INDY Committee Meeting

STANDING COMMITTEE ON INDUSTRY

COMITÉ PERMANENT DE L'INDUSTRIE

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, May 13, 1998

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[English]

The Chair (Ms. Susan Whelan (Essex, Lib.): Order.

Pursuant to an order of reference of the House dated Tuesday, March 17, 1998, this is consideration of Bill C-20, an act to amend the Competition Act and to make consequential and related amendments to other acts.

We have several witnesses who will be before us today, and we have motions as well that we are to deal with. I propose we deal with the motions in-between witnesses.

We'll begin with our first witness, the Canadian Chamber of Commerce. We have Mr. Timothy Reid, the president, and Mr. Paul Crampton, a partner from Davies, Ward & Beck. I want to welcome you both here. I will let you begin with your opening statement, if you have one. Then we'll proceed to questions. I'm sure there will be many. So please begin whenever you are ready.

[Translation]

Mr. Timothy Reid (President, the Canadian Chamber of Commerce): Thank you, Madam Chair.

[English]

and members of the committee. I would like to thank you and the members for having us appear before you to discuss this very important bill.

With me is Paul Crampton, a partner with the law firm of Davies, Ward & Beck, who chaired our special task force on competition law and policy. The Canadian Chamber of Commerce is very fortunate to be able to draw on some of the top professional business experts from among its members and invite them to exchange views with members of Parliament.

[Translation]

The Canadian Chamber of Commerce is the biggest and most representative trade association in Canada. Through our local chambers of commerce, we have partners in all federal ridings. Our network is made up of over 170,000 members and includes businesses of all sizes active in all sectors and all across the country.

[English]

I should say at the outset the Canadian Chamber of Commerce is generally supportive of Bill C-20 and would like to see its speedy passage through the legislative process.

Over the past year, we have been pleased to have been asked by the director of the Competition Bureau, Konrad von Finckenstein, to provide comments on many aspects of the proposals before you.

This legislation proposes a number of amendments to the Competition Act, of which we are quite supportive, such as misleading advertising, ordinary price claims, fraudulent telemarketing, and pre-merger notification. However, we have serious concerns about the proposal to create a new wire-tapping power and would like to propose to you that it be postponed until there has been an opportunity for a full consultative process and public debate, as this issue is not part of the consultation process that led to this legislation.

I'll now turn to Mr. Crampton, who will provide you with our detailed views on the five areas I mentioned briefly. At the end of our presentation of about 10 minutes, both of us will be pleased to answer any questions you may have.

Mr. Paul Crampton (Partner, Davies, Ward & Beck, Barristers and Solicitors): Thank you, Tim.

Madam Chair and honourable members, at the outset I would like to say it's a great pleasure and privilege to be here today to assist Tim in providing you with the chamber's views on Bill C-20.

Our presentation here today represents the culmination of a process that has lasted almost three years. It has involved a lot of time and effort on the part of a substantial number of our members, and it has also involved a lot of very hard work and consultation by the director and his staff in the Competition Bureau, and they should be commended for their efforts.

As Tim noted, our task force on competition law and policy has focused our review of Bill C-20 on the five key areas of misleading advertising, ordinary price claims, telemarketing, wire-tapping, and pre-merger notification.

Turning first to misleading advertising, the amendments would create a dual civil-criminal regime, with the intention that most types of misleading advertising would from now on be resolved by way of the civil regime. Canadian businesses have for some time taken the position that the criminal regime is not well suited to addressing advertising practices that ordinarily are not truly criminal in nature. The new civil option will allow for cases to be resolved more rapidly, efficiently, and effectively, without imposing the stigma associated with criminal penalties.

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On balance, our task force is very supportive of the proposals relating to misleading advertising, and we encourage you to pass these proposals as is. The only difficulty we have with the proposals is they leave scope for the director to use the prospect of going the criminal route in order to leverage concessions out of someone whose practices are being investigated.

To address this, we have suggested to the director that his draft guidelines articulate a specific period within which he would make his decision regarding which route to pursue. The latest draft of those guidelines simply states every effort will be made to arrive at the decision as quickly as possible.

In addition, there's not very much guidance regarding the types of matters considered to be sufficiently serious or egregious to be likely to attract criminal enforcement. We encourage the committee to recommend that the final version of the director's guidelines provide greater guidance and examples to assist the public in determining what matters are likely to fall into the criminal category and when the decision regarding the route that is likely to be adopted will be made.

Turning to ordinary price claims, the main thrust of the amendments in this area is to decriminalize the existing criminal prohibition. In addition, the amendments will clarify the statutory test for determining the ordinary selling price of a product.

Once again, the chamber is strongly supportive of this proposal and would be happy to see it pass as is. We are particularly pleased that the amendments will make it clear that the ordinary selling price of a product will be determined by reference to whether either a volume or a time test has been met.

Although these tests are somewhat imprecise, we have had an opportunity to review the latest draft of the guidelines released by the director in connection with this aspect of the proposed amendments and we are supportive of the 50% tests being proposed, even though we believe they are somewhat conservative.

However, the draft guidelines could be more helpful with respect to clearance sales, which our members have recommended be explicitly exempt from the ordinary price claims provisions. The draft guidelines impose unduly burdensome requirements on advertisers to demonstrate that clearance sales are not misleading.

We encourage the committee to recommend that the final draft of the guidelines include a clear statement that clearance sales will not be caught by the new provision. This is a very important issue to many of our members.

Turning to telemarketing, a number of our members are concerned that the definition of telemarketing in proposed subsection 52.1(1) of the bill is overly broad and could be applied to a range of situations we have described in our submission, as well as other types of communications we have not even thought of yet.

The director's guidelines regarding the proposed telemarketing provisions address a number of our concerns. However, they do not address several other situations that have been exempted from the U.S. telemarketing sales rule based on the long experience they have had in that jurisdiction. This would include most types of calls placed by consumers in response to general media advertising, as well as calls initiated by the consumer that are not made in response to any solicitation. We have elaborated in our submission. Most people would not consider these types of communications to constitute the type of behaviour this legislation is intended to address.

Even if the director were to address these issues and situations in his final guidelines, our members have some difficulty with the approach of enacting an overly broad law, which then must be narrowed by administrative guidelines that may change with the next director. Therefore, we encourage you to narrow the proposed definition of telemarketing in the manner described in our submission.

We also recommend proposed paragraph 52.1(2)(c) be deleted. This provision would permit the creation of additional disclosure requirements by regulation as opposed to by way of an amendment to the act, which would permit a full discussion and debate in a public forum. If fundamental changes to the disclosure requirements are to be made to the telemarketing offence, they should not be made by way of regulation, which permits a much more limited form of consultation and debate in comparison to the amendment process.

In addition to the foregoing, we have recommended in our submission a few other technical changes to the telemarketing proposals.

Turning to wire-tapping, this is the proposal in Bill C-20 that gives us the most serious concern. Many of our members are very opposed to the Competition Bureau having this power. We can conceive of a number of situations in which the bureau could decide it needs the power, and the next thing you know, presidents or other high-level managers of leading competitors in an industry are getting their phones tapped or their offices bugged.

We have no objection to wire-tapping being added to the existing agenda for the next round of amendments to the Competition Act, which we understand will be put forward in two to three years.

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Some of you may have read the adverse press this proposal has received over the last few months. What is particularly troubling about this proposal is the manner in which it was put forth. It was not part of the package of proposals discussed in the June 1995 discussion paper released by the Competition Bureau to launch this round of amendments; it was not part of the package considered by the consultative panel on amendments; it was not part of Bill C-67, the predecessor of Bill C-20; and it was not even the subject of significant consultation before Bill C-20 was introduced for first reading.

The director's guidelines state he intends to confine the use of this power, when employed in respect of an investigation under the basic conspiracy provisions of the act, to situations involving price-fixing and market sharing, and that he will not use the wire-tapping power in connection with mergers or strategic alliances. This position addresses some of our concerns; however, the draft guidelines still leave an unacceptable level of discretion for bureau officers to seek the wire-tapping power in a broad range of other circumstances.

In any event, we're back to the same problem I just noted in connection with the telemarketing proposals; that is, enacting an overly broad law and then narrowing it by administrative guidelines that may change in the future. Therefore, we urge you to delete clause 47 of Bill C-20 in its entirety, or at the very least delete the part of the wire-tapping proposal relating to the conspiracy and bid-rigging offences. Nothing else needs to be done on your part. Our proposal is relatively simple and straightforward.

If you do not accept our request, then we have suggested in our submission the addition of a provision that would require any information obtained by way of wire-tap to be destroyed as soon as it is established that an offence has not been committed.

Finally, turning to pre-merger notification, broadly speaking, the Canadian chamber supports the general thrust of the proposed amendments to the pre-merger notification provisions in the act. However, the amendments do little to address the issue that both the Canadian chamber and the consultative panel on amendments recognize as being a significant concern, namely, the fact that the vast majority of transactions that are subject to pre-merger notification do not raise serious competition issues. This has become a much more serious issue for our membership and for Canadian businesses in general since the director began collecting a $25,000 user fee last November in connection with pre-merger notification filings.

As described in our submission, the overly broad scope of the pre-merger notification provisions can be addressed by raising the financial thresholds in sections 109 and 110 of the act and by creating additional exemptions.

With respect to the size of parties threshold in section 109 of the act, we suggest the threshold be raised by 25%, from $400 million to $500 million, and with respect to the various size of transaction thresholds in section 110 of the act, we suggest they be raised from $35 million to $50 million, and in the case of amalgamations, from $70 million to $100 million. As described in our submission, these changes would be consistent with the approach that has been adopted under the Investment Canada Act, which has thresholds that are indexed to reflect inflation.

We note the CPI has increased by more than 35% since the pre-merger notification provisions were proclaimed into force in 1987. The Investment Canada Act threshold described in our submission has increased by approximately 20% since 1992 alone.

Our recommended increases in the above-noted thresholds are particularly warranted in view of the fact that these thresholds have caught substantially more transactions than initially contemplated. This problem has been exacerbated by the effect of lowering of the thresholds in real terms by over 35% in the last decade. We have provided you with specific wording for two new exemptions, including a rewording of the new exemption that would appear in paragraph 113(c) of the act.

Finally, we would like to draw your attention to the fact that the proposed amendments contemplate transferring the information requirements for short-form and long-form filings from sections 121 and 122 of the act to the notifiable transactions regulations. This is particularly regrettable, in our view, primarily because we will no longer have an opportunity to debate revisions to the information requirements in a public forum with our elected representatives and because the Competition Bureau is proposing to increase substantially the amount of information that would be required to be provided in connection with long-form filings. We are concerned that, as a practical matter, the ultimate wording of the regulations will be decided by the director; we won't have any recourse.

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Unfortunately, given that the long-form information requirements will be transferred to the regulations, which are not currently before you, it is not clear that you can do anything more than perhaps express your views regarding the concerns we've outlined in our submission, in the hope that those views may influence the ultimate content of the regulations.

So, in conclusion, as Mr. Reid stated, the chamber is very supportive of Bill C-20 and would like to see its speedy passage through the legislative process. We would not want our constructive suggestions to be misinterpreted as reflecting opposition to the passage of the bill as a whole or to delay significantly the passage of the bill.

The central provisions of the bill, which would see the creation of a dual criminal-civil regime for misleading advertising and the decriminalization of the balance of the deceptive marketing practices that are currently in the act, are very important to our members. We encourage you to pass these proposals without change.

We are also broadly supportive of the proposals relating to telemarketing, and we've offered some suggestions in the nature of fine-tuning to narrow the overly broad definition of telemarketing that is being proposed. However, we respectfully urge you to postpone the invasive wire-tapping proposal for further consultation and public debate.

Finally, we urge you to adopt our suggestions for reducing the number of pre-merger notification filings.

Thank you very much, Madam Chair and honourable members.

The Chair: Thank you very much, Mr. Crampton and Mr. Reid, for your opening comments.

We're going to begin with questions. I'm going to remind members that we do have several groups that will be appearing before us today, so I will try to be a little exact on our timing here.

Mr. Schmidt, we'll begin with you.

Mr. Werner Schmidt (Kelowna, Ref.): Thank you, Madam Chair.

Thank you, gentlemen, for appearing. It's a pleasure to meet you and to interact with you. The clarity of your brief is very good. You raise some really interesting questions.

The first question I would like to raise with you is, is your concern with regard to the wire-tap provision primarily a concern of process or a concern of substance?

Mr. Paul Crampton: The problem on the substance side is we haven't had an opportunity to fully consult and debate. A lot of us feel initially that we may well have a very serious concern at the end of the day, after we've had an opportunity to consult and debate.

We have a very serious process issue here in that we have a very invasive power being proposed, and it was not the subject of the extensive consultation that all of the other proposals were.

To the extent that there were any other proposals that were contentious, they were postponed, and here you have a contentious proposal that's being included and wasn't even the subject of significant consultation. So we're very concerned about the process, because we think we may ultimately have a substantive issue, at least with respect to the conspiracy provisions, which is what a lot of our members are very concerned about, because that provision is extremely broad and it can apply to any agreement between any two parties. They don't have to be competitors; they don't have to be in a vertical supplier-customer relationship. It could be any two parties.

I think a lot of us at the end of the day may have a problem with that provision, even at the end of the consultation, so we may well have a substantive concern. But we just haven't been able to get there yet.

Mr. Werner Schmidt: I appreciate the concern with regard to process. I think you were led to believe that you were being thoroughly consulted, and then to discover this, I can understand that you felt almost betrayed in this particular instance.

The question I have, though, is if there were some amendments made that would restrict part of your primary concern, would that matter? Would that change your position?

Mr. Paul Crampton: I would have to say that we would want to look at those amendments. The suggestion has been made, well, what if we restrict it only to price-fixing—

Mr. Werner Schmidt: Yes, exactly.

Mr. Paul Crampton: —and market sharing?

Mr. Werner Schmidt: Sure.

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Mr. Paul Crampton: The problem with even that is that a lot of the complaints to the bureau are about agreements that may have some impact on price. There are a lot of different agreements. I could arrange with you to exchange some information and the bureau could become concerned that as a result of our exchange of information we now have a better understanding of each other's costs or the way we look at the market, and that could ultimately result in reduced divergence of prices, greater convergence of prices.

Price-fixing investigations tend to be the bulk of the bureau's investigations under section 45, and many people believe there are price-fixing agreements going on in a lot of industries where there's nothing more than very legitimate conscious parallelism, which the Supreme Court of Canada has said very clearly is not an offence. I'm entitled to follow my competitors' prices if I want to. I don't have any obligation to undercut my competitor.

Mr. Werner Schmidt: I think the real question here is about catching fraudulent telemarketers. I think that's really the issue behind the wire-tapping. Yesterday, I think, we heard some witnesses about dealing especially with fraudulent, misleading telemarketing, where high pressure is used to force unsuspecting people to part with their money where nothing is being offered. I think that's really the intent behind this thing and I think we all would agree that's probably a good thing. I believe the question you have about it is that it's written with such broad scope that it's not limited to that and that it could be interpreted to mean virtually anything. Is that your real concern?

Mr. Paul Crampton: The telemarketing offence is very broad. We have a new offence. It's very broadly worded. There's a maximum penalty of five years in prison, there is an unlimited fine, and then on top of all of that, they want to introduce this very invasive power that they haven't consulted on.

Nobody has come up to us and told us what the experience in the U.S. has been. Nobody has told us that before they had the wire-tapping power for telemarketing they had great difficulty, and after they had the power they had much more success in stopping telemarketing. They haven't come up to us and presented us with a case.

I think many of us have a gut feeling that if there were some scam artist phoning our mothers and trying to bilk them of their savings, we'd sure want the bureau to have this power. The problem is that there hasn't been any consultation.

