INDU Committee Meeting

STANDING COMMITTEE ON INDUSTRY

COMITÉ PERMANENT DE L'INDUSTRIE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, March 30, 2000

• 0910

[English]

The Chair (Ms. Susan Whelan (Essex, Lib.)): I am going to call the meeting to order pursuant to the subject matter of Bill C-229, An Act to amend the Canada Post Corporation Act (letter that cannot be transmitted by post).

We are very pleased to welcome here this morning Mr. David Elder, senior counsel, regulatory law, Bell Canada.

Mr. Gustavson from the Canadian Marketing Association is supposedly on his way from Toronto. He should have been here by now, so obviously he has run into some travel delays. We will begin without him, and we'll allow him to join the table when he arrives, if that's okay with you, Mr. Elder.

Mr. David Elder (Senior Counsel, Regulatory Law, Bell Canada): That's fine with me.

The Chair: If you have any opening comments, we'd be happy to hear them.

Mr. David Elder: I do have some brief ones. Thank you.

Good morning, ladies and gentlemen.

[Translation]

Good morning, ladies and gentlemen.

[English]

I'd like to thank you for inviting me to appear before you today to address this most important issue.

As Madam Chair said, my name is David Elder. I'm senior counsel, regulatory law, with Bell Canada.

I've had the challenge of carrying the pay-per-call service file, which includes the 900 service, for the past three years or so. As you're aware, Bell Canada is a regulated common carrier. Many of our services are subject to CRTC approved tariffs, including the 900 service. These tariffs and the related agreements spell out the rates, terms, and conditions under which services are provided.

I'd like to take a moment to sketch out for the honourable members, if I may, the regulatory framework in which 900 service is offered, since I believe this is key to understanding Bell Canada's role in the provision of this service. As you'll be aware, the Telecommunications Act generally requires that telecommunication services be offered subject to a tariff approved by the CRTC, unless the CRTC forebears such regulation, and that they be provided to all service providers on equivalent terms and conditions. Accordingly, any restrictions on access to 900 service must be approved by the CRTC.

In approving content-based restrictions on access to pay-per-call services, it would appear that the commission has been primarily concerned about two things: first, that any such restrictions not unjustly discriminate against any particular customer group, and second, that any restrictions on content not breach the guarantee of freedom of expression afforded by the Canadian Charter of Rights and Freedoms.

The 900 service provided by Bell Canada consists of two components: there's the network connectivity, for which we receive a usage charge, and there's the billing and collection of service provider charges, for which we receive an accounts receivable management fee. The rates, terms, and conditions for the provision of these services again are approved by the CRTC.

Bell Canada has been particularly concerned with the billing and collection component of pay-per-call services since this service links our brand with a broad range of businesses of varying profiles and reputations. In effect, the tariff forces us into a kind of partnership with service providers whereby the company is required by tariff to bill and collect for the service of others, yet has little say in what those services are.

Despite the difficulties presented by this regulatory framework, I want the committee to know that Bell Canada recognized some time ago the consumer protection issues associated with games of chance, and particularly with so-called scratch-and-win cards. We've made continual efforts to help eradicate the problem. Unfortunately, this has been a bit of a cat-and-mouse game. Each time we've been successful in fixing one of the more misleading aspects of these programs, a new one seems to come to light.

Currently the provision of 900 service is subject to a number of restrictions and requirements designed to minimize caller exposure to fraud, to ensure caller awareness of the nature of the game and its terms and conditions, and to help ensure compliance with the law. I'd be pleased to provide you with more information on these initiatives should you desire this level of detail.

Perhaps in part due to the above initiatives and in part due to the recent conviction and fine of a scratch-and-win card provider under the Competition Act, Bell Canada is seeing fewer and fewer of these types of programs. In fact, there are none currently running in Bell territory, and we are not seeing many applications for new ones.

At the same time, Bell has determined, largely on the strength of the recent finding by the Competition Tribunal, that the CRTC may now be disposed to allowing the company, as well as other telephone companies in Canada, to refuse to bill and collect for games of chance programs that are undertaken for profit. Accordingly, Bell and the other telephone companies will be applying in the very near future for CRTC approval of such a restriction. The restriction would apply to programs whose primary commercial purpose is to profit from the caller charges paid to participate.

• 0915

We see no difficulties, and indeed have experienced none, with regard to games of chance that are carried out with a government licence or for charitable or promotional purposes, and we propose to allow these to continue.

We applaud the efforts of the Competition Bureau and the various law enforcement agencies, particularly the PhoneBusters, in their efforts to protect Canadians from fraud and other scams. We have worked closely with these agencies in the past, and we intend to continue to cooperate with them in the future. The efforts of these agencies have put a chill on the activities of several games of chance operators. As Detective Staff Sergeant Elliot told the members of this committee last week, we haven't seen any mail-out activities since last summer.

In addressing problems such as potentially misleading games of chance, there's a delicate balance that must be maintained, an issue of not throwing out the baby with the bath water. The use of games of chance programs in concert with 900 service can be a valuable telecommunications tool that raises no consumer protection issues. We would not want to see legitimate charities lose the benefits of this tool in their fundraising activities. We also think the public responds positively to the use of 900 services for the promotion of goods and services, as in the first hundred callers receiving a free case of pop.

Necessarily, a highly flexible approach is required in order to maintain this balance in the face of the many shades of grey in the marketplace and the evolving approaches pursued by innovative Canadian businesses and charities. I'm here to tell you that when it comes to 900 service, it's just about all grey.

As a telecommunications common carrier, we would be concerned about any requirement, no matter how worthy the objective or subject matter, that places enforcement responsibility on the telecommunications carrier with regard to the content of any transmission it carries. This strikes us as a clearly collateral means to achieve any public policy goal.

In closing, I would reiterate that the storm created a few years ago by scratch-and-win cards seems to have largely subsided. Even so, we are taking further precautions to prevent another onslaught. Bell Canada continues to make refinements, following the requisite CRTC approval, to all aspects of the terms and conditions for its pay-per-call services. This is an ongoing and dynamic process that we feel is necessary to maintain a balance between the beneficial and perhaps not so beneficial or suspect uses of the 900 service platform.

Thank you for your attention. I'd be pleased to answer any questions you may have.

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

Before we go to questions, I would prefer to hear Mr. Gustavson's opening comments.

Mr. John Gustavson (President and Chief Executive Officer, Canadian Marketing Association): Thank you very much, Madam Chair. My apologies for being late.

The Chair: That's quite all right.

Mr. John Gustavson: Air Canada had a control stabilizer problem. I'm not quite sure what that is, but we didn't object when they suggested we change planes.

I've been before this committee before, but just to reiterate, my organization represents some 790 major companies in this country that are engaged in information-based marketing, the use of personal information to make offers of goods and services to Canadians. That generated sales of just over $15 billion last year and provided employment for some 236,000 Canadians.

The Canadian Marketing Association, formerly the Canadian Direct Marketing Association, has had a long history of establishing ethical standards and practices for its members and indeed for the industry. The code of ethics and standards of practice for the association are compulsory for our members, but we get hundreds and hundreds of requests from other businesses every year for copies of that document as a guide to best ethical practices.

We also have a long history of supporting both government and private sector initiatives to combat mail and telemarketing fraud, including Bill C-20 last year; working with the CRTC to regulate the telemarketing industry; and, of course, helping draft the recent amendments to the Competition Act.

I think it's clearly evident to everybody, and I think you well know, that the fraud and scam artists we're talking about here today prey upon the most vulnerable in our society: the elderly, the disabled, and the lonely. That is the tragedy of what we're talking about today. But it also damages legitimate business and has a serious economic consequence as well in hurting economic growth and employment growth in this country. For that reason we are very interested in combating telemarketing and mail fraud. These artists, as you know, are not necessarily media specific and may use a blend of various media in their efforts.

We have no problem with Bill C-229 or the concept behind it. We have one technical issue in that proposed paragraph 40.6(l)(b) is connected to (c) by an “and”, but this is missing between proposed paragraphs (a) and (b). That may be a matter of legislative interpretation, but the items described in proposed paragraph 40.6(1)(a) are in fact used by legitimate marketers and there should be no problem with that. So we may require the addition of an “and” between those two proposed paragraphs to make that clear. I'll be happy to come back more specifically to that, if you wish.

• 0920

On Bill C-438, we have no issues with that bill. I believe it has been the subject of some discussion at this committee as well.

I guess the primary message I'd like to deliver this morning is that I think there are two far more important and urgent issues than those bills. There's no question that the best defence against fraud and scam is a cautious, educated consumer, and there is a great need for public education in this country. I can name, off the top of my head, three or four very simple things that, if a consumer kept them in mind, would get rid of 90% of the fraud in this country.

They are not complex or subtle. Those things could be easily listed on cards and distributed to senior citizens' homes and areas where the disabled gather. They could be distributed by others to those who are vulnerable to this type of scam, but that's going to require different resources. The office of consumer protection at Industry Canada and their provincial counterparts need more help in getting those education efforts underway and out there.

Second, we need better enforcement and more resources behind enforcement. You can pass all the laws you want, but they're not going to do much good if both the reality and the perception out there in the marketplace are that they are not going to be enforced. “I might as well do it because I'm not going to get caught.”

To summarize, my suggestion is that we need a holistic approach to this that looks at consumer education and proper legislative framework, but also the enforcement of that legislative framework and the proper resources to do so.

Thank you, Madam Chair.

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

Now we will turn to questions. Mr. Lowther, do you have a question?

Mr. Eric Lowther (Calgary Centre, Canadian Alliance): Yes, thank you, Madam Chair.

To Mr. Elder, I have a little bit of confusion here. Maybe I just want to nail down exactly where you're coming from. Does Canada Post deliver these games of chance and contests now through the medium you were talking about?

