INST Committee Meeting

STANDING COMMITTEE ON INDUSTRY, SCIENCE AND TECHNOLOGY

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

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, October 24, 2001

• 1519

[English]

The Vice-Chair (Mr. Walt Lastewka (St. Catharines, Lib.)): We will begin testimony on your order of the day, Bill C-23, an act to amend the Competition Act and the Competition Tribunal Act.

I take it that some members are so used to coming here at 3:30 p.m., they're not reading their agendas, but I appreciate the witnesses coming on time. So I would like to begin the testimony.

Mr. Janigan, please.

Mr. Michael Janigan (Executive Director and General Counsel, Public Interest Advocacy Centre): Thank you, Mr. Chair.

• 1520

We appreciate the opportunity to attend today and give submissions concerning Bill C-23 and the amendments thereto. The Public Interest Advocacy Centre has participated in the current process that has preceded the committee's deliberations and has also submitted numerous briefs and reports over the past 25 years, dealing with competition law from the standpoint of the ordinary Canadian consumer.

I wish to chiefly address the issue of private-party access to the Competition Tribunal, but several other proposed provisions are deserving of comment. We support the provisions that will allow cooperation with foreign states for the purpose of ensuring compliance among substantially similar competition law regimes.

We are cognizant of the concerns regarding confidential business information, including business strategies and processes. However, it is equally important that confidentiality claims do not shroud the sharing of information that may give rise to meritorious prosecution of anti-competitive conduct by a foreign government. Information should not be confidential merely because of adverse consequences in competition law in another state if it is disclosed.

We also support the provisions of Bill C-23 prohibiting misleading conduct by direct mail and Internet marketers, to the effect that the recipient of a communication has won a prize but is really being set up for further solicitation. There appears to be considerable anecdotal evidence that this provision is responding to a genuine consumer problem that is occasionally having particularly harsh consequences, particularly upon the vulnerable consumer. At a minimum, the expurgation of this shopworn practice may help minimize cynicism concerning legitimate marketing practices, particularly in our youth.

Bill C-23's provisions giving the commissioner authority to seek an ex parte interim order of the Competition Tribunal to stop anti-competitive conduct are important and possibly long overdue weapons in the arsenal of remedies available to the commissioner.

Markets can move quickly, and the impact of anti-competitive conduct by a dominant player on a new entrant competitor can be devastating. Sometimes survival may depend on obtaining relief in days rather than weeks and months.

While we understand the natural reluctance to have any remedy, even an interim one, made without notice, we believe a careful balancing of interests allows for interim ex parte orders by the Competition Tribunal.

We note that the committee has before it amendments that would allow for declaratory or injunctive relief by private-party applicants, pursuant to sections 75 and 77 of the act, which deal with conduct involving refusal to deal, tied selling, and the like.

Before commenting on the substance of the amendments, I would like to first deal with the much debated principle of allowing private-party access to the tribunal. Commentators before me have noted the irony of having a statutory monopoly of enforcement set up in an act that has as its objective the maintenance and encouragement of competition.

There has been a rather extraordinary effort expended through the years to scare off advocates of allowing private-party access to the Competition Tribunal. For the naysayers this idea is a virtual sorcerer's apprentice that would unleash an avalanche of non-meritorious litigation on successful businesses, with a view to obtaining in the tribunal what they couldn't win in the marketplace. Predictions of businesses crippled by years of expensive litigation brought by gold-digging barristers abound in the event that this model were ever adopted.

The remarkable thing about this little fable is the degree to which it has gained currency in the intellectual market of competition ideas. With respect, businesses are subject to any number of potential causes of litigation in the operation of their enterprises. Interference with contractual relations, products liability, actions for copyright infringements, actions by shareholders to compel a course of action by the board of directors—the list is near endless as to how parties can bring actions to obtain relief against businesses for alleged misconduct.

Many of these kinds of actions involve matters of public interest that may involve companion proceedings by the Securities Exchange Commission, the Attorney General, and/or provincial consumer ministries.

Are these rights of actions ever abused for strategic purposes? Yes, clearly. Does anyone think the litigation and competing claims between the McCain brothers was simply brought to adjudicate a difficult family disagreement? Of course, there are frivolous actions in strategic litigation, but no one suggests that the sole right to litigate for any of these matters be given to an official appointed by the government of the day. This is because we understand the value of the rights and the potential rights that these private remedies protect.

• 1525

We design systems to discourage abuse, and we go forward adapting our commercial law to the circumstances of the marketplace, not walling off areas of public and private concern for bureaucratic initiative alone.

This quarantine of competition remedies has been allowed to take place because we have not been sufficiently concerned with the ramifications of anti-competitive behaviour. Potential legal expenses have been a greater motivator of policy than the potential harm done to consumers, innovators, and the market as a whole, by maintaining a bottleneck for access to competition remedies.

While the frequent expressions of trust in the commissioner by opponents to private-party access are heartening, it is instructive to note the asymmetric nature of that confidence. The same critics of vesting the commissioner with too much potential power, in relation to exchange of information with foreign states and the obtaining of interim orders, seem to be wholly content with allowing the commissioner complete discretion over the commencement of any Competition Tribunal remedy.

One would also note that the recent account in Saturday's Globe and Mail of the OECD report found that our bureau was lacking in independence and resources. Private-party access would help address both concerns.

As well, in our view there is little to commend the extension of private rights to merely the two sections that are subject to the amendment. Abuse of dominant position, given our history of promoting national champions, remains a key concern, particularly in recently restructured monopoly markets. We also see little reason to confine remedies to declaratory and injunctive relief.

I am prepared to entertain any questions concerning those submissions.

The Vice-Chair (Mr. Walt Lastewka): Thank you very much.

We'll now proceed with Democracy Watch. Mr. Conacher.

Mr. Duff Conacher (Coordinator, Democracy Watch): Thank you very much for the invitation to appear today before the committee on Bill C-23.

Democracy Watch has participated in the past couple of years in the consultations that were commissioned by the Competition Bureau and facilitated by the public policy forum on Competition Act consultations, and also in the industry committee hearings.

I will speak very briefly because we generally support what has been submitted today by the Public Interest Advocacy Centre, and we support, in particular, the creation of a citizen right to sue and take a case directly to the Competition Tribunal, without having to go through the current gatekeeper, the Competition Bureau.

We believe that any injured party should be able to apply for injunctive relief and damages for both criminal offences and reviewable practices under the act.

In addition, we believe that reviewable practices should be formally forbidden instead of merely reviewable, as they currently are in many cases, by the Competition Tribunal. In terms of penalties, we believe that damages should also be increased to include specifically punitive damages.

In terms of violations, we believe that changes should be made to ensure that price fixing and market division agreements should be, in a blanket rule, illegal.

On mergers, we believe that the threshold that triggers pre-notification should be significantly lowered, in terms of the parties and the type of acquisition that is contemplated, under part IX of the law.

In addition, as we noted when we were before the committee last year and released our report entitled “Revolving Doors, The Undue Influence of Corporate Lawyers on the Competition Bureau”, we hope that in sending back the bill the committee will again, as it did in its June 2000 report, send a strong message to the cabinet, and particularly to the finance minister, that the funding for the Competition Bureau should be significantly increased to finally end the practice of repeatedly appointing lawyers from a few corporate law firms to assist or represent the commissioner in competition law cases.

• 1530

The funding should be increased so the Competition Bureau can hire lawyers on staff who can develop expertise. Then these ongoing conflicts of interest and biases that have occurred in several cases, as documented in our report between 1986 and 1999, by having outside private lawyers working for the bureau will finally be ended.

The issue of corporate lawyers working for the Competition Bureau is a classic tale of letting the fox into the henhouse. Clear rules need to be enforced and adequate funding provided to the bureau to prevent this ongoing abuse of the public interest.

Returning to the key issue of creating a right to launch a complaint case directly with the tribunal, we believe Canadians should have this right to sue violators of competition laws, to help ensure, along with increased powers and penalties for the bureau and tribunal, companies comply with the rules.

Now you, as members of Parliament with this committee, have received this bill after first reading and have some opening to make such amendments, which we feel are very much in the public interest. We hope you will resist the very strong corporate lobby you face on the other side, made up of many companies that donate tens of thousands of dollars to the Liberal Party, and do something for all Canadians in this very important area that is somewhat obscure.

Most Canadians probably do not understand exactly how important the Competition Bureau is to them, in terms of their day-to-day interactions with companies. They would understand it if you cited cases where the Competition Bureau—in many cases simply following what the Federal Trade Commission had done, which is a symptom of the lack of resources of the bureau—has stepped in and ended gouging or other abusive practices.

But in the abstract, it's highly unlikely that Canadians would really generally understand the bureau and its role and the law and its role. We doubt you're receiving thousands of letters from Canadians viewing this as a hot-button issue. This means the issue is a true test of whether the government has integrity and is interested in upholding the public interest. Will it act when faced with a strong corporate lobby that is pushing against the public interest and against the public's right to have access to justice? Will it simply ignore the public interest and follow and bow down to that corporate lobby?

We ask you—as we've asked you many times before because many of the issues we work on are under the purview of the industry committee—to act with integrity, to uphold the public interest, and to amend the bill in the ways we have outlined today.

I now welcome any questions. Thank you very much.

The Chair: Thank you very much. We'll start with Madame Girard-Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): Thank you, Mr. Chairman.

I would like to thank the witnesses for appearing before the committee. Mr. Conacher's comments are akin to those of other witnesses who have voiced many concerns regarding the proposed amendments to the Competition Act. I think you came here to tell us that the government and legislators must make changes to reflect the realities of the year 2000. As another witness said yesterday, the time has come to act and to modernize this law.

Mr. Janigan, you said you support the sharing of trade information with foreign states in order to prevent competition. You also commented on the issue of marketing, which was raised at an earlier meeting. You also came out in support of the right of citizens to appeal to the tribunal.

• 1535

There are many people today who are affected by this law. If you were in our shoes, which of the amendments presented by members would you support, and which would strengthen the act and allow the average citizen to access the tribunal without going through the Competition Bureau? I'd like you to be specific.

Thank you.

[English]

Mr. Michael Janigan: First of all, the area that appears to be in need of amendments, and one the committee has acknowledged it is going to study with a view to considering whether amendments are necessary, is that involving private-party access to the tribunal. You have before you some amendments that address the ability of a party to go before the tribunal to seek declaratory or injunctive relief under two sections of the act. One deals with refusal to deal and the other one is in the sections dealing with tied selling.