And we're not suggesting that it be postponed indefinitely. There's an existing agenda. The bureau already has many items on it for future amendments. The director has stated on many occasions that he would like to see a process whereby the act is amended on a regular basis as opposed to every ten years, and he's committed to that. We're saying, “Put it on that existing agenda and we'll dig in.” We will wrestle with these issues and come up with something that works for everybody, just like we did with misleading advertising and ordinary price claims.

It's just that this has come out of the blue and we're very concerned. I think viscerally, as Canadians who enjoy certain basic civil rights, to be facing the prospect of seeing business people—and others, for that matter—having their phones tapped or having their cars or offices bugged.... It's just something that viscerally bothers us and we'd like to talk more about it. We'd like to put the issues on the table and grapple with them.

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

Mr. Werner Schmidt: Yes. Just to be clear in my own mind, your concern isn't with the telemarketing provision as such. It's with the wire-tapping provision. Is that correct? Or would you throw the whole telemarketing thing out?

Mr. Paul Crampton: No. We think the telemarketing provision is a good provision. We think it's too broad, and we've given you some suggestions for fine-tuning.

Mr. Werner Schmidt: I understand that.

Mr. Paul Crampton: We think that is a very good provision. We broadly support it.

Mr. Werner Schmidt: Even though it was not part of your process either.

Mr. Paul Crampton: It was. It was in Bill C-67, and the consultative panel addressed it and recommended that the bureau bring in a telemarketing provision. That has been out there and has been grappled with.

Mr. Werner Schmidt: Thank you, Madam Chair.

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

Mr. Shepherd.

Mr. Alex Shepherd (Durham, Lib.): Just getting back to what Mr. Schmidt was talking about, and standing back from the way business is changing these days, we talk about things like strategic alliances, whereas ten years ago most people didn't talk about that, and yet the word “conspiracy”, when you lay that over the way business is changing.... Are we actually undertaking legislation that's going to inhibit those kinds of alliances whereby people share ideas, technology, and resources? Do you think that's a possible negative effect of this legislation?

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Mr. Paul Crampton: Absolutely. If competitors who are getting together to potentially talk about some packaging reduction initiative or some benchmarking initiative to try to better compete with foreign giants.... As it is right now, there's a chilling effect because this is a criminal provision, and a lot of people just have a blanket policy, particularly since many companies are subsidiaries of American companies and in American anti-trust law price-fixing is an offence per se. If you get together and enter into an agreement, it may be just to exchange information, but if the effect of that agreement has an anti-competitive effect on prices by causing prices to rise, that's per se illegal in the U.S. Because many Canadian entities are subsidiaries of U.S. firms, they already have a policy of not speaking to their competitors.

I think if you throw this in on top of the mix, even more companies are going to refrain from potentially pro-competitive discussions with other members of the industry, and Canada as a whole is going to suffer. I think maybe even the level of investment in the country is going to suffer. I just don't think we need that.

Mr. Alex Shepherd: I guess my own observation is that Canadian society has been less desirous of entering into those kinds of agreements, for cultural differences and so forth, and I just wonder whether some of these provisions wouldn't inhibit that even more.

Mr. Paul Crampton: I think that's right.

Mr. Alex Shepherd: What about the issue of bid-rigging? Is there a clear definition of bid-rigging? Could you be satisfied with the provisions related to bid-rigging?

Mr. Paul Crampton: Bid-rigging is fairly clearly defined in section 47 and it's an offence per se. You don't have to prove that it had any competitive effect.

The problem with bid-rigging is that it's not an offence unless the parties have failed to disclose it to the person who called for tenders. So how is this wire-tapping power going to solve that problem? You don't know until just before the time period for the expiration of the bids passes whether or not that communication was made.

I'm not aware of too many cases where there's been a dispute between the person calling for tenders and the people who allegedly engaged in bid-rigging as to whether there was or was not that consultation. Proving the agreement is typically fairly easy in bid-rigging cases. I'm not aware of too many cases the bureau has lost because it has been unable to prove the agreement. It tends to lose a lot of cases under the basic conspiracy provision of the act.

You mentioned the word “conspiracy”. That's not the name of the provision; that's just how it's colloquially known. It's a provision that applies to all agreements. We call it “the basic conspiracy provision”.

Mr. Alex Shepherd: So the position of the chamber is that it is such a messy area there's no way you can just take a part of it and sort of define it as a contravention, just because of the nature of the way business is changing these days. It's very difficult to define. If you take price-fixing or market-sharing out of there, what's the difference between market-sharing and strategic alliances? How do you make those definitions?

Mr. Paul Crampton: I think if we have an opportunity to discuss it and consult and work at it, it may be that we can come up with something through that process, but we haven't been given the opportunity.

Our position is this: let's talk about it and let's work together. In the past we have worked with the bureau to make the act a better act and we will continue to do so in the future. Anti-competitive conduct in Canada harms Canadian businesses just as much as it harms Canadian consumers, so we have a strong interest in making the act a better act. But we need to be able to talk about it in order to do that and we haven't been given that opportunity in this case.

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

[Translation]

Ms. Lalonde.

Ms. Francine Lalonde (Mercier, BQ): Thank you for this detailed and precise presentation. It is your responsibility, I agree.

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I'd ask you for certain explanations that don't seem to be present in your document or that I at least did not hear you express during your presentation.

Concerning the definition of telemarketing, you're asking for it to be specific because "otherwise, the provisions might be applied to entities whose services are not meant to fall within the scope of the legislation". What do you mean by that?

[English]

Mr. Paul Crampton: We've given some examples in the submission.

Think for a moment about a customer who calls up a company on his or her own initiative. Suddenly we're now into an interactive telephone communication and the telemarketing provisions kick in. I could phone a 1-800 number and have some inquiries, and then over the course of that discussion.... I may be phoning to ask about one product, then the discussion turns to other potential products that might help me in my business, and now we're into the telemarketing provisions.

We gave you a list of some situations that have been exempted in the U.S., based on the American experience. We don't need to reinvent the wheel. They have this lengthy experience and I think we should be able to benefit from it.

[Translation]

Ms. Francine Lalonde: You would like Internet communications to be excluded from the director's guidelines. We've already discussed this with other witnesses. Not everyone is of your opinion. Especially when you think about future developments, we could bitterly regret excluding Internet.

[English]

Mr. Paul Crampton: I appreciate your concern. Our position is that in these Internet situations you don't have the same oppressive environment. You don't have somebody who is in a position to have an extended conversation with you, and you may, if you're a shy person, have difficulty figuring out a way to hang up the phone when you're in a pressure situation. First of all, in Internet communications the person can't reach you unless you turn your computer on. Second, you can walk away and think about it before you get back to them. And third, I am not aware that this is a problem. I think many of us are aware that the telephone telemarketing scam channel is a big problem, but nobody has shown us any evidence that these Internet situations are a problem.

I really can't do anything any better than to go back to the words that the director himself used when he appeared here back on April 2, or the words used when the minister appeared on March 31. In fairly detailed terms, they've explained why they don't think this provision is applicable to those situations and why the enforcement policy of the bureau is going to be that it won't pursue those situations.

We commend the bureau for taking that position, but it gets us back to this fundamental difficulty of having this broad law. Why enact a broad law and then come back and curtail it by way of administrative guidelines that can change?

The Chair: One last question, please, Madame Lalonde.

[Translation]

Ms. Francine Lalonde: I can see that the direction of the legislation towards some decriminalization is satisfactory to you. However, I have questions about that. Big businesses, in particular, have the financial means to pay fines easily. On the other hand, the threat of finding oneself in jail, in the case of those who are really far off the straight and narrow, who really plotted or engaged in fraudulent transactions will continue to weigh.

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You say the directives would be a lot more useful if the director had to make a choice between criminal or civil procedures after a given period of time. Explain to us why this should be so, in your opinion.

[English]

Mr. Paul Crampton: Well, picture yourself in a situation where you may have inadvertently engaged in some misleading advertising. You'd like to explain to the bureau why you did what you did, and why you didn't think it was a problem under the act, but because the director hasn't told you yet whether he's going to go criminal or civil, you don't want to incriminate yourself. You don't want to help the director make a criminal case against you.

We're saying that for people who find themselves in that position, it's an incredibly stressful situation to be in. The director should normally know whether this is the type of misleading advertising that is sufficiently egregious or serious that he intends to proceed by way of the criminal route.

He will know, right up front, whether it's that type of advertising, whether it's targeted to vulnerable groups. He has his guidelines, and they're very good. He should be able to tell within a reasonable period.

What's a reasonable period? We think 60 days is a reasonable period. Then, if he makes his election to go the civil route, we can work toward resolving it in an expeditious manner.

That's the whole point of this dual civil-criminal regime. It's to expedite the enforcement mechanism, because the criminal process was too burdensome. If he's going to delay making that decision, he's going to defeat to some extent the whole rationale for this model.

The Chair: Thank you.

Mr. Reid, do you wish to add to that?

Mr. Timothy Reid: No, that's fine.

The Chair: Okay.

Thank you, Madam Lalonde.

I'd like to turn to Mr. Lastewka, please.

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

First of all, I'd like to thank the witnesses for their presentation and so forth, and the detail with which they've presented it.

I'm a little bit concerned, though, when you bring forward the fact about the consultative process on the wire-tap. If my memory serves me right, the bill was tabled last November. Next week it will be six months.

You also mentioned that you have a good relationship with the department, and you interact and exchange information, so I find it strange that you would say you were not given an opportunity to provide input. I don't understand what you were getting at, that you never had the opportunity to provide input.

The Chamber of Commerce communicates continuously with the departments. If you have, over the last six months, come up with what should be changed in the wire-tap to make it more effective, without saying it wasn't part of the consultative process, I don't understand it when you say you weren't given an opportunity.

Mr. Paul Crampton: I didn't find out about it until the bill was tabled. The bill was tabled at the end of November, I gather. You say, well, under normal circumstances, you might have had an opportunity since that time to consult. But once the bill was tabled, I've had the sense the bureau has been committed to advocating that the bill be passed as it was laid before Parliament for first reading.

I certainly haven't sensed any receptivity to getting in and discussing some of the things that a number of people around the table here today have been talking about: What if we narrow it? What if we limit it to telemarketing? What if we do this, what if we do that? There haven't been those kinds of consultations. There hasn't been any effort to try to persuade us why this is necessary, to make a case for it.

So you're right; there has been a period of time since it was presented for first reading, but I think since it was presented for first reading, the bureau has been committed to provision as it is described in the bill, as it is worded. I certainly haven't sensed any willingness to start tinkering with the wording, although we would love to have done that.

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We're very concerned that this is not a power of last resort at all. In fact, that has been made clear by the Ontario Court of Appeal, which has explicitly stated that the wire-tapping power doesn't have to be the last resort. There are three alternative tests, and they're not cumulative; they're alternative.

The tests are: other investigative procedures have been tried and have failed; other investigative procedures are unlikely to succeed; or the urgency of the matter is such that it would be impractical to carry out the investigation of the offence using other techniques.

So this is not a last-resort measure. This is the Criminal Code here. There's an elaborate framework for these powers, and we are just very concerned about them.

Mr. Walt Lastewka: I guess where I was coming from—and we've been having these types of meetings for a few weeks now, and even months—is that there are going to be some amendments brought forward by people around this table. That's the consultative process we have with Parliament.

So when you make a statement that you're not given the opportunity to bring something forward, personally, I find that offensive from the standpoint that this is why we have standing committee meetings and inputs from witnesses. It's to do exactly that.

Mr. Timothy Reid: We're very pleased to be here. We were willing to come at any time. We were invited, and we're here. We're making a case to you to try to influence your thinking.

Our comments with regard to the consultative process, which has been long-established, have to do with the preparation of legislation. Basically, it's the difference between consultation and simply being informed. The day the bill was introduced we were informed there was a wire-tapping provision in the bill being tabled. That is not consultation.

Mr. Walt Lastewka: Okay.

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

Mr. Jones, do you have any questions? No?

Mr. Lowther.

Mr. Eric Lowther (Calgary Centre, Ref.): I have a couple of quick questions, Madam Chair.

We may have covered some of this ground a little bit already. If you have, we can cut right to the chase.

On the telemarketing being too broad—and you do have some examples there—I'm trying to dig into the intent of your concern, the reason you want to narrow it. We have this broad definition, and I guess if we're going to narrow it, that means we leave some things out of the broad definition.

What's the rationale? What would be left after you narrowed it, and why are some of these things left out? Are we trying to protect consumers in a specific situation but not in others that are outside of the broad definition? Is that the thrust of your intent there?

Mr. Paul Crampton: I think many of us have a sense of the evil that this provision is targeted toward, and I think many of us also have a sense of a broad range of other types of situations, where you might conceive of a consumer telephoning a business and getting into a conversation with somebody at the other end of the phone about products and possible other products and all of a sudden getting into the telemarketing provision where all of these disclosure requirements kick in.

In a broad range of situations, such as the situations the U.S. Federal Trade Commission has recognized, it would be very impractical to start making all these disclosure requirements on that telephone, particularly the ones in proposed paragraph 52.1(2)(b). Proposed paragraph (a) is fairly straightforward in terms of the identity of the person on behalf of whom the communication is being made. You know you're speaking to somebody at such and such a company, or company X, and as for the nature of the product, most of the time we know what product we're talking about, the business interests being promoted, and the purpose of the communication. Normally, that's all fairly straightforward.

• 1615

But then you get down to proposed paragraph 52.1(2)(b):

(b) disclosure is made, in a fair, reasonable and timely manner, of the price of any product

There are many types of products, by the way, where you don't know the price until the end of the day. Mutual funds, for example, is one. I know the Canadian Bankers Association is very concerned about that and other types of securities.

Further, it says:

any material restrictions, terms or conditions applicable to its delivery;

That's just not how people transact when you phone up a company. You don't start getting into all this. It would just be very impractical. And how is somebody going to train people that are on the front lines getting calls from the public? They'd have to hire a large number of additional people because the time per call would be significantly increased.

I think the FTC has some experience in the U.S. with this telemarketing law. They have created some exemptions, and we have given you a list of them. We're saying we don't necessarily think all of them should be exempted, but certainly we've given you the first five or six that we think should be exempted. Then we've said it should be restricted to live voice, in part because the director has already said that this is how he interprets it and the minister has said this is how he intends to interpret it. So why not just say that in the law?

Mr. Eric Lowther: Could I attempt to paraphrase where you're coming from at a fairly simplistic level? That's how I think.

In our zeal to protect the grandmother or whoever has been misled by the deceptive telemarketer, have we maybe gone too far with this and given too much latitude, too broad a definition, to make sure this never happens, and in fact have intruded into an area where we're giving up some of our privacy, some of our personal protection, some of the “buyer beware” types of things that have been in there historically? There is some onus on the buyer. In our zeal to protect everybody maybe we've given up some checks and balances of privacy and practical implementation considerations. Would that be accurate?

Mr. Paul Crampton: I think you're absolutely right, and I think as a practical matter there is also probably a timing consideration. I think the Competition Bureau probably recognized that it had a window to get this bill ready to present for first reading and through the legislative process. Had it had more time, there would have been an opportunity for us to raise these concerns before the bill was tabled, and possibly have them dealt with before it was tabled.

I don't want you to get us wrong. We think that, broadly speaking, this is a good provision. We're just trying to fine-tune it a bit because it is overly broad.

Mr. Eric Lowther: I'm going to put you in the position that we sometimes are in. Would you accept it the way it is unchanged and say it's better to have this the way it is than not have it, or would you say that without these changes it's better not to have it at all?

Mr. Timothy Reid: What we can say on this is that I understand that you, as members of Parliament on this committee, can make changes, propose changes, and we'd like to see you do that and pass the bill. We want both.

Mr. Eric Lowther: So do we.

The Chairman: Thank you very much, Mr. Lowther.

[Translation]

Mr. Bellemare, please.

Mr. Eugène Bellemare (Carleton—Gloucester, Lib.): My questions are for Mr. Crampton.

