INST Committee Meeting

STANDING COMMITTEE ON INDUSTRY, SCIENCE AND TECHNOLOGY

COMITÉ PERMANENT DE L'INDUSTRIE, DES SCIENCES ET DE LA TECHNOLOGIE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, December 4, 2001

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[English]

The Chair (Ms. Susan Whelan (Essex, Lib.)): I'm going to call the meeting to order.

We will discuss Bill C-23, an act to amend the Competition Act and the Competition Tribunal Act.

Today we have, from the Department of Industry, Konrad von Finckenstein, the Commissioner of Competition, from the Competition Bureau. And we have Mr. Chris Martin. I'm sorry, I don't know your position, Chris.

Mr. Chris Martin (Acting Assistant Deputy Commissioner of International Affairs, Department of Industry): I'm the acting assistant deputy commissioner of international affairs.

The Chair: Thank you.

We also have with us, from Justice Canada, Louise Faille, legal counsel for the competition law division, Industry Canada.

Everyone has a set of amendments in front of them now. I would propose we move to our clause-by-clause. As we reach each clause, if anyone has any questions on the clause or any questions on the amendment, we would then have the witnesses discuss them and answer any questions. Is everyone okay with that?

That being said, we'll move to clause-by-clause consideration.

(Clauses 1 and 2 agreed to)

The Chair: There is a proposed amendment for a new clause 2.1.

[Translation]

Mr. Drouin.

Mr. Claude Drouin (Beauce, Lib.): Thank you, Madam Chair.

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We are proposing to amend Bill C-23 in clause 2.1(1) by adding a paragraph e) to subsection 29(1) of the Competition Act.

Committee members have the text of the proposed amendment. Do we need to read it?

[English]

The Chair: Actually, why don't you read the amendment?

Mr. Claude Drouin: Me?

The Chair: Read the amendment, please.

[Translation]

Mr. Claude Drouin: Fine then. We propose the following paragraph (e):

(e) any information provided voluntarily pursuant to this Act.

[English]

The Chair: Monsieur Drouin, could you read the entire wording of the amendment?

[Translation]

Mr. Claude Drouin: Okay:

2.1(1) Subsection 29(1) of the Act is amended [...] by adding the following after paragraph (d):

(e) any information provided voluntarily pursuant to this Act.

How's that, Madam Chair?

[English]

The Chair: I have something different. The English is different from the French.

Are the English and French different? Does it make sense?

Mr. von Finckenstein, could you clarify?

Mr. Konrad von Finckenstein (Commissioner of Competition, Competition Bureau, Department of Industry): Yes.

The content of the two amendments is the same. They were originally drafted in each language, and the drafting style is slightly different. Therefore, you do not have the identical numbering, but the content and effect are absolutely the same.

(Amendment agreed to)

The Chair: Shall the new clause 2.1 carry?

(Clause 2.1 agreed to)

Mr. Konrad von Finckenstein: Madam Chair, I think there was another part to the motion just now that you also have to vote on. It's proposed subsection 29(2), to be amended to replace the exception.

The Chair: We moved G-1 as an entire amendment, I thought.

Mr. Konrad von Finckenstein: You moved the entire amendment?

The Chair: Yes.

Mr. Konrad von Finckenstein: Okay. Sorry.

The Chair: Correct?

Amendment G-2 is for Bill C-23 in clause 3 to be amended by replacing lines 26 to 29 on page 3 with “for which it was requested”.

[Translation]

Mr. Drouin.

Mr. Claude Drouin: Madam Chair, we move that Bill C-23, in clause 3, be amended by replacing lines 26 to 29 with the following:

for which it was requested.

[English]

The Chair: Are there any questions? Mr. Strahl.

Mr. Chuck Strahl (Fraser Valley, PC/DR): While I'm catching up, exactly what's the purpose of it?

The Chair: Madam Faille.

Ms. Louise Faille (Legal Counsel, Competition Law Division, Department of Industry): The purpose of this is to ensure that when the foreign state receives documents, they would promise to not use the information they receive for any other purpose. We wanted to guarantee there would be no ambiguity by adding any other reasons, such as “like” and “unless”, etc. It was taken out. It's strictly “for the purpose for which it was requested”.

The Chair: I think it reflects the evidence we heard.

(Amendment agreed to)

The Chair: There's another amendment to clause 3, amendment G-3.

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[Translation]

Mr. Drouin.

Mr. Claude Drouin: Yes, Madam Chair.

We move that the bill be amended in clause 3 by adding the following after line 31 on page 20:

Records or other things already in Commissioner's possession

30.291(1) For greater certainty, any evidence requested by a foreign state under an agreement may be obtained for the purposes of giving effect to the request only in accordance with the agreement and the procedures set out in this Part, even in the case of records or other things already in the possession of the Commissioner.

(2) This section [...]

section 2,

[...] does not apply in respect of any information that has been made public or any information the communication of which was authorized by the person who provided the information.

[English]

The Chair: Monsieur Drouin is moving amendment G-3, as you see it in front of you. Does anyone want an explanation?

Is there any explanation?

Ms. Louise Faille: This was to address any concerns people had. If the commissioner already had some information in his possession, he would automatically give the information to the foreign state. It is not what we had intended. For any information to be obtained, we would have to follow the procedure set out in part three.

(Amendment agreed to on division)

(Clause 3 as amended agreed to on division)

(Clauses 4 and 5 agreed to)

(On clause 6)

The Chair: We have clause 6 next.

Monsieur Drouin.

[Translation]

Mr. Claude Drouin: We move that Bill C-23 be amended in clause 6 by replacing lines 7 to 10 on page 22 with the following:

mail or by any other means a document or notice in any form, if the document or notice gives the general impression that the recipient has won, will win, or will on doing a particular act win,

[English]

The Chair: Mr. Drouin has moved the amendment you have in front of you known as amendment G-4. I believe it was in response to evidence we heard.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: Yes. You heard evidence that innocent contests might be caught by this, where people answer and become eligible. Therefore, we put the words “doing a particular act”. You have to do a positive act in order to qualify for the contest. This was done in order to address concerns some of the witnesses before you raised.

(Amendment agreed to on division)

(Clause 6 as amended agreed to on division)

(Clauses 7 to 11 inclusive agreed to on division)

The Chair: We have amendment G-5. Mr. McTeague.

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): I move that Bill C-23 be amended by adding after line 13 on page 27 the following subclause:

11.1 The portion of subsection 75(1) of the Act before paragraph (a) is replaced by the following:

75.(1) Where, on application by the Commissioner or a person granted leave under section 103.1, the Tribunal finds that

(2) Subsection 75(1) of the Act is further amended by striking out the word “and” at the end of paragraph (c), by adding the word “and” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) the refusal to deal is having or is likely to have an adverse effect on competition in a market.

(3) Section 75 of the Act is amended by adding the following after subsection (3):

(4) In considering an application by a person granted leave under section 103.1, the Tribunal may not draw any inference from the fact that the Commissioner has or has not taken any action in respect of the matter raised by the application.

11.2(1) The portion of subsection 77(2) of the Act before paragraph (a) is replaced by the following:

(2) Where, on application by the Commissioner or a person granted leave under subsection 103.1, the Tribunal finds that exclusive dealing or tied selling, because it is engaged in by a major supplier of a product in a market or because it is wide spread in a market, is likely to

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(2) Subsection 77(3) of the Act is replaced by the following:

(3) Where, on application by the Commissioner or a person granted leave under section 103.1, the Tribunal finds that market restriction, because it is engaged in by a major supplier of a product or because it is widespread in relation to a product, is likely to substantially lessen competition in relation to the product, the Tribunal may make an order directed to all or any of the suppliers against whom an order is sought prohibiting them from continuing to engage in market restriction and containing any other requirement that, in its opinion, is necessary to restore or stimulate competition in relation to the product.