Mr. David Elder: You say “now”. Our experience is they haven't been doing it currently, but in the past the game cards were distributed by Canada Post, for the most part, I believe.

Mr. Eric Lowther: Was that a problem? Were there issues coming from it that you were concerned about?

Mr. David Elder: I think the concern is with the cards themselves and whether they're misleading people or not. I don't think it matters how they've been distributed or how they come into people's hands.

Mr. Eric Lowther: Are you implying in your presentation that these games of chance are potentially fraudulent, and the onus is on carriers, like the Bell Canadas of the world, to make sure these things are legitimate? Would you like to see that onus placed there, rather than Canada Post having any role?

Mr. David Elder: I guess generally I would. I would not like to see that role put upon Bell Canada. Similarly, if I might go out on a limb, I don't necessarily see that as a role for any carrier, including Canada Post. I think the focus should again be on the perpetrators—those making the cards. You could just as easily put the onus on the printers to vet any content that's coming through. It seems to me that the logical focus is on those who are actually responsible, and not on those who are just delivering and carrying out their functions.

Mr. Eric Lowther: Is there any mail like that today that you would refuse to deliver?

Mr. David Elder: I'm not from Canada Post.

Mr. Eric Lowther: My apologies.

The Chair: Mr. Elder is from Bell Canada, Mr. Lowther.

Mr. Eric Lowther: My apologies. I didn't connect that. I'll withdraw that question and come back for a second round.

The Chair: Sure.

Ms. Redman.

Mrs. Karen Redman (Kitchener Centre, Lib.): Thank you Madam Chair.

I actually have a question for each of the presenters. I'd like to thank you for coming today.

• 0925

Mr. Elder, interestingly enough you talked about a CRTC restriction on the pay-to-participate 1-900 numbers. What would trigger this and who would police it? How would it be determined how you would gate-keep that kind of process?

Mr. David Elder: Currently, for all 900 programs we make some attempt to ensure that they're in compliance with our agreements and tariffs. We have a group within the company that vets these things. We look at a description of the application and obtain advertising material and any scripts that are going to be used for advertising of any kind. In the case of the scratch-and-win cards, we would get copies of the cards. We would sort of peruse them to try to ensure they were in compliance.

If you're speaking about our planned filing with the commission whereby these would be outlawed, that would be a bit easier for us to do than what we're doing now. Instead of going through the card and trying to make a judgment call that the terms and conditions were clear enough, the print was large enough, and there wasn't some kind of misleading pictorial representation, we'd be able to just look at it and make an assessment as to whether the object of the card was to derive revenue from the caller charges, or whether it was truly for charitable purposes or to promote some other kind or good and service.

Mrs. Karen Redman: Does Bell have the right to refuse or revoke 1-900 service to a company?

Mr. David Elder: Yes, we do, if we find that someone is in breach of the terms and conditions that are set out in our tariff, or in particular in our accounts receivable management agreement.

Mrs. Karen Redman: Do you think that Bill C-438 would enable you to better perform that kind of gate-keeping?

Mr. David Elder: I'll have to confess to you I have not seen Bill C-438. My involvement in this was kind of last-minute. I did go through the transcript, but unfortunately I discovered only last night that another bill had been introduced. For whatever reason, I wasn't able to log on to the parliamentary website.

My understanding from reading the transcript is that Bill C-438 has taken sort of the guts of Bill C-229, and instead of putting the onus on Canada Post, it has put that onus on the perpetrators. I think we would generally be in agreement with that approach. But I really can't offer anything on the specifics of the bill, unfortunately.

Mrs. Karen Redman: Thank you for coming. May I ask Mr. Gustavson a question?

The Chair: Yes.

Mrs. Karen Redman: Thank you for coming. It's terrible to have to rush to a meeting the way you have, so thank you for coming in and hitting the ground running.

Have you had a chance to review Bill C-438?

Mr. John Gustavson: Yes.

Mrs. Karen Redman: Do you feel it would hinder legitimate telemarketing services, the way it's written?

Mr. John Gustavson: The answer is no. I don't think it would impede legitimate telemarketing services. For instance, it still allows you to use 1-900 numbers and charge for those calls to enter a contest. Use of the numbers is prohibited when it goes beyond a certain level of misrepresentation. So I have no difficulties with Bill C-438.

Mrs. Karen Redman: Do you also feel that the penalties outlined in Bill C-438 are appropriate?

Mr. John Gustavson: I must confess I have not turned my mind to that. Perhaps people like Barry Elliot, who have a better understanding of the economics of the fraudulent artists, would be better positioned to speak to that. On whether that would be sufficient to really deter them, I would have to defer to the police and the enforcement agencies.

Mrs. Karen Redman: Just as a point of information, it very closely reflects what's in place for other telemarketing fraud that is already in the Competition Act.

Mr. John Gustavson: [Inaudible—Editor]...supported the recent amendments to the Competition Act.

Mrs. Karen Redman: If I may, I have just one final question. You also made reference to the proper resources for enforcement. I'm wondering now if you could flesh that out a little for us, or give us a little more detail. Do you have a dollar figure, a sort of body count of people, or a mechanism that you see would make enforcement more...?

Mr. John Gustavson: I think that's going to take a more sophisticated study, again in cooperation with the enforcement agencies. The government cutbacks have also impacted the ability of some agencies to get out there and devote time and resources to this.

I've been told by Barry Elliot's group that if it's under $1 million, they're not going to bother because they're going after the big guys. So it may be a bottomless pit actually, but I think we could do a lot better. Unfortunately, I cannot give you a dollar figure on that. It would take some interjurisdictional cooperation to come out with a budget. Somebody ought to be doing this. That's my point.

• 0930

The Chair: Thank you very much, Ms. Redman.

Monsieur Bellehumeur, please.

[Translation]

Mr. Michel Bellehumeur (Berthier—Montcalm, BQ): My question is for Mr. Elder, from Bell Canada. What does it cost to use the 1-900 number? I may be out of touch, but I have never used it. So I do not know what it costs.

[English]

Mr. David Elder: For the caller? Right now there's a cap on these types of calls for games of chance, and it's a $25 cap. In the early days we didn't have this cap, and this was one of the initiatives we put in to try to minimize people's exposure.

[Translation]

Mr. Michel Bellehumeur: It costs $25 to make a call.

[English]

Mr. David Elder: Yes.

[Translation]

Mr. Michel Bellehumeur: What is the average right now?

[English]

Mr. David Elder: They range. It depends on the type of program that's being run. Some of them are per-minute charges, so in theory those could get fairly high. Some are very small. Some are a $3 cap for certain types of programs. A lot are in the $25 range.

[Translation]

Mr. Michel Bellehumeur: If I make a 1-900 call, it costs me $20. Who gets the $20? How is the money divided up? Bell Canada must get part of it, and the other company as well. What is the breakdown? Where does the money go?

[English]

Mr. David Elder: Of that $25, 10% of it goes to the telephone company as an accounts receivable management fee. The remainder goes to the service providers, who also must pay us for the network usage charges associated with it.

[Translation]

Mr. Michel Bellehumeur: I repeat that I have never used a 1- 900 number. When people make these calls, is there a warning, before the call rings through, that the user will have to pay for the call that he is going to make?

[English]

Mr. David Elder: Yes, there are. We have a requirement that these calls must begin with a preamble usually of either an 18-second or 36-second duration. The preamble clearly indicates that this is a call that will cost them money. It will indicate how much it will cost. It will give them an opportunity to hang up and not incur any charges.

[Translation]

Mr. Michel Bellehumeur: All right. Have you read Bill C-438?

[English]

Mr. John Gustavson: Yes.

[Translation]

Mr. Michel Bellehumeur: Do you have lawyers that have looked at this bill? If so, do you believe that it will be easy for a Crown prosecutor to prove that an offence has been committed?

[English]

Mr. John Gustavson: The evidence of a violation is going to be fairly clear because, first of all, with the distribution of the physical card or written invitation to make the call, that is going to be fairly self-evident. It becomes a little fuzzier, a little more difficult where the actual offer is made by telephone, because then you do not have any physical piece of evidence, but there is the ability to tape record these things.

I would suggest that for the most part we're talking about a written invitation to make a call. It is that written invitation that will be the violation. So you will have a physical piece of evidence.

The Chair: Thank you very much.

Mr. Cannis.

Mr. John Cannis (Scarborough Centre, Lib.): Welcome, gentlemen, to our committee. I'd like to start off by asking Mr. Elder a question.

You mentioned that the scratch-and-win card or game of chance issue has subsided considerably over the last little while. Can you tell me why that has happened? What has happened for that to occur?

Mr. David Elder: It's always difficult to predict why, but we believe it's the result of two things. One is the fact that we've continued to introduce more and more stringent requirements, with commission approval, in order to deal with these types of games of chance. So we're making it much less attractive for people to try to carry these out.

• 0935

I think the other major thing is the conviction this fall of one of these scratch-and-win card providers under the Competition Act. It's been a real shot across the bow for a lot of these operators. So they're moving on to other things.

Mr. John Cannis: You mentioned also that you really haven't had major problems with government-licensed games of chance, of course. Would you suggest that perhaps on these games of chance that are being sent out...? It ties in with what Mr. Gustavson talked about, educating the consumer, better enforcement, etc. For example, on cigarettes now we brand: “This will kill you”, whatever. There's a stamp there that says “This is not a government-approved or government-licensed promotion”. Do you think that might have an effect in reducing the abuse?

Mr. David Elder: It might well. My experience, though, has been that people see the dollar signs and see the prizes. Despite a number of warnings that are on the cards now, there's a real compulsion on the part of a lot of people to dial that number and to look for the prize.

