rumours of an upcoming election call are true, because the work will have to be done all over again.
This is not a total disappointment, because we feel the bill lacks certain major elements, and, moreover, contains a number of instances of legal overlap-in which the federal government intrudes in matters of provincial civil law, as we are constantly pointing out. The principle is always the same: Ottawa knows better than anyone else what is good for Canadians. This endless paternalism rears its ugly head in many laws. Yesterday, I had the opportunity to discuss the consideration of a private member's bill from the Reform Party.
Ottawa's centralizing influence is clear. Having arrived here three and a half years ago, the Reform Party has now adopted Ottawa's style of demanding and centralizing all sorts of powers.
What does this bill contain? Based on the legislative summary, I can tell you what the main changes proposed are.
Obviously, the merger notification process is to be improved and the regulatory burden on business lightened.
It is designed to ensure quicker and more efficient action against misleading advertising and deceptive marketing practices. I will come back to this, because we must not think that this is something new, that we have just found out about or thought of. There are already guidelines governing misleading advertising and deceptive marketing practices. It is also designed to amend and clarify the law applicable to sales price advertising by retailers.
The fourth point is to provide the courts with new means of dealing with crime, through orders on consent and orders including prescriptive terms upon conviction.
It is also designed to address the recent proliferation of misleading telemarketing practices that consumers have been subjected to and which undermine the value of telemarketing as a legitimate marketing tool. Telemarketing is a booming industry these days, as we all know, for probably having been solicited on a number of occasions for various things.
It is true that the Competition Act had not been amended since 1986 and that some updating is always useful-several of the provisions seem quite legitimate and appropriate, and will indeed help modernize the act to some extent-but there is a problem.
There is a major problem with the number of new civil provisions concerning misleading advertising and deceptive marketing practices. This is a clear invasion of a provincial jurisdiction, namely local trade. I mentioned earlier that we keep hearing nice arguments like: ``It is in the best interest of the people. In
principle, this is a good thing''. But the government is taking advantage of the situation to invade a provincial jurisdiction.
[Editor's Note: The fire alarm having sounded:]
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(The sitting of the House was suspended at 10.12 a.m.)
Mr. Pierre Brien (Témiscamingue, BQ): Mr. Speaker, I hope this time I can finish my speech.
I want to put things back in their context, since we had an unexpected break. We are debating Bill C-67, an act to amend the Competition Act and another Act in consequence. As I said earlier, in the throne speech, the government had already announced a reform to strengthen the economic framework, through legislation relating to competition, bankruptcy and copyright.
A long process led to the bill before us today. A review was conducted as early as the summer of 1994. The Minister of Industry asked the director of investigation and research, appointed under the Competition Act, to comment on the act currently in effect. Following these comments, the minister launched, in June 1995, a consultation process by circulating a discussion paper on the proposed changes to the Competition Act.
An advisory committee was asked to look at the various proposals received during the consultation process. Meanwhile, the Bureau of Competition Policy continued its consultations on specific aspects of the act. This exercise led to Bill C-67, which seeks to modernize the existing legislation. As I said, there are changes that do indeed modernize the act, which had not been reviewed since 1986, and that could bring significant improvements.
However, the federal government is using this as an excuse to continue to slowly invade areas of provincial jurisdiction, including civil law. I will get back to this in a moment.
I just want to briefly mention the provisions of the bill. There are improvements regarding the notice to be given when companies merge and when the regulatory burden is reduced. This will ensure speedier and more efficient resolution of misleading advertising cases and unfair trade practices. I will get back to this particular point.
The bill also seeks to amend and clarify the law governing price advertising by retailers. It also gives the courts new remedies following convictions for criminal activity in the form of consent orders and prohibitive orders to include prescriptive terms.
Finally, it sets out to address the problem of the recent proliferation of deceptive telemarketing practices to which consumers fall prey and which detract from telemarketing as a legitimate marketing practice. As I mentioned earlier, telemarketing is on the increase, but many use it fraudulently. We have all seen television programs or news reports of many dubious and very often misleading practices designed to swindle hundreds, even thousands, of dollars out of individuals on many occasions.
There are, as I pointed out, many legitimate provisions that will update the legislation. The new civil provisions in the case of misleading advertising and deceptive marketing practices, however, constitute direct interference in local commerce, an area under provincial jurisdiction.
In 1989, the Supreme Court recognized that the previous legislation, the Combines Investigations Act, overlapped an area of provincial jurisdiction. This recognition notwithstanding, the Court ratified the provisions, relying on paragraph 91(2), which gives the federal government the power to regulate trade and commerce.