(3) Section 77 of the Act is amended by adding the following after subsection (6):

(7) In considering an application by a person granted leave under section 103.1, the Tribunal may not draw any inference from the fact that the Commissioner has or has not taken any action in respect of the matter raised by the application.

The Chair: Thank you, Mr. McTeague. Do you want to speak to that, or should Mr. von Finckenstein?

Mr. Dan McTeague: I can speak to it.

This simply gives light to the amendment we had given in the four defined areas that would provide effective access, private access, in the limit-constrained areas that we have debated and discussed before this committee.

I'll leave the rest to the commissioner.

The Chair: Commissioner, did you have anything to add to that?

Mr. Konrad von Finckenstein: Yes. These amendments pick up the principles put forward by Mr. McTeague, which were subject to discussions over the last couple of months. A couple of refinements were specifically made to make sure there can't be any misuse of these provisions. Let me deal with it globally, rather than just this specific amendment, because it's true through several amendments.

Basically, we have made sure that there are full loser-pay costs. If anybody brings one of these actions that's unsuccessful, the court may award costs against that person.

Secondly, the tribunal has to grant leave, and when it grants leave, the criteria are spelled out—that is, the tribunal has to have reason to believe there has been a violation, or there has been conduct that could substantially be a violation of the act, the same test that I have to apply before I go on an inquiry.

Thirdly, there's a provision there against double jeopardy. If a private party brings an action, the commissioner can't bring an action; if the commissioner brings the action, the private party can't. So in effect, if this matter is litigated, it will only be litigated once, not twice.

Also, in section 75, the jurisprudence made it clear that you can't bring such a case unless it adversely affects competition. We wrote that into the law by this amendment so that it's clear that this is a test that should be applied. Also, there's a 15-day waiting period before such an application can be brought.

Those are the refinements that have been built around the principles that Mr. McTeague put before you, and the result of it is that you will now have private access in four areas, the four areas set here: refusal to deal, tied selling, exclusivity, and market restriction. A person will have to get the leave of the tribunal; the tribunal will have to make a determination that there is a potentially valid case; the case will proceed; it can only result in an injunction, no damages; and at the end of the day, if the party is unsuccessful, it may have costs awarded against it.

The Chair: Thank you very much, Mr. von Finckenstein.

Mr. Martin.

Mr. Pat Martin (Winnipeg Centre, NDP): My only question would be if the courts may award costs, what would then be the test for how it is seen as a malicious, vexatious, or frivolous complaint? Where is the safeguard here that somebody won't get dinged with costs when their intentions were quite honourable?

Mr. Konrad von Finckenstein: Presumably, since that same court has given them leave to come before it, first of all, it can't be vexatious, otherwise the court wouldn't have given them leave. So you can't then turn around and ding them with costs for vexatious proceedings. So you're protected fully against that.

Mr. Pat Martin: Good enough. Thank you.

The Chair: Mr. Strahl.

Mr. Chuck Strahl: Just two things, for clarification. One, we heard testimony this morning about possibly making the commissioner have to put rulings in writing and make them available ahead, on an ongoing basis.

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It says here, in “Inferences”, under subsection (4), that “...the Tribunal may not draw any inference from the fact that the Commissioner has or has not taken any action...”. I'm wondering, if we want to address that issue of the commissioner making a written ruling, so to speak, on application, whether we do this in here or at another place. I'm not sure the committee wants to deal with it, but it was brought up again this morning and we've heard it several times, about possibly asking you, or the commissioner, to make those rulings public.

Mr. Konrad von Finckenstein: First of all, we make all our rulings public. They are on the website. But this one is for a different purpose. This contemplates a situation where somebody has applied to us and said, please bring this case on a refusal to deal. We look at the situation, and we come to the conclusion that we won't proceed further. So that person says he is going to take it on his own to the tribunal. He should be entitled to do it, and the fact that we have not proceeded should not draw any adverse inference. He shouldn't have to overcome also our reluctance to proceed. He has to make his case to the court, but the opponent can't say that the commissioner didn't bring the case, ergo it's automatically not valid. No, the fact that we didn't bring a case is totally irrelevant to the consideration by the tribunal. That's what this is supposed to do.

Mr. Chuck Strahl: Just to clarify for myself, when you don't take a case, do you publish the reasons?

Mr. Konrad von Finckenstein: We publish the reasons when we take a case, when we make a settlement, and when we don't make a case.

Mr. Chuck Strahl: Okay. That was a concern this morning. So that clears it up.

The other thing on which I want clarification for myself is on the second page, under subsection 77(3), where we talked about “substantially lessen competition”. Is that the same as anti-competitive behaviour? Is it clear in your mind what that means? Lessening competition is not necessarily the same as anti-competitive behaviour.

Mr. Konrad von Finckenstein: Essentially, lessening competition is a test that is used in a large portion of the act—for instance, when you look at a merger and decide whether to approve it or not. Will it substantially lessen competition? It's also used in section 77. That has been in the act for a number of years and has not been changed by these amendments.

Mr. Chuck Strahl: So it doesn't need anything added to it. As you say, that is adequate.

Mr. Konrad von Finckenstein: That is a standard test that's applied in an awful lot of jurisprudence, what “substantially lessen competition” means.

Mr. Chuck Strahl: Thank you.

The Chair: Thank you very much, Mr. Strahl.

Mr. Lastewka.

Mr. Walt Lastewka: For clarification, are we approving amendment G-5 or the government's amendment in this section? They don't read the same.

The Chair: We're approving amendment G-5. You should have it in front of you in this form.

Mr. Walt Lastewka (St. Catharines, Lib.): What about this 11.1?

The Chair: That's just a summary of the actual amendment. It's an explanation. It's not word for word. It's a bit confusing. That's why we have the word-for-word in front of you.

The discussion is actually on a little bit more than amendment G-5 right now. We're talking about the issue of private access and how it has been refined. Okay?

Mr. Rajotte.

Mr. James Rajotte (Edmonton Southwest, Canadian Alliance): Thank you, Madam Chair.

I want to clarify something. You may have actually said this, Commissioner, but if you were already conducting an investigation, then under this, someone would not be allowed private access if you were already conducting an investigation on them?

Mr. Konrad von Finckenstein: When somebody applies for leave to bring an action, I get notified. I have to say within 48 hours whether we are under inquiry or whether we were under inquiry and have settled the case. If either of those situations occurs, then the party may not proceed. If, on the other hand, I say we are not inquiring, or we looked at it and we discontinued the inquiry, then the person is free to proceed.

Mr. James Rajotte: I know you said if you decide not to proceed with the case, the reasons for you not proceeding should not then bias the Competition Tribunal against the person bringing private access. But should that not then just be part of the general evidence that goes forward to the Competition Tribunal?

Mr. Konrad von Finckenstein: This section shouldn't bias the tribunal in terms of determining whether to allow that person to go forward, bring leave or not.

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Once the actual action takes place, assuming he gets leave, then undoubtedly the defendant will introduce the fact that whether we had looked at it and nothing had.... Again, the idea here is that the case should be conducted on its own merits at that point in time.

The section in front of you only relates to the leave application. Once the actual case is proceeding, the defendant will say the commissioner looked at it. Presumably, the tribunal will say he is not here and what we're looking at are the facts that are alleged before us. So that's totally another one to us. We wanted to make sure that for the leave application, also, it could not be used against any applicant. That's why that negative influence clause is in here.

The Chair: Okay.

Mr. James Rajotte: Just to go one further on that, then, will the defendant then be able to present the reasons why you did not?

Mr. Konrad von Finckenstein: No. As I say, when you apply for leave.... The plaintiff first asks for leave. The fact that we inquired and discontinued may be not be adduced and no inference shall be drawn. When the actual case comes along, it's never a relevant fact, because when the actual case comes before the court, the court will look at the evidence as adduced before it. The defendant may want to try to adduce evidence that we looked into it or not. We would not be party, unless we chose to be, and I certainly don't see why we would take sides in a private lawsuit. It would not be our job to do that.