We see little reason to confine the ability to get declaratory or injunctive relief to those sections alone. We would like to see it extended to abuse of dominant position, at a minimum, principally because, as the OECD study notes, this problem is prevalent in the Canadian economy and the commissioner likely does not have the resources to fully deal with this problem. And it involves important competitive questions.

Secondly, we also do not believe that confining the remedies to declaratory injunctive relief necessarily holds water as well. We think there should be a right to claim damages and to obtain costs before the tribunal by private parties who seek that relief.

I believe it was former Commissioner Wetston or Professor Ross who said the other day that we view this as part of the maturation process of the Canadian economy. We are now in a position to understand that if we wish to in fact rely more on market forces to direct the economy, we have to make sure there is a genuinely workable competition in areas so consumers don't get hurt, so innovators can go forward, so efficiencies can happen, and so we're not in the situation where we simply have a small cluster of dominant players exercising their will over a deregulated market.

Mr. Duff Conacher: I agree very much with what Mr. Janigan just stated. I would like to add that when he talks about the maturation of the Canadian economy, citing other witnesses, plainly in our view the maturation of the Canadian economy has seen corporations gaining power without accountability measures also increasing. It has seen Canadians gaining the power to hold those corporations accountable. As a result, you have an ongoing, increasing ability of corporations to abuse their dominance in the marketplace. And simply, accountability measures must follow increased power. There must always be increased accountability; otherwise, along with the increased power within the marketplace in terms of market share, there's also an increased power to abuse, and it must be checked. It's in the public interest quite clearly.

[Translation]

Ms. Jocelyne Girard-Bujold: One of you represents Democracy Watch, whereas the other represents the Public Interest Advocacy Centre. Have you examined section 45 of the Competition Act, which deals with conspiracy? As you know, there has been a huge increase in the price of gas everywhere in Canada, which led some people to accuse the oil companies of collusion. Under the act, a person has to provide written or verbal evidence before he may sue a company for conspiracy. Did either of your organizations study section 45?

• 1540

If you studied section 45, are there any specific amendments you would like to suggest to the committee, such as removing the word "unduly", which would ensure that in the future consumers are truly protected against the effects of certain decisions oil companies might eventually make?

[English]

Mr. Duff Conacher: No, we have not had the capacity to review the act and every single measure within the act. We're not going to pretend that we do have that capacity, which is why, to return to what I said earlier, we are really calling on members of Parliament to uphold their public duty and act in the public interest. In this situation, you have a very well-funded, large, corporate lobby that is trying to thwart that public interest and a true lack of capacity within citizens' groups and the citizenry to respond dollar for dollar, lobbyist for lobbyist, donation for donation.

So we hope that with the help of the Library of Parliament researchers and others testifying, including academics, you will be able to respond in the public interest.

Mr. Michael Janigan: Yes, I'm afraid that we as well do not have any specific amendments to help make this section more effective in dealing with the mischief that's set out in the act.

I would think, at first blush, that this appears to be an area that would be extremely amenable to more attention from the Competition Bureau, with the addition of more resources by the Competition Bureau, particularly where it's dependent upon the accumulation of evidence and analysis of the market operations. This is very resource-intensive and certainly might be capable of being addressed simply by the addition of more resources to the commissioner of competition.

[Translation]

Ms. Jocelyne Girard-Bujold: You are probably aware of the fact that the Commissioner said he does not have enough financial resources to study every request his office receives.

In your presentation, you said that he should hire lawyers, independent lawyers on a contract basis, who, in the past, would have been accused of... Are you asking the committee to call for an increase in the Competition Commissioner's budget to ensure that all these small files... I feel that's asking for a lot.

You also said that this would allow small businesses to go directly before the tribunal, without going through the Competition Commissioner first. Many SMEs cannot afford to hire lawyers today because it's just too expensive. That's a fact. Moreover, many lawyers and oil companies—in other words, the big guys—are involved in a lot of lobbying. By the way, I can assure you that I never let myself be influenced by lobbyists. They don't impress me at all.

Are you saying that the Competition Commissioner's budget should be increased as well?

[English]

Mr. Michael Janigan: As the OECD report appears to have pointed out—and I'm only going by the press account of it—and as the commissioner himself has acknowledged, they are short of resources, and I believe almost all witnesses before this committee have commented upon that fact.

In relation to this section 45, because it's an offence that involves prosecution before the courts, then it particularly is a matter of ensuring adequate resources are invested in the competition commissioner. In the event that private prosecutions are to be initiated, possibly other kinds of mechanisms for recovery of costs, the cost of prosecution may be considered in terms of amendments. From the start, it's primarily a question of ensuring that the commissioner has the resources to prepare an adequate case in order for the prosecution of these conspiracy provisions.

• 1545

The Vice-Chair (Mr. Walt Lastewka): Thank you very much, Madame Girard-Bujold.

I will now proceed to Mr. McTeague.

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): First of all, I want to thank our guests for being here today.

I appreciate your comments.

We've had a number of witnesses to this point on the issue of Bill C-23 and, more interestingly, the very limited restrained version that I proposed with respect to the private right of access. Surprisingly enough, a lot of medium and even larger players are not necessarily against the notion.

Ironically, these much larger witnesses, whom Mr. Conacher referred to earlier, seem to take a rather vicarious position. I would suggest, on your behalf, that the proposal would be out of the financial range of many individuals to be able to seek a remedy or at least find another alternative for recourse in very limited areas. Therefore those of us who advocate on behalf of the much larger population would be doing a disservice if we were to proceed with this limited form of private access.

I'd like to get your thoughts on that. I find it rather interesting that some of the individuals whom we would treat as individuals might have a little more to say and certainly a lot more undue influence, if I could use Madame Girard-Bujold's comments, in terms of what is in the act or those who are practising it, if indeed these individuals speak on behalf of your organizations.

Mr. Duff Conacher: No. Very clearly they don't speak on behalf of Democracy Watch. As I mentioned, we would support, beyond the limited right, the full right to apply, if you're an injured party, for both criminal offences and reviewable practices.

Everyone is of course predicting the future as to what might happen if such a right is created. We'd prefer to look at it another way, as opposed to talking about whether some mythical floodgates are going to open or some strategic litigation will ensue. Instead we'd prefer to simply look at it as a principle of effective enforcement.

It is well-recognized in many areas, for example in environmental law, that creating a citizen right to sue or a party right to sue is effective in terms of ensuring enforcement. It is effective in ensuring that the government regulators also act and uphold the public interest consistently and do not ignore cases that are in the public interest, because they are being lobbied themselves, for example.

So that avenue in a mature democracy is recognized as a very necessary avenue in many areas of the law. It ensures that not only violators of the laws face a good chance of being held to account but also that government agencies that do not uphold the laws consistently or don't have the resources, as we know quite clearly they do not have the resources to uphold the laws across the board, are also held to account. Or, at least, again, the citizens have the right to go around the regulator and set their own priorities.

As, again, we've documented in this report, Revolving Doors, currently in those cases that the bureau does choose to take to the tribunal, it does not even have the resources in-house to do them fully. It is hiring outside lawyers, on quite a regular basis, and creating all sorts of conflicts and bias within the bureau and within those cases.

So for those reasons, both this right needs to be created and the bureau funding needs to be increased so that they can take those cases they choose to the tribunal as the government only, without involving these outside private interests.

Mr. Michael Janigan: I would suggest that the first point to be made is that this remedy is available in addition to the remedy that might be enforced by the competition commissioner. So the presence of a private remedy will not take away whatever capacity is in place prior to this amendment for a small business, for example, to obtain relief.

• 1550

Secondly, it probably unintentionally embellishes the argument that more than declaratory and injunctive relief should be available at the tribunal by the fact that if damages and costs were available to offset the costs of this potentially expensive litigation, it may make for a more effective remedy.

Mr. Dan McTeague: You're suggesting, then, that damages could be part of a proposal, as opposed to simply having the matter referred to the tribunal or to the Federal Court to ascertain damages. Do you believe that would provide us with more effective competition law to sustain, support, and invigorate the competitive process, if we had that?

I note, for instance, the Australian model does have a form of damages within it, and clearly, while there are some who would like to ascribe what we're doing to the U.S. model, in fact it's probably more analagous to the Australian system. It seems to work there. Do you see any fear that might be raised—except for those who have a vested interest, obviously—towards perhaps ensuring that small business or any type of business that's subjected to an anti-competitive harm is able to recover some of those losses as a result of lack of oversight?

Mr. Michael Janigan: I think the general experience with specialized tribunals is that they are much more receptive and attuned to the kind of evidence that might be proffered in order to prove damages or whatever relief is being sought. With all due respect to sitting judges of the Federal Court, not all of them may have that kind of experience in competition law, in business law or commercial law, with respect to damages, to enable the kind of specialized assistance and knowledge the tribunal would bring to bear.

So, in general terms, I think it's best to have a remedy fashioned by the tribunal that's most equipped to deal with it.

Mr. Dan McTeague: Mr. Conacher, did you have something to say about that?

I have a couple of questions with respect to resources.

By the way, Mr. Clerk, could you also provide our witnesses with copies of the changes I've made, the amendments I've proposed, unless they have those already as a routine for witnesses?

The witnesses may not be aware of the fact that, as a result of the efforts of this committee, there was indeed an increase given to the budget of the Competition Bureau.

Is it your view that the working of the Competition Bureau should be investigation and enforcement in areas that do engender a broader public concern, areas such as abuse of dominance, areas such as mergers, merger review, areas such as conspiracy, if we could divorce the small issues that may not wind up on the national radar screen or don't necessarily, in and of themselves, create a general overarching concern of substantial lessening of competition? Do you see a line there that we may want to reach out to, that goes beyond the proposal in terms of my amendments, or do you believe my amendments, as suggested here by Howard Wetston yesterday, should be subjected simply to a five-year review and then we look at it from that perspective? Should we be going further as a committee on Bill C-23?

Mr. Duff Conacher: In terms of the private right of action?

Mr. Dan McTeague: Yes, in the context of Bill C-23.

Mr. Duff Conacher: Right.