Mr. John Cannis: What is your view, Mr. Gustavson, on that?

Mr. John Gustavson: I don't think it would be appropriate to say that because there's no problem in this area we should announce this as the only criterion for establishing a legitimate contest or lottery. There are other ways of going about it. It may in fact discourage people from participating in other legitimate contests, and the bill is fairly adequate in addressing that point.

Mr. John Cannis: It ties into the question that I want to ask you, Mr. Gustavson. You talked about better educating the consumer. You talked about better enforcement. Perhaps that's one method of sending the signal that there will be enforcement.

I want to ask you how your members collect data.

Mr. John Gustavson: Basically, it's from people who come to do business with them. They volunteer this information because—

Mr. John Cannis: You also indicated that your organization provides the information to users out there. All of the members are approved members. In the past, have they all adhered to the rules and regulations put forth by your organization? Have there been examples in the past where there's been some abuse?

Mr. John Gustavson: Oh, certainly. We have an ethics and privacy committee. When complaints are received and they cannot be resolved by staff, they go to the committee. Something over 95% of consumer complaints we receive are resolved, but if there is any evidence of a scam or fraud we don't deal with that. We immediately refer it to the Competition Bureau.

The enforcement of our ethics committee is quite aggressive. For the most part, marketers fall all over themselves trying to make their customers happy so they'll come back and buy again. So there have been very few occasions where we've had to actually exercise discipline. Again, if there's evidence of fraud or illegal conduct, we don't handle that. We send it immediately to either a law enforcement agency or the Competition Bureau.

Mr. John Cannis: Thank you very much.

The Chair: Mr. Bernier.

Mr. Gilles Bernier (Tobique—Mactaquac, PC): Mr. Elder, I get a game of chance card and I want to make that 1-900 phone call. You said that it costs $20, $25, $30. I listen to the conversation of the person I'm talking to. After the conversation and after I ask my question, I'm not satisfied and I don't want to pay that bill. So what would happen then? When I get my bill, that's going to be on it. If I don't want to pay that bill, are you going to disconnect my phone?

Mr. David Elder: No, we won't.

I'd like to address two things that you raised there. First of all, with these games of chance cards, when you call the 900 number it's not typically a live voice. You'll get an IVR. You'll get a recorded voice platform so that you don't really have an opportunity, unfortunately, to ask the question.

On your second point, for anyone who makes a 900 call and reasonably disputes it when they get their bill, we'll charge that back. We'll remove that from their bill.

• 0940

I'm glad you raised this, because I noticed in the earlier transcript from your hearings last week there was some discussion about this. If this is the first time that's happened, if this is the first time you've called the 900 number and you reasonably dispute it, we'll charge that back. We'll remove it from your bill and that's the end of the story.

There was some talk last week that this would then be collected by the service provider. If that's the first time you've charged something back, they won't collect it. If you've done this before, if one month you call up and you say there's a bunch of 900 calls here, and I didn't make these or I didn't understand they were going to cost me money or my teenage son did these, fine, we'll write those off.

If you do that again the subsequent month and you refuse an offer of call blocking, which you can have put on your line such that you will not be able to dial the 900 numbers, then again we'll charge that back, we'll remove it from your bill. At that point we will hand that over to the service provider, according to the terms of our agreement, and they will pursue collection.

Mr. Gilles Bernier: You also said during your presentation that every time you try to fix a problem there's another that seems to crop up. Can you elaborate on that a little?

Mr. David Elder: Going through the history of these things, we would have a problem with, say, the font size. So we'll have people saying, call right now for information on how to collect your prize, and that will be in very large type. And in very small type underneath it will say there is a charge per call of $24.99. So we'll say that's wrong. We're going to put in place a new restriction that says those two things have to be at least the same size. So that problem then goes away and we stop getting complaints from people who say they didn't realize there was a charge because they didn't see it because the type was so small.

The next thing that happens is people start displaying the prizes in a way that's misleading. And I think you had some talk about this last week, where you had the poker hands. The poker hands that anybody who plays poker would have intuitively thought would have won the big prize in fact won the booby prize. So then we put in place a restriction that says very clearly you can't list these things.

It's very difficult to always be chasing after these things. We have to have, for our own purposes, very clear restrictions and guidelines so that the people in the front lines who have to vet these things have something fairly clear to go by and aren't always just making a pure judgment call.

Mr. Gilles Bernier: Mr. Gustavson, you claim that you like Bill C-438. I'm going to quote from proposed section 52.2 where it says “cause to be distributed”. Can you explain to me what that means to you?

Mr. John Gustavson: I think “cause to be distributed” says that it can be delivered in many.... The fact is these things can be delivered outside Canada Post, because they are not addressed. So it is the individual who is responsible for putting that into some form of delivery system that would be held accountable under this bill.

I'm a lawyer, but I'm not in the field of legislative interpretation as any sort of specialty. I take it that in a normal interpretation of the bill that means you go back to the actual person responsible for creating the card or the offer and hold them responsible, not the carrier.

Mr. Gilles Bernier: You're absolutely correct by saying that it would be the one producing the card, not the distribution side of it. For example, if I create those cards and I want them to be distributed, I go to Canada Post. If I meet the criteria, Canada Post will distribute those cards. I would be breaking the law by bringing it to Canada Post, but Canada Post would not be breaking the law.

Mr. John Gustavson: Yes.

Mr. Gilles Bernier: So that would be the same for Canada Post. It would be the same for anybody else.

Mr. John Gustavson: Or the same for the telecommunications company who receives or transfers the response....

Mr. Gilles Bernier: That's right. So if we're going to amend the Competition Act, if we're going to change the law, and we're here to discuss this issue, Bill C-438 does not address the distribution side of it. Would you agree?

Mr. John Gustavson: I would agree with that. When we say the person who created the card, it's back to the person who caused the card to be created. It's not the printer. It's not the agency that designed it. It's the person who's in charge of the scam. And that's quite proper, as that's the person who is out to do malfeasance. That's the person who's out to do the scam.

• 0945

Is it practical to impose something on any of the carriers? I think you're going to hear from Canada Post officials later, but I would point out that we had no objections to Bill C-229, which did impose responsibility on Canada Post not to distribute cards of that nature. If there are practical problems we're not aware of, I'm sure Canada Post will tell you.

Where we would draw a proper line, though, is if Canada Post started opening envelopes. It's a long, slippery slope if Canada Post starts invading and censoring mail that is transferred in an envelope.

Mr. Gilles Bernier: The reason I'm asking you that question is that I delivered to the clerk of the committee this morning.... Last week I introduced a private member's bill in the House, which is Bill C-458. I'll read you the first two lines of proposed subsection 52.2(1), if they want to distribute a copy of that bill. It says “Subject to subsection (2), no person shall distribute or cause to be distributed”. So it would stop the person who produces it and it would stop the distribution of those games of chance.

Mr. John Gustavson: I guess the question there would be, what if this were not a card? What if this offer were in a sealed, addressed envelope? You're saying that Canada Post is going to have to open and examine mail put into its care. A lot of people would object to the idea of Canada Post censoring their mail. I think the bill as it stands catches those people, whether it's in an envelope or not, without giving Canada Post the ability to start opening our mail.

The Chair: Last question, please, Mr. Bernier.

Mr. Gilles Bernier: To me it's not just Canada Post. I did support Madame Redman on Bill C-229. The thing I objected to in Bill C-229 was that it only focused on Canada Post. You have to understand that Canada Post only delivers about 20% of those games of chance. There's a whole wide range of other companies that deliver them, so Bill C-229 would not have fixed the problem. It was a good start, but it would not have fixed the problem.

Mr. John Gustavson: I would agree that Bill C-438 is more comprehensive in addressing the problem.

The Chair: Thank you.

Mr. Malhi, please.

Mr. Gurbax Singh Malhi (Bramalea—Gore—Malton—Springdale, Lib.): Thank you, Madam Chair.

My question is to both of you. Is there any contribution from Bell Canada to educate the public on fraudulent activities? Also, how do Consumer Affairs and Industry Canada play their part to educate the public?

Mr. David Elder: The answer to your first question is that Bell Canada has not been active in terms of a public information campaign of a general sort. Certainly when we do get calls from people who are charging back calls they've made, our client representatives at that point will do a little explanatory work and explain the charge-back process and how 900 works. But we haven't done any big mail-outs or anything like that.

Mr. Gurbax Singh Malhi: Have you advertised in the public directory?

Mr. David Elder: No, we haven't. I suppose that's something we could consider. We do have some material in our introductory pages of the phone directory about some other issues of public concern, but mostly about privacy issues and that sort of thing. If this were to continue to be the type of problem it was for us a couple of years ago, that's something we could consider.

In terms of your second question about the role of Industry Canada and the Competition Bureau, it is my understanding that those bodies, those organizations, have done a bit more in the way of public education. I would think your question would be better placed to representatives of those groups.

Mr. John Gustavson: I would think the details of the amounts spent on public education would best come from Industry Canada, but I can say they've joined us in sponsoring a series of videos to prevent scams and in support for some other initiatives with some other groups.

• 0950

There's certainly no comprehensive, coordinated approach to public education on how to avoid scams. I can say that. There needs to be both federal and provincial coordination of those efforts and some more money put behind it.

Mr. Gurbax Singh Malhi: I have just one more question: what do you suggest to improve, to better, enforcement resources?

Mr. John Gustavson: What I think we're missing here is some group within government sitting down and saying, let's put together a package: what do we need legislatively; what do we need to enforce that; and quite frankly, with the creativity of the scam artists out there, how can we get the message out to those who are most likely to be targets or victims of these people?