So, once again, this is not the first time our political system or our Constitution has led to overlap that is expensive in practice because it results in confusion and conflict between levels of government, and is the source of many problems.
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We know that this is not unique to the trade sector. It happens in a lot of cases, as we see on a regular basis. In a number of areas, health for one, the government is trying to expand its powers or interventions, while at the same time decreasing its contribution, for example its transfer payments for health. The federal government must have found that this money did not do much for its visibility, so it decided to cut transfers to the provinces.
For example, it cut $2 billion in transfer payments for health and then injected millions and millions of dollars into initiatives so that the federal government's logo will be highly visible on the cheques issued, whereas transfer payments would not have had that visibility. The bottom line is that the citizens are clearly penalized. We can see that just about all of the provinces are having to undertake major reforms, and often to make drastic cuts in these areas, as a result of the drastic cuts in the funding they receive.
The federal government's attempt to expand its jurisdiction is, therefore, not unique to trade and competition. As recently as yesterday, the Prime Minister announced that he had, during his mandate, modernized federation and made major constitutional reforms. So he said, to my great amazement. The only changes the federal government has made have been hit and miss, and peripheral, always with the goal of ensuring that Ottawa and the federal
machinery will have an increasingly large role to play in numerous areas of jurisdiction.
The only time it pulls out of anything is when there is no more money left. Then the federal government says: ``OK, now we are going to pull out''. Yet it makes sure to hold on to all of its sources of revenue. They say: ``Oh no, we will no longer interfere with forestry or mining, for example, because we have just found out these are provincial jurisdictions, but we will keep the cash''. The federal government does have jurisdiction over that. It has no struggles with its conscience when it comes to keeping hold of the money.
As I said earlier, the court had recognized these encroachments in the former legislation but nevertheless validated them, saying it was impossible to do otherwise, considering section 91(2) of the Constitution. The court decided there were factors that mitigated the seriousness of these encroachments.
In the final instance, creating a system of civil remedies was justified if the government could demonstrate there was some justification for doing so. When the federal government can do that, this mitigates the seriousness of federal intrusion. We find this in a decision by the Supreme Court which, in most cases, comes down on the same side and seldom on the side of Quebec, so draw your own conclusions. This is just another example of the highest court in the land interpreting the legislation it gets from people like the hon. members opposite, who are gradually diminishing the powers of the provinces and find excuses for these multiple intrusions by the central government, and I say central, because this has gradually become a centralist government.
With the court's blessing, the government has taken advantage of all this flexibility it has been given by a court that is equally centralist. And the result today is Bill C-67, which introduces more duplication and intrusion in areas under provincial jurisdiction. This is not necessarily about occupying a legal space that had been vacant so far. Some provinces already have measures to deal with these practices.
In the existing legislation, misleading advertising and deceptive marketing practices are treated as matters to be dealt with only in criminal court. That is as it should be, because of the federal government's powers with respect to criminal law. However, Bill C-67 proposes to establish a parallel non-criminal mechanism to deal with these offences, although, as I said before, in most cases these areas are already regulated by the provinces. In Quebec, we have the well-known Consumer Protection Act, whose purpose is to protect consumers against certain practices.
Now we will be stuck with two sets of legislation that deal with misleading advertising and deceptive marketing practices. We will, or perhaps I should have said we would, because I have the distinct impression that we will not manage third reading of this bill before an election is called, considering the intense activity we are seeing among Liberal members today. This is a party preparing to hit the campaign trail. In fact, from what I can see, several members all already on the campaign trail.
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So, there will be two sets of rules. Which one will prevail? This will be very confusing for consumers. How well protected will the consumers feel in all this? Which legislation will they feel protects them best? There already is legislation. It is clear that legislation like Quebec's Consumer Protection Act can be used effectively against such practices.
Now, there will be another, federal act, and the public will know that. They will wonder what its scope is and what it deals with. This is another instance of unnecessary overlap. There are many businesses, but not all of them use misleading advertising and have deceptive practices. Businesses, small and medium size ones in particular, complain bitterly about the regulatory burden, all the government red tape and the legalities imposed on them. They find it quite confusing.
In the face of initiatives like this one, which will result in two co-existing acts, one federal and one provincial, regulating business practices, how can we expect these people to concentrate on doing what they do best? They are not in business to fill out government forms. These are entrepreneurs who have found a niche where they feel comfortable, can innovate and want to sell their products.