The Chair: Mr. Strahl.

Mr. Chuck Strahl: I agree with this idea about double jeopardy—it does seem to me that's the proper way to do it. But there was at least one witness I talked to who argued that we shouldn't restrict that, that if somebody wanted to allow you to start your investigation and start a private access at the same time, why not let them do it? In fact, his suggestion was that you might even want to join his action or join the proceedings as things moved along. Maybe you could just explain why you don't think it's healthy to have both happening at once.

Mr. Konrad von Finckenstein: It seems to me there's an issue to be litigated. It will be litigated either by us or by the private party. It doesn't need to be litigated twice. Nothing prevents us from joining a private party that has obtained leave and becoming an additional plaintiff in that matter. We couldn't separate or subsequently do it, so it will be once before the courts, either jointly or only by the plaintiff.

Mr. Chuck Strahl: You can still join if you feel it's necessary and in the public interest, is that right?

Mr. Konrad von Finckenstein: I can't imagine why we would, but the possibility is there.

Mr. Chuck Strahl: Okay. Thank you.

(Amendment agreed to on division)

The Chair: Now G-6. Mr. McTeague.

Mr. Dan McTeague: Madam Chair, I move that Bill C-23 be amended by adding after line 13 on page 27 the following:

11.1 Section 77 of the act is amended by adding the following after subsection (3):

(3.1) For greater certainty, the Tribunal may not make an award of damages under the section to a person granted leave under subsection 103.1(7).

The Chair: Mr. von Finckenstein.

Mr. Konrad von Finckenstein: This section is put there for clarification. As we said all along, if the prior party brings an action, the person should only have damages.

The act right now provides that when you bring an action the court may issue an order saying that the conduct has to stop, or any other order, in order to restore the competition. Some private practitioners have said that you could read into this any other order to restore competition the award of damages. That's not intended. Therefore, for clarification it says here, for greater certainty, that this does not mean that you may avoid damages.

(Amendment agreed to)

The Chair: Now G-7. Mr. McTeague.

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Mr. Dan McTeague: I move that Bill C-23 be amended (a) by adding after line 13 on page 27 the following:

11.1 Section 79 of the Act is amended by adding the following after subsection (3):

(3.1) Where the Tribunal makes an order under subsection (1) or (2) against an entity who operates a domestic service, as defined in subsection 55(1) of the Canada Transportation Act, it may also order the entity to pay, in such manner as the Tribunal may specify, an administrative monetary penalty in an amount not greater than $15 million.

(3.2) In determining the amount of an administrative monetary penalty, the Tribunal shall take into account the following:

(a) the frequency and duration of the practice;

(b) the vulnerability of the class of persons adversely affected by the practice;

(c) injury to competition in the relevant market;

(d) the history of compliance with this Act by the entity; and

(e) any other relevant factor.

(3.3) The purpose of an order under subsection (3.1) is to promote practices that are in conformity with this section, not to punish.

11.2 The Act is amended by adding the following after section 79:

79.1 The amount of an administrative monetary penalty imposed on an entity under subsection 79(3.1) is a debt due to Her Majesty in right of Canada and may be recovered as such from that entity in a court of competent jurisdiction.

The Chair: Thank you.

Are there any questions on G-7? Mr. Volpe.

Mr. Joseph Volpe (Eglinton—Lawrence, Lib.): I wonder if the commissioner knows whether this is the amendment that caused one of the witnesses such great consternation last week.

Mr. Konrad von Finckenstein: If you're referring to the witnesses from Air Canada, yes, that's the clause.

This clause is meant to deal with anti-competitive air conduct in the airline industry, and it provides that.... As you know, Bill C-23 before you already provides that you can get a written opinion from us, a binding one, on conduct. But where a company engages in anti-competitive air conduct, notwithstanding our opinion or because they didn't get one, and the court finds, indeed, that they have engaged in anti-competitive conduct, the court can prohibit that conduct, and it can award an administrative monetary penalty up to $15 million so as to make it clear that this is an act that should be abided by and the rules should be followed and the court is not willing to tolerate anti-competitive conduct.

Now, it will look at the circumstances, will look at the frequency and duration of the practice, as well as the ability or the class of person affected, the injury to competition, the history of compliance etc.

This basically allows us, when we move against a player in the airline industry who has engaged in anti-competitive conduct, to tell the court to prohibit it and to award an administrative monetary penalty in order to ensure further compliance because of these factors. It is up to the court to decide whether to award an administrative monetary penalty and the amount.

Mr. Joseph Volpe: In the climate in which we find ourselves with Tango and WestJet, is that amount sufficient to ensure compliance?

Mr. Konrad von Finckenstein: I think an administrative monetary penalty in any amount is something a company wants to avoid. It affects its reputation and it is something that is not appropriate, but the court will have to decide what the appropriate amount is.

As you probably remember, not too long ago there was undue disclosure by Air Canada to some investment bankers, and the Ontario Securities Commission awarded a penalty of around $1 million. Administrative penalties in these amounts are not uncommon. It depends on the gravity of the situation of the conduct, but it's certainly something that any responsible company wants to avoid. I don't believe there's any airline company that wants to have an administrative monetary penalty awarded against it. It's also something that is just another nuisance. It's appropriate that the court has to decide, but I really think the fact of the penalty is just as important as the amount.

Mr. Joseph Volpe: Thank you.

The Chair: Mr. Strahl.

Mr. Chuck Strahl: For clarity, then, subsection 55(1) of the Canada Transportation Act defines those domestic services as what, as airlines? Just airlines?

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Maybe for the record, maybe you could explain why airlines are singled out in this section. We just passed something there saying there wouldn't be any damages awarded and so on, but this is the one grouping that is going to have the possibility of, if not damages, certainly monetary penalties. Could you just explain why the airline industry, as opposed to any other industry, needs to be singled out for that?

Mr. Konrad von Finckenstein: As you mention, they are not damages, they are administrative monetary penalties. They're already in the act, by the way, under section 74 for misleading advertising. They're now extended to the airline industry in the same way, in previous amendments....

We have a crisis in the airline industry. I think everybody knows that. It's also an industry with extremely high mobility of assets, where anti-competitive conduct is relatively easy to engage in and change from location to location because you have many routes. Therefore, the government thought it was necessary here, in order to—as subsection (3) says—promote conformity and compliance, to remind people in the airline industry that if they engage in anti-competitive conduct, not only will there be a prohibition order issued against them, but there may be, if the court deems it appropriate, administrative monetary penalties.

Of course it's felt that it's very important that we have proper competition in the airline industry and not anti-competitive acts.

The Chair: Mr. Strahl.

Mr. Chuck Strahl: What would you say to those people who argue that we shouldn't single out airlines, that we should let transport policy, transport ministers, and transport regulations handle this, and the Competition Act should be framework legislation that's not industry-specific? Is this just something you have to deal with, or do you think this is the best way to deal with anti-competitive behaviour in that industry?

There's no doubt it has some problems. People have suggested it shouldn't be industry-specific in framework legislation, that there should be general terms and general principles, and by being specific in here we're asking you to become an expert in singling this one out. What do you say in response to that?

Mr. Konrad von Finckenstein: The intent here is to make sure there's no anti-competitive conduct in the airline industry. The idea is not to regulate or make us the regulator of the airline industry, but to make sure the provisions of the framework legislation that apply to all industries, but particularly in the way they apply to the airline industry, are being adhered to and respected.

This is one of the few industry-specific provisions in the Competition Act, primarily for constitutional reasons, because most industries fall under provincial jurisdiction. Airlines are clearly in the federal jurisdiction, therefore you can put them in here. That's why they're here.

As I mentioned before, you should ask the ministers who proposed these amendments, but the principal reason is obviously because we have a crisis in the airline industry.