What I really think is missing is this task force or group, whatever you want to call it, saying let's take a look at the whole problem here and the various things we need to do to solve it. That's not to take away from the importance of Bill C-438 or even Bill C-229, but it's piecemeal, quite frankly. That study has to happen if we're going get to the root of this problem.

The Chair: Mr. Elder.

Mr. David Elder: Sorry, if I could just add something, I've just been reminded that in fact Bell Canada has participated in the forum on telemarketing fraud. As an active participant, we've attended a number of CARP meetings on consumer protection for seniors. We have done that in terms of consumer education.

The Chair: Thank you, Mr. Malhi.

Mr. Lowther.

Mr. Eric Lowther: Thank you, Madam Chair.

I apologize earlier for having you mislabelled here in the wrong organization.

Mr. David Elder: I apologize if I misled you.

Mr. Eric Lowther: No, you didn't. It's fully my mistake. But now that I think I'm on track here, I do have some questions for you that should be more appropriate this time, Mr. Elder.

For example, when Bell Canada or any of the carriers offers a 1-900 service to a group that wants to use it, do you do any formal checking beforehand? Do you ask them what the business plan is, what they are doing; and only then do you say, okay, we feel comfortable with this, fine, here's your 1-900 service? Or is it, gee, anything goes, pay the bills, sign the bottom of the form, you're in, you got your number...?

Mr. David Elder: No. We do try to check them out. We have some forms filled out that provide some basic information about the type of program and how they're proposing to carry it out.

Mr. Eric Lowther: Do you refuse some?

Mr. David Elder: Yes, we do.

Mr. Eric Lowther: What kind would you refuse? Can you give us an idea of what you would be uncomfortable with?

Mr. David Elder: We have in the past.... I'll focus on the scratch-and-win promotions because those seem to be the ones that are nearest and dearest to your hearts. We have refused, on a number of occasions, some of these from going forward. Also, a number of times, while they eventually get carried, there will be several iterations where they'll send us their game card and their application and we'll say no, you have to make this type better, you have to include the contest rules, which weren't there before, and we think this is misleading, we want the odds of winning. There are all kinds of requirements that we—

Mr. Eric Lowther: Would you exclude one where...? Well, I guess you're obviously not excluding one where they actually have to pay to claim the prize.

Mr. David Elder: Well, in fact—

Mr. Eric Lowther: Because that's what a 1-900 number basically does.

Mr. David Elder: In fact, for none of these do you have to pay to claim the prize. One of the requirements we have is that there has to be an alternate means of entry. On all of the game cards, there's the possibility that you can write in to claim your prize.

What you are calling for is information on how to collect your prize. There are two ways to do that. One is to dial the 1-900 number and get information on how to collect your prize, which usually tells you to mail something anyway, or you can just mail a self-addressed, stamped envelope to the address indicated and say, here's my card and here's what it comes out to, so tell me what I won and how to collect it.

Mr. Eric Lowther: Yes. I was under the impression, though, that there are some in which, if you buy this item, you're now eligible for the bigger prize—but I don't want to go down that road right now.

My other question would be this, then: Once you've given them the service and they're up and running and then you're getting uncomfortable with it, are there times when you pull it? Do you say, gee, we're just not that comfortable any more so we're going to discontinue this agreement?

Mr. David Elder: Yes.

Mr. Eric Lowther: Okay.

Mr. David Elder: Yes, and we have done that. Frankly, we usually wind up in litigation thereafter.

Mr. Eric Lowther: Is that driven by consumer complaints?

• 0955

Mr. David Elder: Yes.

Mr. Eric Lowther: Okay.

Who collects the money when the person is calling in? Let's say I'm going to phone this 1-900 number, I'm not that familiar with them, and I didn't really figure out that it's going to cost me a bunch of money to find out where to collect my prize. I call in, and oh, gee, now I owe some money, but I'm not going to pay it because I didn't figure out all of this. So I'm going to fight you. Now, am I the prize winner in a battle with Bell Canada or the telephone carrier, or is it between the 1-900 customer, your customer, and the end person? How does that work?

Mr. David Elder: Well, you're never in a battle with Bell Canada, I'm pleased to say.

Mr. Eric Lowther: Oh, good.

Mr. David Elder: Whether you are or are not in a battle with the service provider again depends on whether you've called these 900 numbers before. If you've called a 900 number—just to reiterate what I said earlier—and it shows up on your Bell Canada bill and you don't dispute it, you'll pay it and we'll collect it.

If you do dispute it, if you call up our business office and say that there's this charge on your bill and you never made the call, or that you didn't understand the consequences of your action when you made the call—

Mr. Eric Lowther: Yes.

Mr. David Elder: —we will write that off. We'll remove that from your bill and we will advise the service provider that the call was charged back. Under the terms of our agreement, the service provider waives all right to that money and can't pursue it.

If you've done this before, then we will write it off and it'll come off your bill, but we will hand contact information to the service provider to collect it.

Mr. Eric Lowther: I see. That's great.

The Chair: Thank you.

Mr. Eric Lowther: I have more questions, Madam Chair, but shall I wait for another round or...?

The Chair: Well, I don't think we're going to have a whole other round.

Mr. Eric Lowther: Could I have one more little quick one?

The Chair: Sure.

Mr. Eric Lowther: Thank you.

Mr. Gustavson, what this Bill C-438 is intending to do.... I understand you've just had a brief look at it, but I'd be curious about your comments as the present CEO of the Canadian Marketing Association. Is it your position that for somebody to have to incur an expense—be it 1-900 or some minimum fee or charge or something—in order to collect a stated prize that supposedly they have....? Should that be what Bill C-438 is trying to do? Should it be saying that this is not kosher, that you can't do that, that you could complain to the Competition Bureau and then shut these people down because paying to get your prize is just not something we're comfortable with?

Or should we just leave that alone and say, look, folks, if you want to pay to get a prize, there are some risks involved? It might be a bogus prize or incurring some expense for something that might not be as attractive as the picture portrays it, but buyer beware: if you want to walk down that road, that's up to you. I'm wondering which side of that you would lean on.

Mr. John Gustavson: The problem is this: the presentation is so misleading that it gives the impression that you have won and probably that you've won something fairly substantial. The fact is, maybe you have won something when you call, and it may be a dollar—while the call is going to cost you ten dollars. It is the misleading aspects of this that this bill addresses.

There's no reason that you cannot still run a contest and say, hey, you might win a million dollars, call this number, and it's going to cost you.... Be transparent. Say how much it's going to cost. Be open and honest. They're simply entering a contest and there's a 1 in 800,000 chance that they might win. There's nothing wrong with that. It's not prohibited by the bill.

It's where they've misleadingly given you the impression that you have won to entice you to make the call.... That's what the bill addresses. We think legitimate use of 1-900 numbers for contests, where it's open, honest, and transparent, and not misleading, is still protected.

The Chair: Thank you very much.

Thank you, Mr. Lowther.

Mr. Lastewka, please.

Mr. Walt Lastewka (St. Catharines, Lib.): Thank you.

Mr. Elder, you mentioned earlier that you had lowered the amount down to $25, I think. How did you come up with the $25 as a number? When you wrap in the costs of the 900 line and so forth, what is the difference between $25 and the actual cost of that 900 line?

• 1000

Mr. David Elder: I'm not really in a position to give you that precise economic information. I mean, $25 would be well above the cost for providing that call. There are per-minute charges for the network.

Mr. Walt Lastewka: Well, doesn't that give you a suspicion right off the bat that the scheme or whatever the program is behind it is to make money on the calls?

Mr. David Elder: Yes.

Mr. Walt Lastewka: Doesn't that concern your company?

Mr. David Elder: It has. The difficulty is that it's not illegal. We are a common carrier and we are required to provide service, subject to a few restrictions. And if something is not illegal, it's very difficult for a common carrier to wade in and say you can't do this. In fact, there are court cases to that effect.

There's a fairly key and seminal decision where we were asked to provide some information about someone who's suspected of keeping an illegal book-making operation, and it was found that it was improper for us to be giving out that information without some sort of judicial authorization.

So we're in a bit of a bind. We have a regulator looking over our shoulder telling us not to give out confidential customer information and that we can't suspend service unless something is clearly contrary to law, which has been interpreted as being so found. On the other hand, we're certainly sympathetic to some of these things. So we try to play down the middle and see if we can get the approval of our regulator to put in place some kinds of restrictions that will get at the problem.

Mr. Walt Lastewka: It would almost seem to me that you want to stay away from the responsibility, that having a 1-900 number at $25 is.... You're almost saying it's okay. Somebody else should be taking care of it and you take no responsibility.

Is that what you're trying to tell us?

Mr. David Elder: Well, I don't know that we would say we would take no responsibility, because we have quite a few guidelines, and I'd be pleased to file them in detail with this committee. Our accounts receivable management agreement is quite lengthy.

Mr. Walt Lastewka: I have a hard time believing legitimate game players—as Mr. Gustavson has talked about—would charge that amount of money if it were legitimate, if it weren't for the purpose of making money on the phones.

Mr. David Elder: I think that's right. And now that we have the decision from last fall at the Competition Tribunal, which basically said these are contrary to the Competition Act, we're going to be moving ahead, as I said, to file with the regulator a proposal that would allow us to refuse them. So in the future, when we do make a finding that the whole purpose of it is to gain revenue from the caller charges, we can shut it off.

Mr. Walt Lastewka: I see Mr. Gustavson wanting to protect legitimate marketing projects, and I think your company has a role in making that possible.

Mr. David Elder: Well, it's certainly in our business interest to do so as well.

Mr. Walt Lastewka: Mr. Gustavson, there's always a lot of discussion on marketing. The most vulnerable people are always senior citizens.

Mr. John Gustavson: They are often one of the target groups, though we've also found the disabled, who are at home a lot, and people who are lonely, which is another characteristic of the target groups.