Mr. Crampton, my colleague Mr. Lastewka mentioned the consultation process. I agree with him. If we were to invite everyone to discuss things with our officials, wouldn't this almost be considered as lobbying? All kinds of people would be going to see our officials to pressure them into not having certain procedures applied, to protect some group or another.

[English]

Mr. Paul Crampton: There is a process that has been established of consultation, and the bureau has always been very good about consulting with respect to significant initiatives whether they're guidelines, merger guidelines, price discrimination guidelines, or misleading advertising guidelines. The bureau consults and has a long history of consulting. It has an excellent relationship with the business community and other stakeholders because it consults.

• 1620

There are a few key stakeholders, and we, the chamber, like to think we represent a very broad base of businesses in this country, and we like to think we're an important stakeholder. I know other organizations feel the same way. We're not talking about thousands of people going to the bureau—

Mr. Eugène Bellemare: But don't you recognize that this is a proposal by our staff, and the consultative process really is that you're invited here or you've asked to come here? It's either one of the two. The end result is that you are here to make a comment. Would you not consider that consulting?

Mr. Paul Crampton: Now we're consulting about a bill as opposed to consulting about what's going to be in the bill. That's a very fundamental distinction. With respect to the act—

Mr. Eugène Bellemare: But you would accept that today we're going through a consultative process.

Mr. Eric Lowther: Madam Chair, I would like to raise a point of order. I don't think it's prudent for us to debate with these witnesses on the process of consultation. They're here to speak to us about particular recommendations to the bill. To debate whether they had a chance to consult or not is a side issue, I would suggest.

The Chair: Mr. Lowther, the witnesses raised that issue in their opening statement and I do believe Mr. Bellemare has the right to question on it. They raised it.

Thank you.

Mr. Eugène Bellemare: I'm afraid, Madam Chair, that my time may be eaten up—

The Chair: Mr. Bellemare, I'd ask you not to belabour this point, because it's been raised as well.

Mr. Eugène Bellemare: I'm going to move to another point where the concern of Mr. Crampton is that we are going to be bugging people. I had the impression when you were speaking that you think we're about to hire tens of thousands of people to listen in on conversations just because it would be a nice thing to listen to the conversations. I don't think the government is ready to do that.

We want to make sure we protect our communities and our most vulnerable people against crooks, against scammers, and against deceptive telemarketers. You say we should look at the alternatives, and you suggest three: you say if there are other investigative procedures, that's what we should look at; if there are others—there's a second one I've jotted down here, but it isn't written properly; and the other one is if it's impractical, then do the bugging.

We would be doing the telephone bugging according to a complaint. A senior citizen, for example, losing all of his or her life savings to some scammers in another judicial jurisdiction—let's say B.C. telemarketers attacking Ontario, or Quebec telemarketers attacking people in Ontario, or Ontario attacking Manitoba people so that the police forces have some problems. When anyone calls, they call the local police. They don't call a police force that is—

The Chair: Mr. Bellemare, could you please move to your question?

Mr. Eugène Bellemare: In terms of the alternative to protecting the individual who feels he's been taken for all his money—or her money—and makes a complaint that they now keep telephoning him and trying to get more money, isn't that the point where the government would come in and start bugging to make sure they have proof that there's malicious wrongdoing going on?

Mr. Paul Crampton: I'm not sure if I fully understand the question, but let me just say a few things. If I haven't answered your question, maybe you can restate it.

It hasn't been established yet, the case hasn't been made yet, at least not to a level that would provide us with a minimum degree of comfort, that this power would be used as a last resort.

• 1625

I know in the draft guidelines previous to this there were words such as it would only be used “when absolutely necessary”. Those words are now gone, so it's not going to be used as a last resort. The statute, the Criminal Code, doesn't require it to be used as a last resort.

I can tell you there are members.... One member of our task force is in the telephone business, and he has told me we would be shocked if we knew how often wire-taps are granted.

So we're very concerned that the bureau hasn't made a case to establish that when it has tried to trace the telephone number or find the Visa slip.... If somebody has given their Visa number to somebody at the other end of the phone, the person must have filled in a Visa slip and tried to cash it in somewhere. A person must have an address, and the phone company can tell the police where the address is. Other techniques can be used.

Nobody has explained to us, “Well, when they tried that in the U.S., without the wire-tapping power, they were generally unsuccessful”, or “When we've tried it in the past, under the misleading advertising provisions, it hasn't worked”. They just haven't given us the basic information to make the case for this invasive new law.

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

Madame Lalonde, do you have one final question, please?

[Translation]

Ms. Francine Lalonde: Yes, thank you. I'd like to get back to these 60 days. I'd also like to talk about wiretapping.

Doesn't what you say show that you disapprove of the intent of making this legislation preventative with the objective of advising and aiding any business unknowingly engaging in delinquent behaviour, as you said before? Are you telling us that this direction is unrealistic? You are asking for the director to hold back for 60 days: does that mean that until then, the person would not have co-operated for fear of self-incrimination? You're talking about preparing enforcement strategy for the legislation.

[English]

Mr. Paul Crampton: You're still going to have a very strong criminal provision that has jail as a penalty and substantial fines as a penalty, so you will still have that deterrent. But the underlying intent for the creation of a dual civil-criminal regime—and I think it's been expressed—is to move away from a punishment regime towards a corrective regime. We want to stop these practices, and we want to stop them in an expeditious manner.

To the extent the director can make his decision, within a reasonable time period, as to which way he wants to go, that will facilitate resolving these matters in an effective manner. If he's going to go the civil route, which is much quicker, he can get his injunction and he can get his corrective notice so the rest of the market gets the information it needs much more quickly.

I think the Collins committee in 1988 also recommended this, and the working group in 1991 also recommended this. This is the culmination of many years of intensive study by a lot of different bodies, all of whom have said misleading advertising is not well suited to the cumbersome criminal law, and much more effective law can be made if we decriminalize these provisions. To the best of my understanding, they're not criminal in the U.S. either, and they have a very effective regime down there.

• 1630

The Chair: Madame Lalonde, last question, please.

[Translation]

Ms. Francine Lalonde: Here is my question: by imposing a 60- day limit, would we not be bound to enforce only part of the law, the part that's not criminal? So this provision would probably be enforced very little in future.

[English]

Mr. Paul Crampton: I wouldn't think so, because if I make a misleading representation about some heart drugs to vulnerable people, the director is going to know, certainly within 60 days, that this is egregious conduct and he's going to be going the criminal route.

For the most part, he'll be able to ascertain fairly quickly, based on the product and who buys the product—which are going to be known immediately—and based on the nature of the person who made the representation.... Have they a long history? What steps did they take to address the situation after they became aware that it might be misleading? Did they exercise due diligence? A lot of that is going to be fairly clear within a relatively short period of time—certainly, I would have thought, well within 60 days.

So we're just saying, please, let's have a reasonable time period in the law within which the director has to make his election.

The Chair: Thank you.

Thank you very much, Madame Lalonde.

[Translation]

Ms. Francine Lalonde: Thank you, sir.

[English]

The Chair: Mr. Crampton and Mr. Reid, we want to thank you for being with us today and for your very interesting comments and the debate that followed.

I would encourage you, if you have the opportunity, to read the transcript—which should be out by the end of this week, if it's not already available—from the session we had with members of a consultative panel last week. I would be interested in your comments on their comments on wire-tapping. We are deferring clause-by-clause and amendments of this bill until the week after next. The House is not in session next week. If you would take that opportunity, I would be interested in your comments on what was said at that meeting as well.

Again, we want to thank you. You're free to go.

We're going to move to motions before we move on to our next group of witnesses. Mr. Lastewka is going make a motion and then there are some amendments by Mr. Schmidt, I believe.

Mr. Lastewka.

Mr. Walt Lastewka: Thank you, Madam Chair. I want to take the opportunity to move that we approve the seventh report on main estimates from Industry Canada.

The Chair: Okay.

Ms. Francine Lalonde: Pardon?

The Chair: You should have in front of you a motion on the main estimates to approve them.

[Translation]

Ms. Francine Lalonde: It's not a motion to approve the budget. It's a motion to say that we considered it, which isn't the same thing. "To consider" does not mean the same thing as "to approve". I can vote to say that I've considered it, yes. I can't vote to say that I approve it.

[English]

The Chair: Madame Lalonde, the motion is to approve the seventh report. The seventh report, if you read it, has considered the main estimates and reports the same.

[Translation]

Ms. Francine Lalonde: We considered them, so have we approved them?

[English]

The Chair: In French it says “studied”. It should say “considered”. Is that not the same?

[Translation]

The Clerk of the Committee: It's the same thing.

[English]

The Chair: The clerk is telling me a étudié is the same as “has considered” in English. I don't know if it is or not. I apologize.

Mr. Schmidt, you obviously don't like this motion.

Mr. Werner Schmidt: Well, no, I'd like to amend the motion, Madam Chair. The motion as such has to be done. There are three motions here with regard to three votes.

• 1635

INDUSTRY

Atlantic Canada Opportunities Agency

Vote 25—Grants and contributions $258,918,000

Mr. Werner Schmidt: First, I would move that vote 25 be cut by $216,880,204.

The Chair: Just a minute, Mr. Schmidt. Are you on motion 1? Is that motion 1 for vote 25?

Mr. Werner Schmidt: Yes, that's my motion 1.

The Chair: Could you repeat that? I have different numbers than you do.

Mr. Werner Schmidt: My apologies. I think I have the wrong piece of paper here. I'm reading from the wrong one.

I move that vote 25 be reduced by $162,329,486.

The Chair: Do you have any discussion to add to that, Mr. Schmidt?

Mr. Werner Schmidt: Yes, Madam Chair. This particular issue deals with the Atlantic Canada Opportunities Agency. I believe the issue here is to reallocate these funds to another way of distributing the same amount of money to that area. The regional agency is not the most efficient way of doing this. The Auditor General said this agency is not particularly efficient. The Senate committee on industry, banking and financial sectors indicated these agencies should be deleted because they could be subsumed under existing crown agencies such as the Business Development Bank of Canada, Farm Credit Corporation, or other ways of doing this. I think the issue here is to become more efficient, and that's the reason for the motion.

The Chair: Thank you, Mr. Schmidt.

Mr. Lastewka, do you have any comments on that?

Mr. Walt Lastewka: I certainly do. I understand where Mr. Schmidt is coming from, but there have been improvements made in the agencies, and members around this table know the agencies have changed in the way they not only review but approve and follow up on their projects. We've had discussions in the House on this where it has been proven that businesses that have worked with agencies have been more progressive. They're making an impact in the regional areas, where they're closer to the people and the businesses. I would vote against it, Madam Chair.

The Chair: Madam Lalonde.

[Translation]

Ms. Francine Lalonde: Madam Chair, on a point of order. You told me the motion that was tabled is specific and that we've considered the votes. That's what the motion says. If the text of the motion read that we had "adopted" them, then we could table an amendment suggesting a decrease in whatever area. If you were to accept such an amendment, that would mean we'd be adopting the rest. I think we 'd find ourselves right in the middle of a kerfuffle at that point.

The wording of the motion you sent us requests that we consider the votes. I didn't prepare any amendment because I figured that what had been submitted to us was simply to tell the House that we considered them, without necessarily approving them or being in agreement. I thought it was just a consideration, nothing more.

[English]

The Chair: Madam Lalonde, if you read the entire motion of the seventh report, just to clarify, “and reports the same” means we're reporting the estimates the same as they were presented to us without amendment. Mr. Schmidt's amendment is to change our report and amend vote 25. In actuality, this seventh report means we're accepting the estimates as they were put before the committee when we report the same back to the House. That's what it means. That's what it says.

[Translation]

Ms. Francine Lalonde: In French, it doesn't mean the same thing.

[English]

The Chair: It's not the same thing. At the end where it says—

[Translation]

Ms. Francine Lalonde: We report the consideration. We're not doing a report... "Reports the same" means that it gets passed. In French, it doesn't mean that.

[English]

The Chair: Okay, that's what it says in English. I didn't do the translation. That's what it means in English, so that's what I have to assume it means in French.

The clerk tells me it does mean the same in French.

We have an amendment before us from Mr. Schmidt. If there are no other comments on the amendment—

[Translation]

Ms. Francine Lalonde: I think we're dealing with a serious procedural problem. On the substance, I'm certainly against it, but I don't find the way of... I wasn't here when the minister came.

• 1640

[English]

The Chair: Okay.

[Translation]

Ms. Francine Lalonde: I'm absolutely against this, and I'm making my opposition known.

[English]

Mr. Werner Schmidt: I'm going to speak to the procedure. I don't know, Madam Lalonde, if this will help, but the process is for every committee to study the departmental estimates and consider them. That simply recognizes we have looked at them. We report back to the House that we have seen them and considered them, which means evaluate to see whether we agree with them.

If we make no changes, the report that goes back to the House simply says we have considered them and that's all that happens. That's all it does.

The Chair: They're adopted as they are.

Mr. Werner Schmidt: They're adopted by the House. We don't adopt them in any case. If we have amendments, then we change the consideration of those numbers. We haven't considered the same numbers as were represented. We may accept an amendment. When we report back to the House, we report the amended numbers and that's what the House then votes on.

The Chair: Thank you, Mr. Schmidt.

Mr. Jim Pankiw (Saskatoon—Humboldt, Ref.): I have a point of order. I would like a recorded vote.

(Motion negatived: nays 8; yeas 3)

Economic Development Agency of Canada for the Regions of Quebec

Vote 60—Grants and contributions $216,376,000

The Chair: Mr. Schmidt.

Mr. Werner Schmidt: I would move amendment 2 with respect to vote 60. The amendment here is to reduce vote 60 in the amount of $29,523,594.

The Chair: Is there any discussion, Mr. Schmidt?

Mr. Werner Schmidt: The discussion is identical to that before, with the exception that the reference here is to the economic development of Canada for the region of Quebec. I don't think I need to repeat the argument. I think you all know what it is.

Mr. Jim Pankiw: Could we have a recorded vote?

(Motion negatived: nays 8; yeas 3.

The Chair: We have one more amendment, I believe.

• 1645

Western Economic Diversification

Vote 120—Grants and contributions $231,263,000

Mr. Werner Schmidt: I move that vote 120 be reduced by $131,736,115.

The reason here is similar to the ones I've advanced, with one additional caveat: there are even more ways in which the crown corporations could subsume all of the work the WD is doing in western Canada. For the sake of efficiency, I think, I appeal to all members of Parliament to vote in the interests of taxpayers so that their tax dollars could be used more efficiently and be applied more directly in the application of the interests of business and individuals in Canada. Therefore, I would ask for the support of everyone around the table.

The Chair: Thank you for that insightful comment, Mr. Schmidt.

Mr. Lastewka.

Mr. Walt Lastewka: I would have to add that we are going to vote in favour of the taxpayers and that we support the Western Diversification department, the work it's been doing, and the positive things that have come out. That's why we will vote no.

The Chair: Thank you, Mr. Lastewka.

Mr. Walt Lastewka: Maybe we could use the same recorded vote.

The Chair: Could we apply the same recorded vote? Is it unanimous?

Some hon. members: Agreed,

(Motion negatived: yeas 8; nays 3)

The Chair: On the main motion before us, that we have considered the main estimates and we are reporting the same to the House, in a recorded vote....

[Translation]

Pardon?

Ms. Francine Lalonde: On the report in total?

The Chair: Yes, Ms. Lalonde.

Ms. Francine Lalonde: I'm asking for a recorded vote, please.

[English]

The Chair: A recorded vote, please.

The Clerk: This vote is to approve the seventh report, which is on the main estimates.

(Motion agreed to: yeas 6; nays 5)

The Chair: Thank you very much. I shall report the same to the House tomorrow morning when I also give our report. I want to thank you for your cooperation.

I want to apologize to the witnesses. We've had that on our agenda for a couple of days now and we did have to take care of that item.