Again, we believe it should be broader and should apply to both criminal offences and reviewable practices. Of course, you may decide to move more slowly and take a first step in terms of opening up the private right of action, and then we very much believe most federal laws should be on a mandatory five-year review period. Given how rapidly the marketplace is changing, but in particular in this area, with amalgamations in many industries, it is particularly important to be reviewing the rights and responsibilities under such a law on a very regular basis. But generally we believe the right to launch a case directly to the tribunal as a private party should be as broad as possible.

Mr. Michael Janigan: I think we would also concur that a full suite of remedies should be available, and particularly if you're dealing with a five-year review period, it would be good to get experience with the tribunal dealing in these areas, particularly in the area of private-party access. As well, at a minimum, it should be extended to issues associated with abuse of dominant position in the marketplace.

• 1555

Mr. Dan McTeague: Thank you, Mr. Chairman.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. McTeague. We'll be back to you.

Mr. Martin.

Mr. Pat Martin (Winnipeg Centre, NDP): Thank you for the opportunity to get involved in this Bill C-23. I'm relatively new to the subject, so I'm learning a lot from the groups that come to give briefs to us.

I found it interesting that, in the last session we had, one fellow—I think it was Thomas Ross—was explaining that either you put regulations in place to guarantee fairness in the industry sector or you let competition be the regulator, that it's an either/or kind of thing, and more and more Canadians are feeling that competition as a regulator has in fact let them down. It hasn't worked.

There are examples where people are crying out for re-regulation of deregulated industry sectors to ensure fairness. The State of California would be a good example, when, in that bastion of free enterprise, they reached a crisis point with their electricity situation. Now they're re-regulating as fast as they can, because free and open competition hasn't served them very well.

Having said that, that helps sum up for me what important work has been going on for the last couple of years with the review process that took place, the public policy forum that we have in great detail here.

Maybe I will use my time to allow you to expand on a couple of things.

First of all, we understand that, regarding sections 75 and 77, allowing private access or private complaints to be filed under those categories—which deal with exclusive dealing, tied-selling, and so on—in reaction to questions here, one witness said this country is actually getting to be a sanctuary for scam artists in those areas. He was asked to table the information that led him to make comments like that. He did table the fact that—it goes year to year—for instance, in the year 2000, 613 complaints fell within the civil matters branch area. There were 74 complaints under section 75, and 47 complaints under section 77, of which zero applications went before the actual tribunal. Of the 613 matters filed, and of the 120-odd matters filed within sections 75 and 77, no applications went before the tribunal.

Will the amendments that you would be recommending regarding private access help to improve that startling statistic? And if it will cause an overwhelming number of more cases to go actually all the way through for a proper hearing, how would we then make sure it doesn't become a mini-industry, like it has, or some people say it has, in the United States? When you get three times the proven damages, it's like they're getting more litigious than ever in regard to those private...

So will the changes you recommend—and I notice you're in very good company; your organization is amongst a whole list, and both your organizations would recommend that particular change of private access—or the amendment put forward, bring the desired results, and what safeguards would you put in place to make sure we don't just create a frenzy of complaints?

The Vice-Chair (Mr. Walt Lastewka): Mr. Janigan.

Mr. Michael Janigan: I'll try to address some of those points.

With respect to complaints under sections 75 and 77, if any of those complaints have dealt with scam artists, the general results of enforcement seem to indicate that once something is initiated against them, they pack up and go elsewhere. So if a volume of these complaints involve scam artists, it doesn't necessarily surprise me that you would not see action of the tribunal. Probably all you're left with is an empty office or a boiler room where the marketing offences have taken place. You will see a volume pickup in circumstances where there simply are not the resources for the Competition Bureau to deal with this matter, and where there is substantial reward being obtained by the party accused of the misconduct.

• 1600

With respect to potential abuse of the system, the same kinds of remedies that are in place in courts of law or in other tribunals to deal with frivolous and vexatious litigation should be available to the Competition Tribunal in terms of awarding costs, dealing with something peremptorily, asking to have the particulars of the application substantiated. I think all those kinds of things are available to the Competition Tribunal.

I'm less panicked by the thought of a U.S.-style system than perhaps others might be. The United States didn't wake up at the turn of the century and decide, gee, let's give a bonus to lawyers here, and in fact let's allow them to collect three times the damages, because we like lawyers. Lawyers were about as popular at the turn of the century as they are now. The reason they did is they felt strongly that the businesses and the trusts of the day had to be disciplined in an effective way and that they couldn't necessarily depend upon their government to do that. This is why they invested so much into their various anti-trust legislation in the United States and why it has been given access. It has had some important results in the United States.

We may not need that level of legislation in Canada, but it's important to know they brought that about because they believed strongly in a competitive market. They have believed in the idea of competition probably much more strongly than Canada has. Canada to a large extent has always relied upon the government to partner with business in order to get us through problems that may occur. It has just been a function of our economy. We've always been less reliant upon market forces or the idea that the market has to be fair in order to deal with it.

We're now in a situation where consumers are being forced in large part to rely upon market forces to deal with this. So we better be certain that in fact we've got it right in terms of whether a competitive market is created. That doesn't mean we walk away from standards in the marketplace. It doesn't mean, for example, there shouldn't be a fair business practices act or health and safety standards. All of those still have to be enforced by the government. But on top of that, we have to make sure that in the areas where we have said the competitive market is capable of delivering these goods, there is a competitive market.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. Martin.

Mr. St. Denis.

Mr. Duff Conacher: I would just like to make a brief statement. I won't repeat anything Mr. Janigan has said, because I agree with it generally. But we look at it this way. If you injure a company, what are the limits of that company taking action against you? If a company injures you, then why should it not be the same, if you believe in the market? Is the market only free for the sellers and the large corporations that can dominate and drive prices and services in whatever direction they want, or is it also free for consumers? We believe that creating such rights is what creates an actual free market, not just a pseudo-free market where really it's just free for those who have power. So that's why these kinds of rights—those based on the principle of democratic operation and fairness and rights and responsibilities that work in the public interest—need to be created based on those simple principles.

The Vice-Chair (Mr. Walt Lastewka): Thank you.

Did you have any further questions, Mr. Martin?

Mr. Pat Martin: Do I have any time left?

The Vice-Chair (Mr. Walt Lastewka): Well, we're...

Mr. Pat Martin: That's fine, I'll wait for the next round.

The Vice-Chair (Mr. Walt Lastewka): No, go right ahead. You're on a roll.

Mr. Pat Martin: Okay, that's great. That will help me. Thanks.

Just before I move on to a different question, you'll be interested to know that when I said in the year 2000 that 74 complaints were filed under section 75 and 47 under section 77, of those, only 10 were investigated. And of those, three were resolved by an alternate mechanism, and zero went to the tribunal. I can give you a copy of this if you're interested.

• 1605

I'm also curious regarding damages, etc. If we are going to be giving the general public better access to a mechanism of satisfying some kind of grievance, how do you measure the actual damages to an individual? It's easy enough to measure the damages for another corporation that feels they've been squeezed out of the market in some way. They can claim lost opportunity. You can calculate that, although you might not get it bang-on. For an individual, how would he... I'm not a lawyer, but to win any cases you have to show or prove damages. How is an individual damaged, other than having their democratic rights affronted? How do you put a value to the damages to an individual?

Mr. Duff Conacher: That's definitely a difficult area, but that's also why we recommend the damages should include punitive damages to punish violators and to create an incentive to comply with the law. So we believe the damages should extend to that area as well.

It's a key factor. You mentioned earlier how we've been generally in a deregulatory period and people are starting to see the effects of it. I don't believe we were in a regulatory period before. Although regulations were passed, I believe that in most cases, as with the competition area, there was a key element missing to the regulatory regime—a fatal flaw. It undermined the regime entirely in most cases.

Those key elements are: clear rules that are strong—no loopholes, no technicalities that you can get off on—and then an independent agency that will enforce those rules; a requirement to disclose what you're doing as a means of tracking problems; and penalties high enough to actually make a difference—to hurt the bottom line of a company. High enough penalties have been a major area very much lacking in Canada. Again, this is why we recommend punitive damages be included, because Canadian regulators haven't taken into account the reality that companies make decisions based on the bottom line. If the penalty and the chance of getting caught do not add up to a penalty that will hurt the bottom line, then the company is highly unlikely to comply. The final element is the citizen's right to sue.

If you look at most regulatory areas, I think you will find that one of those five key factors is missing. As a result, the regime just simply does not work, because there are more incentives to violate the law than there are incentives to comply.

So I don't believe we've ever been in a regulatory period in Canada. I'm hoping finally we will move into a regulatory period, because I believe it's necessary to ensure the marketplace works fairly. It applies as well to government institutions. Government institutions themselves have not faced internal regulations to ensure they uphold the public interest. So I await that regulatory era.

Mr. Michael Janigan: Just very briefly, I don't know whether I'm in a position to conduct a damage seminar here, but, as I recall, it will likely involve a reasonable expectation of profits on the company's part. You have to look at the act itself to see whether or not it was an approximate cause of the damage that occurred, whether or not it was too remote to have affected the profitability. A variety of different questions have to be examined.

It's actually one of the reasons why the U.S. went to the triple-damage system, principally because the issue of damages was so difficult to apply and was so difficult to find, and frequently did not adequately measure the degree of wrong that had been done by the anti-competitive conduct.

That's why I say a specialized tribunal, such as the Competition Tribunal, is probably in the ideal situation to adjudicate these kinds of issues, because they will have the experience in dealing with it as time goes on.

The Vice-Chair (Mr. Walt Lastewka): Thank you very much.

Mr. Bagnell.

Mr. Larry Bagnell (Yukon, Lib.): Thank you. First I want to go on record that, unlike one of my colleagues, I'm not such a fan of regulation. I think it's a really poor second choice for solving the problem, in that Canadians have seen electric prices and telephone prices go up 20%, 30%, 40% when inflation is only at 2%. As hard as it is, I'd push for trying to make competition work. Obviously, it's difficult. We have this bill, and we're trying to fix it.

• 1610

For years I've been fighting against a non-competitive environment in the big industries, and that's been pretty well addressed by my colleagues on both sides here in the committee meetings.