Mr. Walt Lastewka: Yes, but many times that falls into seniors too.

Mr. John Gustavson: Yes.

Mr. Walt Lastewka: Do you have a mechanism within your association concerning any of your members that a person can complain to?

Mr. John Gustavson: Yes.

Mr. Walt Lastewka: Is it well known?

Mr. John Gustavson: Yes, I believe it is. It's called Operation Integrity. We get several hundred complaints every year that they resolve.

Mr. Walt Lastewka: I think that needs to be a little bit more known. Maybe I could talk to you after the meeting.

Mr. John Gustavson: Sure.

We are listed with the Better Business Bureau, which is aware of it, and with other places that people might go to with their problems. For example, a lot of the social service agencies are aware of what we do.

Mr. Walt Lastewka: Thanks, Madam Chair.

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

[Translation]

Mr. Bellehumeur.

Mr. Michel Bellehumeur: To Mr. Elder of Bell Canada, do you have an idea of the revenues involved for 1-900 numbers?

[English]

Mr. David Elder: Of those companies?

[Translation]

Mr. Michel Bellehumeur: Yes.

[English]

Mr. David Elder: No. I'm not sure of—

[Translation]

Mr. Michel Bellehumeur: Do the Bell Canada representatives know?

• 1005

[English]

Mr. David Elder: For Bell Canada, we don't keep records according to the type of program, but currently I think we make in the neighbourhood of about $1 million a year off all 900 services. Again, we get a permanent charge for the network usage, in cents, and then we get a fee, which is 10% for most of these, of what we collect.

[Translation]

Mr. Michel Bellehumeur: I have another question. Before granting a 1-900 number, you seem to do a little investigation or at least check into certain things. In the case of games of chance, lotteries, scratch-and-win cards and things like that, do you ask the companies to show you their provincial lottery licence, for example?

[English]

Mr. David Elder: We would if it's a lottery. For instance, in the province of Quebec if you're going to run a game of chance, because of the provincial legislation that's in effect there we do require a registration with the régie responsible for gaming in Quebec.

[Translation]

Mr. Michel Bellehumeur: Am I wrong, or is the problem of these scratch-and-win cards and games of chance much more significant in the anglophone provinces than in Quebec?

[English]

Mr. David Elder: No. I think that's correct, and I think largely because of the Quebec consumer protection legislation, we see very few of these operating in that province.

[Translation]

Mr. Michel Bellehumeur: Is it not up to the provinces to protect us against this problem of games of chance over the telephone?

[English]

Mr. David Elder: I suppose certainly the provinces have a role to play. On the one hand, this can be viewed as a matter of property and civil rights, which would fall to the provinces. At the same time, as far as we're concerned, this is being used in conjunction with the telecommunications service, which is clearly a federal matter. So again we're into one of these situations where I think both the federal government and the provinces each have a role.

[Translation]

Mr. Michel Bellehumeur: I understand. However, the problem in Quebec is much smaller, if not practically inexistent, mainly because you need a lottery and race-course licence for all types of games, bingos, etc. I think that it is essential for the provinces to pass similar legislation.

[English]

Mr. David Elder: I should qualify.... I'm certainly by no means an expert in the consumer protection legislation of the province of Quebec, but yes, our experience is that we see fewer difficulties in that province, and I think logically the reason for that is the legislation that's in place in that province to protect consumers.

I should point out, though, it's not just Quebec that requires a licence. If you're going to run a bingo or a real lottery in the other provinces, take Ontario for instance, you do need a provincial licence. The difficulty with these things is that I'm not sure they are the types of lotteries that are prohibited by the Criminal Code unless you have a licence, because what you're paying for is information on how to collect your prize, rather than paying for the opportunity to participate.

If these were set up in such a way that you gave me $25 and I gave you this game card, and you might win something, I think that would clearly be contrary to the Criminal Code, an illegal lottery, unless you had a provincial licence. But again, that's not the case.

These people are very bright, and they set things up to make it as grey as possible, because they know it will be very difficult for someone to shut them down or to obtain a conviction.

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

Madam Redman.

Mrs. Karen Redman: Thank you, Madam Chair.

I just have a point of information. I believe Mr. Elder mentioned it earlier today, and certainly on previous occasions it has been referred to, and that's the Cave Promotions assessment. My recollection is that it actually was happening out of Montreal and Calgary. Although Quebec may see less of a proliferation, this truly doesn't know geographical boundaries, and I think that's why it's very important that there be a federal response to this issue.

• 1010

The Chair: Monsieur Bernier.

Mr. Gilles Bernier: Thank you.

It's more or less a statement than anything else, because I want to refer to Mr. Elder. When he answered a question from Mr. Lastewka, he said they're not breaking the law. That's exactly what I was talking about earlier: not breaking the law. By the phrase that I quoted to that gentleman yesterday, “causing to be delivered”, you'd still not be breaking the law because you're delivering the service. The phrase “causing to be delivered” would not attack you people, it would attack the people causing it.

It would be against the law for me to do it, yet there are always people who will try it anyway, just to see how far they can get and to see if they're going to get caught. I'm sure there are some people who are going to fall into the cracks and not get caught, so that problem will not be rectified just by having “causing to be delivered”.

That's just a statement I wanted to make.

The Chair: Thank you.

I want to thank Mr. Gustavson and Mr. Elder for being with us this morning. We appreciate your time, and we appreciate the conversation and your participation in this discussion.

We're going to suspend for two minutes as we change witnesses. All our witnesses are here, and I'm going to ask members to stay in the room or not go too far.

• 1011

• 1017

The Chair: I would ask members to return to the table, please. We're going to resume.

I want to apologize to our witnesses in advance. It appears that we are going to be disrupted by a vote on Bill C-6, so we anticipate the bells at any moment. When the bells do start, we will continue for the first 15 minutes. It will be a 30-minute bell, so we will break at the 15-minute mark and you'll have approximately half an hour to talk amongst yourselves until we return.

We have Canada Post, Treasury Board, and witnesses from the Department of Industry with us. What I would propose is that we hear from each of you if you have any opening statements, and then we'll move to questions together. I also propose that we begin with David Olson, the assistant general counsel for Canada Post.

Mr. Olson, go ahead whenever you're ready.

Mr. David Olson (Assistant General Counsel, Canada Post Corporation): Good morning, Madam Chair and honourable members. My name is David Olson. I'm assistant general counsel with Canada Post Corporation's legal affairs branch. It's a privilege to appear before you this morning.

Canada Post Corporation fully supports actions to effectively combat deceptive marketing. We have had an opportunity to review the provisions of Bill C-438, an act to amend the Competition Act. We understand that this bill creates a specific criminal offence relating to deceptive contests conducted not only by mail but through other systems of delivery as well.

Of course, section 52 of the Competition Act was amended during the last Parliament to address deceptive telemarketing practices. We understand that in essence the proposed bill, Bill C-438, extends those telemarketing provisions to printed lottery and contest schemes. We believe adding such an improved provision to the Competition Act is the most effective way to deal with these deceptive practices. As well, Bill C-438 shifts the responsibility to the companies and individuals who circulate these games. They would bear the onus of complying with the law. Canada Post therefore fully supports the objectives of this bill.

There is an additional issue that I would like to clarify. We understand that a previous witness before the committee raised concerns about Canada Post's ability to deal with these issues, despite its active work with various police agencies and others to combat such illegal activities.

It must be remembered and stressed that Canada Post Corporation is governed by the provisions of the Canada Post Corporation Act. That act, of course, mandates Canada Post to ensure that Canadians have universal access to their postal system. The act itself protects the principle of the sanctity of the mail, and Canada Post is not free to arbitrarily seize and detain mail or, for that matter, to act as a censor. There are numerous court decisions in this regard.

• 1020

We understand that this principle of the sanctity of the mail conforms with the expectations of Canadians with regard to privacy and to guaranteed rights in a free and democratic society. However, we would like to stress that the Canada Post Corporation Act does maintain a balance, on the one hand protecting privacy, and on the other hand providing an avenue in the act for the minister responsible for Canada Post to issue orders prohibiting Canada Post from delivering mail addressed to perpetrators of mail fraud.

Notwithstanding the legal avenues available to control marketing fraud, Canada Post as well as several other interested groups have realized that effective prevention is the key to decreasing the number of incidents of fraud or deception.

As you may know, this consensus led to the creation of the Deceptive Telemarketing Prevention Forum under the leadership of the Competition Bureau in May 1996. It brings together a wide group of organizations and businesses dedicated to preventing and combating telemarketing fraud. Canada Post is a founding member of the forum and its second largest financial contributor. Other important members are Bell Canada, the Better Business Bureau, the Royal Canadian Mounted Police, Visa Canada, the Canadian Association of Retired Persons and Project PhoneBusters.

In May 1999 the forum launched a Canada-wide public awareness campaign. Canada Post actively joined in the campaign, and in addition to our involvement in that forum, Canada Post uses its own extensive network of post offices as well as its active and retired employees to raise public awareness. Canada Post believes that public awareness is the best means to address deceptive marketing practices. Canada Post commends the committee for its efforts in dealing with this important issue.

Thank you very much.

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

I'm now going to turn to Mr. Villeneuve, the director of corporate identity and government communications, from the Treasury Board Secretariat.

[Translation]

Mr. Jean-Pierre Villeneuve (Director, Corporate Identity and Government Communications Division, Service and Innovation, Treasury Board Secretariat): Thank you, Madam Chair.

If it could be helpful, I would like to shed some light on a program that is relevant to today's discussions. It is called the Corporate Identity Coordination Programme and it is concerned with the Government of Canada's visual signature.