I recently had a discussion with an entrepreneur in my riding, who was telling me that it makes no sense whatsoever, that one full time employee spends one full day every week filling out forms. Out of a dozen employees, one person works full time to fill various forms for different levels of government. One employee out of a dozen spends all his or her time on this. The entrepreneur is not being unreasonable. He realizes that money must be collected and taxes must be paid to governments. However, one wonders about the usefulness of many regulations and about the extent to which the information will actually be used.
It is not always easy to gather all this information. The more information there is, the more public servants it takes in Quebec City and in Ottawa to sort out that information, to check it out and to do something with it. In the end, people are lost in a maze of data. Provisions such as those in Bill C-67 will definitely not help the process.
One wonders why. What will be the next step once this bill takes effect? Tell the provinces they have to withdraw, as the bill gives the federal government control over this area, since telemarketing and trade practices transcend boundaries?
The federal government probably thinks it is the one in the best position to exercise that control. Given the globalization of trade, what would the next step be? The federal government will not be in a position to take that next step. Therefore, what will happen, given that companies do businesses in several countries? Will international legislation be required to monitor such activities? No, because the provinces can do it. The fact that a business engages in sales, trade, soliciting or telemarketing outside the province or, conversely, that an outside company engages in telemarketing solicitations in a province, does not mean we cannot legally monitor their actions.
It may be different in the case of referendum acts, because if money is spent outside the province, the Quebec legislation cannot regulate that activity. This is a different issue but, normally, a province should be able to monitor, through legislation, what goes on on its territory. Quebec already has a number of provisions to that effect.
Instead of stubbornly trying to find new ways to set standards that will apply from coast to coast, the Minister of Industry should have had the courage to introduce provisions that would have promoted greater access to the Competition Tribunal. Currently, the director is the only person who can go before the Competition Tribunal. If the director does not take action in a given case, the private parties cannot go to the tribunal for corrective action. Therefore, under the current act, only one person can initiate proceedings.
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In September 1996, not so long ago, the Secretary of State for the Federal Office of Regional Development for Quebec, speaking to the bar association, admitted that his government had abandoned for the time being the idea of allowing private parties access to the tribunal.
The director of the Bureau of Competition Policy, however, admitted in a speech to the Canadian Institute, and I quote: ``Given the extent of commercial activity covered under the legislation, it is difficult for the director to investigate all complaints that strike him as justified and to institute proceedings, thus leaving certain parties without recourse''.
This comment makes it plain that there are cases in which certain parties suffer damages and seem to be justified in lodging a complaint. He seems to be saying that he is unable to investigate all complaints, even those that he feels are justified. We are not talking about unjustified complaints, but about those he feels are justified. He is therefore unable to take action accordingly and the end of his comment is significant: ``[-] thus leaving certain parties without recourse''.
Rather than continue to interfere in civil matters at the provincial level, an attempt could have been made, in this bill, to sort this problem out. It is widely recognized in our legal system that there is no justice without access. Changes could have been made under the bill regarding access to the tribunal in order to allow those adversely affected by the supposed violations to correct these injustices.
The government could have shown leadership and implemented a more balanced system that is more accessible and that makes recourse available to private individuals, while ensuring that prosecutions do not serve strategic interests or objectives incompatible with the purposes of the Competition Act.
Obviously, we want to see this done in such a way as to avoid all sorts of problems. In the interest of avoiding duplication, the government should ensure that recourse available to private individuals is not already covered by the provinces. If the provinces are already addressing these sectors, the federal government should not interfere.
I will also say a few words about telemarketing. The advisory committee concluded that telemarketing was a serious problem in Canada that should be tackled at the federal level, not at the provincial level, because of interprovincial and international ramifications. With that kind of reasoning, one can justify any encroachment on any sector whatsoever. If the problem is serious and would have an impact on more than one province, the federal government would, according to the committee, have a moral obligation to intervene.
I may recall that the Consumer Protection Act regulates telemarketing quite satisfactorily. As they do in so many other cases, the provinces can get together on this and ensure their regulations are compatible. This is not to say that provincial regulations are infallible, but my point is that the provinces are certainly capable of exchanging information and data with a view to improving their respective legislations.
Although Bill C-67 merely criminalizes certain unlawful telemarketing practices, we must warn the federal government against intervening in this area, as it did in other cases, by creating civil remedies. The problem is that civil remedies are a matter for the provinces to decide.
This flexible federalism they talk about is often one-sided. Although the Minister of Intergovernmental Affairs and the Prime Minister keep repeating that their federalism is very flexible, it looks a lot more like paternalistic federalism. The government thinks it is on the side of the angels when it says it has the right to intervene in areas under provincial jurisdiction. But now that it has substantially reduced transfers to the provinces, as I said earlier, it says the provinces are not doing what they ought to be doing. It knows better than anyone else what is good for consumers.