I was quite disheartened a couple of years ago when—and I'm just seeking your advice on this—a chap in one of the smallest industries, one that has a proliferation of outlets, suggested to me that he was under social pressure or peer pressure to not have low prices. If it's that prevalent, do you have any suggestions on how you could avoid situations like that with small business? I'm sure you deal with a lot of small underprices. Do you think that exists, or do you have any suggestions for routes we might take to... Maybe it just takes a change in attitude and values, I don't know. Obviously, it works against what we're trying to achieve here, which is free competition and a free marketplace so everyone gets the best price and so businesses are sharpening their pencils.

Mr. Michael Janigan: I think it's always a question of resources that can be used to apply to this problem. Many times the Competition Bureau has difficulty in determining the pattern of behaviour in an industry. How do they know whether or not it is a situation of what's called “unconscious parallelism” in terms of prices or whether or not a given price is actually based upon an implicit or an explicit agreement to maintain prices at a certain level, thereby denying consumers the benefit of an effectively competitive market? That's the kind of analysis that you'll probably only get with a Competition Bureau with sufficient resources to do the kind of intensive investigation that needs to be done.

Mr. Duff Conacher: I wish I had other ideas, but I think these changes and more resources will help solve a lot of the problems that are out there now.

The Vice-Chair (Mr. Walt Lastewka): Thank you Mr. Bagnell.

Mr. Rajotte, did you have any questions? Madame Girard-Bujold? No further questions?

I'd like to thank the witnesses for coming this afternoon to share their information with us. Thank you for the question and answer period.

We'll take a two-minute break, and we'll start with the second session immediately after.

• 1613

• 1617

The Vice-Chair (Mr. Walt Lastewka): I'd like everybody to be seated.

We do have a vote, so we're going to be interrupted by the bells. Hopefully, we can get through this session before the bells ring.

I'd like to proceed, if I may. I'll proceed with the agenda as written. From the Canadian Federation of Independent Business we have André Piché and Stéphane Robichaud. André, I take it you're going to begin. Thank you.

Mr. André Piché (Senior Policy Analyst, National Affairs, Canadian Federation of Independent Business): Mr. Vice-Chairman and members of the committee, my name is André Piché, from CFIB, and this is my colleague, Stéphane Robichaud. He's the director of provincial affairs for New Brunswick and P.E.I.

On behalf of the 100,000 small and medium-sized business owners across Canada who are members of the Canadian Federation of Independent Business, we want to thank the committee today for inviting us to appear to discuss proposed amendments to the Competition Act.

Bill C-23 is vitally important to our members. We had hoped to be here to present you with an Atlantic perspective today and to give you a national perspective on October 30. However, recent developments have caused the committee to decide to initiate a study of the Canadian economy next week. We applaud that decision, and we're very happy to participate in that exercise as well.

Catherine Swift, our president, and Garth White, our senior vice-president of national affairs, will look forward to appearing before you next Tuesday to present you with some post-September 11 data regarding our members' expectations for business and for job creation for the remainder of this year and for next year.

The purpose of our presentation before you today is threefold. First, we want to talk briefly about the role played by SMEs in the Canadian economy. Second, we want to describe some of the long-standing concerns of our members with respect to the Competition Act. And third, we would just like to briefly outline for you the main reasons for our strong support for Bill C-23.

[Translation]

As you are probably aware, most businesses in Canada are very small. Of the approximately one million businesses in Canada, over three quarters employ 5 people or less, and over 97% of businesses have less than 50 employees. As graph 2 shows, the SME share of total Canadian employment has been growing steadily over the past few years. As you will note, SMEs accounted for 56% of total employment in 1998, as compared to 53% in 1990.

• 1620

Small businesses create the majority of new jobs and are the economic backbone of local communities. A recent CFIB survey called Building better Communities revealed that small business owners have a strong entrepreneurial streak and are very loyal to their community. Over half of the surveyed business owners stated that they started their business from scratch. The remainder have taken over a family business, purchased an existing firm or created a spin-off from an existing firm. When asked about the possibility of relocating their business, seven out of ten business owners stated that they did not plan to move over the next three years. Nearly all of those who plan to move indicated that they would move within the city limits or to an adjoining municipality.

SMEs not only play the major role in job creation and economic growth but also are a major contributor to their community's well-being. However, to fulfil their role, SMEs need not only fair rules of competition but also a fair and efficient redress process.

[English]

The stated purpose of the Competition Act is to maintain and encourage competition in Canada, to promote the efficiency and adaptability of the Canadian economy, to ensure among other things that:

small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices.

CFIB has pushed repeatedly over the years for a review of the Competition Act to address the act's apparent inability to deliver on its intended purpose, which is to enforce fair rules of competition while not impeding the dynamic nature of the Canadian economy. In recent years we have also seen industry and consumer groups turn to provincial governments for help as a result of a perceived lack of effectiveness of the Competition Act. Indeed, CFIB has made several representations to boards of inquiry set up by both the Quebec and New Brunswick governments on the issue of gasoline pricing.

In 1999 the CFIB surveyed its members across Canada as to whether or not the federal government should strengthen the Competition Act. Of the 8,700 respondents who had an opinion, 64.3% said yes and 35.7% said no.

You may recall that CFIB wrote to this committee in April 1999 to express its support for Bill C-235, which was sponsored by MP Dan McTeague and which sought to strengthen the predatory pricing provisions of the Competition Act. We commend the committee for its decision at that time to take a closer look at the Competition Act and its enforcement.

Subsequently, a series of studies was commissioned by the Competition Bureau. In the report that looked into the effectiveness of the Competition Act and the performance of the bureau, the VanDuzer report, the authors pointed out that over a five-year period the Competition Bureau had received 931 complaints about alleged unfair pricing practices. However, very few had been the subject of formal inquiries, and even fewer were the subject of litigation. In fact, of 931 complaints, there were only three formal enforcement proceedings.

It is impossible to determine how many businesses have refrained from complaining to the Competition Bureau, believing it's a waste of time or fearing retaliation from the sources of unfair competition. However, based on anecdotal evidence the CFIB has heard over the years, we believe it is a significant problem.

The VanDuzer report also highlighted the need for more jurisprudence. The authors pointed out that some minimum number of formal enforcement proceedings are essential if the private sector is to attach any credibility to the Competition Bureau and hence be motivated to comply with the law. The authors pointed out that:

The relative absence of formal enforcement proceedings raises several concerns regarding the certainty and, ultimately, the effectiveness of the law. More formal enforcement proceedings would force the courts and the Tribunal to progressively refine the law, making clear its appropriate application as well as signalling the seriousness of the Bureau's intent to enforce it.

• 1625

Mr. Stéphane Robichaud (Director, Provincial Affairs, New Brunswick and Prince Edward Island, Canadian Federation of Independent Business): In consultations held in August 2000 on possible amendments to the Competition Act, CFIB provided numerous examples of flagrant cases of unfair competition that threatened the survival of many small businesses. Among the examples cited were the following:

In New Brunswick and Nova Scotia, independent gas retailers had to subsidize their operations with significant injections of capital just to survive the effect of eroding price margins imposed by their wholesalers.

Independent auto glaziers had to seek an invoice number from a national competitor before initiating work on an insurance claim. These independent operators would then have to forward their bill to the competitor, who would discount it by up to 40% before sending the bill to the insurance company. The cheque would then come back to the competitor, who would take a $15 administration fee and eventually pay the independent operator's invoice.

An independent grocery chain in the Annapolis Valley of Nova Scotia was driven out of business through predatory pricing. The grocery chain was forced out of business through a combination of predatory pricing and control of the wholesale market by the two largest supermarket chains in the region. Other small grocery chains have also been affected by these types of pressures—for instance, Capitol Stores in the Halifax region.

Nova Scotia greenhouse operators provided examples of price intimidation and dumping on the part of local dominant retailers that resulted in a reduction in the number of greenhouse operators in Nova Scotia from 16 five years ago to seven as of June of this year. For instance, you would have a large producer in Ontario with an order of 100 tons of tomatoes for the Boston market. In order to ensure the best quality, 120 tons would be produced and the extra 20 tons dumped on the Nova Scotia market.

Recently the CFIB contributed to settling an issue being dealt with by the Competition Bureau regarding the acquisition of Multi-Marque by Canada Bread. Without any intervention, this would have led to a control of 90% of the Atlantic Canada market with the remaining 10% divided among several small players. Following an extensive review by the Competition Bureau, market shares were divested to some other players and a minimum level of competition was maintained. Incidentally, this was a positive instance of our proceedings over the years.

As we speak, some foreign manufacturers of printing equipment are trying to squeeze out Canadian small and medium-sized businesses that remanufacture printing supplies such as ribbons, toner cartridges, and ink jet cartridges. These SMEs have created 5,000 direct and indirect jobs in Canada and last year saved through recycling 3,200 tons of plastic and metal from Canadian landfills.

The Competition Bureau has limited resources, as the commissioner pointed out in his committee presentation, and the bureau has to give priority to issues of national importance, such as merger proposals in the banking sector or the air transportation sector. Hence the need to give SMEs an alternate process to get redress.

CFIB's position on Bill C-23 is that we believe the proposed amendments are a step in the right direction in improving the fairness and effectiveness of the Competition Act. With respect to private right of access, we strongly support the proposal for the following reasons:

The amendment will ultimately benefit both large and small businesses as it will help clarify certain aspects of the law for all. As we pointed out earlier, there is very little jurisprudence with respect to reviewable matters under the Competition Act. Private access will help alleviate that problem, as was the case in Australia, the U.S.A., and New Zealand when private access was introduced.

We are satisfied that the proposed measures to prevent strategic litigations will prevent potential abuse since remedies available to the tribunal are in the form of an injunction as opposed to monetary damages and the award of costs.

Furthermore, we firmly believe that any small or medium-sized business whose very survival is being threatened by an unfair competitor ought to have the right to fight back and have its day in court. We are heartened by the fact that this also seems to be the position of the Commissioner of Competition and of his predecessor.

• 1630

Finally, with respect to the need for consensus to proceed with private right of access, we respectfully submit that there is strong support for the proposed amendments. As we are sure you have noticed in your hearings, virtually all small and medium-size businesses favour this proposal, while a few large corporations oppose it.

Given the predominance of small and medium-size businesses in Canada as compared to large businesses, we believe strong support exists for this progressive change in the legislation.

Not to proceed at this time with these amendments would be tantamount to giving veto power on matters of public interest to a few large corporate concerns.