[English]

The federal identity program is a government-wide program that applies to approximately 160 institutions of the Government of Canada and that is in all regions of Canada and abroad. Simply put, Madam Chair, the goal of the federal identity program is to make the Government of Canada visible in the daily lives of Canadians by helping them recognize at a glance the programs, the services, and the activities of the Government of Canada.

I'll be happy to expand on this, but I think it's important that members of this committee know that the federal identity program has three official symbols. I've given the clerk of the committee copies of those symbols if you would deem it appropriate to distribute them to members of the committee, and those three symbols are the coat of arms, the flag of Canada symbol, as well as the Canada word mark. As I mentioned, Madam Chair, I'll be happy to expand further, if you wish, afterwards.

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

We have invited Nicole Ladouceur, the assistant deputy commissioner from the Department of Industry, to return. I don't know if you have any more opening comments for us or if you're just here to answer questions.

Ms. Nicole Ladouceur (Assistant Deputy Commissioner, Fair Business Practices Branch, Department of Industry): That's right. I'm just here to answer questions. Of course I delivered my statement last Tuesday. I don't have anything to add to that.

Merci.

• 1025

The Chair: Thank you very much, Ms. Ladouceur.

I'm now going to begin with Mr. Lowther. Do you have any questions, Mr. Lowther, at this time?

Mr. Eric Lowther: Yes, to Mr. Villeneuve.

Can you give the committee any idea—I don't want volume, but a few summary statements—as to what kinds of protections are in place to make sure the symbols of the government are used appropriately?

Mr. Jean-Pierre Villeneuve: Madam Chair, there are protections in place to do exactly what is being indicated. As I mentioned earlier, the symbols of government are the flag symbol, the coat of arms, and the Canada word mark, and these are indeed protected under the Trade-marks Act. They were approved and entered as official marks of the Government of Canada on the trademarks register, which is held by the Canadian Trade-marks Office; and the Canadian Trade-marks Office, for greater clarity, is part of the Canadian Intellectual Property Office at Industry Canada.

More specifically, the coat of arms was registered and public notice was given back in April 13, 1955. The flag of Canada was registered and public notice was given on April 14, 1965, and finally, the Canada word mark, which is a newer creation, if you will, was registered and public notice was given on August 25, 1982.

Mr. Eric Lowther: Is it possible—and this is to perhaps you, Mr. Villeneuve, and Mr. Olson—today for me or someone to send something in the mail and get a symbol of the Government of Canada on my piece of mail somehow through Canada Post? Bill C-229 talks about how it needs to be in an envelope if I'm sending something out, but could I send out a card or use Canada Post courier-type services to have some sort of implied impression that Canada Post had given some scrutiny to what I'm mailing?

I'm fumbling with the question here and I apologize, but I hope you can get an idea of where I'm going in that. Could I send something through Canada Post services that would give the receiver the impression that it had some sort of government sanction or a government logo on it? Is that possible today?

Mr. David Olson: Could I have a moment? Thank you, sir, for giving me a moment.

My understanding is that Canada Post act stipulates that nothing in the course of post is subject to delay or seizure, and certainly we don't act as a censor. The only powers we have to scrutinize mail are expressly set out in the act. Other than determining that it's mailable matter, it's properly addressed and so on, we don't exercise that kind of scrutiny of the mail at this time.

Mr. Eric Lowther: Maybe I'll leave it at that point.

The Chair: Mr. McTeague.

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): Thank you.

Mr. Olson, my question is very brief. I was here when Sergeant Barry Elliot of Project PhoneBusters was concerned specifically with respect to Canada Post, but more particularly to the question of Purolator, which is a division of your organization. His concern—and it's one I think the committee would probably like to get a firm and clear answer on—deals with the prospect of Purolator not having a mechanism in place whereby an individual who may have second thoughts before the delivery is actually made.... They may not be in a position specifically with your company to ask the courier to return the cheque based on what is perceived to be a second thought or perhaps a fraudulent occurrence.

Could you give us an explanation as to why your company is different from other courier companies, more importantly, given that one specific concern that I seem to remember from Sergeant Elliot's concern, if you're prepared to address it at this time?

• 1030

Mr. David Olson: I'm certainly not counsel to Purolator. It's true that the Government of Canada owns a large number of shares through Canada Post in Purolator, but I am not counsel for Purolator and it's a separate company, a separate corporate structure, and operated completely at arm's length from Canada Post Corporation.

Certainly the provisions of the Canada Post Corporation Act relating to the sanctity of the mail and ensuring the sanctity of the mail, and ensuring that nothing in the course of mail is subject to illegal search and seizure and so on, those provisions do not apply to the operation of Purolator.

Mr. Dan McTeague: Under the circumstances, Madam Chair, I'm wondering if it might be possible to have a representative from Purolator explain the procedure in the context of this very important bill and in terms of what has been raised. I appreciate Canada Post being at arm's length from a company that it owns. Would it be possible to do that?

The Chair: Mr. McTeague, what was raised was Priority Post; it wasn't Purolator that was raised at the last meeting.

Mr. Dan McTeague: I'm sorry, Priority Post.

The Chair: Mr. Olson should be able to speak to Priority Post, because that was the issue.

Mr. Dan McTeague: I'm sorry, it's Priority Post. I said Purolator, the Ps must have thrown me off.

I follow the school of Mr. Lowther this morning, so I think we've had a tough day.

I'm sorry, Mr. Olson, we'll begin again. I think you understand.

Mr. David Olson: I understand the question.

Mr. Dan McTeague: Yes, that's right, Priority Post. Thank you.

Thank you, Madam Chair.

Mr. David Olson: I think I probably addressed it by saying, as I mentioned to you in attempting to distinguish the situation between Purolator and Canada Post, that of course Canada Post, as I alluded to in my opening statement, is mandated under the Canada Post Corporation Act to ensure and protect the privacy of the mail. There's a specific section, section 40(3), in the Canada Post Corporation Act that reflects this principle, which in essence states that nothing in the course of post, after it has been mailed, is liable to demand, seizure or detention.

What I did say is that Parliament in its wisdom, when it set up the Canada Post Corporation Act, did provide for a balance in that act by also enacting the prohibitory order section, so that where evidence is brought to the attention of the corporation that there are reasonable grounds to believe persons are committing an offence by mail, then the minister can make an order prohibiting the delivery of mail to that person. Ultimately, if that process is followed, which takes into account fundamental principles of due process, then at the end of that, the mail, if such an order is in place, would be returned.

Mr. Dan McTeague: Due process takes years around here in terms of dealing with that. How are you going to do this in 24 hours, in the time in which Priority Post would normally make the delivery?

Mr. David Olson: Our experience is that we can, if the evidence is brought to us in a timely way, turn these kinds of applications around fairly quickly. There's provision in place for an interim order to be made under that section, sir.

Mr. Dan McTeague: I understand Priority Post is in affiliation with Canada Post, and for that reason it acts in very much the same way as Canada Post would. But can you tell me if that's an advantage in terms of how other courier companies do it, where there's a demand that says, look, we made a mistake, or something is wrong here, let's pull it back? Why would I have to have an interlocutory involvement by someone within Canada Post or under the direction of the minister in order to accomplish what other companies are simply doing?

• 1035

I presume that you wouldn't want to be party to a potentially fraudulent or criminal activity, and as a result, you exempt yourself by simply saying “if we know that”, “if there's evidence to demonstrate that”. I see evidence in terms of the Competition Act and many other areas. Is the burden of proof beyond a reasonable doubt? I don't know who's going to make that assessment, but I suppose if the police were to call you, if Barry Elliot for instance were to call you, to tell you that there is potentially a problem there, you will intercept that.

Mr. David Olson: I understand that this avenue has been held out to him.

Mr. Dan McTeague: Why, Mr. Olson, would—

The Chair: Last question.

Mr. Dan McTeague: Thank you, Madam Chair.

Why, Mr. Olson, would Priority Post request or require an involvement of someone from the police, as opposed to other companies, which do not require the same kind of simple demand to have it returned?

Mr. David Olson: I understand your question, sir. Priority Courier is not a separate operating division of Canada Post Corporation. Priority Courier is just one of the services that Canada Post itself offers. It's not a separate company like Purolator; it's just one of Canada Post's services. It is regarded as mail under our act, and as I mentioned earlier, Parliament has stipulated...and wants to protect the integrity of that service. So really Priority Courier, as I say, sir, is one of Canada Post's key services and is mail under the provisions of our act. This is why that service is subject to the section 40 that I indicated and, as well, the balance that Parliament tried to create in the first instance.

I hope that addresses your concern, sir.

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

I want to apologize again to the witnesses. We're going to have to suspend now. We're at 15 minutes. And I will ask the members to return as quickly as possible so that we can complete this session with the witnesses, and also so that we can then move into dealing with our report again.

Thank you. We'll be back in 15 minutes. We're now suspended.

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The Chair: I'm going to call the meeting back to order. I want again to apologize to the witnesses for the delay. It has given them some time to talk amongst themselves, I'm sure.

I'm going to return to questions. Mr. Lastewka.

Mr. Walt Lastewka: Thank you, Madam Chair.

I want to follow up, Mr. Olson, partially on what Mr. McTeague was getting at. He was getting at basically Priority Post and retrieving a parcel, for one reason or another, after it had been sent.

I got the impression from Barry Elliot last week that there was a lack of cooperation between PhoneBusters and the post office as far as being proactive on deceptive marketing is concerned. I wonder if you could comment on that. I think he left us with the impression that he wanted to work closer with the post office and that it wasn't happening.

Mr. David Olson: Sir, as I indicated in my opening remarks, Canada Post has been very active in this forum, that is, the Deceptive Telemarketing Prevention Forum that's led by the Competition Bureau. We're somewhat surprised about that remark because PhoneBusters is also a member of that forum, as I understand it.