The Chair: Mr. Strahl.

Mr. Chuck Strahl: As my final comment on this, because of subsection (3.2) you may find someone has either done it continuously or deliberately, or they have a history of problems, and so on, that will affect the amount of the recommendation on this monetary penalty. But when the tribunal investigates, do they make recommendations on changes to regulations, or do they just say, “Given the regulatory framework we're given, this is what we find”? Do you make recommendations on changing recommendations in another act or in another minister's bailiwick?

Mr. Konrad von Finckenstein: We have two roles under the act. One of them is enforcement of the act and making sure people comply with the provisions. Second, we have a policy role. We are asked to make recommendations to any federal decision-maker on competitive issues that may fall under that. In that capacity, we make recommendations. We have made recommendations on airlines, telecom, energy, etc. Those are really two quite separate functions.

Mr. Chuck Strahl: Do you make those public?

Mr. Konrad von Finckenstein: Yes.

Mr. Chuck Strahl: Thank you.

The Chair: Thank you very much, Mr. Strahl.

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Mr. McTeague.

Mr. Dan McTeague: Because it is a proposal that is timely, there are sections of the Competition Act that are industry-specific. There are some on the banks, and some others under section 78 are illustrative. For instance, freight equalization is industry-specific to the Canada Transportation Act, and has found its way into the Competition Act.

That's just a clarification for you, Mr. Strahl.

Thank you.

The Chair: Thank you very much, Mr. McTeague.

Mr. Rajotte.

Mr. James Rajotte: Thank you, Madam Chair.

Commissioner, I just want to ask you, specifically under paragraph (3.2)(b), “the vulnerability of the class of persons adversely affected by the practice”, if you can explain why that is in there and its implications.

Mr. Konrad von Finckenstein: If you look at the present act, in section 74, you will see the same language. The idea is that when you award the administrative monetary penalty you look at the overall conduct, the frequency, the effect of competition, and to what extent people in that class are vulnerable and therefore have left the market, thereby reducing the competition.

Since the overall purpose of the whole act is to have competition and maintain it, you have to take into account the consequence of the anti-competitive act. Part of it is the severity of the act, part of it is the vulnerability of the people who are at the receiving end of the act.

The Chair: Is that okay, Mr. Rajotte?

Mr. James Rajotte: Yes.

[Translation]

The Chair: Go ahead, Ms. Girard-Bujold.

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): The following is noted in the proposed amendment to subsection (3.2): “... the Tribunal shall take into account the following:”. The text goes on to list several things, including in (e) “any other relevant factor”. What exactly do you mean by "any other relevant factor"?

[English]

Mr. Konrad von Finckenstein: This is basically a catch-all provision because you don't know right now what the other factors may be. You don't want the court to be precluded from looking at anything except (a), (b), (c), and (d). If there is another issue that is relevant that the court should take into consideration when assigning the penalty, either up or down, it may do so. That's why you have the subsection in it.

Ms. Jocelyne Girard-Bujold: Okay.

(Amendment agreed to)

The Chair: There are a number of amendments for clause 12. We're at G-8.

Mr. McTeague.

Mr. Dan McTeague: I move that Bill C-23 in clause 12 be amended by replacing line 16 on page 27 with the following:

103.(1) Any person may apply to the Tribunal for leave to make an application under section 75 or 77. The application for leave must be accompanied by an affidavit setting out the facts in support of the person's application at section 75 or 77.

(2) The applicant must serve a copy of the application for leave on the Commissioner and any person against whom the order under section 75 or 77 is sought.

(3) The Commissioner shall, within 48 hours after receiving a copy of an application for leave, certify to the Tribunal whether or not the matter in respect of which leave is sought

(a) is the subject of an inquiry by the Commissioner; or

(b) was the subject of an inquiry that has been discontinued because of a settlement between the Commissioner and the person against whom the order under section 75 or 77 is sought.

(4) The Tribunal shall not consider an application for leave respecting a matter described in paragraph (3)(a) or (b) or a matter that is subject of an application already submitted to the Tribunal by the Commissioner under section 75 or 77.

(5) The Tribunal shall as soon as practicable after receiving the Commissioner's certification under subsection (3) notify the applicant and any person against whom the order is sought as to whether it can hear the application for leave.

(6) A person served with an application for leave may, within 15 days after receiving notice under subsection (5), make representations in writing to the Tribunal and shall serve a copy of the representations on any other person referred to in subsection (2).

(7) The Tribunal may grant leave to make an application under section 75 or 77 if it has reason to believe that the applicant is directly or substantially affected in his or her business by any practice referred to in one of those sections that could be subject to an order under that section.

(8) The Tribunal may set the time within which the conditions subject to which an application under section 75 or 77 must be made. The application must be made no more than one year after the practice that is the subject of the application has ceased.

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(9) The Tribunal must give written reasons for its decision to grant or refuse leave and send copies to the applicant, the Commissioner and any other person referred to in subsection (2).

(10) The Commissioner may not make an application for an order under section 75, 77 or 79 on the basis of the same or substantially the same facts as are alleged in the matter for which the Tribunal has granted leave under subsection (7), if the person granted leave has already applied to the Tribunal under section 75 or 77.

(11) In considering an application for leave, the Tribunal may not draw any inference from the fact that the Commissioner has or has not taken any action in respect of the matter raised by it.

(12) If the Commissioner has certified under subsection (3) that a matter in respect of which leave was sought by a person is under inquiry and the Commissioner subsequently discontinues the inquiry other than by way of settlement, the Commissioner shall, as soon as practicable, notify that person that the inquiry is discontinued.

103.2 If a person granted leave under subsection 103.1(7) makes an application under section 75 or 77, the Commissioner may intervene in the proceedings.

103.3(1) Subject to subsection (2), the

The Chair: Mr. McTeague just moved amendment G-8, as you see it in front of you.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: These are the rules of double jeopardy, which you've just discussed at great length after pointing out that you can only proceed once on these matters. The last part made it clear—to the question put by Mr. Strahl—that the commissioner can intervene in proceedings started by a private person.

(Amendment agreed to on division)

The Chair: Mr. Strahl.

Mr. Chuck Strahl: We just got these amendments 20 minutes ago, so on the rest of these, I'd like to go on division. Clearly we've never had a chance to look at them. We're taking everybody's word here that this is how it's going and this is what they mean. I don't have any reason to doubt honourable members, and certainly not the commissioner. When we say on division, it's not because it's opposition. I'll go over them tonight, when I do my midnight reading, to know how they fit into the bill.

It's hard to visualize this, because—

The Chair: We'll let Mr. McTeague speak to this for one second.

Mr. McTeague.

Mr. Dan McTeague: Thank you, Madam Chair.

Mr. Strahl, much of what I am reading here is the basis, almost word for word, of what I proposed to give light and effect to private access. There are some things that have changed, for instance the times and dates—10 days rather than 15 days; one year rather than two years. They are substantive changes, but they are nevertheless agreeable to the committee.

I understand your reasons for asking for division, but I want to assure you that what I have proposed here are in fact just the slight modifications that were inferred by the presentations, including that of the commissioner.

Mr. Chuck Strahl: As long as you understand why I—

Mr. Dan McTeague: It's perfectly understood.

The Chair: Mr. Strahl, just to clarify, I had agreed that after the commissioner's appearance, he would work closely with Mr. McTeague, because it was Mr. McTeague's original proposal to ensure the wording was well understood. I apologize that you didn't receive it sooner than 20 minutes ago.

Mr. Chuck Strahl: It wouldn't be prudent of any of us to just say all in favour. I have no idea if it's exactly the same words. I trust Dan—

The Chair: Maybe I could ask them to spell out the differences as we go through. I apologize. I'm having them read the amendment to ensure everyone has it word for word. Maybe it would be better if I had them point out the differences.