We now have several witnesses before us: from the Normark Group of Companies, Mr. Warren Stelman, president; from the Hudson's Bay Company, Mr. Ingram, vice-president and general counsel, Mr. Paul Schabas, counsel, and Ms. Hélène Yaremko-Jarvis, director of legal services; and from The Canadian Federation of Independent Grocers, Mr. John Scott, president. If I have mispronounced anyone's name or if I have missed anyone, please introduce yourself when it is your turn.

I will begin with the Normark Group of Companies. Mr. Stelman, are you prepared to begin?

Mr. Warren Stelman (President, Normark Group of Companies): Mr. Kohos will start. He's just waiting for his name-tag.

The Chair: I propose that each association or group or company do their presentation first, and then we'll move to questions. We'll begin with Mr. Kohos from the Normark Group of Companies.

Mr. John Kohos (Compliance Manager, Normark Group of Companies): I have given out a very small, simple, and straightforward package. The content is mostly our specific comments about the amendments. It isn't in French and I apologize if that's an inconvenience for anyone.

• 1650

I saw the amendments for the first part only five days ago. In any case, my specific comments are here. I have seven minutes—is that what they said?—which is barely enough time to alienate you.

Voices: Oh, oh!

The Chair: It's supposed to be five minutes.

Mr. John Kohos: Since you have my comments in writing, basically I'm here to voice those and to answer any questions. I thought I would start by making a general comment about something that occurred to me the first time I saw this.

I'm not sure how many people know that a lot of the rights and freedoms that we enjoy in Canada were defined for us by a drug dealer named Oakes. That's the truth. Mr. Oakes was arrested some years ago and charged with trafficking in drugs. They never caught him trafficking—and by the way, this relates directly to my sentiments on this bill—but he had an amount of drugs that the police and the law considered sufficient to qualify as trafficking and he was convicted. The Supreme Court overturned it in something of a landmark decision because they said you can't do that, you cannot administratively make somebody guilty and make him prove he's innocent. You can't say a person has more drugs than a personal stash and must prove he wasn't selling, because it reverses onus.

What also came out of the Oakes case was a very interesting decision by the Supreme Court. It actually said that under section 1 of the charter, which says that the only limitations that may be exerted under the charter of rights are where it may be considered reasonable in a free and democratic society.

But then the question was this: what is a reasonable limitation on a freedom? The Supreme Court laid out three specific conditions. In fact, ironically, it's referred to in a lot of circles as the Oakes test. The first is that the law must have an honourable intention, the second is that it must be well designed to achieve that objective, and the third is that it do so with the least amount of carnage and side effects.

If I wanted to yell “fire!” in a crowded theatre, I couldn't do that. I'm not allowed to do it because it's a matter of public safety, and it's a reasonable limitation. I can't just yell “fire!” in a burning theatre—unless my chair is being consumed by flames, I suppose. But if somebody wanted to achieve that by saying to me that I can't yell or speak at all in a theatre, they would still achieve that public security. I wouldn't be yelling “fire!” in a theatre, but they would have gone beyond what had to be done in order to achieve what they had to achieve, and it would not have been done with the least amount of side effects.

I'm not sure exactly who it was that sponsored the amendment, so I'll go very gently, but from what I can tell, it's like drift-net fishing: somebody wants to burn down the entire village to smoke out a few bad apples. That's what it's about. When I looked into these amendments, what I found is that while the intention is honourable and in that way.... We all know why we're trying to do something about this. I think we all know what the problem is. We do have to stop this kind of behaviour. We have to do something to bring these people to justice. And we do have to protect our citizens and so forth, but I don't think anyone's going to be able to do it with this bill the way it's written. I don't think it works, I don't think it stands up, and I don't think it's constitutional. And I could be a little bit more specific about that, if I may.

In the first instance, in proposed subsection 52.1(1), where it says “telemarketing means”—and it describes telemarketing—I've been hard-pressed to find anybody who can describe or name any business for me anywhere in this country that won't fit this description, except for the two kiosks I saw in a carnival in a shopping centre parking lot the other day that didn't have phones. This description is not the description of telemarketing. It's not what telemarketing is at all. It doesn't differentiate between inbound or outbound calls; it says for any business purpose whatsoever, including the use of or the promotion of.

In telemarketing, the problem being faced, the actual phenomenon—I don't know how many of you have any first-hand experience—is that somebody calls you on the phone and presses you to make a decision. They harass you and hound you and so forth. But we're talking about the bad apples, not about all telemarketers. Bell Canada is in the telemarketing business and so is Club Price. So are businesses throughout this country and the rest of the world.

• 1655

Telemarketing just means using your phone to sell, and in fact this is not even about telemarketing; it's about fraud, fraud over the telephone.

With respect to the type of telemarketing we're describing or the kind we're contemplating where something is abusive and so forth, somebody didn't call you up on the phone and harass you to the point where you called them back in two weeks to place the order. That's just regular business.

The actual description of telemarketing would not be what it says here. It would not be “directly or indirectly”, “supply or use of”, “for the purpose of promoting”, and so forth. A more accurate description of telemarketing is the one I put on this sheet: a systematic use of outbound live voice interactive telephone communications to sell products and services directly to persons neither initiating nor requesting such a solicitation. That's what it is. You call people on the phone who didn't ask you to call and at that point your behaviour determines whether you've committed a crime or not, and that would be in the first instance. Somebody said—

The Chair: Mr. Kohos, could you try to sum up, please?

Mr. John Kohos: Okay, I will. Maybe someone will go to questions.

The Chair: There will be a lot of questions on some of the issues you're discussing.

Mr. John Kohos: What I'll say is this. That's the main thing. Two things in here disturb me tremendously. One of them is a situation where you are guilty until proven innocent—there are two proposed sections in here to that effect—and the other is the description of what constitutes telemarketing. The description of telemarketing is incredibly broad. It's not the description of telemarketing. It is drift-net fishing.

The suggestion that we could add exclusions to it like they did in the States where everybody is included “except the following list of people” would not be acceptable. It wouldn't redeem 52.1(1) because it would still reverse the fundamental onus, making the restriction the rule and the freedom the exception. Then there are those who'll be left off because we forgot to put them on the list and they'll have to fight to say they are not this type of telemarketer and so forth.

Last, we keep referring to telemarketing even in proposed subsection 52.1(10), where we say “telemarketing, telemarketing, telemarketing”. I'll make this very brief and then I'll get off it. Here it says, “use of lists of persons previously deceived by means of telemarketing”, “characteristics of person to whom the telemarketing was directed”, “the amount of proceeds realized by the person from the telemarketing”. This is kind of a violation of the spirit of your own proposed subsection 52.1(4). This suggests that telemarketing itself is an offence.

Everything I've read in this amendment.... Everywhere I read it, the word “telemarketing” is used as though telemarketing itself is an offence. Telemarketing is not an offence. Telemarketing is picking up the phone to call somebody. Fraud is an offence.

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

I would now like to turn to Hudson's Bay Company and Mr. James Ingram, general counsel and vice-president.

Mr. James Ingram (General Counsel and Vice-President, Hudson's Bay Company): Thank you, Madam Chair. Mr. Paul Schabas will make the submission on our behalf.

Mr. Paul B. Schabas (Counsel, Hudson's Bay Company): Thank you, Madam Chair.

Yesterday I faxed a copy of a statement to the clerk. I don't know whether you've received it—

The Chair: We all should have a copy.

Mr. Paul Schabas: —but I'd just like to take you through it.

As is well known, the Hudson's Bay Company is Canada's largest department store retailer. It is also, of course, Canada's oldest company, founded in 1670. It operates the Bay, Zellers, K Mart, and Fields department stores across the country. We appreciate the opportunity to speak to this committee in support of the provisions in Bill C-20 dealing with regular price claims.

We support and agree with the comments of the minister that the provisions on regular price claims will bring much needed clarity to the law, a law which has great significance for retailers and for consumers. If passed, Bill C-20 will bring to an end long-standing confusion regarding the meaning of the term “ordinarily sold”, found in the current act in 51(1)(d).

Passage of the bill will bring to rest, finally, the debate between retailers and the Bureau of Competition Policy, a debate that, I note, has caused lengthy litigation over whether a regular price is based on a volume test or a time test. I'll come to that in a moment.

By adopting a definition of “regular price” that permits retailers to meet either a time test or a volume test, Bill C-20 at long last provides a clear direction for the retail industry and for consumers. It is a workable and enforceable standard that gives retailers the ability to choose their preferred marketing strategy and thereby gives consumers choice between a high/low strategy with sales or an everyday low-pricing, or EDLP, strategy.

• 1700

Retailers, regulators, advertisers, lawyers, and consumers have grappled with the meaning of the words “ordinarily sold” for many years. The two competing interpretations are probably known to the committee, but just to summarize, under the volume test a retailer is only to refer to a price as a regular or ordinary price if it has actually sold a significant amount of the product at that price, usually referred to as the 50% target. Under the time test, however, a retailer may refer to a price as a regular price if it has offered the product for sale at that price for some reasonable period of time. It's not determined on how much of the item you actually sell.

As I note, the wording in the old act is ambiguous and could support either test.

We support the time test, along with the vast majority of Canadian retailers, consumer groups, and lawyers. However, until recently, the Competition Bureau was of the view that the volume test or, at best, a dual requirement of volume and time, was the proper interpretation of the act. We are pleased to see that the bill as it is presently before you brings clarity to the law by defining and making clear that you can satisfy the regular price claim if you meet either test, so retailers who follow a time test, as does the Hudson's Bay Company, are not offside the law if they don't meet a volume test.

However, the act does leave some terms undefined, and the bureau is drafting guidelines on that—terms such as: What does “substantial volume” mean? What does “substantial period of time” mean? What does “good faith” mean in the act?

What we can say is, we hope the bureau will develop guidelines that have flexibility to adapt to changing marketing practices and will consult with us in developing those guidelines.

The importance of those changes should not be underestimated. For most Canadian retailers, the volume test is unworkable and simply contrary to commercial reality. High/low pricing is common, and it is clear that consumers like and wait for sales. I've given you an example on page 4 of our submission as to how unworkable the volume test is.

Just to summarize, we give the example of a merchant who has 1,000 items of a good priced at $100, offers it for sale at $100 for—in the example—11 months, and only one item is sold. It doesn't matter whether it's one or a few hundred. Once they put it on sale and suddenly sell the rest, because consumers wait for sales, they're offside the volume test from that time forward. The sale price then becomes the regular price. That's why it's unworkable. You can't predict or anticipate, and the reality is that when you operate in a high/low environment, most of the product gets sold at the sale price, and we shouldn't be dictating to consumers somehow that they shouldn't wait for sales.

Nevertheless, as I've said, that was the position long advocated by the Competition Bureau. Indeed, it has been suggested that Eaton's ill-fated moved to EDLP, which it has now rejected, as one can see when one opens the paper and finds Eaton's flyers frequently again, was due to the bureau's position.

Until just last week, the Hudson's Bay Company had been engaged in a very lengthy and expensive litigation with the bureau that centred on these issues and was to be a test case on the meaning of regular price, as to whether a volume test or a time test applied.

That case is now settled without dealing with those issues, in large part because—and we stated this in court—the need for a test case to resolve the time/volume issue is no longer necessary in light of what we hope will be the early passage of Bill C-20. The longstanding dispute between the Hudson's Bay Company and other retailers and the bureau is ending, and we, for one, look forward to dealing with the bureau in a context of cooperation rather than as a defendant in a criminal court.

We're pleased to say that the bureau has clearly listened to the Canadian retail industry, consumer groups, lawyers, and advertisers, all of whom argued forcefully before the consultative panel for a time test that will make the law clear, comprehensible, and effective. I note that a time test is also consistent with the approaches to the issue in the United States, with whom we have free trade, and with the United Kingdom, Australia, and New Zealand, which are the other countries that lawyers look to for parallels.

The time test also gives consumers what they want: choices and sales. It allows maximum choice for them. I note at the top of page 6 that consumers are knowledgeable and sophisticated. They wait for sales. They are skeptical of prices. They shop around.

• 1705

So the law, as proposed, will ultimately further competition, rather than impose one theory or one approach to retailing on the industry and on consumers.

Finally, if I can talk briefly about enforcement and decriminalization, the Hudson's Bay Company also supports the decriminalization of the law relating to regular price claims, but in doing so we emphasize that the remaining criminal offence of misleading advertising, which it is proposed should remain, should clearly be reserved for only the most serious cases involving mens rea or criminal intent, and this must clearly be stated in the bill, as it does at second reading.

I note in passing that when this bill was introduced before the last Parliament, that was not clearly stated. We have no difficulty with the misleading advertising criminal offence remaining, as long as it is, in effect, parallel to a criminal fraud. Retailers should not fear, as they do today, criminal prosecution for infractions caused by accident or inadvertence, situations that are inevitable in large organizations.

The practice of charging individuals, which has occurred on a number of occasions in the recent past, usually senior executives, and subjecting them to treatment as criminals, including arrest, fingerprinting, and so on, in order to extract guilty pleas from corporations, which has happened—it didn't happen to the Bay, but it has happened to others—must stop. Bill C-20 should accomplish this and lead to a more effective enforcement mechanism that focuses on correction rather than punishment.

The criminal process is a blunt and often ineffective tool; prosecutions are costly, time-consuming, and often of little relevance when finally completed. The matter we resolved last week dated back to the 1980s. It has little relevance to today's marketplace. The decriminalization of the process and referring matters promptly to the tribunal will deal more effectively with complaints, by means of corrective orders.

The last point we make is our concern, however, with the fact that the tribunal may be given too many powers. The tribunal, as in the bill as presently drafted, has the ability to impose many remedies, cease and desist orders, interim cease and desist orders, monetary penalties, information notices, and consent orders. We say the only power the tribunal really requires in this area is the power to make cease and desist orders.

Monetary penalties are penalties. They're punishment. They're not corrective orders.

Interim cease and desist orders are a drastic remedy, and we say they must be carefully limited, as such orders can have huge implications for expensive advertising campaigns often planned months, if not years, in advance. Such interim orders may ultimately be found to have been unjustified or unnecessary, thereby causing enormous damage to the party that is the subject of them.

We agree that if the tribunal is given the power to issue interim cease and desist orders, such orders should only be granted where the government has met a very high standard, based on clear and convincing evidence that the practice is misleading, and that there will be irreparable serious harm to the public if the order is not made.

So subject to the reservations expressed, we urge quick passage of Bill C-20, and we thank you for the opportunity to speak to the committee.

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

We're now going to turn to Mr. John Scott, the president of the Canadian Federation of Independent Grocers.

Mr. John F. T. Scott (President, Canadian Federation of Independent Grocers): Madam Chair, this brief was faxed to the committee yesterday.

First of all, I'd like to thank you for the opportunity you afforded to us to present our perspective on Bill C-20, currently before the House of Commons.

The Competition Act is extremely important framework legislation for Canadian business, and we appreciate your interest in the views of the independent sector of the retail grocery industry on its amendment.

The Canadian Federation of Independent Grocers was founded in 1962 with the intent of furthering the unique interests of independent and franchised grocers in this country. From very humble beginnings in Ontario, the organization now represents almost 4,000 retailers and boasts membership in every province and territory.

We pride ourselves in being a constructive and effective voice for the interests of our membership. Our members include full independent retailers with names you may be familiar with, such as Farm Boy, Thrifty, Longo's and Highland Farms, or franchised retailers such as IGA or Foodland.

• 1710

At the outset, I wish to state that CFIG was extensively involved in the consultation process leading to Bill C-20. We worked very hard to convince the bureau and members of Parliament that certain proposed provisions be withdrawn, because they would have had a very damaging effect on the independent grocery retailers across the country.

We were very pleased that the government accepted our request. Both sections of the act in question were very important to our members. There are very few provisions in this act as it is that actually provide some modicum of protection to the competitive interests of the small business community.

