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Speaking Notes: Presentation to the House of Commons Standing Committee on Finance
February 23, 2009
Dr. Anu Bose
Head, Ottawa Bureau
Executive Director and General Counsel
Public Interest Advocacy Centre
Bill C-10, An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and related fiscal measures
Good evening. My name is Anu Bose, the head of the Ottawa Office of Option Consommateurs. With me, is Michael Janigan, Executive Director and General Counsel of the Public Interest Advocacy Centre here in Ottawa. Both organizations have been engaged for over three decades in representing the interests of ordinary consumers in the delivery of goods and services in the market place or subject to a regime of regulation. Mr. Janigan addressed the Industry Committee on the subject of the previous legislation, Bill C-19, that was introduced, but not passed by the previous Liberal government. We are here to speak to you about the proposed amendments to the Competition Act.
We would first note that while the proposed amendments are quite comprehensive, they have certainly been the subject of considerable past discussion among stakeholders and represent a fairly balanced take on necessary refinements to the Act. For example, of the amendments complete the reform of misleading advertising or deceptive marketing that has been the consensus for over two decades. These amendments help the Competition authorities address this abuse in an economic and administrative fashion. By so doing, the intent of the provisions will be more efficiently enforced, and sanction meted out, where necessary, that is appropriate to the conduct of the offending advertiser.
Naturally, there has been an effort to bolster the effectiveness of the non-criminal enforcement procedure to encourage compliance, including more realistic maximums on administrative monetary penalties, and some new rights for complainants. In the view of Option Consommateurs, this package of amendments places appropriate emphasis on the importance of deterring anti-competitive conduct, particularly in the current difficult financial environment that all Canadians are experiencing. Michael Janigan will now give some additional comments on the importance of these amendments.
It is essential that the Committee understand that these amendments are designed to make markets work better, and to protect the legitimate interests of consumers and suppliers in open markets. The practices that are being deterred involve conduct that subverts the operation of a competitive market and prevents the existence of an informed market of customers, as well as the ability of suppliers to challenge dominant players with new products and services. When some of these changes were brought forward in Bill C-19 in 2005, there were some vociferous protests from some of the larger business players concerning the potential burdens that could be imposed upon them.
If a protest occurs again, it is important that these submissions are adjudicated on their merits, not on the basis that they represent the views of all non-governmental stakeholders. For example, you won’t be hearing from the independent business person who has used the family assets to finance a new business only to see it crushed by actions of suppliers of the new business instigated by a market incumbent. You may read about a scam luring shoppers to purchase a wonder product that is misrepresented and misdescribed, but the pensioner who has to cut back on necessities because she fell for the scam won’t be here to tell you that what happened to her is an acceptable risk that allows more creative advertising to take place.
And you won’t hear from the parties complain about increases to maximum penalties that the existence of dollar amounts sufficiently robust to deter the largest of businesses from breaching the Act will probably prevent more Bureau files from being opened because of business self-policing to avoid such sanctions.
But, it is of the highest importance that you understand that deterring anti-competitive conduct as proposed here is not the heavy hand of government in operation; instead it is supportive of open markets and less regulation. The fact is a lot of money can be made by misleading the public or unfairly stacking the deck against competitors. Unless you have the tools at hand to prevent such conduct from being rewarded, you are allowing three unfortunate things to happen:
1. You are preventing informed choice and possible innovation.
2. You are enabling inefficiency in the delivery of that product or service
3. You are ensuring that incumbents have little incentive to become more productive
As a final matter, Dr. Bose will address an issue of some importance, particularly to Quebec consumer organizations.
As the members of the Committee may know, consumer groups including my own are active in ensuring compliance with consumer protection laws by means of class actions. Most of these cases are settled or adjudicated with a provision of a percentage of the funds to consumer or public interest organizations to do education or similar pro-active work around the issues in play in the litigation. It is good public policy by having the wrongdoers pay for attempts to stop other wrongdoers.
It is likely that, in the future, the civil remedies under the new legislation may be pursued in preference to class actions in provincial courts. The former legislation, Bill C-19, recognized this fact and helped ensure that leftover restitution funds would be put to similar usage:
74.1 (1.2) The court may also designate in the order a not-for-profit organization in Canada that benefits persons who have been affected or are likely to be affected by reviewable conduct under this Part — or any other person or organization that the court considers appropriate in the circumstances — to receive any or all of the amount of the payment that remains unclaimed or undistributed in the manner and on the terms set out in the order.
74.1(1.2) Il peut en outre y prévoir que, si tout ou partie de la somme n’a pas été réclamé ou n’a pu être distribué, la somme non réclamée ou non distribuée est versée en tout ou en partie de la manière et aux conditions précisées dans l’ordonnance à un organisme à but non lucrative au Canada qu’il désigne et qui vient en aide aux personnes qui ont souffert ou risquent de souffrir de comportements susceptibles d’examen visés par la présente partie ou à toute personne ou tout organisme qu’il estime indiqués dans les circonstances
While the current wording of 74.1 (8) (g) would not prevent this from happening, for greater certainty, we would suggest that the clause from Bill C-19 be inserted as Section 74.1 (9) and Section 74.1 (9) becomes Section 74.1 (10). This way there will be no diminution in the redress available to Quebec consumers, and it will extend the same benefits to consumers across Canada.
Thank you and we would be pleased to answer any questions that the committee may have.