Mr. Chuck Strahl: No, no. If something huge and awful is in the works, we'll be expected to find that before we vote on it in the House. But I don't anticipate that. “On division” just covers that off. Thank you.

The Chair: Okay. We have amendment G-9.

• 1630

[Translation]

Mr. Claude Drouin: I move that Bill C-23 be amended in clause 12 by:

(a) replacing line 20 on page 27 with the following:

paragraph 10(1)(b), issue an interim order

(b) replacing line 27 on page 27 with the following:

order if it finds that the conduct or measures could be of the type described in paragraphs (1)(a) and (b), respectively, and that, in the absence of an

[English]

The Chair: Mr. Drouin has just moved amendment G-9 as you see it in front of you.

Mr. von Finckenstein, do you have any comments?

Mr. Konrad von Finckenstein: This deals with the application for interim cease and desist orders. The ex parte now refers to section 10. It is now limited to paragraph 10.1(b). This is where the commissioner goes on an inquiry because he has reason to believe there's a violation of the order.

Paragraph 10.1(a) is when he's directed by the minister, and paragraph 10.1(c) is when there are six resident complaints. The idea here is that we cannot ask for a cease and desist order except where we have gone on inquiry because we believe there's a likely violation of the act. That's just a clarification of the first part.

The second part deals with the decision of the tribunal and makes it clear this tribunal has to come to the conclusion that the conduct or measures are of the type described in paragraphs 10.1(a) and (b), i.e., refusal to deal, tied selling, exclusivity, or market restriction. If the competition tribunal and council does not come to the conclusion that these are conducts or measures that could be of that type, then it won't grant it. That's all.

The Chair: Mr. Volpe.

Mr. Joseph Volpe: Commissioner, what specific case are you thinking about in this one?

Mr. Konrad von Finckenstein: This is the counterpart to what we have in airlines. In airlines we can issue a cease and desist order because of the high mobility of assets and the crisis that we have in the airlines.

In all other industries where we feel a conduct should be stopped while we investigate, we actually make an application to the tribunal. We would say to the tribunal that we believe there's a minimal case here, and ask them to please order this conduct be stopped while we investigate because if they don't, by the time we finish our investigation, this company may have gone out of business.

That's the situation in any industry. It depends, obviously, on the fact that we feel this is a fairly dramatic anti-competitive act and that there are likely to be dramatic consequences in very short period of time. That's why we would move.

Mr. Joseph Volpe: That's not a response to my previous question about the current situation in the airline industry.

Mr. Konrad von Finckenstein: No.

(Amendment agreed to on division)

The Chair: Now we go to amendment G-10. Mr. Drouin.

[Translation]

Mr. Claude Drouin: Thank you, Madam Chair.

I move that Bill C-23, in clause 12, be amended by replacing lines 38 to 44 on page 27 and lines 1 to 3 on page 28 with the following:

Consultation

(3) Before making an application for an order to prevent the continuation of conduct that could be the subject of an order under section 75 to 77, 79, 81 or 84 by an entity incorporated under the Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act or the Cooperative Credit Association Act or a subsidiary of such an entity, the Commission must consult with the Minister of Finance respecting the safety and soundness of the entity.

[English]

The Chair: Mr. Drouin has just moved amendment G-10 as you see it in front of you.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: This provision deals with applying for cease and desist orders against financial institutions. These are, of course, all subject to regulation by the Department of Finance and the Superintendent of Financial Institutions.

Just the mere fact that we would start such an action could have serious implications for the financial institution. Since the Minister of Finance is charged with the overall safety and soundness of the financial market, this makes it mandatory for us to consult with him on the safety and soundness of those institutions before we would undertake an action.

Given the nature of the dual responsibility for the financial sales industry, it was felt it would be prudent to make sure nothing would be done without consulting with the Minister of Finance, to avert any action that could affect the safety and soundness of an entity.

• 1635

(Amendment agreed to on division)

The Chair: G-11, Mr. Drouin.

[Translation]

Mr. Claude Drouin: I move that Bill C-23, in clause 12, be amended by adding after line 13 on page 28 the following:

Application to Tribunal for Extension

(5.1) The Commissioner may, before the expiry of the second 35 day period referred to in subsection (5) or of the period fixed by the Tribunal under subsection (7), as the case may be, apply to the Tribunal for a further extension of the interim order.

Notice of application by Commissioner

(5.2) The Commissioner shall give at least 48 hours notice of an application referred to in subsection (5.1) to the person against whom the interim order is made.

Extension of interim order

(5.3) The Tribunal may order that the effective period of the interim order be extended if

(a) the Commissioner establishes that information requested for the purpose of the inquiry has not yet been provided or that more time is needed in order to review the information;

(b) the information was requested during the initial period that the interim order had effect, within the first 35 days after an order extending the interim order under subsection (5) had effect, or within the first 35 days after an order extending the interim order made under subsection (7) has effect, as the case may be, and

(i) the provision of such information is the subject of a written undertaking, or

(ii) the information was ordered to be provided under section 11, and

“ the information is reasonably required to determine whether grounds exist for the Commissioner to make an application under any section referred to in paragraph (1) (a) or (b).

Terms

(5.4) An order extending an interim order issued under subsection (5.3) shall have effect for such period as the Tribunal considers necessary to give the Commissioner a reasonable opportunity to receive and review the information referred to in that subjection.

Effect of application

(5.5) If an application is made under subsection (5.1), the interim order has effect until the Tribunal makes a decision whether to grant an extension under subsection (5.3).

[English]

The Chair: Mr. Drouin has moved G-11 as you see it in front of you.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: Yes, G-11 and G-14 are the same amendments. One is for all industries; G-11 is for the airline industry. When we apply for cease and desist order, here in G-11 the tribunal can grant it for a maximum period of 80 days. Now, it sometimes happens that the information that we need in order to decide whether to bring a full application to the tribunal or not has not been rendered to us; it has not been rendered to us by the alleged perpetrator of the anti-competitive act. So this provision allows us to apply to the tribunal and say, “We need to make a decision, and we can't make a decision because we don't have the information. We have requested it from the alleged perpetrator and they have not furnished it to us. Because of that we can't make a decision, but the cease and desist order is running out. We're coming to the end of the 80 days.”

Therefore we can make out that case. The tribunal gets the power to extend those 80 days for as long as is needed for us to get the information and a reasonable time period on top of it to make a decision whether to drop the case or proceed and make a formal application. It's up to the tribunal to decide whether to grant us or not. Of course our obligation is to make out the case that this is vital information; we have requested it; it's in the hands of the alleged perpetrator and has not been delivered to us within the 80 days.

The Chair: Just so I understand you, sir, this would be the same as G-14.

Mr. Konrad von Finckenstein: Yes. G-14 is the same for airlines. In airlines it's not a tribunal that issues a cease and desist order, but the commissioner. But again after 80 days, if the information is not in our hands and we have demanded it and it is in the hands of the alleged perpetrator, then we can go to the tribunal and say this is the situation; please extend it for sufficient time for us to get the information, so we can make a decision. The tribunal again can decide whether to co-steward it, grant it, or not.

The Chair: Okay. Are there any questions on G-11?

Mr. Strahl.

Mr. Chuck Strahl: Mr. Commissioner, I submitted an amendment basically to accomplish the same thing. This is for the tribunal. G-14 would be the amendment that works exclusively under your power to do so. That covers it off.

• 1640

The intent of the amendment that I put forward is covered under this. As you described it, if the company is not coming forward with the information and they're being obnoxious about it, and you can convince the tribunal about it, then the order stays in effect until such time as they comply.

Mr. Konrad von Finckenstein: They shouldn't be able to benefit from their own tardiness.

(Amendment agreed to on division)

The Chair: Amendment G-12. Mr. Drouin.