We wish to thank the members of the committee for putting the spotlight over the past two years on the workings of the Competition Act. We believe you have an opportunity through this bill to make a significant improvement regarding fairness in the workings of the Competition Act, and we urge you to give it your full support.

Thank you.

The Vice-Chair (Mr. Walt Lastewka): Thank you very much.

We'll now hear from the Canadian Petroleum Products Institute, Alain Perez, president; and Tom Ryley, executive vice-president, Sunoco.

Mr. Perez.

Mr. Alain Perez (President, Canadian Petroleum Products Institute): Thank you, Mr. Chair.

We are very grateful to be invited to address Bill C-23 and to share our views on the concept of private access. My name is Alain Perez. I'm the president of the Canadian Petroleum Products Institute, CPPI. My colleague Tom Ryley is executive vice-president of Sunoco, and a director of CPPI.

As you know, CPPI represents refiners and marketers of petroleum products. Membership is attached to my brief. Since neither Tom nor I are lawyers, we will try to give you a business perspective on the matters that are before your committee.

On Bill C-23 itself, CPPI has been an active participant to the public policy forum process. We then argued for and against several potential amendments to the Competition Act, but we are now generally supportive of the bill in the form in which it was introduced in the House of Commons.

The Competition Act is a framework law. It is the most important piece of all legislation governing our industry. We adhere scrupulously to the letter and intent of the law. It provides Canadians with the framework needed to ensure a highly competitive marketplace, and we welcome all amendments that protect consumers and enhance competition.

Let me address the question of private access. Philosophically, our industry does not oppose private access.

To paraphrase the Commissioner of Competition in his testimony before you, there may be private matters that require that parties be allowed to argue directly to a tribunal. But as Mr. von Finckenstein also said, private access must be viewed as a way to complement public enforcement actions.

We agree with him and would add that private access must not weaken the core responsibilities of the Competition Bureau, regardless of what it takes in terms of resources. The bureau's mission is to protect competition and the public interest.

First and foremost, private access, even if found to be a fair and convenient process, must not be used to disturb the marketplace or diminish competition, or as a tool to promote private interest. Consistent with these premises, our industry, while not opposed in principle, is still apprehensive. Let me explain.

One point that needs clarification is that we are not apprehensive about private access being used as a tool for strategic litigation by the so-called small and medium-size enterprises, or SMEs.

In the case of our industries, SMEs are our customers. They are independent retailers and marketers, small and large. We have a commercial relationship that spans many decades.

I know some of them support private access, but I know also that many other independents, including those who are members of CPPI, see private access, the way it's defined by Bill C-472, as largely irrelevant to their relationship with refiners.

• 1635

Instead, we are concerned that much larger commercial entities, for example, hypothetically a large U.S. retailer, may use the private access provisions as a tool to serve their own interests. In short, it could result in strategic litigation being used as one of the tools that could help them achieve commercial objectives such as rapidly establishing a strong presence in the Canadian market.

Going back to the core responsibility of the bureau, we believe that in such a dispute, even if the parties involved have the financial and legal resources to fight it out before the tribunal, it is incumbent upon the bureau to analyse and recommend what is in the interests of consumers and how competition should be preserved. I would submit to you that such a private dispute could have more consequences in the marketplace than many of the mergers the bureau studies routinely. Therefore, how can you allow reasonable private disputes to go to the tribunal—private access—and minimize the risks for strategic litigation?

First, we respectfully submit this is such a serious issue that the process of defining a broad consensus—I'm restating the commissioner's objective—should not be linked necessarily to Bill C-23. Other very critical amendments of the act are currently being studied by the bureau and its stakeholders, and private access is important enough to be part of the next round of consultation.

Let me outline the requirements we believe are needed to make private access an effective tool that complements the bureau's role, serves the public interest, and gains broader consensus.

We think private access should not go beyond sections 75 and 77, because, as suggested by the commissioner, these sections often involve issues between two companies, usually a supplier and a distributor, and they are essentially private in nature. That was his testimony of last week.

We would, however, note as a matter of principle that when a private claimant seeks to apply under section 75, because there is allegedly a refusal to supply, the commissioner should intervene if the public interest in competition is at issue. If that public interest is not at issue, the matter is really one for private law and should be dealt with under common law or civil law by provincial courts.

As noted before, there must be safeguards to ensure private access is used in the public interest. The amendments proposed by Mr. McTeague, in effect the provisions of Bill C-472, include such safeguards, including the requirement for leave to institute private access, the possibility of costs being awarded against the plaintiff, notice to the commissioner, and the resulting possibility for the commissioner to intervene in the proceedings.

These safeguards, and others containing the core of Bill C-23 and Bill C-472, appear desirable to us. But they have not been sufficient to ensure a broad consensus of stakeholders. We would, therefore, like to suggest one more type of safeguard for your consideration, and that is that a private action could be instituted only if the plaintiff has approached the commissioner and asked the commissioner to institute the proceedings, and the commissioner has declined to institute the action in his own name. If the commissioner decides to institute the proceedings, there would be no need for private recourse. This, we believe, would have the effect of ensuring the bureau continues to exercise its core responsibility while allowing truly private matters to proceed in front of the tribunal.

Thank you for your attention. Tom and I will answer your questions when our turn comes.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. Perez.

I'll now go to David Croome from the Consumers' Association of Canada. Mr. Croome.

Mr. David Croome (Chair, Trade Committee, Consumers' Association of Canada): Thank you very much.

My name is David Croome. I'm a volunteer who is the chair of the trade committee of the Consumers' Association of Canada.

• 1640

In our 54-year history the Consumers' Association of Canada has appeared many times before the committees of the House of Commons and of the Senate. We have appeared on a variety of consumer issues related to competition within specific sectors, such as financial services, as well as the broader questions of the Competition Act.

We are, of course, pleased to have the opportunity of being here today to discuss this very important bill and its potential to support the interests of the Canadian consumer. I'd like to make the point that, of course, the Canadian consumer is part of the broader public interest that's been mentioned earlier.

First, I'll briefly outline the background and the work of CAC. We are a 54-year-old, independent, not-for-profit, volunteer-based organization with a national office in Ottawa and provincial and territorial branches. Our mandate is to inform and educate consumers on marketplace issues, to advocate for consumers with government and industry, and to work with government and industry to solve marketplace problems in beneficial ways. We focus our work in the areas of food, health, trade, standards, financial services, and communications services, though we most certainly also address other marketplace issues as they emerge.

All of our CAC policies are framed within a general set of consumer-oriented principles, which are in common with the principles governing consumers associations that are members of the worldwide federation of consumer groups, Consumers' International. Among those principles are the right to choice, to safety, to information, and to a healthy environment.

Now I'd like to turn to the Competition Act and the bill that is the subject of this appearance. To repeat the four principal points in the preamble to the Competition Act:

The purpose of this Act is to maintain and encourage competition in order to (a) promote efficiency and adaptability of the economy, (b) expand opportunities for Canadian participation in world markets while recognizing the role of foreign competition in Canada, (c) ensure that small- and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy, and

—perhaps significantly last on the list—

(d) provide consumers with competitive prices and product choices.

The three key elements of Bill C-23 are in principle supporting each of these points, in particular, efficiency, world markets, equitable opportunity for the smaller enterprise, and a competitive market providing the consumer with choice. We ask this committee—to make the point again—to remember that the greater good of Canadian consumers should come before the needs of business, whether it is large or small, domestic or international, or a new or existing investment. That is the long-term interest of the Canadian consumer.

In April 2000 at the start of the public review of the private members' bills preceding Bill C-23, the commissioner stated that “the Competition Act is part of Canada's marketplace framework legislation aimed at encouraging competition to the benefit of both businesses and consumers”.

We should recognize that the act is generally acknowledged to be a very complex piece of legislation and we as members of CAC may not have the required specialist knowledge to discuss the minutiae of those inter-relationships and the implementation of sections of the act by itself or with other legislation. However, we are very grateful for this opportunity to present our more general comments on how we view the changes proposed under Bill C-23.

Our first comment is on deceptive prize notices. These are not a cause to be treated as buyer beware. They are misrepresentations of facts in order to induce someone, the consumer, to incur a cost and part with their money without proper warning of terms or probabilities of reward. So, yes, we at CAC recognize and endorse the justification of a criminal sanction against those who commit the deception.

• 1645

In fact, we would like to see the bureau having the authority to issue immediate cease-and-desist orders where it has established that a prima facie exists. The bureau already provides guidance on good practices for competitions, so good practitioners are already aware of what is required and will know how to structure their competitions accordingly. Those who deceive and mislead should be prevented from continuing as soon as the bureau recognizes that fact. The bureau should not have to wait until a formal case is heard. The details of use of an adjudicator or some other method of separating all of these powers from the commissioner might have to be considered. But we feel that the availability of a well-designed, cease-and-desist process has great benefit in this area, and much harm to consumers may be avoided.

On a point of detail, we would also propose that there be specifications about the positioning and legibility of the conditions that apply when claiming a prize. Perhaps the point size should be specified together with colour and those conditions be displayed on the same side as the come-on, the prize announcement. Existing regulations on advertising claims could be used for guidance on these details.

In addition, as presently drafted it seems that the bill only applies to competitions delivered by mail or e-mail. CAC therefore suggests your committee consider having the act apply to hand-delivered competitions, say in the street or to a residence or place of work. In other words, the act should apply irrespective of the mode of delivery. We recognize of course that in some instances provinces and/or municipalities may have jurisdiction over some of these activities.

To reconfirm, CAC endorse the criminal sanction against those who use deceptive notice of winning a prize and we suggest the need for the act to apply to all delivery methods, and for the bureau to have the power to issue cease-and-desist orders.

Now we turn to the competition tribunal judicial powers. In spite of earlier, wide-ranging discussion by this committee and an open consultation process managed by the Public Policy Forum, the right of private access is not provided in this bill. Such access was originally proposed for the “Refusal to deal”, section 75 of the act, and for the “Exclusive dealing, tied selling, and market restriction”, section 77 of the act.

Many commentators feel that this bill, C-23, prepares the act for this right of private access. If correct, CAC welcomes the longer-term implications of these changes as providing increased transparency and accountability, and the opportunity for extending activities beyond the priorities set by the bureau.