As many of you know, the Canadian grocery industry is dominated by 10 major players that collectively represent 83% of the retail grocery volume in the country. Most of our members must buy their products from these companies. Each of the major companies operate corporate and franchise stores as well as sell to the independent. With this level of concentration, it is extremely important to ensure that each player in the industry has the opportunity to maintain his position, assuming his operation is effective, efficient, and competitive within the retail food structure.

The bill you are currently considering proposes amendments that receive the support of CFIG. We are particularly pleased with the provisions under misleading advertising. The decriminalization of some of these aspects will be of tremendous benefit to the small business sector.

The extended and limited resources of the Bureau of Competition Policy dictates that it can rarely investigate the concerns of smaller retailers with respect to concerns regarding inappropriate, inadvertent or misleading advertising by their competitors. The burden of proving the accusation that is placed on the independent far exceeds the resources these small companies are able to apply. Therefore, we applaud the provisions in the bill that will reduce the burden of proof on a number of aspects of misleading advertising while maintaining the standards of criminal activity on those that are most damaging.

We did have some misgivings with respect to the ordinary price issue. We have had several meetings with the bureau, and we've reviewed their contemplated operational guidelines. The bureau has assured us that the normal pricing policies practised by the retail grocery community will not be affected by these provisions. The food industry, like the retail department store industry, as previously discussed, uses a variety of pricing structures. Some are high/low, some are EDLP, and others use the deep discount feature.

Each player in the industry, whether chain or independent, uses one or a combination of these methods to attract or retain customers. Each is a long-established and effective practice within the Canadian food industry.

We are satisfied that it is not the intent of the bureau or members of Parliament to interfere with the normal operation of the retail food industry with respect to what have become normal pricing practices. We are satisfied that the definition of “ordinary price” is largely a housekeeping matter that clarifies “regular price” to the Canadian service sector in general.

Madam Chairman, the other provisions contemplated in this bill do not directly affect the independent retail grocers, and I will not waste your time by attempting to discuss their merits. It is, however, important to state that there are very significant concerns in our sector and others as many industries in Canada move to a much higher level of corporate concentration.

The spirit and intent of the Competition Act seeks to preserve competition in the interests of consumers. The interpretation by the bureau of the provisions of the act further narrow their particular interest or enthusiasm in pursuing many matters that are often, in our opinion, offences under the act. As a result, it is extremely difficult and very rare for independent grocery retailers or anyone else in our sector to have the bureau seriously investigate charges of abuse for apparent violations.

We recommend that as the Standing Committee on Industry, you undertake a review of the spirit and intent of the act and the activities of the bureau with respect to the protection of small business. It is repeatedly mentioned by the political element in our country that small business is the backbone of the economy. We agree that the health of the small business sector is extremely important to our way of life. We submit that without the active involvement of the bureau in a more rigorous application of some of the specific sections under the act, it would be very difficult for this entrepreneurial part of our economy to continue to thrive.

Once again, Madam Chairman, we appreciate the opportunity to appear before you. We are prepared to answer any questions of your committee.

As a final word, we urge you to move forward with this bill and to direct the bureau to examine alternatives to protect the small business sector in the very short run.

The Chair: Thank you very much, Mr. Scott, and I do wish to apologize. Your brief did not make it to the committee members today. We'll take care of that. It will be sent to their offices.

• 1715

I also apologize to the committee members.

Ms. Francine Lalonde: I have it.

The Chair: You do have it? Oh. I don't have it. If everyone else does, that's fine, then.

Mr. Lowther.

Mr. Eric Lowther: Thank you, Madam Chair.

Thank you for the excellent presentations.

I have a couple of quick questions. You don't need to go too long on the answers. It's more for clarification than anything else.

Mr. Schabas, it sounds to me, if I can paraphrase your presentation, that you're largely supportive of the changes. I didn't hear very many reservations. I was just curious, on a bit of a side note, whether in your organization you have anybody who does telemarketing.

Mr. Paul Schabas: Telemarketing?

Mr. Eric Lowther: Yes.

Mr. James Ingram: We do, but a very limited amount.

Mr. Eric Lowther: Is it mostly inbound, or do you do any outbound telemarketing?

Ms. Hélène Yaremko-Jarvis (Director, Legal Services, Hudson's Bay Company): We have an insurance subsidiary that sells insurance products, and I believe telemarketing is used there.

Mr. Eric Lowther: Did you review any of the amendments for the telemarketing-related clauses, the wire-tapping provision, any of that? Have you any concerns there, or any comments?

Ms. Hélène Yaremko-Jarvis: We have used outside counsel, and we've supported the briefs of the Canadian Bar Association. They have addressed some issues, and we support the comments made there.

I guess one of our specific issues—I know you were listening to others on this—was that we would like it to specify that it applies to live voice situations.

Mr. Eric Lowther: Good. Thank you.

The one recommendation you did make related to, “The only power the Tribunal requires is the power to make cease and desist orders”. That was your one recommendation.

Having had a little bit of experience in the retail sector in the past, what would you suggest should be done with repeat offenders? Because what often happens is that these fellows treat this almost as their cost of doing business—you know, they get the warning, and once they get the green light back on again, they're good for a month or two, and then away they go again.

In your mind, should there be escalation here if we have repeat offenders?

Mr. Paul Schabas: There are two ways to deal with that. If it's a repeat offender and the bureau's watching it, they'll move that much more quickly to stop it. Secondly, if there are repeat offenders and, as you're suggesting, some degree of deliberation, then they're simply acting quite deliberately, and that would be a situation where the bureau could consider proceeding under the criminal provisions.

Mr. Eric Lowther: Okay.

I think that's all for now, Madam Chair.

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

Mr. Murray, please.

Mr. Ian Murray (Lanark—Carleton, Lib.): Thanks.

I'd like to address my questions to you, Mr. Schabas. I'm trying to understand whether the relationship between the bureau has evolved over the years vis-à-vis department stores in that there is almost now a recognition that perhaps with what we might want to call “globalization”, the role of retailing has changed somewhat.

What I had in mind, in listening to Mr. Scott, is that when it comes to grocery stores, you have such things as the vagaries of weather, which dictates the prices of products on the shelves, whereas when you go to the department store, you normally have more set prices from your suppliers, and you know what you're looking at a year ahead, probably.

But the world has changed. You now have, for example, Wal-Mart. You see the ads on TV with the falling prices every day or whatever.

Mr. Paul Schabas: They go back up too, sir.

Mr. Ian Murray: Do they?

You mentioned that consumers are more sophisticated and knowledgeable now, and I think you're right. Essentially, very few Canadians shop at the Bay unless there's a sale on. You're pretty sure that every Saturday there's going to be another one-day sale, or the biggest-sale-of-the-year event, or Bay Day, or whatever. I don't think people normally shop for most things unless there's a sale on.

The other question I'd like to ask you is, do you think department stores as well have been targeted more by the bureau over the years than have the smaller retailers? Are we now in an era of deregulation, where the government's willing to sit back a bit more and accept that some of the business practices that contribute to successful retailing are perhaps not detrimental or against the best interest of the consumer?

• 1720

Mr. Paul Schabas: I wouldn't say we're into an era of deregulation, but we're certainly into an era of a better understanding, we hope, with the bureau. Certainly speaking for the large department stores, the bureau had a stated, quite public policy of going after large companies rather than small companies to get the biggest bang for its buck in the fines, and hopefully have the biggest deterrent effect.

Our view of this is the bureau has come around in recognizing the volume test doesn't work and it's in the public interest to encourage different kinds of marketing. You're absolutely right. Wal-Mart says it has EDLP and falling prices, but prices can't keep falling. The public knows how high/low department stores work and they wait for sales, whether it's a Saturday sale or a white sale in January. They know, as well, when they go to the Bay they'll see those things and they may not see them at some deep discount store of some other kind, where they have nothing but everyday low prices. The consumer is aware of that and the bureau knows that.

Mr. Ian Murray: What effect will this have once this bill is passed? Will the consumer see an actual change in the way stores operate? Will this change the way the Bay, for example, markets its products? Do you see some opportunities there that may actually better serve consumers?

Mr. Paul Schabas: I can't say, as its outside counsel, whether it will change. I can say the way it markets is in compliance with the new legislation. The Bay hopes, in clarifying the law, this will clarify it for all retailers so once again all retailers can be on some kind of level playing field.

Once the bureau issues guidelines as to what the appropriate period of time is to establish a regular price, we believe we are the best at that in Canada. We feel that with the uncertainty in the law right now, to some extent other retailers, who don't make sure they offer it for sale for a long enough period of time that it's a reasonable period to establish a regular price, may be competing unfairly with us.

Mr. Ian Murray: Mr. Scott, you're expressing concern about corporate concentration in the food business, and I just want to make sure I understand what you're saying. You tell me the independents need the protection of the bureau against these very large companies.

Mr. John Scott: I think the bureau needs to take a greater interest in our industry with respect to the interests of the consumer when perhaps the larger players may engage in practices that may be questionable against the smaller players.

Mr. Ian Murray: So you're talking about predatory pricing rather than—

Mr. John Scott: There are provisions under the act in predatory pricing. There are also provisions under the act for abuse of dominant position, both of which have been brought to the attention of the bureau on a number of occasions.

Mr. Ian Murray: Thanks.

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

[Translation]

Ms. Lalonde, do you have a question?

Ms. Francine Lalonde: I have a question for the Hudson's Bay Company representative and another one for Mr. Scott.

First of all, I have a comment for you, Mr. Schabas. Is the Hudson's Bay Company present in Quebec?

Mr. Paul Schabas: Yes.

Ms. Francine Lalonde: But we have your brief only in English.

Ms. Hélène Yaremko-Jarvis: There are two of our chains in Quebec, The Bay and Zellers.

Ms. Francine Lalonde: That's what I thought. But your brief is in English only.

Ms. Hélène Yaremko-Jarvis: You'll have to blame our outside counsel.

Ms. Francine Lalonde: I hope this counsel is feeling blamed and that the company will be telling him that this isn't a way of representing it adequately. These comments are not aimed at an individual, but when one represents a huge corporation, it seems to me those regulations should be respected.

In your brief, you say something I'm happy to see there because I'm sure that many think the same thing. On the other hand, I'll tell you why it is of concern to me, nonetheless. You state:

• 1725

[English]

The practice of charging individuals—usually senior executives—and subjecting them to treatment as criminals in order to extract guilty pleas from corporations must stop.

[Translation]

Jurisprudence tells us of cases where, as you know, people were actually sent to jail. The judges wondered whether it was logical for these people, recognized by their communities as being good and respectable, to wind up in jail. Judge LaForest, in Ontario, and a Quebec judge, judge Bellavance, handed down the same kind of judgment.

Judge Bellavance said that severe penalties other than fines were necessary because fines are often paid off by the corporate entity alone. This can decrease the respect necessary for this legislation to work properly as its efficacity depends very greatly on the number of businesses who actually conform to its provisions.

Judge LaForest, in his case, said and I quote:

So that's the fundamental reason justifying the jailing of those responsible for exploiting...

As far as I'm concerned, I could add that in this world we live in, at a time when the gulf between the rich and the poor is huge, you can still be put into jail for stealing bread to put in your children's mouth.

So decriminalization rests in part on an argument which, and you say so frankly, reads that it's not proper to consider as criminals people who are so well considered by the community and who are responsible for the businesses making so much money. It's not ill will on their part, but they do it anyway.

As a parliamentarian, that's a bit of a problem to me. What do you think?

[English]

Mr. Paul Schabas: I suppose I could say the current law creates a crime for which people can go to jail without criminal intent. The way it has been enforced, and indeed the experience of our company in the case that was recently ended, is that for a period of time, even where the government doesn't have to prove any criminal intent or knowledge on the part of individuals, it can still charge them and they can still conceivably go to jail.

We're not opposed to the retention of a true criminal offence of misleading advertising for which someone can go to jail. Our concern is with the practice in the current situation where it's a regulatory offence that doesn't involve any knowledge on the part of an individual but could be done through some lack of controls, for example, in a company, and someone can be charged and face those criminal sanctions.

Our particular concern has been that that has been used to some extent to force companies to plead guilty. No company likes to have its executive or chief executive charged criminally and dragged into court, usually where federal prosecutions take place, which is where all the drug dealers are, facing that and going home every night worrying they may end up sent to jail for a lack of control in their company but something they didn't know anything about. That's really the concern we're getting at here.

[Translation]

Ms. Francine Lalonde: We could debate this at length, but I thank you for your candour.

I also have a question for Mr. Scott and I would first like to thank him for his presentation. Basically, it's the first time this opinion has been presented to us and I find it quite interesting.

You said that the medium-sized businesses who had competition problems with the bigger ones, I imagine, didn't have the financial means to have the old legislation enforced. That's what you're saying. Thus, you hope that from now on the bureau will have more means available to deal with the situations you have to deal with.

So here is my question: don't you think this will depend on the means and resources made available to the bureau?

• 1730

[English]

Mr. John Scott: Oh, yes, the resources of the bureau are a constant struggle for us; there's no question about that. Some of our acid comments are often directed towards that now.

However, let's take the issue of misleading advertising or perhaps inadvertent marketing techniques by a major competitor. We are well aware that some of our competitors are using those on a regular basis in certain markets.

From discussions with the bureau and discussions with our own lawyers on competition policy, we understand very clearly that the burden of proof is very much on our people. Our companies don't necessarily have the resources to retain third-party legal people or even investigators to prove the allegation. Moving to a civil regime probably implies, as we understand it, perhaps a lessening of the rigour of the burden of proof—in other words, perhaps a more open discussion in some of these milder cases, which are frankly a very aggravating part of our business right now.

[Translation]

Ms. Francine Lalonde: One last question.

[English]

The Chair: Last question, please, Madame Lalonde.

[Translation]

Ms. Francine Lalonde: They are brief, Madam. You state:

[English]

We submit that without the active involvement of the Bureau in a more rigorous application of some of the specific sections under the Act it will be very difficult for this entrepreneurial part of our economy to continue to thrive.

[Translation]

Could you clarify, please?

[English]

Mr. John Scott: Once again, the bureau puts together certain guidelines under which it will act on any particular matter. One of the ones we continually run up against, and one of the reasons perhaps our small business sector has difficulty in getting the support of the bureau for applications under what appear to be obvious problem areas, is the definitions of things such as “abuse of dominant position” and “market area”.

The definition of “market area” by the bureau may be so broad as to preclude the application of certain specific provisions under the act when they relate to small business. If you take the same provisions of the act and relate them to larger market areas that meet the guidelines of the bureau, you end up in market areas where you have the Bay and Wal-Mart, not a large grocery retailer against a small grocery retailer. Do you understand what I mean?

Those are the kinds of issues we have a problem with, and we suggest that in the long run, this may be well in the interests of your committee to have a look at and say, “All right, perhaps we should apply this or direct the bureau to look at this in a different way”.

The Chair: Thank you.

[Translation]

Ms. Francine Lalonde: In brief, that's a hope you entertain but you're not sure.

The Chair: Thank you, Ms. Lalonde.

[English]

Madam Jennings, please.

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you. My question is addressed to Hudson's Bay, Mr. Schabas.

On page 7 of your brief, when you talk about the tribunal and the powers the tribunal will have under the bill, you say the only power it requires is the power to make cease and desist orders and that monetary penalties are directed at punishment and are unnecessary. Would you expand on that? On first reading, I don't agree with you, so I'd like to know what your logic is behind that.

Mr. Paul Schabas: Our logic is that the whole notion of decriminalization is to correct practices, and if you're to correct practices, you need orders to tell people to correct them. We don't need to start imposing a different parallel system of fines that we've seen in the criminal system. It's not the fines that are going to deter; it's the fact that the bureau is out there, is active, can get cease and desist orders, and can force companies to come to the tribunal to try to defend their practices.