[Translation]

Mr. Claude Drouin: I move that Bill C-23, in clause 12, be amended by replacing, in the English version, line 31 on page 28 with the following:

[English]

On the day on which the order confirming the interim order is made; and

The Chair: Mr. Drouin has moved G-12 as you have it in front of you.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: Thank you.

The provision right now says “on the day on which it is made”, and we are now changing it to “the day on which the order confirming the interim order is made”. It may not have been clear there what “it” referred to. In order to clarify it, it has been redrafted to make it absolutely clear. It is “the day on which the order confirming the interim order is made”.

The Chair: Are there any questions?

[Translation]

Have you a question, Ms. Girard-Bujold?

Ms. Jocelyne Girard-Bujold: Yes, I do.

Is the purpose of this amendment to bring the English version in line with the French version?

Mr. Konrad von Finckenstein: Basically, yes. The French doesn't need to be amended because it is clearer. We merely need to amend the English.

Ms. Jocelyne Girard-Bujold: Thank you.

[English]

(Amendment agreed to on division)

(Clause 12 as amended agreed to on division)

(On clause 13)

The Chair: Amendment G-13 amends clause 13.

[Translation]

Mr. Drouin.

Mr. Claude Drouin: I move that Bill C-23, in clause 13, be amended by

(a) replacing line 17 on page 29 with the following:

R.S., c. 19 (2nd Supp.), s. 45; 1999, c. 2, par. 37 (z.12)

13.(1) Subsection 104(1) of the Act is re-

(b) replacing lines 21 to 23 on page 29 with the following:

an interim order under section 100 or 103.3, the Tribunal, on application by the Commissioner or a person who has made an application under section 75 or 77, may issue such interim order as it

« adding, after line 27 on page 29, the following:

R.S., c. 19, (2nd Supp.), s. 45; 1999, c. 2, par. 37(z.12)

(2) Subsection 104(3) of the Act is replaced by the following:

Duty of the Commissioner

(3) Where an interim order issued under subsection (1) of the application by the Commissioner is in effect, the Commissioner shall proceed as expeditiously as possible to complete proceedings under this Part arising out of the conduct in respect of which the order was issued.

[English]

The Chair: Mr. Drouin has moved the amendment G-13 as you see it in front of you.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: The effect of this amendment is to make sure that the interim orders do not apply in private access, that a party who applies for private access cannot ask for an interim order. The only person who can ask for an interim order....

Yes?

The Chair: Madame Faille, did you wish to...?

Mr. Konrad von Finckenstein: My apologies, I answered you too quickly.

The Chair: Okay. We're at G-13.

Mr. Konrad von Finckenstein: The purpose is interim orders right now under the section in your Bill C-23 only apply where the commissioner applies. Since we have now put in private parties and given them the right, this type of interim order, as contemplated by one or both, would also apply to private parties.

The Chair: Any questions? Mr. Strahl.

• 1645

Mr. Chuck Strahl: Just for clarification, under private orders, would the commissioner issue the interim order or the tribunal?

Mr. Konrad von Finckenstein: It's always the tribunal that issues the order.

Mr. Chuck Strahl: Okay. So if they issued an interim order during the process of a private application, that's what they would do with it.

Mr. Konrad von Finckenstein: Basically you have to distinguish between cease and desist orders. Cease and desist orders are only available to the commissioner, whether they are issued by the commissioner or whether he applies for the tribunal. Those are not available to private parties. But when a private party goes to litigate, the court of course in the process of a full hearing can make interim orders. This section has now been amended to make sure that the private party has that right.

Mr. Chuck Strahl: Thank you for that.

(Amendment agreed to on division)

(Clause 13 as amended agreed to on division)

The Chair: Mr. Strahl, I believe you have the next amendment.

Mr. Chuck Strahl: I have that amendment here, just for clarification. I'm not sure if it's still necessary.

The Chair: This is the 20 to 30 days.

Mr. Chuck Strahl: Right. Under G-14, though, we can do one of two. G-14, as the commissioner has explained, has the same effect as—

The Chair: Do you wish to withdraw your amendment then?

Mr. Chuck Strahl: Well, assuming that we're going to pass G-14, and I'm open to the commissioner's suggestion as well. This was an attempt to do exactly what we did under our G-11.

The Chair: Under our G-11 already.

Mr. Chuck Strahl: Yes. Basically this is for the commissioner himself, as opposed to the tribunal's ruling. So I take the commissioner's advice on this. Obviously it's more extensive on G-14. The effect was to allow it to be extended indefinitely if necessary.

The Chair: Mr. von Finckenstein.

Mr. Konrad von Finckenstein: I thank you, Mr. Strahl.

Your amendment puts that power into the commissioner. G-14 puts it into the tribunal. We have to apply to the tribunal and make out the case for such an extension. I believe this is fairer, because we can do it up to 80 days. So I think we should accept G-14.

Mr. Chuck Strahl: I'll withdraw my amendment. That's the effect I wanted. I think it's covered in G-14, if it's the same as we just went through on G-11.

The Chair: Okay. That amendment is not moved.

If I understand correctly, the wording in G-14 is the same as the wording in G-11. Is that correct?

Mr. Konrad von Finckenstein: Yes. As I say, in both the wording is the same. It's an extension of a cease and desist order.

The Chair: I was just going to have Mr. Drouin move it, but maybe we could take it as having been read, as it's in front of you, if it's already been read in G-11.

Monsieur Drouin.

[Translation]

Mr. Claude Drouin: May I move the proposed new clause 13.1, Madam Chair?

[English]

The Chair: If you could move G-14.

Mr. Claude Drouin: Yes, okay.

The Chair: You don't have to read it all. You just have to move the amendment.

Mr. Claude Drouin: I so move.

The Chair: Mr. Drouin's moved the amendment that you have in front of you, G-14, as if read.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: I apologize. I said the wording is the same, but the time periods are slightly different in this one from the other one.

The Chair: Could you explain the difference?

Madam Faille.

Ms. Louise Faille: In the interim order of G-11, the order's 10 days and then there are two possible extensions of 35 days. In this case we've taken into account that the first order is 20 days, and then there are two possible extensions of 30 days. That's the only basic difference. We've just taken into account the respective provisions.

(Amendment agreed to on division)

The Chair: We have amendment G-15. Mr. McTeague.

Mr. Dan McTeague: I'm sorry, which one are we at?

The Chair: G-15. Oh, wait. I have G-16 and then G-15. G-15 is next. Do you have G-15?

Mr. Dan McTeague: Yes, I have it. Thank you.

I move that Bill C-23 in clause 14 be amended by (a) replacing line 34 on page 29 with the following:

103.3 or a temporary order under section

(b) by replacing line 11 on page 30 with the following:

103.3, 104.1 or consent agreement under section 106.1 on application by the Com-

• 1650

(c) by adding after line 27 on page 30 the following:

106.1 (1) When a person granted leave under section 103.1 makes an application to the Tribunal for an order under section 75 or 77 and the terms of the order are agreed to by a person in respect of whom the order is sought and consistent with the provisions of this Act, a consent agreement may be filed with the Tribunal for registration.

(2) On filing the consent agreement with the Tribunal for registration, the parties shall serve a copy of it on the Commissioner without delay.

(3) The consent agreement shall be published without delay in the Canada Gazette.

(4) The consent agreement shall be registered within 30 days after its publication unless a third party makes an application to the Tribunal before then to cancel the agreement or replace it with an order of the Tribunal.

(5) Upon registration, the consent agreement has the same force and effect, and proceedings may be taken, as if it were an order of the Tribunal.

(6) On application by the Commissioner, the Tribunal may vary or rescind a registered consent agreement if it finds that the agreement has or is likely to have anti-competitive effects.

(7) The Commissioner must give notice of an application under subsection (6) to the parties to the consent agreement.