As I did indicate in my opening remarks, Canada Post, through the forum and on its own, is committed to increasing everyone's awareness of this problem by our financial support of the forum and participation in it; by, on its own, displaying educational posters, for example, in post offices across the country; and by regularly communicating with its employees through our internal performance magazine and so on.

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I did take the liberty of bringing with me one of the posters we have displayed in our post offices to raise public awareness of this issue. You'll see that it says “Stop phone fraud. It's a trap”. We indicate, for more information, to call PhoneBusters, which I understand is the organization Mr. Elliot is associated with, and as well the Competition Bureau. I understand that this particular poster has been in our post offices for over six months. I understand that they're rotated from time to time. That's just to give you a flavour of Canada Post's commitment to this issue and to raising public awareness.

So we're somewhat surprised about his remarks, but we understand his commitment to this process as well.

Mr. Walt Lastewka: Many of our members have worked very closely with PhoneBusters over the years. I hope it's not just a matter of communication. I think being proactive in this type of situation is key.

I'd like now to turn to Ms. Ladouceur. Previous witnesses have said that the consumer affairs portion of Industry Canada and the provinces needs to be more proactive, especially in the area of seniors, who are so vulnerable. They mentioned that the consumer affairs section of Industry Canada and of the provinces has been cut back. Could you make some remarks on the work of the Office of Consumer Affairs in Industry Canada and how they tie in with the provinces in order to do things?

Ms. Nicole Ladouceur: I'm not here to represent the Office of Consumer Affairs. That's a separate part of Industry Canada.

That being said, the Competition Bureau does participate in what we call the Consumer Measures Committee. The Consumer Measures Committee is a committee that was created as a result of the Agreement on Internal Trade. The Consumer Measures Committee has representatives from all the provinces and territories, as well as a representative of Industry Canada. The Office of Consumer Affairs co-chairs with one province or territory that Consumer Measures Committee. The bureau participates as well because we are the enforcement arm of the department.

The Consumer Measures Committee has regular conference calls. We also have a ministerial meeting and a deputy ministerial meeting once a year, the latest one having taken place in Quebec City two or three weeks ago.

The CMC will put on its agenda issues that have to be dealt with. One of the main ones is harmonization in terms of consumer protection issues. It also does a lot with regard to educating the consumers in their respective jurisdictions.

We've talked a lot about the forum, and the CMC is part of the forum. For instance, the poster the representative from Canada Post brought here today is in fact being distributed across the country. Part of that package was a very comprehensive video, which is also being made available free of charge to whoever requests it, as well as a pamphlet. It was by pooling the resources of private and public sector organizations that we were able to put together this national campaign.

I think that is what I can say with regard to the work on a national basis among the provinces, the territories, and the federal government.

Obviously there's an issue about resources. I think I mentioned this the last time I was here. I don't know of any agency, be it public or private sector, that is basking in resources these days. I think that was one of the main driving aspects of the forum. This was where all the organizations were pooling whatever resources they had. CARP, for instance, is a member of the forum. CARP obviously is non-profit. So is PhoneBusters. Obviously they did not have to put in any financial contribution. Canada Post put in a financial contribution, and Bell Canada did as well.

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We pooled those resources to create a very comprehensive national education campaign, which is being made available free of charge, for instance, to government agencies and senior citizens' homes.

We also worked closely with the RCMP, the OPP, the Sûreté du Québec, and local police agencies. We have what we call decks and speeches, which are already put together and which they can simply deliver. We provide the pamphlets free of charge. I think a lot is being done on that front.

Mr. Walt Lastewka: The reason I brought up that question is that when we talk to the deliverers, whether it's Bell Canada or the direct marketing group, they say there needs to be more education. Is the Canadian direct marketing group part of your organization when it comes to communications?

Ms. Nicole Ladouceur: Yes. In fact they funded part of the national campaign.

Mr. Walt Lastewka: Okay. Thank you.

Ms. Nicole Ladouceur: When we devised the campaign, we wanted to make sure the message was appropriate. We didn't want to victimize Canadians. We wanted to make sure we were in fact empowering consumers. We wanted to make sure our message was very well focused. So we formed a steering committee, which had representatives from consumer protection areas but also from the business area because we wanted to make sure at the same time that we weren't harming legitimate business. The Canadian Marketing Association was part of that steering committee.

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

Mr. Bernier, s'il vous plaît.

Mr. Gilles Bernier: Thank you.

Mr. Olson, Canada Post is a crown corporation. It's a business, and a business is in business to make money. If I do something that's illegal for me to do but that is not illegal for you to do, would you still do it? Is that question too complicated?

Mr. David Olson: No, the question isn't complicated. I hope it's not a personal question. I think I understand, sir, what you're getting at.

I have had the opportunity to review your draft bill with my colleagues, and Canada Post as well supports the principal features and objectives of it. My understanding of the process is that they were drafted somewhat in isolation but with largely the same objective. So we commend the objectives.

Your bill, as I understand it, would hold both the perpetrators and the delivery agent criminally responsible. As I say, we support the overall principle. We have some difficulties, to be honest, with holding the delivery agent criminally responsible in these circumstances. It seems to be drafted in such a way that it's a strict liability offence. If Canada Post and its employees are going to be exposed to criminal prosecution, what is the onus and obligation on Canada Post and its employees? Do we have to open mail to ascertain whether or not an offence is being committed? What about the principle of the sanctity of the mail? Aren't we starting down a bit of a slippery slope here?

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It's not just with respect to Canada Post. As you may be aware, sir, for a number of years Canada Post was in the economy ad mail business. The Government of Canada directed Canada Post to withdraw from that business. We did. The gap has been filled by quite a number of local suppliers, such as Publi-Sac and so on. I presume youth are probably delivering this type of material. Are they going to be held to that criminal standard as well? I'm concerned about that.

Or in terms of the practicality of holding to that standard counter clerks in our post offices, we have a large network of franchisees in drugstores, hardware stores, and florist shops who are the ones who take this product over the counter. Do we really want to rely on the judgment of these persons as to whether or not a criminal offence may be committed here?

So we support the objectives, sir, of your bill and commend you for it. It's just that we do have some practical concerns about the implementation of that part of proposed section 52.2 that would hold the deliverers criminally responsible.

I may have been long-winded, but I hope I've dealt with your question, sir.

Mr. Gilles Bernier: You know as well as I do that if we just held responsible the person who caused the delivery, there would always be people around the world who would try to do it just the same. So that means the end result would be that we would not eliminate it. We could cut it down, but total elimination of it would not happen.

The basis of my bill, because it is my critic portfolio, as you know, was that Bill C-229, which I supported in principle, only targeted Canada Post. I felt that wasn't fair, because Canada Post only delivers about 20%. There's the other 80%. So if Canada Post stops but the other ones don't stop, you're not stopping the problem. I'm not saying you're creating another one, but you're not stopping it. So that's why I came out with my bill to stop the production and distribution of it.

I don't know if it's in the act, but I understand you're not allowed to open mail. It might not be a good example, but I'll use it just the same. If somebody brings a package to the post office and you hear a little sound in that package, are you going to open it? It might be a bomb. Who knows?

I'm coming back to the mail card games. If I'm producing those mail card games, it is illegal for me to distribute them. But by bringing it to Canada Post, according to the act itself, if it follows the criteria and the requirements of Canada Post, you will deliver it. So by not holding you responsible or not calling the cops on me, it's scot-free again, and we're not stopping it. That's the intent of my bill. It doesn't just target you. It targets the whole process.

Mr. David Olson: I understand, sir. I fully understand the purport of your bill. I don't want to repeat myself, but there are practical difficulties in making that aspect of the bill enforceable. That's the dilemma.

Mr. Gilles Bernier: Can I get in a last question?

The Chair: Briefly.

Mr. Gilles Bernier: Say I have a large number of envelopes, which are sealed, but there are game cards in them. I'm not telling you, so you don't know, but say I come to the post office and that's what's in the envelopes. It follows the criteria and the requirements of the act. Say I'm asking you, “I have this that I would like Canada Post to deliver. How much will it cost me?” So you figure out the price and I pay you and you deliver them. You're not breaking the law, and those game cards are still going around the country. That's my big concern. I don't know how we fix the problem, because I know you're not allowed to open mail.

Mr. David Olson: That's correct, sir.

Mr. Gilles Bernier: But how do we fix the problem if we're only targeting the ones who produce it but not targeting the ones who distribute it? It's not going to stop if we try just to—

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Mr. David Olson: I really do think, sir, the principles behind your draft bill and behind Bill C-438 of having the perpetrators held criminally responsible, with all the force of the Competition Bureau and the Competition Act, are probably the most appropriate way to go.

Certainly Canada Post will have significant responsibility in complying with directions and orders from the Federal Court in enforcing the Competition Bureau and turning over all sorts of evidence to the Competition Bureau in support of its inquiries as to whether or not a criminal offence has taken place and the prosecution of that. So there still is a significant burden on Canada Post that we'd gladly accept, but at least you have an agency then that is charged with investigating and prosecuting quasi-criminal and criminal offences and has that kind of expertise, and of course we then would comply with whatever evidentiary burdens would be necessary to support those prosecutions.

The Chair: Thank you.

Thank you very much, Mr. Bernier.

Ms. Redman, please.

Mrs. Karen Redman: Thank you, Madam Chairperson. I have a question for each of the presenters, and if I may, I'll start with Mr. Villeneuve.

Thank you very much for this.

The representation of government logos was introduced as part of Bill C-229, because I think there were incidents as recently as a year ago in Europe where there were knock-offs of very official-looking logos, and they were used to deceive the recipients of the mail. Is the use of government logos by unauthorized persons a major concern for the government, and who's responsible for ensuring that government logos are not being misused?