That is why we are against this bill. However, considering the parliamentary calendar, it is quite likely the proceedings on this bill will have to wait until the next Parliament.
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Let us hope in the meantime that the departments concerned will have another look at their work and will see there is overlap and infringement in a number of sectors which are covered by civil remedies and which should remain, as in the present case, under provincial jurisdiction, so problems are not continually being created.
We often feel here that we create more problems than we solve. It could be true in this case. In the end, it will not benefit those this bill was intended to serve: consumers.
I would remind you that it is a major sector, and the director of the competition bureau has indicated he is unable to properly carry out the mandate. He said he cannot investigate every complaint, many of which are well founded. That then is a practical problem. They could have said that some people did not have access, that their complaints were founded but left in limbo, and wonder what they could do to give them recourse.
They start with a problem and look for solutions. They look around and see the provinces have already done things that come within a given field of intervention. What comes under federal jurisdiction and what can the federal government do without always trying to bypass the provinces in order to have jurisdiction in the sector? So, if we have the opportunity to do so, we will vote against this bill.
Since you are going to interrupt me, Mr. Speaker, and this may be my last statement in this legislature, I would like, before I conclude, to thank the people in my riding whom it has been my great pleasure to represent and whom I would be delighted to continue to represent as of June 2 or 3, the day after the elections are expected to be held.
I would like to say that, in a future Parliament, people may count on me and on the Bloc Quebecois to again remind this government it often acts in a way that complicates things, in a way that ends up costing more and doing less for people.
People will have someone speaking in their defence and not coming to where they live to defend Ottawa's goals. This is what we will be offering them in the coming weeks, and I am sure that this is what the people of many Quebec ridings, including, I hope, the riding of Témiscamingue or the region of Abitibi-Témiscamingue, will want in Parliament.
I therefore thank you and remind you that we will do everything to ensure that the bill never comes to pass-either in this Parliament or in the next. Some provisions have merit, are good and could be adopted. Others will have to be added and still others will have to be withdrawn. We hope that, in the usual course of a bill in the next Parliament, where we will begin some of this work again, the appropriate corrections will be made.
Mr. Barry Campbell (Parliamentary Secretary to Minister of Finance, Lib.): Mr. Speaker, I am very pleased to have the opportunity to address this House on Bill C-67, an act to amend the Competition Act and another act in consequence.
The subject we are discussing today deals with a fundamental element of the economic framework governing business in Canada. Indeed, the free play of market forces is the very basis of our politico-economic structure and shapes all relationships between Canadians and companies doing business in Canada and abroad.
Canadians, whose quality of life is the best in the world, base their economic relationships on the principle of competition. It is through competition that productivity, efficiency and innovation are improved, thereby enhancing Canada's competitiveness, our prospects for growth and our standard of living.
The Competition Act plays an essential role in ensuring that this system continues to flourish. The Competition Act applies to all economic sectors and to all types of trade in Canada. It is the legislative framework by which Canadian society, through Parliament, ensures that businesses compete on a fair basis.
The Competition Act is also an important means of ensuring protection of the public interest in deregulated industries. It responds well to this government's desire to adopt less costly solutions for Canada by avoiding direct intervention in these economic sectors.
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The amendments we have introduced seek to improve the code of conduct that defines the parameters for business conduct in Canada. With this bill, we can continue to promote a climate of vigorous competition while protecting consumers against deceptive or misleading practices. These changes will contribute to a healthier marketplace, and ultimately, to a better environment for economic growth and jobs.
In our discussion of the need for a healthy marketplace, we must make particular reference to the role of consumers. I would like to take this opportunity to consider the relationship between healthy competition amongst businesses and the effective protection of consumers' interests.
Experience has shown that, where international and domestic markets exist, consumers enjoy lower prices, a greater choice of products, better quality goods and services, and better information about these products.
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As a result of the continued rivalry within markets where competition has free rein, manufacturers and merchants must innovate to anticipate consumers' needs. To keep its market position, each business must earn and renew consumers' trust daily. The most competitive markets are those where consumer information flows without restriction and options are avidly sought out before goods and services are offered.
When markets are competitive, consumers are more apt to inform producers and suppliers of needs and expectations. They are better informed of the choice of products, services and prices so they acquire greater power vis-ŕ-vis producers and suppliers that must vie for their business. That is why the free play of market competition needs to be preserved and promoted. After all, restrictive practices that lessen competition are profitable only to the businesses that engage in them. They also decrease the overall welfare of society which is the reason we must be sure to keep vigilant and put an end to such practices.