The Chair: Mr. McTeague has just moved amendment G-15 as you see it in front of you.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: This is the area-of-consent agreement I spoke to you about when I appeared before you last time. Bill C-23 now suggests that a consent agreement may be registered and that it may include terms whether or not they could have been opposed by the tribunal. It has now been changed to make it clear that a consent agreement has to be consistent with the provisions of the act; i.e., it has to be a consent agreement the tribunal could have issued.

This is a consent provision private parties may enter into, and they have to be consistent with the provisions of the act, the same as any consent agreement the Commissioner enters into—which we will get to in a moment. Upon filing it, we get notice of it, and it becomes effective within 30 days of a registration unless the third party makes an application to vary it. This is basically in order that private parties who engage in litigation don't have to litigate it to the bitter end. They can make a deal, and they can register it. As long as that deal is consistent with the act, it becomes a consent judgment of the tribunal.

(Amendment agreed to on division)

The Chair: We're on amendment G-16. Mr. Drouin.

[Translation]

Mr. Claude Drouin: I move that Bill C-23, in clause 14, be amended by replacing lines 38 to 40 on page 29 with the following:

the Tribunal against that person.

[English]

The Chair: Mr. Drouin has moved amendment G-16 as you see it in front of you.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: We just spoke about consent agreements. These are now consent agreements that are made by the commissioner, and again, the words “and may include other terms, whether or not they could be imposed by the Tribunal”, which are now in Bill C-23, are being removed.

(Amendment agreed to on division)

The Chair: We're on amendment G-17. Mr. Drouin.

[Translation]

Mr. Claude Drouin: I move that Bill C-23, in clause 14, be amended by

(a) replacing line 8 on page 30 with the following:

Rescission or variation of consent agreement or order

106.(1) The Tribunal may rescind or vary a

(b) adding after line 27 on page 30 the following:

Directly affected persons

(2) A person directly affected by a consent agreement, other than a party to that agreement, may apply to the Tribunal within 60 days after the registration of the agreement to have one or more of its terms rescinded or varied. The Tribunal may grant the application if it finds that the person has established that the terms could not be the subject of an order of the Tribunal.

• 1655

[English]

The Chair: G-17 is moved by Mr. Drouin as you have it in front of you.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: It can be here in the consent agreement. The previous amendment made sure that it had to be an amendment that was consistent with the act. Now a person who is directly affected by a consent agreement and who feels that this judgment is not consistent with the act is given the right to go to the tribunal within 60 days after the consent agreement has been registered and ask the tribunal to vary or rescind that consent agreement.

Basically, the commissioner can make a consent agreement with any party as long as it's consistent with the act. Anybody directly affected by that agreement who feels it's inconsistent with the act has 60 days to go to the tribunal and challenge that consent agreement.

The Chair: Are there any questions on G-17? Mr. Strahl.

Mr. Chuck Strahl: Just for greater clarity, is it if you make a ruling or if the tribunal makes a ruling?

Mr. Konrad von Finckenstein: We start an action against the company. The company comes to us and says, why don't we settle this? We make a consent agreement, we draft it, we register it, and it becomes a judgment of the court. If somebody else is directly affected by that and says that we shouldn't have done it, that this was something the tribunal couldn't impose, they have 60 days to go to the tribunal to challenge the agreement.

Mr. Chuck Strahl: If you use the current sexy issue, which is airlines, let's suppose there were some sort of interim agreement agreed to between two parties, but somehow we'd forgotten to think of some little guy who's flying to Victoria from Abbotsford. If he feels that it's somehow compromising his future and contravenes the act, then could he apply under this grace period here, the 60-day period?

Mr. Konrad von Finckenstein: If he could prove that he's likely affected by it and that what we did was outside the act, yes indeed, he could do it.

Mr. Chuck Strahl: So he couldn't just ask to be included in the interim order. It would have to be a case where it contravenes the intent of the act.

Mr. Konrad von Finckenstein: Precisely.

Mr. Chuck Strahl: And if he wanted to, he could start his own further action, I suppose. Otherwise, the interim order as it affects him....

Mr. Konrad von Finckenstein: To take your hypothetical situation, let's say we have an action with Air Canada and we settle it. If we settle it to the detriment of some other airline, presumably, and our settlement is outside the terms of the Competition Act, then it could be attacked.

Mr. Chuck Strahl: Good. Thank you.

(Amendment agreed to on division)

(Clause 14 as amended agreed to on division)

(On clause 15)

The Chair: We're on amendment G-18.

[Translation]

Mr. Drouin.

Mr. Claude Drouin: I move that Bill C-23, in clause 15, be amended by replacing line 23 on page 31 with the following:

Reference by agreement of parties to a private action

(3) A person granted leave under section 103.1 and the person against whom an order is sought under section 75 or 77 may by agreement refer to the Tribunal for determination any question of law, or mixed law and fact, in relation to an application or interpretation of Part VIII, if the Tribunal grants them leave. They must send a notice of their application for leave to the Commissioner, who may intervene in the proceedings.

Reference procedure

(4) The Tribunal shall decide the questions

[English]

The Chair: Amendment G-18 is moved as read by Mr. Drouin.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: As you know, the act right now has provisions for references if there's an issue of fact or law where both parties to an action want to settle rather than start a whole law suit. Where everything really turns on some interpretation or some definition, they can bring it before the tribunal and the tribunal can make a ruling.

Now that we've opened the act to private parties, the provision here that basically allows two private parties engaged, unless they refuse to deal in a case where there is a question of interpretation of the act or its application.... They can by consent go to the tribunal and say, “Just decide this one issue for us, because everything turns on it. There's no need to bring it to a full case.”

The reference provisions that are in Bill C-23 in proposed section 124.2 now have been extended to also allow private parties to avail themselves of these reference proceedings.

The Chair: Are there any questions on G-18? Mr. Strahl.

• 1700

Mr. Chuck Strahl: We talked again this morning about the usefulness of the guidelines, the advisory bulletins that the commissioner and the tribunal put out. Does this affect that in any way, other than that it expands to include those that are initiated by right to private access? Is that what it does? Or does this change it?

Mr. Konrad von Finckenstein: The act uses some very vague language. How do you apply it to specific provisions? Very often everything falls on how you determine one or two words. What Bill C-23 does is allow us, rather than start a whole full-scale institution costing maybe a million dollars, to have just this very limited litigation on the interpretation of that section, because everything falls from it.

What we're saying here is why should this be restricted to the commissioner? If two private parties are now disputing an issue and have the same uncertainty about an interpretation, they can do it. It has nothing to do with our guidelines. Our guidelines are generally to help people interpret; they just tell them what our position is. They may not agree with our position, of course.

(Amendment agreed to on division)

The Chair: Mr. McTeague.

Mr. Dan McTeague: I have a question and perhaps even a motion—but I don't want to spring this on my colleague here—on clause 15. It refers to an amendment I had made earlier regarding the International Trade Tribunal and a reference there by the commissioner. It is contained in the package originally given to us. I just want to read the motion; I'm leaving it open to the committee whether or not to deliberate it at this time—we didn't have much discussion on it. The motion is that Bill C-23 be amended in clause 15 by adding after line 27 on page 31 the following:

124.3(1) The Commissioner may ask the Canadian International Trade Tribunal to inquire, in accordance with terms of reference approved by the Minister, into the state of competition and the functioning of markets in any sector or subsector of the Canadian economy.

(2) The Canadian International Trade Tribunal shall conduct the inquiry, submit a report to the Commissioner and the Minister and cause notice of its submission to be published in the Canada Gazette.

(3) The Minister shall cause a copy of the report to be tabled before each House of Parliament on any of the first fifteen days on which that House is sitting after the report is submitted.

Madam Chair, the reason I'm moving the motion is for obvious reasons. We've heard a number of witnesses come before us to suggest Canada's international competitiveness is in question. There have been a number of incidents, particularly with the airline industry, but also with gasoline and other industries, where there may be sectoral concerns. Currently the commission does not have this discretion, but it may very well be put to some use.