Is there a lack of enforcement with respect to the protection of government logos? I'm thinking of how easy it is to reproduce them now, with the technology we have. Could you briefly outline for us what that kind of protection currently looks like? And I'm assuming there are a lot more logos than just these three you've given us as examples.

Mr. Jean-Pierre Villeneuve: The very purpose of registering the Government of Canada's official symbols with the Canadian Trade-marks Office was indeed to confer upon those symbols legal protection. That's why it was done, and therefore it was deemed and continues to be deemed important.

We do protect the Government of Canada's official symbols and the ownership rights the Government of Canada has for those symbols against trademark infringements. Who is responsible for doing so? The Treasury Board Secretariat is responsible for the three symbols that were distributed to members of this committee.

I will add that departments use those symbols in combination with text, which results in the corporate signature of each department. To wit, the combination of the flag symbol with a title of a department or an agency, such as Treasury Board of Canada Secretariat and its French rendition, Secrétariat du Conseil du Trésor du Canada, is the corporate signature. The Treasury Board Secretariat is responsible for its own corporate signature, as would be other departments for their own.

Once again, however, ultimately the Treasury Board Secretariat is responsible for those three symbols that have been distributed, and once again, combinations thereof can result in corporate signatures for departments, and they are then responsible for their own corporate signatures.

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As I mentioned a minute ago, we do protect the symbols of government and we do this in a variety of ways, which I'll be happy to go into, if that's the desire of this committee.

I'm looking at my notes. The member asked about the type of protection. Citizens and members of Parliament will bring to our attention now and again possible infringements to the official symbols of the Government of Canada, or at least the appearance of an inappropriate use of those symbols. In cases such as those, what we do is relatively simple. Whenever we do receive a complaint of this nature that is justified in our judgment, we simply first call the individual concerned or a representative of the corporation concerned and point out the misuse of the government symbol in question.

Most often, the misuse of the government symbol is the result of lack of knowledge that one may not do that. In most cases this results in the person ceasing to use the Government of Canada symbol in question in an inappropriate way. If the response is negative, however, then we refer the matter to the appropriate legal counsel and a registered letter is sent to the individual asking him or her to cease and desist. The letter generally explains that the government will take legal action against the individual if he or she does not abide by the request.

The Chair: Ms. Redman.

Ms. Karen Redman: Perhaps it's more appropriate to ask this of Mr. Olson.

I will appreciate your intervention, Mr. Villeneuve.

My recollection was that in doing some of the background work for Bill C-229 and Bill C-438 I visited with the head of Canada Post. They had an actual poster that showed a vast variety of logos that I was under the impression were registered and regulated by the government.

Yet, Mr. Villeneuve, it sounds as if you're saying you're basically looking at variations of these three that you've given us as handouts.

I'm just wondering if there's another list, to your knowledge, Mr. Olson, that exists through Canada Post.

Mr. David Olson: Perhaps I could just have a moment.

Ms. Karen Redman: Mr. Villeneuve.

Mr. Jean-Pierre Villeneuve: Madam Chair, perhaps I could add some supplementary information regarding the symbols. Some institutions of the Government of Canada use symbols or identifiers or logos that are not amongst the three that you have in front of you. This is particularly the case of crown corporations that have their own unique identifier that they use in combination with the Canada word mark that you also have in front of you.

Ms. Karen Redman: Then they don't fall under your purview per se, but there are protections within the government if they are deemed to be misused?

Mr. Jean-Pierre Villeneuve: The federal identity program, which is the program I'm describing, applies—and you'll forgive me for the jargon, I hope—to schedules 1, 2 and 3 of the Financial Administration Act. Schedule 3 includes crown corporations. In the case of crown corporations they have been asked to use the Canada word mark in combination with their own unique identifiers.

The Chair: Mr. Olson.

Mr. David Olson: I am advised that the logos and symbols shown to you when you visited with our president were symbols of the institutions of the Government of Canada that were in a registry in the Canadian Intellectual Property Office administered by Industry Canada.

I don't know whether any of my colleagues can add any more information than what I've been able to provide.

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The Chair: Did you have something further to add to that, Mr. Villeneuve?

Mr. Jean-Pierre Villeneuve: I would just like to confirm that this is the register I was referring to a few minutes ago, which is held by the Canadian Intellectual Property Office, more specifically, by the Canadian Trade-marks Office within that office. The trademark register confers legal protection to trademarks and symbols of various kinds.

The Chair: Thank you very much.

Are you finished, Mrs. Redman?

Mrs. Karen Redman: Can I have two more questions?

The Chair: No, one more question.

Mrs. Karen Redman: Mr. Olson, I'll ask my remaining question of you. You talked about the deceptive telemarketing education program, and again from my visit with Monsieur Ouellet I believe Canada Post contributed $200,000 to that. I'm just wondering if you could speak for a moment to the marketing funds, where they come from, and future plans of that piece for dealing with telemarketing, fraud, and mail scams.

Mr. David Olson: Perhaps I might have a moment.

My understanding is that you significantly overstated the financial support of Canada Post Corporation. I believe the amount I mentioned in my opening statement was $20,000. The source of those funds is from a communications budget for public relations, as I understand it. There are a number of demands on that budget, but I understand we are committed to this program and presumably moneys have been set aside to continue our efforts in this area. I am advised that this program is a priority for Canada Post Corporation.

Mrs. Karen Redman: Thank you.

The Chair: I want to thank the three witnesses for being here today.

Mr. Olson, I'm not sure you've alleviated our concerns about Priority Post, with all due respect. Priority Post is operating as a courier type of service, and yet people who send things through Priority Post don't have the same rights as they do under other courier services to retrieve the information they've sent.

That was a big concern raised at this committee, and I'm not sure if I've misunderstood earlier conversations. I don't understand why someone who sends something by Priority Post cannot have it stopped before it reaches its destination if they wish to have it stopped. I'm the customer. I'm sending it.

Mr. David Olson: I'll attempt to clarify it. Priority Post is part of the bundle of services that Canada Post offers.

The Chair: I understand that.

Mr. David Olson: It is treated as and is mail under the definition under the Canada Post Corporation Act.

As I've attempted to explain during the course of my remarks, Parliament has deemed it appropriate to protect the integrity of the mail after it has been turned over to Canada Post for delivery. Section 41 of our act, I believe, stipulates that nothing in the course of mail, while it's in the post, is subject to delay or seizure, save in exceptional circumstances which are under the Customs Act and by CSIS. So that is the direction.

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The Chair: I understood that explanation the first time. My point is that the only thing we as a committee can do then is disagree with that, because Priority Post is operating as a courier type of service.

People are sending things through Priority Post. Seniors, in particular, are being told by these perpetrators...which obviously Canada Post is well aware of. Because you're sending all these packages by Priority Post to the same place—Montreal is an example that was used—there's no way to stop it once it's gone into Priority Post. If they had sent it by another courier-type service, they would have been able to stop it within a couple of hours.

Without contacting the police as an individual, there seems to be no way under...so we'd have to make a recommendation to change the act.

Mr. David Olson: In fairness, there is the mechanism that I did refer to, and that is the prohibitory orders section.

The Chair: Via the police.

Mr. David Olson: No, the complaints would be made to Canada Post to consider applying to the minister for a prohibitory order that would stop the delivery of that mail piece to—

The Chair: Mr. Olson, you're missing my point. My point is this. The senior calls and talks to their son. The son says, “You shouldn't have done that, you should stop it.” He calls Canada Post. Canada Post says, “Sorry, we can't help you.”

If you had sent it by Purolator or UPS, you could have called them and they would have stopped it. That's the difference we seem to have here.

It seems that you may be not recognizing that the—

Mr. David Olson: No, I understand your point and I'm very sympathetic to it. The dilemma is how you distinguish then between various classes of mail.

The Chair: There's a big distinction between regular mail and Priority Post. I use Priority Post on a regular basis.

Mr. David Olson: I'm not so sure. Letters are carried by Priority Post.

The Chair: Yes, but Priority Post is done to expedite. It's an expedited service. It's not a regular postal process and you pay more for that service.

Mr. David Olson: That's true.

The Chair: So you should have some type of control.

Mr. David Olson: I leave this suggestion to you. The principle of the sanctity of the mail and protecting privacy rights is an important principle that's embedded in our statute. Do you distinguish one service from other services? And if you're going to allow for mail opening and return and the interruption of the mail flow, should there be a balance to that?

The Chair: You put words in my mouth that I didn't say. I never said “mail opening”. I never suggested mail opening. I suggested mail return for someone who has sent something with Priority Post. I never said to open it. I said return it to the sender if the sender says they don't want it to go any more.

I guess what you're saying is we'd have to make a recommendation to change the act. That's something this committee will have to take under consideration, because we have to look at the protection of all the consumers in Canada and it appears, from the evidence at this committee—and regrettably I haven't heard anything to dispel that evidence this morning—these fraudulent operations have now found a way to really affect seniors once again by using Priority Post. So that's regrettable, and we as a committee will have to deal with that recommendation.

I'm hearing from you that there's really nothing you can do to stop it. The only thing would be a change to the act. Based on the evidence we have before the committee, that's something we'll have to take into consideration in our final report.

Mr. David Olson: The only suggestion I can make to you is to look carefully at the balance that's provided in the prohibitory orders section.

The Chair: I guarantee we will look at it all carefully.

Mr. David Olson: Thank you very much.

The Chair: With the committee's permission, that will be it. I want to thank the witnesses very much. We're going to adjourn for two minutes to give time for the room to clear, and then we're going to reconvene for the in camera meeting.

We're now adjourned.