Some might argue that the broad national consumer concerns of the Consumers' Association are and will be covered by the bureau, and that the right of private access will only benefit corporations in the competitive market. Indeed there are many cases where the bureau has pursued cases in which CAC saw great merit. So we're certainly not arguing that the bureau does not do the right thing.

Rather, where the priorities of the bureau do not allow it to take on a project, then CAC, possibly acting with other public interest groups, would—under the private access rule—be able to bring a case to the tribunal without waiting in line for the bureau to act. Therefore, in the longer term CAC would like to see not only the right of private access, but also the possibility of class action suits being brought.

The CAC recognizes that there must be a balance between convenience and maintaining regulatory responsibility. So we are concerned that in the longer term the use of private access should not diminish the bureau's responsibility for oversight of maintaining and enhancing competition in Canadian markets. The commissioner and this committee should ensure that there is no off-loading of bureau responsibility to private entities through use of a future private access mechanism.

CAC recognizes that the changes in Bill C-23 to the powers of the competition tribunal will simplify and speed up the realization of the objectives of the act. In fact they will help the bureau in its work to “maintain and encourage competition in Canada in order to provide... consumers with competitive prices and product choices”. The proposals appear to be practical and effective means of increasing the efficiency of the bureau and the tribunal in their joint handling of cases.

• 1650

We also suggest that this committee consider the question of the sections under which such cases might be brought. So far discussion has been about one or more of sections 75, 77, and 79—abuse of dominant position. We suggest that such cases should be brought by the commissioner under those three sections and that all three be considered for private access in the longer term.

As a further comment, we recognize that there are valid concerns on the need for safeguards and against strategic litigation in these proposals of Bill C-23. The act itself is designed to promote competition in its broader sense and not to be used to harry competitors or suppress competitive behaviour through strategic litigation. However, we believe that with the tribunal able to award costs and summarily dispose of cases, such strategic litigation would be effectively discouraged.

The question of the award of damages by the tribunal is certainly a much more contentious and difficult issue. As we are all aware, in the United States triple damages are possible, as are class action suits. The CAC feels that the litigious temptation of triple damages may be too great, and that the tribunal should have the option to award single damages where the nature of the case justifies it.

The Vice-Chair (Mr. Walt Lastewka): We're slowly getting beyond our time. Could you just summarize the last page? Then we could get into questions, and if there are additional things you would like to point out, we could do it during the question and answer period.

Mr. David Croome: Certainly.

On the question of facilitating cooperation with foreign competition, we would like to affirm our support for the underlying principles of beneficial cooperation with foreign competition authorities. The bureau needs that power to effectively respond to anti-competitive behaviour, such as that with some transnational mergers and certain marketing practices.

In closing, we would like to emphasize that a vigorous and openly competitive market is in the best interests of all consumers. We have proposed a number of minor changes here and stated our support for the longer-term adoption of the right of private access.

Thank you for this opportunity.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. Croome.

I'd like to now begin with Mr. Strahl.

Mr. Pat Martin: I have a point of order. I was wondering what the order was to be.

The Vice-Chair (Mr. Walt Lastewka): Pat's first.

Mr. Pat Martin: As a member of the fourth party, I'm somewhat sensitive to—

The Vice-Chair (Mr. Walt Lastewka): Oh, okay. I don't want you to be too sensitive. You can begin. Go ahead.

Mr. Pat Martin: Okay, thank you.

Thank you all for your interesting briefs.

Given that there are three groups, I would start by saying that I appreciate the views of the CFIB and I always welcome its briefs and presentations. They are often accompanied by a very thorough survey of your membership, and I like that. You don't just speak as an executive board; you do a really comprehensive job of canvassing your expansive membership first, and that carries a lot of weight for me. I appreciate the additional weight this gives your remarks.

I noticed within your brief you were careful to point out that although you were in favour of the private access side of this bill, you cautioned as well against the types of penalties. Maybe you could clarify. I'm a little unclear on what you were recommending as a form of penalty. I was interested to hear the Consumers' Association caution about the triple damages in the U.S. I'd be interested to hear about how those two views contrast, and then also I'd like to hear from the petroleum producers...

I'm not sure if I understood your brief fully as it relates to private access, but I do have a letter here from the commissioner, who followed up his presentation to this committee with some clarifying notes. He has your organization clearly in the camp of those who oppose the private access provisions. He has a list of both camps now, those for and those against.

• 1655

For the sake of the committee, I'll ask: which side are you on? Are you opposed to private access? As I said, your message seemed softer than an absolute condemnation of the idea. Most of your members are large American companies that operate in a regulatory regime that has triple damages and the possibility of class action. So if you operate well in that environment—and I would argue that you do—then why are you afraid of similar restrictions in this country that won't even go as far as the American regulations?

The Vice-Chair (Mr. Walt Lastewka): Mr. Perez.

Mr. Alain Perez: Well, the commissioner may have put us in the camp of the opposed because at the initial step of the PPF process, we opposed the introduction of private access, as it was defined, on questions of law and principle.

Obviously my members have been surveyed, and Tom and I speak for all of them. My brief says that philosophically we cannot be against private access, because private access is defined as private parties who want to go in front of a tribunal to deal with private matters.

What we are against, and remain against, is the type of private access that would take the bureau away from what we consider are its responsibilities to consumers and the marketplace. For us to support private access, it would need not just safeguards against strategic litigation but also a commitment in law for the commissioner or the bureau, if called upon, to study the case and decide whether it's a matter of public interest. In that case it would litigate itself, as it does today, or if it declined, it would explain why and allow the parties to go to the tribunal. In that case, I presume it would have declined because the matter was private, so only the private parties could debate it.

That's our position. We would oppose private access—as we have—if it was viewed as private interests or agendas taking precedence and using the Competition Act, the only law in Canada that protects consumers in the marketplace, to divert it from its primary mission.

Mr. Pat Martin: One thing I'll ask is whether any of your members are also members of the BCNI, the Business Council on National Issues.

Mr. Alain Perez: Yes, they are.

Mr. Pat Martin: So is there a contradiction there? The BCNI is clearly in the opposed column. When you canvassed your members, was it unanimous? Was there a split?

Mr. Alain Perez: No, not at all. There was no embarrassment there.

Mr. Pat Martin: No embarrassment.

Mr. Alain Perez: Next week, the BCNI and other groups will present a legal view of private access.

Mr. Pat Martin: They did yesterday, and they were vehemently opposed to any section 75.

Mr. Alain Perez: We also oppose rushing into private access and adding it to Bill C-23 without the proper consultation. We're giving you a business perspective. We are not concerned about litigation from small and medium-sized enterprises; that's a myth. We are concerned about much larger corporations using the threat of litigation.

If private access keeps the bureau involved in what it should be doing, which is defending the competition marketplace, and if it's in the law—not as it is today, because in Bill C-472 today, the plaintiff would notify the bureau, but the bureau doesn't have to do anything... We would like to see a process whereby the bureau would not just be notified—presumably they're going to read what's there—but the bureau would decide whether to pursue it themselves, or decline and explain why. At that point, we trust the government and the bureau to do the right thing.

• 1700

Mr. Pat Martin: Thank you. I think I understand.

Were there others who care to answer the other points I made?

The Vice-Chair (Mr. Walt Lastewka): Any other comments?

Mr. André Piché: Mr. Martin, you asked about our view of the strategic litigation. Essentially, we have the same view as the commissioner when he presented before you. He thought that the strategic litigation safeguards put in place were reasonable and could do the job. I quote him:

You have to convince the court, first of all, that you have an arguable case, and secondly, that there's no incentive for you to sue, because you're not going to get money—all you're going to get is an injunction—and lastly, you may actually have to pay costs for yourself and your opponent if you're unsuccessful.

He believes those are sufficient deterrents, and we also believe they're reasonable.

Mr. Pat Martin: That's very helpful, thank you.

And the association?

The Vice-Chair (Mr. Walt Lastewka): Any other comments?

Mr. David Croome: At one point you raised the issue of why triple damages would not be appropriate. I understand that the general approach to the Competition Act is one of incremental change, so the direct step to triple damages may seem inappropriate. Go to single damages, though it may be hard to define, and see if that works. Then act accordingly.

The Vice-Chair (Mr. Walt Lastewka): Mr. Martin, last question.

Mr. Pat Martin: As a last comment, when the commissioner was here he opened his remarks by saying that Canada has become a safe haven for scam artists in the false contests and things you were talking about. He was asked for details. Mr. Bagnell asked him if this was just anecdotal evidence, or if there were numbers. Apparently there were 13,100 complaints related to misleading advertising and deceptive contest practices, 4,200 complaints related to mail, and 1,600 related to telemarketing. So the numbers are certainly there, and your association is justifiably outraged by this. I commend you for concentrating on that, as one of the things you could do for the Canadian consumer.

Knowing those figures, would you like to add anything to that—to restate your position on these telemarketing scams, which mislead seniors especially?

Mr. David Croome: On that last point, the people who fall prey to these things tend to be the ones who are least able to respond adequately to them. They might also be less than well informed about how they can respond, in the sense of lodging a complaint with some organization. They wouldn't be aware that the Competition Bureau in Ottawa is the place to address their concerns. So the bureau needs to respond proactively—not just wait for the complaints, but be an active manager in dealing with this large number of cases.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. Martin.

I'm going to allow Mr. Strahl to ask some questions first, then come back to the government side for two questions. Then it's back to you, Mr. Martin, since you have a private member's bill.

Mr. Strahl.

Mr. Chuck Strahl (Fraser Valley, PC/DR): Thank you. We all seem to be speaking on the same private member's bill tonight, so we may all have to bail on you shortly.

Anyway, thank you to all the witnesses for coming. It's been good to hear from you.

I too am interested, as Mr. Martin was, in the nuances of the Petroleum Products Institute's position on this private action. I thank you for the way you've detailed it here. That makes it much clearer, and I think we all understand your position better. It appears to be a little different from the BCNI's position, which is categorically against it.

I'd like to ask the CFIB representatives what they think of these safeguards described by the other panellists. Do you think these are reasonable safeguards, or do they just complicate a matter that you'd like to see wide-open?

Mr. Stéphane Robichaud: I am not a lawyer either. For the past six years, though, I have spent an extensive amount of time talking to small business owners about various issues. I've dealt with people in the auto glass industry, gas retailers—people who are in very precarious situations, who feel their only resource is the Competition Bureau.