I'm advancing it on the presumption that this is not something that has created a lot of fire and incendiary remarks, and I think it's something we may well want to entertain, with the consent of the members of Parliament here. I'll gladly withdraw it, though, if there's a lot of objection.

Perhaps the commissioner would like to also comment on it while I'm putting it on the floor.

The Chair: Before the commissioner comments, Monsieur Drouin wishes to comment on it.

[Translation]

Mr. Claude Drouin: Thank you, Madam Chair.

Since the committee hasn't really worked on this, I think it would be better to defer our study and come back to this matter later. Therefore, I move that we defer consideration of Mr. McTeague's motion.

[English]

The Chair: Mr. von Finckenstein, did you have any comments on it?

Mr. Konrad von Finckenstein: I have followed the proceedings of your committee very closely. I don't believe there was any discussion or debate on this particular amendment. Mr. Drouin will know better, but I don't believe the government supports it; it's not being put forward as a government amendment. Maybe this is an amendment that should have the benefit of full discussion before being moved.

The Chair: Mr. McTeague.

Mr. Dan McTeague: Madam Chair, under the circumstances, I withdraw the motion in accordance with what we've heard here.

The Chair: The motion is not moved.

(Clause 15 as amended agreed to on division)

(Clause 16 agreed to on division)

(On clause 17)

The Chair: The next amendment is G-19.

[Translation]

Mr. Drouin.

Mr. Claude Drouin: I move that Bill C-23 be amended by adding after line 34 on page 31 the following:

1999, c. 2, s. 41

16.1 Subsection 8(1) of the Act is replaced by the following:

Jurisdiction

8. (1) The Tribunal has jurisdiction to hear and dispose of all applications made under Part VII.1 or VIII of the Competition Act and any related matters, as well as any matter under Part IX of that Act that is the subject of a reference under 124.2(2) of that Act.

• 1705

[English]

The Chair: Mr. Drouin has moved amendment G-19, as you have it in front of you.

Mr. von Finckenstein.

Mr. Konrad von Finckenstein: The purpose of this clause is to give the Competition Tribunal authority to hear references under part VII.1, part VIII, and part IX of the Competition Act. There was some doubt after our consultation with the tribunal whether the Competition Tribunal Act, as it stands right now, does give them the power to hear references under part IX. Putting this section in makes clear that they have that capacity.

(Amendment agreed to on division)

The Chair: On clause 17, Mr. Strahl, we have your amendment and then we have amendment G-20. I'm not sure.... We can't pass both of them. Do you want to move your amendment first, or did you want to withdraw your amendment?

Mr. Chuck Strahl: Well, I—

The Chair: Did you want to move your amendment? Go ahead.

Mr. Chuck Strahl: I move that in Bill C-23, clause 17 be amended by replacing lines 4 to 7 on page 32 with the following:

Competition Act on a final or interim basis.

Basically, what I did with that amendment was take the clause—this deals with awarding costs of proceedings—and remove the phrase “if it finds that the proceedings are frivolous or vexatious or that any step in the proceedings is taken to hinder or delay their progress.” It just basically eliminates that.

As for its purpose, we heard testimony from several witnesses—certainly it was quite clear, for example, from Jack Quinn, who is one of the lawyers who testified—who mentioned that the standard of the bill now, which includes “frivolous and vexatious”, is not going to work very well to ensure that the private litigants' incentives are aligned with the public interest, because a frivolous and vexatious test is a very high standard to meet on a cost award.

The intent of this amendment is to take out “frivolous and vexatious” and leave the common law rules to apply to it. But in the amendment that follows—the government amendment—they are more specific. They add the words “in accordance with the provisions governing costs in the Federal Court Rules, 1998.”

I'm not familiar exactly with what that does, but I don't think it obviates what I'm trying to do here, which is just to take “frivolous and vexatious” out and allow this to be covered by the common rules. If that's the intent, I'll withdraw my motion, and we can go with the government one.

The Chair: That's okay with you?

Mr. Chuck Strahl: I believe so. I'm not a lawyer, but my understanding is it covers it by general Federal Court rules.

The Chair: Mr. von Finckenstein, is that correct?

Mr. Konrad von Finckenstein: You should be a lawyer; your understanding is absolutely correct.

The Chair: All right, then. Mr. Strahl has withdrawn his amendment—not moved it. We will go to Mr. Drouin for amendment G-20.

[Translation]

Mr. Claude Drouin: I move that Bill C-23, in clause 17, be amended by replacing lines 4 to 7 on page 32 with the following:

Competition Act on a final or interim basis, in accordance with the provisions governing costs in the Federal Court Rules, 1998.

[English]

(Amendment agreed to on division)

(Clause 17 as amended agreed to on division)

(Clause 18 agreed to on division)

(On clause 19)

The Chair: On clause 19, we have an amendment, I see—amendment G-21. This should do it.

[Translation]

Mr. Drouin.

Mr. Claude Drouin: Thank you, Madam Chair.

I move that Bill C-23, in clause 19, be amended by replacing line 7 on page 33 with the following:

4.1(2) or (4) or 100(1), section 103.1, 103.3 or

[English]

The Chair: Mr. Drouin has moved amendment G-21, as you have it in front of you.

Mr. von Finckenstein.

• 1710

Mr. Konrad von Finckenstein: Yes. This section of the Competition Tribunal Act allows the chairman or a single judicial member to sit alone to hear applications. We have now created a new type of application, an application for leave to bring a private party action. This is a consequential amendment, saying such a member sitting alone can also hear leave applications for the private member actions. It's a consequential amendment. Since we created this new leave-type application, we also have to empower somebody to hear them.

(Amendment agreed to on division)

(Clause 19 as amended agreed to on division)

(Clause 20 agreed to on division)

The Chair: Shall the title carry?

Some hon. members: Agreed.

Some hon. members: On division.

The Chair: Shall the bill carry?

Some hon. members: Agreed.

Some hon. members: On division.

The Chair: Shall I report the bill to the House with amendments?

Some hon. members: Agreed.

Some hon. members: On division.

The Chair: Shall the committee order a reprint for use at report stage?

Some hon. members: Agreed.

The Chair: I want to thank the commissioner and the other witnesses for being here today. I want to thank all the witnesses who attended and all the members for their cooperation on this bill—in particular Mr. McTeague for all his hard work, but others as well. I also want to thank our researchers and our clerks.

Mr. Strahl.

Mr. Chuck Strahl: Madam Chair, we heard a lot of testimony over the last while about the need for resources for the commissioner. I wondered if he would care to comment, based on this amended bill, on whether he feels there will be additional resources required because of this amended bill, and if so, whether he'd like to give us some idea as to what he thinks the extra obligations will mean to him and his budget.

The Chair: Mr. Strahl, I'll be happy to let Mr. von Finckenstein answer that, but in fairness, he wasn't at the roundtable meetings we had for about four hours this morning. We will be inviting him to meet with us once we have an opportunity to schedule more meetings.

Mr. von Finckenstein, if you'd like to, comment.

Mr. Konrad von Finckenstein: Thank you.

Just generally, I understand from my observer this morning that there was lots of testimony as to the insufficient resources of the Competition Bureau. Indeed, we are under-resourced and we have an enormous task, and stretching it out costs all industries of the economy. These provisions per se will undoubtedly mean extra work for us, but the problem of resourcing the bureau is not with this bill or the additional duties. It's just generally that we are under-resourced for the tasks we carry out.

As Madam Chairman said, I wasn't prepared for this question. I'd gladly come back to you in a more detailed manner.

The Chair: Thank you very much.

I want to remind members we have a meeting tomorrow afternoon at 3:30 on the small-business lending. There will be no meeting on Thursday, and Tuesday morning we will have a future business meeting. If you could, think about that for next Tuesday.

Thank you very much. The meeting is now adjourned.