Ms. Marlene Jennings: But in many sections of administrative law, tribunals that do have executory powers do precisely—and that's within the civil regime—have the power to impose penalties, because in some cases that are treated as civil, our legislature has deemed that the offence, while not of a criminal nature, is so egregious that it requires a monetary penalty to make an example within that particular system.

• 1735

You don't recognize that there may in fact be such cases?

Mr. Paul Schabas: I don't disagree with you on a level of talking about the jurisdiction of tribunals to do this. But our position is that, no, you don't need this to solve these problems. If you've got an egregious offence, a deliberate offence, then take it under the other process.

Ms. Marlene Jennings: But you may not meet the standard of proof under the other process, which is beyond a reasonable doubt and the mens rea, but you may meet very easily the standard of proof under civil proceedings.

Mr. Paul Schabas: Our concern, I suppose, is that if you meet it too easily, then it just becomes a different form of penalty rather than looking at correction.

Ms. Marlene Jennings: That's even though you're very pleased that senior executives will no longer be treated as criminals—

Mr. Paul Schabas: They won't be treated as criminals if in—

Ms. Marlene Jennings: —and be tried in the same courts as drug pushers.

Mr. Paul Schabas: Yes, we are. That's different, though. In the current regime, you're dealing with them being guilty until proven innocent, yet they can go to jail for it and the onus is on them.

We don't think that's necessary. The reality in just about all cases where the individuals were charged was that it caused the companies to promptly plead guilty and pay a fine. Maybe it was not so promptly: sometimes it took years of litigation because they didn't want to have their executives face that possibility.

The fact is that a lot of retailers, to the extent that someone finds that there is some misleading practice going on.... It's not deliberate, it's something that has happened inadvertently. It happens because, especially in the larger companies like the Hudson's Bay Company, which advertises all the time, sometimes something goes wrong.

We welcome a new regime where the bureau can phone us up and say that they have a problem with this. We'll look at it and take steps to correct it. If we disagree with it, we'll go to the tribunal and get a ruling from them. That will set a precedent for future conduct.

Ms. Marlene Jennings: Thank you.

I have one question for Mr. Scott. I'd like you to expand on the issue that some of the other members asked you about. This is the issue of the Bureau of Competition Policy not putting resources or having resources to deal with abuses that directly affect small or medium-sized grocers within that particular industry, and that you'd like this committee to possibly review that and make recommendations as necessary that might incur further legislative changes.

Mr. John Scott: Well, whether or not it invites further legislative changes is a totally different issue.

Ms. Marlene Jennings: Okay.

Mr. John Scott: You have the framework under the act whereby the bureau can respond to most of the interests of the small business community. That's sitting there now, and these amendments will be very helpful in that regard.

Unfortunately, the majority of small business complaints under sections on such things as abuse or predatory pricing don't become the priority of the bureau. What I'm suggesting is that perhaps the committee might want to look at that over a period of time and say that maybe some of the resources the bureau has should be allocated in those areas and that perhaps there should be a little bit more balance there.

We understand as well as you do that high-profile cases in the large companies create a lot of black ink. They're very good for the bureau and they're very good for saying the Competition Act works. But in terms of long-term protection of the small business element, we suspect that a portion of the resources should be directed our way.

To that end, Madam Chair, I'd suggest that the next time there's a consultative panel that is put together by the bureau to look at amendments to the act, they should include somebody from the small business sector on it. It was very difficult to deal with that panel the last time around, which resulted in us, as some of you are aware, coming directly to members of Parliament over the issue.

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

Mr. Lowther.

Mr. Eric Lowther: Yes, I had a couple of questions.

First of all, I didn't quite understand the whole Normark Group of Companies. Who are they? Can you give us a little bit of an idea of who you are and what you do?

Mr. John Kohos: Normark is an advertising specialty company. We produce printed products that are used in advertising that's more direct. This means such things as pens, key tags, ball caps, clocks, and all the things that people use in businesses and so forth.

Mr. Eric Lowther: Are you involved in telemarketing?

Mr. John Kohos: Yes.

• 1740

Mr. Eric Lowther: Are you more than one company? Are you in a consortium of companies?

Mr. John Kohos: No. Well, there are several companies, but it's the same company. We're not a group of a lot of owners. It's all just each operation having their own specialty.

Mr. Eric Lowther: Great, but you are involved in telemarketing now?

Mr. John Kohos: Yes.

Mr. Eric Lowther: You made reference to the fact that the telemarketing definition is in fact too broad. In your brief, you had a suggested definition of what telemarketing was. It's interesting that the Hudson's Bay Company also sort of echoed the thrust of your definition here of having a live voice only, which is not represented in the amendments.

Mr. John Kohos: I would go further to say that it should be a voice and outbound.

Mr. Eric Lowther: Yes, that's good.

If this definition were included in the amendments, would you be supportive of the amendments?

Mr. John Kohos: All other things being equal?

Mr. Eric Lowther: Yes.

Mr. John Kohos: If that definition were in the amendments, I would support the definition.

Mr. Eric Lowther: Would you support the amendments?

Mr. John Kohos: The other amendments? No, I've got a lot of concerns there. In fact, this fellow from the Bay was just talking about being guilty until proven innocent. This is something I've been choking on for about three days. I've been reading this thing up and down.

I'm not an attorney myself, but there are some things in the act that I don't understand. I'm kind of scandalized by them.

Look at this notion that my company could be charged or considered guilty of something and that the only proof required is that an employee of my company did something. That's whether or not the employee is identified. So the company has now been implicated. Then it goes on to say that I can be tried, convicted, and sentenced for something whether I knew about it or not, in effect, on behalf of my company if it's never charged. So we've created a kind of guilt by association, where we're guilty until we're proven innocent and there is no criminal intent.

The fact is that there are a lot of things in here that I can't accept.

Mr. Eric Lowther: Okay. I'm concerned that we're going to get cut off, but I want to get a couple of more clarification points in here.

Are the thrust of your comments primarily telemarketing oriented or are they across the board? Are you coming at this from a telemarketing perspective?

Mr. John Kohos: No.

Mr. Eric Lowther: No, it's across the board.

Mr. John Kohos: Yes. The fact is that it was brought to my attention because of some concern in the telemarketing side of it. The question was whether I had seen this. I looked at it. I also have a computer company, and it's not involved in telemarketing. So my concern in coming here today was not for the protection of telemarketing. I'm more concerned about the fact that this includes my computer company and everything else I do. This goes far beyond that.

Mr. Eric Lowther: There's a thrust behind this legislation to protect people to some degree, certainly the telemarketing side of it, from misrepresentation and abusive practices that might mislead elderly folks. That's the story we often hear. It's not to put them down, but it could be anybody.

Mr. John Kohos: No.

Mr. Eric Lowther: Clearly you're not happy with this. Do you have a counter position? Do you have something that helps this group of people and this legislation to be on target that doesn't impact your business?

Mr. Warren Stelman: What I fear most in reading this legislation is that there doesn't seem to be any form of differentiating between companies engaged in telemarketing. Some are operating diligently and in an honest fashion.

It may be in some respects an aggressive form of marketing. Our company, for one, tries to adopt a policy of—we've been accused of the discriminatory practice of trying not to do this—weeding out the age groups of people, because we realize it's a sensitive issue at times. But we find ourself cast in a boiling pot without any differentiation. In our package, I've included copies or examples from the OPP regarding contacting customers and actually soliciting business.

Mr. John Kohos: Are you folks familiar with the term “recovery room”? Do you know what a recovery room is? A recovery room, in its own way, is the most despicable kind of telemarketing there is. Companies go out and sell you or rip you off over and over and over again. At the end of the day, somebody makes one last call to you and says that for an extra $500 they'll get back the money that was taken from them already. That's the last thing: the recovery room.

I did include something. I bit down real hard before I put it in the package, but if you look in the package I passed around, there's a recovery room operation. It's being run by a law firm in Toronto, and their shill is the Ontario Provincial Police. They're selling the product for a fee. You'll see phrases in there such as, “The cost of representing you depends on how big your loss is. Send back this pamphlet with 10% of whatever you've lost to date.”

• 1745

If you look on the back page you'll see a picture of four guys. Two of them are Ontario Provincial Police with Phonebusters, two of them are lawyers. They're all standing next to a very tiny statue of a suit of armour called Sir Galahad, your gallant champion, and so forth.

We're now getting into what you call an abuse of power. When you put provisions in that are too general and too loose, and you write them today with all the good intentions you have and the sense that sits around this table, you're going to have to realize that at some point these laws are going to fall into the hands of other people. And if what we're going for is expediency because it's considered a hot issue, and if we rush to judgment and we write this stuff up sloppy...you know, we'd be more than glad to work with any of you to help re-define all this and tell you how it's all really done. But you have to ask yourself the question, if everyone is moving for expediency, if we don't have the time to do it right, when will we have the time to do it over?

This is not going to do it for you. This is going to create pandemonium among not the people you're after but all sorts of honest people as well as some others. You're going to have people getting on their horse with Sir Galahad and riding down trying to promote their own little game and that sort of thing. And that concerns us a lot.

Somebody may want to cut me off, but—

The Chair: Mr. Kohos, in fact that's exactly what I'm going to do right now, because we have to move on.

I want to thank Mr. Lowther for those questions. There may be further questions.

Mr. John Kohos: Sure.

The Chair: We are running behind. We started with you behind and we're now probably almost an hour—

Mr. John Kohos: By the way, our numbers are on this. If anybody does want to pursue this further and wants to get some real ground-floor information on what it is you're really after so you can target it properly, call us.

The Chair: Mr. Kohos, all the committee members can contact all the witnesses. They're aware of that.

I have three people still on my list. I'm going to ask them to all be very brief, because we do have to move on.

Mr. Shepherd.

Mr. Alex Shepherd: Yes, I can be very brief because most of these issues have been touched on.

Mr. Scott, we've been told basically that this conspiracy provision is an important aspect of the bureau. You seem to be alluding—maybe I'm incorrect—that it hasn't been used very effectively, certainly in the case that you represent. And I almost would take that one step further. From your own members' point of view, you thought the bureau in the past has been a bit of a paper tiger. It hasn't really addressed—

Mr. John Scott: That's correct.

Mr. Alex Shepherd: And so when the bureau comes forward and says we have to strengthen the provisions in the conspiracy section of the act, you come forward and say they're not enforcing the section in the first place.

Mr. John Scott: I haven't referred specifically to conspiracy, Mr. Shepherd.

Mr. Alex Shepherd: I see.

Mr. John Scott: I was talking about the issues related to abuse of dominant position primarily, which are extremely obtuse.

Mr. Alex Shepherd: Do you have any opinions on the conspiracy sections?

Mr. John Scott: Not today, sir.

The Chair: Thank you, Mr. Shepherd.

Madame Lalonde, you had a final question.

[Translation]

Ms. Francine Lalonde: Mr. Schabas, basically, you're happy with decriminalization but you're worried about the fact that the cease and desist orders are being obtained through a means of evidence other than evidence obtained in a criminal context where you have a trial. In the latter case, there must be proof beyond any doubt because proposed clause 74.11 reads:

74.11(1) Where, on application by the commissioner, a court finds a strong prima facie case...

At that point, the court may order to engage or not to engage or even impose fines. So, on the one hand, there's decriminalization with the problems posed by the Criminal Code but, on the other, this new kind of civil intervention means the people being prosecuted have less of a chance or that their behaviour may be examined. They have less of a chance of giving proof.

• 1750

[English]

Mr. Paul Schabas: I think you may have misunderstood our position. We have no difficulty with a criminal provision remaining where it involves criminal intent.

[Translation]

Ms. Francine Lalonde: I understood that.

[English]

Mr. Paul Schabas: We accept that there is a civil standard and a civil parallel before the Competition Tribunal, and that this will in fact be more effective for the bureau in enforcing and obtaining cease and desist orders because the standard is lower than it would be to establish a criminal offence with the proof beyond a reasonable doubt standard. We don't have difficulty with that, and frankly, we don't really have difficulty with the standard in proposed section 74.11 that sets out a civil standard.

The concern we expressed in our submission was simply, with respect to interim cease and desist orders, that we keep the requirement that is in the bill now, that the bureau establish that serious harm is likely to ensue. If these orders are too easy to obtain, if they just stand up and say, “We say it's misleading, therefore give us an order”, this could cause serious problems for retailers when the bureau is wrong.

The Chair: Thank you.

Thank you, Madame Lalonde.

I want to thank the witnesses. Mr. Kohos and Mr. Stelman, I want to thank you for joining us today. I do want you to be aware that the consultative panel was formed in 1995 and legislation was actually introduced in the last Parliament, so I apologize that for some reason you were not aware of this legislation before now. There should have been a publication of that, and unfortunately not everyone always gets that information.

Mr. Scott, I want to thank you for your comments, and we will take them under advisement. I come from southwestern Ontario and I'm very concerned about some of the recent things that have happened. It's very interesting when you look at what happens to competition in smaller businesses once they disappear.

Mr. Schabas, from Hudson's Bay Company, Mr. Ingram, and the counsel who's with you, we appreciate your comments. And I want to tell you, I'm a different shopper from Mr. Murray, and I want to know exactly what a reasonable time is and I'm going to watch. I just buy, and so I don't want to buy one day and find it's on sale the next.

That being said, I want to thank you, and we're now going to trade witnesses. We'll exchange places.

If the witnesses could please take the seats along the front all at the same time, we're going to do it in the same format as before, where we hear from all the witnesses and then go to questions.

• 1755

We are pleased to have four witnesses before us. We have from the Conseil des normes sur la publicité, Madame Niquette Delage. We have Ms. Louise Rozon from Option Consommateurs, and Jacques St-Amant, the lawyer. We have from the Congress of Union Retirees of Canada, Ms. Mary Eady, the Ottawa national representative, and Mr. Larry Wagg, the first vice-president. We have appearing with us today as an individual, Ms. Olga Orozco.

I will begin as I have them listed, if that is okay. I have Ms. Niquette Delage from the Conseil des normes sur la publicité. I would ask that everyone keep their opening statements to no more than five minutes, please.

[Translation]

Ms. Niquette Delage (Honorary President, "Comité provincial de prévention de la criminalité économique, Conseil des normes sur la publicité"): Ladies and gentlemen, let's get one thing straight. Fraud perpetrated against the population under the guise of philanthropy, hurts. It is perpetrated by individuals who know that there's money to be made and that a popular cause will generate appreciable amounts of income. Why not make hay while the sun shines?

Charitable organizations cannot afford the luxury of losing the monies taken that way. That's why, for a while now, they've been airing their concerns although that's not all they're doing. They've been questioning themselves and have decided to self- regulate, to come up with a code of ethics with specific rules of conduct to regain the trust of a public which is far more readily decoding the language of philanthropy.

Although it is ready to give, the public does want to make sure that the solicitation is legitimate, that the funds gathered will be properly managed and that 80% or more, if possible, of the funds thus gathered will go to the cause. Those who have been tentatively observing how successful non-profit organizations proceed draw lessons that will serve their own interest which is to attract the money from those still too-numerous people who are ready to give without being aware of the fact that they are victims of false representations made over the telephone.

Telemarketing is a legitimate means of communication, it's popular and profitable, if you don't mind my saying so. It has been denounced, and deservedly so, on occasion. However, to avoid tarnishing its reputation, the Quebec philanthropic community did two significant things, the first one being mentioned precedently, which was the writing and adoption of a code of ethics. The second one was to write up a typical contract for exchanges between charitable organizations and telemarketers.

The subcommittee on philanthropy of the provincial Committee on the Prevention of Economic Crimes, which I chair, has shown idealism and determination while knowing full well that this contract would have many telemarketers climbing the walls because, according to its provisions, it was to impose to restrictions that some, in the early 90s, judged intolerable, unrealistic and goodness knows what else.