• 1705

What I hear from my members is that when they turn to the Competition Bureau, the message they hear is, “Until you're out of business, this isn't running you out of business”. I say this because the Competition Bureau has explained to you that there's a good reason why these small business owners don't get the attention they feel they deserve. There are many issues before the Competition Bureau, and it has to decide which to spend its time on. The bureau has explained that to you very well, but I feel that what it's adding into the picture will simply stall the process further.

As it is, our members can't get access to the commissioner. They can't get the attention of the Competition Bureau for the issues they have. So if you follow that route, there's no reason to believe things would change in any way.

Mr. Chuck Strahl: On the last point—and we'll get the Canadian Petroleum Products Institute in here in a minute—they suggest that a private action could only be instituted if the plaintiff has approached the commissioner, and the commissioner has declined the institute the action in his own name. Then it could go ahead.

It does seem to me there's some validity to that, if there was a limited timeframe. If we said to the commissioner, “You have to respond within a certain period, and give a written reason why you're not going to proceed”, that may save everybody. The commissioner may be able to point out that something has already been tried three times, and doesn't go anywhere. He may find it completely frivolous. Or he may just not have the resources because there are already two cases going on and may urge the plaintiff to start a private action.

Wouldn't that be reasonable? Wouldn't that keep some of the frivolous stuff out of there?

Mr. Stéphane Robichaud: In theory, it makes sense. But the reality has been that it's impossible for many of these small business owners to even get the commissioner's attention to have their situation assessed appropriately.

Mr. Chuck Strahl: But again, what if we required the commissioner to respond—if it were no longer good enough just to send a form letter saying “Sorry, I'm busy this week, I haven't got the resources.”

I'm not a lawyer either, you know, I'm just throwing this out. But I saw in your brief that there were 900-plus complaints already, even without any hope of private access. There may be 2,000 if we open up the floodgates a little. We're going to have to give more resources to the commissioner and the tribunal. So what if we just said “Okay, you've got a month”—or whatever time is reasonable—“and you have to respond within that time, or else private access to the tribunal is allowed”?

It's interesting that most of the small fry in this pond say they want access, but the big fish say “Don't worry about us, just look over your shoulder and there are bigger fish”. I'm not sure who to feel sympathy for. But it does seem to me that we need to be cautious, and not just throw open the doors to strategic litigation from anybody.

A bookstore could be doing a thriving business, but it would be vulnerable to some big conglomerate like Chapters—though I don't want to pick on them—saying, “We'll get this sucker”. If everybody just got into it, the lawyers would have a field day. Isn't that a concern?

Mr. André Piché: In reality, I think perhaps the first step for any small business owner considering direct access to the tribunal would be to go to the Competition Bureau and check the facts. I would try to get informal advice from it before proceeding. So in a sense what you're talking about makes a lot of sense. But I'm not sure we need a formal process. I think it would happen because a small business owner who decides to go the tribunal route really has to think about it very seriously. It's very expensive, and very time-consuming.

Mr. Tom Ryley (Executive Vice-President, Sunoco Inc., Suncor Energy Inc.; Canadian Petroleum Products Institute): May I just add something?

Mr. Chuck Strahl: Yes, please, if you would. I find this an interesting topic.

• 1710

Mr. Tom Ryley: First of all, I'd like to tell Mr. Martin that Suncor Energy is a Canadian corporation, as are a majority of CPPI members.

The issue we would have with direct private access is really one of the efficiency of government and the efficiency of how competition matters are resolved, because there are no changes to the law that are really occurring here. The competition law that we're adhering to is the same whether there's private access or not.

Our concern is, first all, if we go directly to the tribunal, then it is a quasi-judicial process and we're involved. It becomes far more time-consuming. There's a lot more procedure. There's a need for a lot of outside experts. I'm frankly a little bit surprised that smaller companies aren't intimidated by that, because Suncor and Sunoco, which is a reasonable sized enterprise, is intimidated by the potential commitment of time to that.

The other thing I'm quite concerned about is when people have a public tribunal at which they can make their assertions, whether or not they're ultimately found to have merit, there's always the fear that you are judged to be guilty until proven innocent. The allegations that people make about your behaviour often get a lot more press than what is ultimately determined to be the reality of the situation.

So I think that's why our association takes the position that we are not opposing private access, but we think that the reputation of all the parties involved and also the efficiency of government is best supported by following this conduit through the bureau. If the bureau will pick up the case and take it to the tribunal, that should be fine. If the bureau does not wish to do so and provides its reasons why, then we're not concerned that it would then move to direct private access before the tribunal.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. Strahl.

Mr. Bagnell.

Mr. Larry Bagnell: Someone is waiting for me in my office, so when I leave it's not because I don't like your answers.

My two short questions, which just need a short answer so I can leave, are for the CFIB. But before that I want to say I agree with the petroleum industry on the fact that—and I made this point yesterday—I hope private access doesn't dilute the regular core business of the competition board so that resources or whatever is needed cause the core business to suffer as well.

I was happy to see the consumers group bring up the issue of prizes. I did disagree, though, when you said consumers' needs were in front of business needs, because they're integrated. If there's a very competitive, healthy business community, then obviously they're going to be able to offer low prices and good products for consumers. But I'm glad you brought up the prizes, because no one else did. That's one of my pet points in this. In fact, I think the provision should even be stronger, that it should be guaranteed that the cost of collecting the prize can't be more than the prize.

My question is for the CFIB, because maybe some of your businesses are launching these contests. I'm not sure if it was in your brief, but are you in favour of these provisions related to contests?

Mr. André Piché: Yes, we are in favour of the provisions.

Mr. Larry Bagnell: As Mr. Martin did, I want to compliment you. Of all the groups I get information from, yours—and I wrote a letter this week to that effect to someone—is the best, in the sense that when you present the ballots and everything, you present the arguments that came in from your members on both sides, and that is very helpful for us in debating policy.

You talked about the cases that can't be held now because of private access, and that's been well dealt with by everyone else. But of the cases that can go under the existing regulations, the larger cases, are you happy that those are being dealt with effectively and competition is being preserved?

Mr. André Piché: I think what we pointed out is that there were a number of complaints made to the bureau, and very few had actually resulted in successful completion. So it's one of the reasons why we believe that private access is just another way of helping small business get redress.

As the Commissioner of the Competition Bureau said himself, this is to round out the Competition Act as it is now. So we certainly would be concerned if direct access meant an undermining or a weakening of the functions of the bureau. We believe the bureau has a very legitimate role to play. It's just another element of its arsenal. I think it's another avenue for small business to get redress.

• 1715

Mr. Larry Bagnell: Are you saying that if it didn't work the first time through the tribunal, then they could try plan B, try again?

Mr. André Piché: One of the problems that was highlighted in the studies made by the bureau was the lack of jurisprudence we have in Canada from the tribunal. One of the ways of increasing this jurisprudence is to have more cases going before the tribunal. The effect of that jurisprudence will be to clarify the rules of engagement with respect to competition between all businesses, whether they're small or large, and that can only be of benefit to everyone.

Mr. Larry Bagnell: Good, thank you.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. Bagnell. Mr. St. Denis.

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Thank you, Mr. Chair.

Thank you, gentlemen, for being here. It's been a very good discussion.

Mr. Perez, in your presentation you commented on the suggestion whereby an applicant for a private action would go to the commissioner first to get an opinion from the commissioner on whether the commissioner would take up this case and then proceed on behalf of the applicant, or to a broader class of people represented by the applicant, to the tribunal, or if it was rejected, the applicant would then make his or her own case.

Have you, in thinking this through, thought of the possible extra cost to the applicant, who, in your scenario, would first have to go to the commissioner and, depending on what happens there, then have to go to the tribunal? And have you thought of the possibility that a scenario like that would slow things down? Could you support a situation where maybe those two things happen at the same time, where, while the applicant for private access to the tribunal made an application to the tribunal, concurrently, the same application or documents were submitted to the commissioner in the run-up time before the tribunal looks at the case?

The commissioner would have an opportunity to decide to pick it up, to indeed see whether there was any support beyond the applicant's in the broader community for that. I think the commissioner is more or less mandated to look at things from a national point of view, as opposed to an individual case, and I can see the merit to that certainly in some cases. So could you support a concurrent application process where the general notion of private access, with the necessary bells and whistles as proposed and others if necessary, could proceed with the commissioner having, shall we say, a fall-back option or the exception option of participating? Could I have your comments on that?

Mr. Alain Perez: Actually, Bill C-472 requires that when a complaint is made to the tribunal, the commissioner at the same time is notified and he has the right to intervene. So there is no question of delays here. There wouldn't be any more delays, and there wouldn't be any cost either, because it would be just a question of sending a notice to the commissioner. And the commissioner, as I have tried to explain previously, has to study that notice. They don't go into a drawer. He has to decide whether or not to intervene.

What we're adding here is that when he declines to intervene, he has to tell us why, and this goes to the core of our proposal here and I think to the core of the dispute between Bill C-472 and the private sector, which is that we don't want to see the bureau stop doing what they're supposed to do. If they don't have the money, give them the money, but don't let them abdicate their responsibility.

Very briefly, I've heard a lot of comparison with the U.S. The difference between Canada and the U.S. is that in the U.S., every state has an antitrust division. There is an antitrust division in Washington and there is the FTC, so there are lots of resources out there.

• 1720

Here we have one Competition Bureau, and no province has any jurisdiction on competition. So I don't see why, in getting to private access, you would even consider diminishing the responsibilities and the accountability of the bureau.

The Vice-Chair (Mr. Walt Lastewka): One more question.

Mr. Brent St. Denis: I may have misunderstood your earlier comments, but is it a one-after-the-other process, as you see it, or concurrent? Is there a danger that the comments of the commissioner—assuming he or she didn't agree and then made such a statement—could possibly prejudice the applicant's case before the tribunal? The commissioner swings a lot of weight, you know, when it comes to these issues. Is there a danger of that?

Mr. Alain Perez: He has the right to intervene already in Bill C-472.

Mr. Brent St. Denis: It would require him to make a comment one way or another, as I understood it.

Mr. Alain Perez: It would require him, if he declined, to explain why.

Mr. Brent St. Denis: Which would probably be in most...