A thorough revision and update of the Competition Act was last carried out in 1986. We want this key element of business law to continue to operate effectively. Accordingly, there is a need after 10 years of experience with the current model to ensure the legislation keeps pace.
The amendments we are considering today are not intended as an in depth reform of the act which is generally serving Canada well. They will however clarify the law in certain areas, promote voluntary compliance and provide a better and more effective variety of tools to the Competition Bureau. This is a balanced and focused package of amendments that result from broad consultations with consumers, businesses and experts. It reflects a high degree of consensus.
I will now deal with the main amendments we are proposing to show how they will promote healthy competition and lead to the faster and more efficient resolution of problem situations. To put the proposed amendments in context, I should first indicate that the current act contains provisions on criminal matters as well as those of a non-criminal nature. The criminal offences it deals with include price fixing, bid rigging, predatory pricing, retail price maintenance, misleading advertising and other deceptive marketing practices. In these matters the onus is on the crown to prove beyond a reasonable doubt that an offence has been committed.
The non-criminal or civil matters by contrast may be reviewed by the Competition Tribunal of Canada. These include mergers, abuse of dominant position, refusal to deal, consignment selling, monopoly tied selling, market restriction and delivered pricing. For reviewable matters the bureau may apply to the tribunal for a remedial order.
The bill before us builds on this foundation of enforcement tools and remedies, supplements the criminal provisions with a new offence related to deceptive telemarketing and creates a new civil approach for most instances of misleading advertising and deceptive marketing practices.
The bill also improves existing provisions relating to merger pre-notification, prohibition orders and ordinary price claims. The common denominator reflected in these amendments is a focus on clarifying the law for business and improving enforcement efficiency and effectiveness.
Telemarketing is a legitimate method of product promotion. However, when we refer to deceptive telemarketing, we are focusing on the use of deceptive representations and abusive tactics in the course of telephone promotions. Deceptive telemarketing has defrauded victims of large sums of money in the process. It has tarnished the reputations of honest telemarketers. Cleaning up this industry could be an asset to business and consumers.
Small and medium size businesses are also frequently targets of deceptive telemarketing. The Competition Act should not allow dishonest undertakings whatever their modus operandi to increase criminal operators' profits at the expense of honest businesses.
Currently the act prohibits the use of false or misleading representations for the purpose of promoting the supply or use of a product or promoting any business interest. The act also contains provisions relating to promotional contests. However, the existing law does not specifically forbid certain practices that have come to be associated with deceptive telemarketing. These need to be addressed.
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This bill will create a specific new offence relating to these practices. The maximum penalty on summary conviction will be a fine of $200,000 or a year in jail or both. On indictment the maximum penalty will be a fine at the discretion of the court or jail for up to five years or both.
This new provision will apply to situations involving use of interactive telephone communications whether initiated by a telemarketer or by potential customers. The telemarketer will have to provide certain important information at the outset of the telephone conversation. Also, a number of deceptive practices will be prohibited.
To close on this subject, let me just add that another amendment will make it easier to obtain interim injunctions from courts to quickly put an end to the activities of deceptive telemarketers. These injunctions will also be available against third parties to enjoin them from providing products or services to deceptive telemarketers.
These amendments represent a considerable improvement in the current law. They address the most problematic practices that have been identified. They also incorporate penalties that will provide better deterrence.
In this area of competition law, the proposed amendments will be of great benefit to all stakeholders, consumers as well as businesses. As I have already mentioned, the current law contains provisions relating to misleading and false representations. Violations of these provisions are addressed solely through the criminal law process, prosecutions in criminal courts. Advertisers can avoid being convicted if they establish they have acted with due diligence.
Under the proposed amendments there will still be a blanket prohibition of deceptive advertising and marketing practices. The Competition Act will offer the bureau two avenues, criminal prosecution or civil resolution, to rectify conduct which though problematical has occurred unintentionally. Under this new civil regime most of the deceptive practices now prohibited will remain practically unchanged but will become reviewable matters.
The bureau can call upon a judicial member of the tribunal, the federal court or provincial superior court, and redress can be obtained through court order or by way of consent. Orders to publish information notices as well as to pay administrative monetary penalties for individuals may be issued. Last, consent orders may be entered into and will then be legally binding.
Measures such as these will expedite decision making and ensure that it is done consistently and by a specialized body.
The Speaker: My colleague, you will have the floor after question period of course.
It being almost eleven o'clock, we will now begin statements by members.