But we had to speak up and protect from themselves those organizations that were delivering themselves into the hands of the first agency or independent contractor that came along under the pretext that a bit of money is better than none at all. Philanthropy, as an industry, needs government's help. Having asked for it at many levels without success to date, we're turning to you.

We've been encouraged in this by the recent declarations made by Minister John Manley who, on 31 March last, recognized that a good number of our legitimate charitable organizations would find it very difficult, if not impossible, to gather funds without the use of telemarketing. He added:

When giving to charitable organizations, Canadians generally don't expect to get anything in return. However, they do have the right of seeing their gifts used for the good cause and not wind up in the pockets of con artists.

• 1800

Even though it's not up to us to suggest the contents of an amendment to the bill, we would like to draw your attention to the wording of paragraph 52.1(1) which does not address our concerns at all. Any amendment which would allow incorporating philanthropic activities in the provisions dealing with telemarketing will be supported by us. We would like to be informed of it to be able to examine it and see if we're ready to support it because it would then serve the interests of the public and the philanthropic industry which, need we be reminded of this, is something on the order of 100 million dollars. It isn't peanuts.

I prepared a text to explain the workings of our organization, the Comité provincial de prévention de la criminalité économique.

[English]

The Chair: Madame Delage, I have to move on. That was five minutes, and I'm going to have to stick to the five minutes or we're not going to be able to go further. I apologize.

Madame Rozon or Mr. St-Amant from Option Consommateurs.

[Translation]

Ms. Louise Rozon (General Director, Option Consommateurs): Thank you. First, we'd like to thank you for having invited us here tonight to share with you our observations concerning the changes to the Competition Act.

The matters you are considering are extremely important for consumers who unfortunately are confronted too often with unfair trade practices.

Our association, whose headquarters are in Montreal, is concerned with many questions, the banking sector being one of them. We regularly find that the rules established by the Competition Act are not followed. Amongst other things, in 1996 we initiated a class action suit against Quebec pharmacists who recognized their guilt when accused of price fixing, a suit that has been settled out of court since.

So we received with interest the proposed amendments to the Competition Act.

[English]

The Chair: Can I just ask you to speak a little slower for the translation.

Ms. Louise Rozon: Okay.

The Chair: I'm going to tell you, you're not going to be able to read this all in five minutes, so don't try. If you could just summarize your comments, please.

Thank you.

[Translation]

Ms. Louise Rozon: First, we'll tell you about the positive innovations and the concerns.

Concerning the positive innovations, there is the matter of telemarketing. We're happy to see that Parliament wants to counter abusive telemarketing practices. As those practices often stem from interprovincial or international trade, we think that that kind of problem is probably best settled at the federal level.

On the other hand, consideration should be given to giving courts the power to order Canadian telecommunications enterprises to provide no further services to abusive telemarketers. We think that kind of order should be provided for in the Competition Act. It's a mechanism that exists in the United Kingdom where it is regularly used.

We also suggest that the Criminal Code be amended to allow wiretapping in the context of investigations concerning certain kinds of offences. Wiretapping, in itself, in our opinion, is a major infringement of fundamental rights. It should thus be used with prudence.

Behaviour bearing examination: this is also an interesting innovation, in our opinion, being able to provide the Competition Commissioner with the means of changing certain behaviour. That's a mechanism that can be very useful in many cases, but it would be even more so if the bill were amended somewhat.

Among other things, courts should be given the possibility of handing down more diverse orders. For example, they could order a business to repair the prejudice caused by changing the trade practice at issue, by temporarily prohibiting certain kinds of publicity or by obliging a business to reduce prices temporarily.

As for the concerns we observed, they have to do with the penal sanctions provided for in the Competition Act. First of all, there's a considerable increase in the burden of proof required to obtain a judgement and in some cases it might be better to decriminalize certain behaviour.

• 1805

As for the burden of proof, clause 52 is amended so that proof is required that a business has given misleading or false indications "knowingly or without concern for the consequences". That's a very high requirement, in our opinion, which does not exist under the present Act.

We also have another concern. Clause 54 of the present Act dealing with double ticketing has been forgotten. In our opinion, that's not good news for the consumer.

In our magazine, Consommation, you can read the results of an investigation we did last December on the accuracy of optical readers. We bought 375 products and found, in some cases, up to a 26% margin of error. Every time we found an error, we mentioned it to the business concerned and went back a few days later. In many cases, even after the business was informed of the mistake, it was still there. So we think there's a major problem there and that clause 52 should be maintained so that kind of offence remains a clear offence under the Competition Act.

In conclusion, in our brief, we pointed out other more technical problems. Amongst others, we'd like to emphasize that we think it is clear that the evolution of electronic trade and commercial practices will, in future, lead to other amendments to the Competition Act.

Thank you for your attention.

The Chair: Thank you, Ms. Rozon.

[English]

I'm now going to turn to the Congress of Union Retirees of Canada. We have Ms. Mary Eady and Mr. Larry Wagg.

Mr. Larry Wagg (First Vice-President, Congress of Union Retirees of Canada): Thank you very much, Madam Chair.

Just before I go into our introduction, I'm sure members of the committee have the National Pensioners and Senior Citizens Federation brief. By way of explanation, both their organization and our organization are made up of volunteers, so we're the pitch-hitters here in Ottawa today.

I might also mention we're the largest affiliate of the National Pensioners and Senior Citizens Federation, which is the oldest senior citizens organization in Canada.

The Congress of Union Retirees was founded in 1993. Its purpose is to knit together various organizations that have been formed among retired union members across Canada, whose unions were generally affiliated with the Canadian Labour Congress. We, of course, monitor the standard union things as they affect retirees, but more to the point in this hearing, we petition legislation for the introduction and enactment of legislation on measures to improve the health and welfare of all retired persons in Canada.

Since its founding, CURC has grown in membership. We now have some 500,000 affiliated members across Canada, and we're hoping to be one million within the next two years. Our largest affiliate is the Federal Superannuates National Association, which is the public servants organization here, closely followed by retired members of the autoworkers and the steelworkers. Now I'll turn it over to my colleague.

Ms. Mary Eady (Ottawa National Representative, Congress of Union Retirees of Canada): Thank you.

We're very pleased to have this opportunity today to present our views on Bill C-20, and in particular the sections dealing with telemarketing fraud. There are those who believe business is best left to itself and the market will correct itself. Unfortunately, this does not usually happen when it comes to those whose purpose is to dupe and deceive the consumer. In telemarketing, the growing evidence of fraudulent and false information cries out for government regulation to curb this billion-dollar section of an otherwise useful service.

We wish to make three main points in the limited time we have.

First, one of the main provisions in the proposed bill covers the issue of judicially authorized interception, without consent, of private communications in suspected deceptive telemarketing, price-fixing and bid-rigging cases.

We support this provision in the belief that it is necessary in this electronic age to give consumers, particularly the seniors we represent, the protection they expect from their government.

• 1810

Two, we strongly support the bill in putting the onus on telemarketing firms to obey the law and be responsible for their employees' actions, and to disclose important information to the consumer. The actual draft bill lists the various aspects of things that will have to be identified by the telemarketer to the person they are calling.

Three, we would like to stress the need for public education in order to protect vulnerable consumers, and we would also like more disclosure on companies that break the law. The National Pensioners and Senior Citizens Federation, in its submission to this committee, had many good suggestions that we support, including one that would require information to be available in various languages spoken in our communities, and also that the telephone book, for example, carry information on consumers' rights in this regard.

Finally, we would like assurances that adequate funding will be given to the agency charged with enforcing this act and its accompanying regulations. Without this funding, the provisions will really be without meaning.

I want to make just one other point and ask the committee if it has considered the growing number of items being offered through the Internet and the World Wide Web in its deliberations. There is an article today in the Ottawa Citizen that deals more with the fraudulent use of information gathered through deceptive methods on the Internet. I'm wondering if this whole issue has been explored, because as I read it, the purpose of this bill is to try to update this kind of legislation. In my view, unless it covers things like the Internet it won't go into 2000 at all.

The final question; under proposed subsection 52(2)(b), will the regulations provided for be available for public comment before being implemented? If so, we would appreciate being notified so we might comment on them.

Thank you.

The Chair: Thank you very much, Ms. Eady and Mr. Wagg.

I'm going to turn to our last witness now, Ms. Olga Orozco.

Ms. Olga Orozco (Individual Presentation): Thank you, Madam Chair, and thank you, members, for giving me the opportunity to come here and present something different.

As a new citizen of this country, I was taken by somebody from a telemarketing corporation. I feel obligated, although it is difficult for me because of my accent and because I'm not used to speaking in public, to come and tell you what happened to me.

Although I have an accent, I consider myself a very intelligent person and I take pride in that. My family has been provided for through my efforts since I came to this country. My husband is disabled, and I started a small business. They call it small business, but I call it a tiny business because it is just provides for my family.

I don't know how the law is written and I don't have any information about how the Bill C-20 will be written. I just came here to tell you what happened to me as an example of what could happen to somebody else.

I received some documents from a company. First of all, I received some phone calls congratulating me because my business had been running for more than three years and less than five years without a complaint from any customers.

• 1815

If you bear with me, Madam Chair, I might be a little emotional about it, because it's a personal thing, and I might take more than five minutes. I'm going to try to be as brief as possible.

I've handed out the information—

The Chair: Mrs. Orozco, I don't want to appear unsympathetic, but I do want to tell you I have to stick to the time limit I've allotted to everyone. Everyone does have your package in front of them, so if you could be as brief as possible, they can read the letter. It is very detailed.

Ms. Olga Orozco: Okay.

I was led to believe by a telemarketing person that I was guaranteed to win a prize and I had to become a customer of the company in order to be legally able to claim the prize.

I complained about the prizes I received. I did receive two prizes, and the two prizes were not useful even as toys. I complained, but the president of the company called me back and assured me I was truly the winner of a new car, which I believed was a reward for me for a loss I had had two weeks prior to that call. Somebody had stolen my car, so I was going to be rewarded.

I took it so personally, and I said yes, I have to buy whatever products you want in order for me to claim the prize. The most important thing was that I had some doubts, but I had already placed the order and they kept asking me and harassing me and pressuring me a lot for the money.

I paid the money and had not received the car, so I kept calling. I made about 20,000 phone calls to that centre in Montreal. When I called, they assured me, “Yes, you won the prize. This is the number of the Minister of Transportation; you ought to call the Minister of Transportation and give your driver's licence number in order for us to send you the car, because legally we're obligated. But before you do that, you have to send us a payment for the taxes.” So they led me on and on, maybe for two or three years.

First of all, there was a universal microwave satellite dish antenna. I received that. It was just a plastic toy that I couldn't even feed my dog in.

Then they gave me a number to call the Minister of Transportation.

Yes, I feel stupid; I feel angry. But something has to be done about it.

All my letters are there and all the information. I didn't prepare a statement, but I have written letters to that company and I handed out copies to you. I have sent the letters to the officers who were investigating the fraud, and I handed them out to you.

When I as a new immigrant see “Important Official Documents”, for me these are important official documents. Maybe for a Canadian they're not, but for me they're important official documents.

Then, when I see “Canadian Classic”, for me Canadian is a dream. It says “Canadian Classic Celebration”.

I feel sorry for the people who are truly doing business correctly. I feel sorry, because they lost my trust. The police magazine of the year...they call me every year and I say, I'm sorry, I don't want to do that. I don't want to participate in that magazine. Maybe the telemarketers who are sending me information are truly doing business with a good heart, but I don't trust anybody else.

I have copies of the cheque. There was some more money that I sent to this company in money orders, but I had to provide that to the officers who were investigating the case.

I have some questions and some suggestions.

• 1820

I am a member of a big community, the Spanish community in Toronto. I have been speaking to them to tell them how to become truly Canadian. Although we have an accent and although we were not born here, this is my country; this is my new home. This is the place where I made my new home with my new husband. You don't leave the other home because you hate it, but you make your new home.

When I speak to the people, I ask them, “Please don't fall into the same trap.” I went on Latino TV to tell them, “This is me. You believe in me? You think I'm smart? No, I was so stupid. Don't be as stupid as I was.”

So I want to suggest something. A lot of people come to me and ask me, “What do I do? I'm opening a new business. I'm doing a cleaning company.” Every time, after the company has been opened or registered, a month later they'll be called by a telemarketing company saying they won a prize.

My suggestion to the committee is that in order for these new people not to become victims of deception, as I was, there should be a package for a new small business, or tiny or puny business being opened, saying, “Beware of these.” Because I believe that through that directory, the people are getting the information. The bad apples are getting the information through those means.

I thank you for the opportunity. I know I became a little bit emotional, and I still am, but I have to get my point across, and this is the way I know how.

The Chair: No, we very much appreciate your appearing before us. We very much appreciate your evidence, Ms. Orozco, and we appreciate your recommendation.

We are going to entertain questions now. I will begin with Mr. Lowther, please.

Mr. Eric Lowther: Thank you, Ms. Orozco. I want you to know we all get a little bit emotional on this committee from time to time.

I'm going to ask if I could forgo first position, and depending on the other questions that are asked, I may not need to ask any, Madam Chair.

The Chair: Okay, Mr. Lowther. We will pass to Mr. Shepherd.

Mr. Alex Shepherd: Mrs. Rozon, one aspect of your testimony interests me. You did a survey—I'm back to double-ticketing—and you found a number of infractions. The Retail Council of Canada has told us these infractions go both ways. Did you find that?

In other words, the ticket item on the shelf differs from the bar code on the cash register; the cash register is not programmed for the lower price. That's the one people complain about. The Retail Council of Canada is saying it goes both ways. Sometimes the bar code is in fact lower than the price on the shelf. Did you find that in your survey?

[Translation]

Ms. Louise Rozon: Within the framework of our investigation, generally speaking, we saw that the consumer was the loser. Where we found the most errors is when the articles were on sale. A reduced price was tagged on the shelf but the optical reader didn't register this change. So the consumer was paying the regular price. Based on our investigation, it was not equal. It's true that the consumer sometimes was the winner but, generally speaking, the consumer was most often the loser.

[English]

Mr. Alex Shepherd: Okay.

Some people have suggested that the reintroduction of section 54 should be streamlined. It talks about double-ticketing, and of course now what we're doing is the same thing you just suggested: a sale price and a bar code that actually goes through a machine. I've been informed by some people in other jurisdictions that the penalty for that is you get the goods for free. Is this something you would recommend?

[Translation]

Ms. Louise Rozon: In fact, that's one of the recommendations we're making. In some stores it's not really possible. If you buy a lawnmower at a bad price, it would be a bit surprising that the store would accept to give it, but we think that one of the ways of settling that problem would be for businesses to reward the consumer who finds a mistake.

In some cases, the thing could be given to the buyer. In supermarkets, products aren't sold for very high prices. It would be possible in those cases. In other kinds of businesses, you should not only reimburse whatever the overpayment was, but also offer a reward to the consumer. This would serve as a deterrent to business owners and each and every consumer would have an interest in monitoring the bill and pointing out errors.

• 1825

Mr. Jacques St-Amant (Counsel, Option consommateurs): I'd like to add a detail you might find interesting. Last February, a poll was run in Quebec by CROP. People were asked: "Do you want business owners to put a price tag on all their goods?" Generally speaking, in food stores, pharmacies, bookstores and other such places, 90% of Quebec consumers answered: "We want to have price tags on the goods."

So the consumers want that information. They want a price tag just simply to know how much they have to pay.

[English]

Mr. Alex Shepherd: You don't know in what jurisdiction it actually occurs that in fact they give the goods for free, or say, something you're suggesting, if it were under a certain dollar value—if it were under $100—you'd have to give them the good for free?

Mr. Jacques St-Amant: There is a provision like that in the Australian code of practice regarding supermarkets. We have that, and if need be, we can send it to you. We don't have it here, but we can get it to you.

Mr. Alex Shepherd: That would be appreciated; thank you.