Mr. Alain Perez: He would just have to say this was purely a private matter. In his opinion, it would have no effect on the marketplace, therefore the resources of the plaintiff and the other party should be expanded, not the government's.

Mr. Brent St. Denis: Okay, I appreciate the clarification.

Thank you, Mr. Chair. Thank you, Mr. Perez.

The Vice-Chair (Mr. Walt Lastewka): Mr. Martin, you have a short question.

Mr. Pat Martin: Yes. I welcome the chance to get back into it a little bit.

I don't want to back and forth with our witnesses from the Petroleum Products Institute, but Petro-Canada is on the list of your membership, as well as the list of companies that oppose this, as per the Public Policy Forum, as is the Canadian Chemical Producers Association, which may not be related; Imperial Oil; the Canadian Petroleum Producers Association; Shell Oil; and Irving Oil. I certainly don't think your industry is unanimous in this, but that's not the point; you're only speaking for the organization you're here to represent.

Mr. Alain Perez: I'm speaking for these people here.

Mr. Pat Martin: Are you speaking on behalf of those organizations? Have you actually contacted them again, and they've changed their views since the public policy forum?

Mr. Alain Perez: They have not changed their views, Mr. Martin. Petro-Canada is the chair of CPPI right now. I would certainly not be here committing suicide, presenting something that my chairman was not in agreement with. Mr. Ryley is not the co-conspirator here. We were opposed to Bill C-472, the way it was written. We are still opposed to Bill C-472 the way it is written.

Mr. Pat Martin: But Bill C-23, which we're here to speak to...

Mr. Alain Perez: Bill C-23 is fine. We will support that.

We're bringing to your attention what we think could bring a consensus, certainly with my industry, around Bill C-472 and the amendments to Bill C-23. So there is no—

Mr. Pat Martin: Contradiction. I think I understand. That's fine.

The Vice-Chair (Mr. Walt Lastewka): Okay, Mr. Martin. I want to go to Ms. Torsney. If there's time we'll come back.

Mr. Pat Martin: Okay.

The Vice-Chair (Mr. Walt Lastewka): Ms. Torsney.

Ms. Paddy Torsney (Burlington, Lib.): Yesterday we had some presenters who suggested that one of the ways to assist with private access and make sure it was achieving the best opportunity for Canadians would be to limit the length of time cases could be dealt with, have pre-agreed facts, and limit the number of witnesses and experts who could testify.

Have any of your organizations given any thought to whether that would be of interest to you? If you already support it, would that be a problem? If you're a bit concerned about it, would it help you to be less concerned?

Mr. Tom Ryley: Yes. I think it's fair to say... None of our organizations has people on staff just to deal with issues before the bureau or the tribunal, so efficiency in government is important to us, as taxpayers. It's also very important to us as enterprises that have to allocate our scarce time among various activities. We're in support of anything that can occur to make the process work more effectively. I think that is really the point Mr. Perez was making to Mr. Martin.

• 1725

As we've worked through this issue of private access, we're not advocating it. We're not opposing it because we see the pressures for it and we understand them, but we're trying to figure out a workable resolution, to make it work as effectively as possible.

Ms. Paddy Torsney: CFIB?

Mr. André Piché: Essentially, I have to agree that any process that takes place should be efficient and fast. It is in the interests of especially small business owners, who may not be in business for very long if the process takes too long. We would be in favour of something that was streamlined, efficient and fast—absolutely.

Ms. Paddy Torsney: Mr. Croome.

Mr. David Croome: I don't have anything to add to those points.

Ms. Paddy Torsney: To the CFIB specifically, I appreciate a lot of the work you do as well, and I appreciated you providing us with the numbers. They're very helpful.

You have over 100,000 members, but only 8,700 people replied—not a great return—and 64% of them said they supported changes to the Competition Act.

You mentioned in your brief that people are a bit afraid of annoying their suppliers, and what have you. But surely, if the information is kept confidential by you as an organization... I'm a bit surprised that the response rate was so low, if there's such a need for changes. That's one thing.

The second thing I'm concerned about is that it really is a question of resources. On the one hand, if a small business person feels that, through the Competition Act, they need to seek remedy because otherwise they're going to go under or their business is being severely affected, I'm a bit concerned about whether they have the resources to be involved in an action, to get counsel, to even attend, or even write the letter. I really wonder how effective a mechanism it's going to be for a small business owner, especially one with fewer than five people.

Mr. André Piché: I'll address the first point about the rate of responses we got. If I go by other survey methods that are being used by StatsCan, this is a very good return.

Second, many small businesses will not respond to this issue because they're not touched personally. It's one of those things that—

Ms. Paddy Torsney: Not yet.

Mr. André Piché: —when you're hit with it, then you're very concerned about it, but otherwise you're not and you don't think it's going to hit you. So that's about the rate of return on the responses.

Do you want to talk about the second point?

Mr. Stéphane Robichaud: Yes. It links to the point André is making, as far as the point of return. I know there are concerns about an influx of requests, as soon as this change is made in position.

I can assure you the small business owners know almost nothing of the Competition Bureau, until they are faced with the situation where they're losing their family business. They're not in it for interests, and they're not following these changes as another possible strategy in their competition or their marketing strategy. It's a tool for people who are faced with a very desperate situation.

From the examples I've been faced with there were small business owners who had grouped together, whether they were in the auto glass industry, or small retailers. Probably six to eight times a year I'm asked to meet with people in P.E.I., or in small communities. People from all over the Maritimes have joined together and are all in very desperate situations. It's not just one small business. When it gets to that point, they're all in a very precarious situation.

Ms. Paddy Torsney: That's fair.

To you, Mr. Croome, thank you very much for your support on the game cards. It is actually a serious problem. Perhaps because we get a lot of junk mail—not junk mail, but important circulations from businesses—especially those of us who spend time volunteering on some of these committees, you don't necessary look through it all.

Since they were distributed with my householder, I have paid a lot more attention to these kinds of things. I am constantly looking at what is out there in circulation. It's perhaps partly my interest in marketing, as well. It's surprising how many of these products are out there and how many people are confused into believing they have won something.

• 1730

Ultimately, to Mr. Bagnell's point, if they know that it's going to cost them more than the prize is worth and they still choose to spend on it, we can't stop that. But if they don't understand that there is a cost, as with the 1-900 calls in the specific scratch and win ones that got me a little agitated, then they don't... It's a sad example of buyer beware, because they are getting caught and they're spending a lot of money when they don't have it. It does really concern me, which is why we started the private member's bill. And then we're inundated with all kinds of mail about those cards.

Thank you.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Ms. Torsney.

Mr. Martin, you had one last short question.

Mr. Pat Martin: That's fine.

The Vice-Chair (Mr. Walt Lastewka): Chuck.

Mr. Chuck Strahl: I agree with CFIB's comment that this is not a panacea for small business or big business. Nobody likes to go through these processes, and as WestJet is finding out, even when you're accepted, it's still no good. You still have to slog it out in the marketplace often against a competitor that seems to hold the cards. So I agree with you. I don't anticipate there's a whole flood of people with two or three employees just eager to get to see Mr. von Finckenstein.

The question I had for whoever wants to address it is the draft bilateral agreement that was tabled by Mr. von Finckenstein as a suggestion of how this bilateral agreement might work—I would think probably first of all with the United States and then with other countries that have a well-developed competition bureau similar to ours or someone we want to have an agreement with.

Did anybody have a chance to have a look at that to see whether you feel... I'm thinking of you, Mr. Ryley. You're asking what about that big American company that uses this just to get information or get access to your strategic plans or whatever it might be. Are you convinced that this type of bilateral agreement has enough safeguards for you to be comfortable if our government were to sign something like it with the Americans, for example?

Mr. Alain Perez: The issue of bilateral agreement is complicated first by the fact that we don't have the same laws and second by the fact that what is an offence there may not be one here, and vice versa. So it opens up all sorts of things. You could have a U.S. company suing just to get the information on something that here would be completely innocuous, but there would be considered something else.

So a lot of care has to be given. However, I don't want to doom the bureau by saying that I support them, but in general we trust the bureau and we trust the government. Therefore, it's a concern. Lawyers are going to bring all sorts of other issues around that. From a business standpoint and from the experience we have with other laws, such as access to information, etc., governments usually do a good job at making sure that their own nationals are not in jeopardy. It's a concern, but it's not something overwhelming.

Mr. Chuck Strahl: Well, that's my position too. This is a big framework agreement. None of us here is a lawyer. But it does seem to me for many industries—I don't know whether it would be the same for the CFIB folks or not—that the bigger threat, so to speak, for competition is the biggest fish in the ocean, whatever the ocean might be. If the ocean includes a bilateral agreement with the United States or with the Europeans, for example, and with others that have well-developed competition bureaus of their own—something not the same as us—it does seem to me that it's worth your taking some time before this is passed into law to look at that section itself. Although we may hope the government does it right, and let's hope they do, the concern we need to have is on that international competitive side.

We saw recently, for example, the Nordic countries complaining about some things that were going on in Europe and then saying, well, it passes muster here, but I go to another jurisdiction and it doesn't; it's a different set of rules.

This is one of the things we are going to have to get right, especially the first one or two of these bilateral agreements, because failure to get it right will perhaps doom us to some serious problems. It's as significant as a NAFTA type of agreement, especially for industries like yours that have a lot of transborder negotiations.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. Strahl.

I'm going to conclude the meeting.

Mr. Chuck Strahl: If I might, just before you conclude, I have one thing to bring up, and not with regard to the witnesses.

• 1735

The Vice-Chair (Mr. Walt Lastewka): I want to thank the witnesses, both for your detailed reports and for being very succinct in your explanations today. I think it was very clear that there were a number of issues that were muddied, but you were able to clear them up. So I want to thank you for your efforts.

Mr. Chuck Strahl: Mr. Chairman, if I could, I don't have a motion or anything, but I wonder if it would be appropriate, given the article that was in the Globe and Mail on the weekend about the OECD's supposed analysis—an unknown confidential report that deals specifically with the Competition Bureau—to ask our clerk to make all necessary inquiries to try to get a copy of that report somehow.

They slam this thing pretty seriously. We had better either defend it vigorously or have the minister in to explain why the OECD apparently thinks it's such a bad deal.

The Vice-Chair (Mr. Walt Lastewka): Okay.

Thank you. The meeting is adjourned.