Mr. Jacques St-Amant: People at the Office of Consumer Affairs of Industry Canada are looking quite closely at those issues, if you're interested.

Mr. Alex Shepherd: Okay.

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

[Translation]

Ms. Lalonde, please.

Ms. Francine Lalonde: Thank you all. I will address my questions to Option consommateurs.

I thank you for this excellently prepared brief. It is in French only. So I'll ask our clerk to have it translated into English. Everyone is going to laugh about this one. Madam Chair will allow me to say that when the Hudson's Bay Company representatives showed up with a brief in English only, I chewed them out. I do it anytime we're not handed a document in both official languages when it's done by a big concern that has a lot of money or by a big public organization. When it comes from individuals or cash poor organizations, it's not the same thing.

You emphasized something quite new and extremely interesting in my eyes. I had identified it, but it's always more interesting when the witnesses bring it up.

You say there's a danger not only of decriminalization, but, to all practical intents and purposes, that the remaining provisions in the criminal legislation won't be able to be applied because the requirements are being increased. Proposed clause 52(1) states that no person shall "knowingly or without regard for consequences, make a representation to the public that is false or misleading". It will be just about impossible to prove that it was ever done knowingly or without regard for the consequences.

You point that out, on the one hand, but you also point out, and this is extremely important, that in clause 52 only paragraph (a) was kept, which can continue to be part of the criminal provisions, while paragraphs (b), (c) and (d) were added to clause 74 which could lead to the court not interpreting those provisions anymore as leading to penalties under the Criminal Code, if I understand you correctly.

Could you elaborate on those consequences, please?

Mr. Jacques St-Amant: Very quickly and without getting into the details, because these are questions which, even in a legal context, are very complex, by introducing the "knowingly" in clause 52 what seems to be required is that any future prosecutor prove what the Supreme Court has called a subjective intent. It's an extremely heavy burden. That means, for example, that you couldn't prosecute any person engaged in a business who was negligent without proving a really very specific intent to commit an offence. In the case of a body corporate, it is extremely difficult to prove that the body corporate itself did anything knowingly. You'd have to produce a resolution by the board of directors. I pity the prosecutor who will have to deal with that one.

• 1830

Some witnesses said before that it was absolutely unthinkable to impute criminal intent to managers who missed something. On one hand, I think it's up to the people themselves to make sure that their affairs are properly managed. On the other hand, it's something our Criminal Code has been doing continuously and for a long time. There are hundreds of provisions in Canada. In criminal law, it even goes further than that. It says that if a body corporate is irresponsible, it is possible to prosecute its administrator who can be found guilty of a criminal offence. So prosecuting and finding guilty a physical person who is the director of a compagny is something that's done regularly. It's nothing new.

With respect to what you said about the amendment to section 52, this creates a problem of interpretation, and I have no doubt that business people will raise this one day. They will say: "We did something that was considered an offence. Parliament deliberately repealed those sections. It is no longer an offence. Therefore, why are you charging us? Parliament decided that it was no longer an offence." In that case, the prosecutor would have to prove that, nevertheless, the remaining provision has to be interpreted as including everything that is a criminal matter. Therefore, a clever lawyer will say: "Yes, but why has Parliament done this now, when previously the trouble had been taken to state everything explicitly?" The Crown might win, but it might also lose.

Ms. Francine Lalonde: We will continue to work on this, but you really have to read the present Competition Act to see the content of subparagraphs (b), (c) and (d) to understand that, if they are included in the section of the Act that refers to a behaviour—

Mr. Jacques St-Amant: Subject to review.

Ms. Francine Lalonde: —of a company whose behaviour is subject to review, it becomes difficult to think that it be found guilty under subsection 52(1). Thank you for having clarified this. This is an extremely important provision.

Next, you pointed out that this is primarily a matter of provincial jurisdiction. You also pointed out that decisions of the Supreme Court, which is reputed always to lean in that direction and has again done so, have established that the jurisdiction is shared. However, you say that implementation of the Competition Act is largely based on exercise of this jurisdiction.

The Chair: Your last question, please.

Ms. Francine Lalonde: Because there are parallel civil law systems in Quebec and at the federal level, are you not afraid, for example, in the case of section 219 of the consumer protection legislation, that businesses or citizens will not know which way to jump, because both systems refer to misleading information? How will we be able to differentiate?

Ms. Louise Rozon: I would just like to point out the difficulties as we see them. Quebec is one of the provinces that have very thorough consumer protection legislation. Unfortunately, this is not the case for all the provinces. Therefore, by eliminating the provisions dealing with misleading advertising from the Competition Act, we might considerably diminish the rights of consumers in some provinces. This was one of our concerns.

Mr. Jacques St-Amant: There is something else that has to be kept in mind. Under section 19 of the Quebec legislation, the consumer tries to solve his own problems and we hope that he will win his case. The Competition Act provides that businesses will change their practices, usually, because they have to deal with the Competition Bureau. In this respect, it might be useful to have a broader and somewhat different type of intervention than is provided for solely through private civil action.

Ms. Francine Lalonde: But provided that there is some mutual respect between the two jurisdictions. This hope was expressed by the coordinator of the Consumers Association of Canada.

• 1835

Mr. Jacques St-Amant: I believe that efforts have been made for a number of years to harmonize labour legislation between the federal government and the provinces with respect to consumer protection. There's still a great deal of work to be done, but there are so many questions about activities going on that, in my opinion, there will never be too many means of recourse.

Ms. Francine Lalonde: Thank you.

[English]

The Chair: Thank you very much, Madam Lalonde.

Mr. Lastewka, please.

Mr. Walt Lastewka: Thank you, Madam Chair. I'm going to be very brief.

First of all, I would like to thank all the witnesses for taking their time to be with us. I thought the recommendation by the seniors group, Ms. Eady and Mr. Wagg, concerning the telephone directories, having a very clear description at the front of the directory for consumers, was a very good idea. Of course, that's what we're here for, to hear new things.

I should comment that when you mentioned the Internet and e-commerce...there is a process in place to try to get something done on that, but it entails many countries working together, because the Internet is so international.

So I want to thank you for your idea on the directories.

Ms. Delage, you were talking about double labelling, and I kind of missed the point you were trying to get across. Was it the same as has been discussed or something different?

Ms. Niquette Delage: It's quite different, because what we've been asking over and over, through the provincial government, the municipal government.... You know, in Montreal we did have a bylaw, which was rescinded. This is part of the document I sent in yesterday, explaining to you how we got to talk to you today.

What we would like to see would be the philanthropic industry—because it is an industry—included in the dispositions of the Competition Act. The problem is that telemarketing is being used by universities, by hospitals, by a number of legitimate groups, but it is also used fraudulently by people who just take away the sums that could be used by legitimate groups to help the public. That's why we feel that whatever is in the legislation at this point in time does not cover our concern.

There are groups that will be selling things, and they are covered by the legislation, but the ones who get donations are not. Many people are defrauding the public by requesting of it some donations in the name of a soi-disant “charity” that does not exist.

Mr. Walt Lastewka: I thought that was the point of view you were getting across. I think one of the members has brought that forward and is wanting to put an amendment through.

Madam Chair, those are the remarks I would like to make.

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

Mr. Lowther, please.

Mr. Eric Lowther: Thank you.

I want to applaud the seniors group for having a three-point plan there. Certainly a big part of your plan, as Mr. Lastewka said, is your public education component, and I think it's a great idea.

The dilemma we find ourselves in here a little bit with this bill is that people purchase merchandise all the time, sometimes in private arrangements. When they do, they check it out and do private evaluations and check with other customers they know to see if it's a good, reputable firm. Maybe they test it before paying for it. In general, many people look out for their own interests, because once you've been taken, it's kind of too late; you're looking for some way to get back. We used to have an old saying: “Buyer beware” before you buy.

The converse is, though, that the government will oversee and sort of protect us, and certainly the law has a role to protect people. But if you carry that too far, what can happen is you trade off your personal space in order to be protected. It can become intrusive, in fact, to the point where, in order to protect everybody, it's intrusive to everybody to protect or address a few situations.

I'm curious, from all the groups, do your memberships really support giving up more of your privacy in order to have the government give more protection or protect in this way? I reference particularly the broad definition of telemarketing, very broad, that under suspicion of some sort of bad practice, there is allowed to be put a wire-tap in place, whereas prior to this, one side had to be informed. If this goes through, neither side will have to be informed. You're giving up privacy for this protection.

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Are your members really comfortable with that?

Mr. Larry Wagg: If I may answer that—or attempt to—both our organization and the national pensioners have annual conventions, with representation from all across Canada. The bureau will be aware that we've already supported Bill C-20 in its initial proposals.

To our organizations, and to the people we represent, a crook is a crook. If you start from that basis, then it seems to me—and I heard it earlier from witnesses—-that, no, I don't think the majority of them look on it as the government taking something away from them.

In our “age group”, if I can use that term, many of us were part of building this society, which was more a welfare society. We looked on government as being us, and therefore part of the protection, not the other way around, which apparently now in society some people believe. But I believe the majority of our members don't.

As well, I find it very difficult, when you're talking about law, that we already have laws on the books about wire-tapping—but as long as it's in drugs or prostitution or whatever. All of a sudden I heard the Hudson's Bay company say they didn't want their heads being in the same room with them.

Look, as far as we're concerned, a crook is a crook. There's no difference if they're wrong.

I might add—and this might be more personal; I appreciate what this witness who came here on her own said today—that we have lots of examples of what's happening in telemarketing. I'll tell you what happens in our house. We don't buy anything over the phone, and if members ask us, we advise them the same thing.

I'm sorry, but that's the way it is.

Mr. Eric Lowther: But isn't that the best protection?

Mr. Larry Wagg: We still need the legislation. I was in labour relations all my life. You know why you have labour acts, and you know why you have health and safety acts, and you know why you have all those other acts. I get so damn mad at corporations saying, “We'll self-regulate; really, our interest is the interests of our workers ”, when historically, that is neither proven nor a fact.

The Chair: Thank you.

Mr. Lowther, are you finished?

Mr. Eric Lowther: Yes, I'm finished.

The Chair: Thank you. Madame Lalonde.

[Translation]

Ms. Francine Lalonde: I will ask my question.

[English]

The Chair: I apologize. I have to go to Mr. Bellemare first.

Ms. Francine Lalonde: Okay.

The Chair: Mr. Bellemare, then Madame Lalonde.

[Translation]

Ms. Francine Lalonde: I thought that he was giving me his time.

[English]

The Chair: Sorry. My fault.

[Translation]

Mr. Eugène Bellemare: Madam Chair, the third and last group that we met today is composed of consumer representatives. They are different from the salespeople that we previously heard. There was one, in particular, who obliged me to bite my tongue throughout his presentation.

In the near future, should we not take a short part of an upcoming meeting to discuss the suggestions that might apply to our bill?

Ms. Delage referred to a point concerning telemarketing for the philanthropic—I have to say—industry. For example, there are constantly programs on the seal hunt on television. I recently heard from a colleague that a British agency was using this medium to raise funds. The objective was not really to protect seals.

A member of Parliament who does not sit on this committee prepared an amendment to the Act, and I wonder if the committee clerk could provide Ms. Delage with a copy of the proposed amendment.

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Mr. Bryden is presently exchanging correspondence with the Competition Bureau, and I do not think that he has officially presented his amendment here. I think we should examine it, because he spoke to me of offshore telemarketing, which occurs, for example, when a charitable organization in Canada hires people abroad to carry out telemarketing. Those people are often paid by the piece or on a percentage. They may be very incompetent or dishonest, and that would have an impact on us. This is the observation I wanted to make to the committee. I thank the witnesses who are here today.

[English]

The Chair: Mr. Bellemare, I should let the committee members know that Mr. Bryden has written to the clerk with his proposed amendment, and will be appearing with us when we do clause-by-clause, putting forward his amendment at that time.

Amendments don't require any notice. I suppose that's why it's not before the committee yet, but if anyone is interested, they can contact the clerk.

Madame Lalonde.

[Translation]

Ms. Francine Lalonde: My question is for both Ms. Eady and Ms. Rozon. It concerns the Internet.

You will note, Madam Chair, that both of them recommended that the scope of subsection 52(1) be expanded to include the Internet. I would like to hear what both of you have to say on this, since the bill does not provide for this. There were objections. The Director of the Bureau said no, but I think that there is a great deal of concern about this. Therefore, I would like to hear your comments.

[English]

The Chair: Ms Eady.

Ms. Mary Eady: I think they are quite right to be concerned. You start realizing that it's difficult to police it, if you like. Also, I think it is used for telemarketing, and it isn't all in one country, either. It goes around the world and you don't know where the people are from. This is such an expanding area, as more and more people begin using the Internet. Already there is really no way of checking the accuracy of a lot of the information on it, apparently.

I think it's something the committee certainly should look into, because again, if we're looking at the future, and having had experience with legislation, I know how seldom you get a chance to really overhaul it. I think you should take advantage of this opportunity and really look into the future. I didn't have a lot of time to study the bill, but it seemed to me it was dealing with problems of the past rather than of the present and future.

The Chair: Thank you.

Madame Rozon or Mr. St-Amant.

[Translation]

Mr. Jacques St-Amant: The Director of Competition seems to be saying that the objective of the proposed subsection 52(1) is... Basically, it is necessary to intervene because there is rapid interactivity in these transactions and we have to increase consumer protection. This is partially true, but there are other characteristics of a telephone transaction, a telemarketing transaction, that necessitate intervention to protect consumers, and these same characteristics apply to Internet transactions. For example, in both cases, it is very difficult to prove the representations that have been made.

• 1850

In both cases, there is a strong likelihood of problems in international private law, and the consumer and seller are quite likely to be in different jurisdictions. Our witness gave us an example of this earlier on.

In both cases, the use of credit cards for payments may involve higher expenses. You give a credit card number, and hope it will be used properly.

In both cases, there are reasons to believe that it would be useful to have telemarketing intervention include Internet transactions. There are also other provisions with respect to misleading advertising that could perhaps be drafted more precisely to ensure that Internet transactions are covered. I was told by the Bureau that, in any case, they were not too worried because the general provisions would cover Internet transactions.

On a web site—I don't have the document before me—do we see information on or in something? I am not sure that both cases would be covered by the wording of the section that could result in a condemnation or review whether in the present legislation or in the bill. You may have to consider adjustments in this regard.

Ms. Francine Lalonde: Could you provide us with amendments within two weeks?

Mr. Jacques St-Amant: We could draft a bill in two weeks.

[English]

The Chair: No, no, just so you understand, we are meeting for clause-by-clause on May 26. May 25 is our last witness on Bill C-20. So if you have any amendments, would you submit them by the end of next week at the very latest. We are trying to give all committee members next week time to review what they've heard. The House is not in session next week, and that will give them the opportunity to look at the various testimony, as well as the director, so that we can have comments back to the committee on May 26 and proceed to clause-by-clause.

Mr. Jacques St-Amant: We will not commit to that, but we will do our best.

The Chair: Well, if you could, we would appreciate it.

[Translation]

Ms. Lalonde, have you finished?

Ms. Francine Lalonde: I would like to thank Ms. Orozco and all the others who came here today.

[English]

The Chair: Thank you.

On behalf of the committee members, I want to thank the witnesses for being with us. Thank you for your patience and understanding of our delays from yesterday that carried over to today.

As Mr. Bellemare explained, it's very nice to have the consumers' side. We appreciate it, and we will definitely take your comments into consideration.

It's nice to also have Ms. Orozco, who can give us a personal example of telemarketing fraud. In light of the previous witnesses, it's nice to know these amendments will help individuals.

I appreciate the brief from the seniors organization, in particular. You could pass that on to people who could not be with us today. The comments are warranted. We know this legislation stemmed from things that happened to many seniors in the past, and hopefully it will prevent it from happening in the future.

Again, I thank all the witnesses.

The meeting is now adjourned.