INST Committee Meeting

MINUTES OF PROCEEDINGS

Meeting No. 60

Tuesday, December 4, 2001

The Standing Committee on Industry, Science and Technology met at 3:45 p.m. this day, in Room 705, La Promenade Building, the Chair, Susan Whelan, presiding.

Members of the Committee present: Larry Bagnell, Claude Drouin, Jocelyne Girard-Bujold, Walt Lastewka, Dan McTeague, James Rajotte, Andy Savoy, Brent St. Denis, Chuck Strahl, Joseph Volpe and Susan Whelan.

Acting Members present: Pat Martin for Bev Desjarlais.

In attendance: From the Library of Parliament: Dan Shaw and Geoffrey P. Kieley, Research Officers.

Witnesses: From the Department of Industry: Konrad von Finckenstein, Commissioner of Competition, Competition Act, Competition Bureau; Marcel Morin, Acting Assistant Deputy Commissioner of Competition, Legislative Affairs Division, Competition Policy Branch; Chris Martin, Acting, Assistant Deputy Commissioner of Competition, International Affairs Division, Competition Bureau. From the Department of Justice Canada: Louise Faille, Legal Counsel, Competition Law Division, Industry Canada.

Pursuant to its Order of Reference of Thursday, May 3, 2001, the Committee resumed consideration of Bill C-23, An Act to amend the Competition Act and the Competition Tribunal Act (See Minutes of Proceedings, Thursday, October 4, 2001, Meeting No. 37).

The Committee proceeded to Clause-by-Clause consideration of the Bill.

Clause 1, carried on division.

On Clause 2

Claude Drouin moved, -- That Bill C-23 be amended by adding after line 16 on page 1 the following:

2.1 (1) Subsection 29(1) of the Act is amended by striking out the word "or" at the end of paragraph (c), by adding the word "or" at the end of paragraph (d) and by adding the following after paragraph (d):

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

(2) Subsection 29(2) of the Act is replaced by the following:

(2) This section does not apply in respect of any information that has been made public or any information the communication of which was authorized by the person who provided the information.

After debate, the question being put on the amendment, it was adopted on division.

Clause 2, as amended, carried on division.

On Clause 3

Claude Drouin moved, -- That Bill C-23, in Clause 3, be amended by replacing lines 26 to 29 on page 3 with the following:

for which it was requested,

After debate, the question being put on the amendment, it was adopted on division.

Claude Drouin moved, -- That Bill C-23, in Clause 3, be amended by adding after line 31 on page 20 the following:

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

(2) This section does not apply in respect of any information that has been made public or any information the communication of which was authorized by the person who provided the information.

After debate, the question being put on the amendment, it was adopted on division.

Clause 3, as amended, carried on division.

Clauses 4.1 and 5, carried severally on division.

On Clause 6

Claude Drouin moved, -- That Bill C-23, in Clause 6, be amended by replacing lines 7 to 10 on page 22 with the following:

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

After debate, the question being put on the amendment, it was adopted on division.

Clause 6, as amended, carried on division.

Clauses 7 to 11, carried severally on division.

New Clause 11.1

Dan McTeague moved, -- That Bill C-23 be amended by adding after line 13 on page 27 the following:

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

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

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

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

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

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

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

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

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

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

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

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

After debate, the question being put on the amendment, it was adopted on division.

New Clause 11.3

Dan McTeague moved, -- That Bill C-23 be amended by adding after line 13 on page 27 the following:

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

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

After debate, the question being put on the amendment, it was adopted on division.

New Clause 11.4

Dan McTeague moved, -- That Bill C-23 be amended by adding after line 13 on page 27 the following:

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

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

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

(a) the frequency and duration of the practice;

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

(c) injury to competition in the relevant market;

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

(e) any other relevant factor.

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

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

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

After debate, the question being put on the amendment, it was adopted on division.

On Clause 12

Dan McTeague moved, -- That Bill C-23, in Clause 12, be amended by replacing line 16 on page 27 with the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

After debate, the question being put on the amendment, it was adopted on division.

Claude Drouin moved, -- That Bill C-23, in Clause 12, be amended by

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

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

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

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

After debate, the question being put on the amendment, it was adopted on division.

Claude Drouin moved, -- That Bill C-23, in Clause 12, be amended by replacing lines 38 to 44 on page 27 and lines 1 to 3 on page 28 with the following:

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

After debate, the question being put on the amendment, it was adopted on division.

Claude Drouin moved, -- That Bill C-23, in Clause 12, be amended by adding after line 13 on page 28 the following:

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

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

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

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

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

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

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

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

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

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

After debate, the question being put on the amendment, it was adopted on division.

Claude Drouin moved, -- That Bill C-23, in Clause 12, be amended by replacing, in the English version, line 31 on page 28 with the following:

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

After debate, the question being put on the amendment, it was adopted on division.

Clause 12, as amended, carried on division.

On Clause 13

Moved by Claude Drouin, -- That Bill C-23, in Clause 13, be amended by

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

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

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

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

(c) adding, after line 27 on page 29, the following:

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

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

After debate, the question being put on the amendment, it was adopted on division.

Clause 13, as amended, carried on division.

New Clause 13.1

Claude Drouin moved, -- That Bill C-23 be amended by adding after line 27 on page 29 the following:

13.1 Section 104.1 of the Act is amended by adding the following after subsection (5):

Application to Tribunal for extension

(5.1) The Commissioner may, before the expiry of the second 30-day period referred to in subsection (5) or of the period fixed by the Tribunal under subsection (7), as the case may be, apply to the Tribunal for a further extension of the temporary order.

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

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

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

(b) the information was requested within the initial period that the temporary order had effect, within the first 30 days after an order extending the temporary order under subsection (5) has effect, or within the first 30 days after an order extending the temporary order made under subsection (7) has effect, as the case may be, and

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

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

(c) the information is reasonably required to determine whether grounds exist for the Commissioner to make an application under section 79.

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

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

After debate, the question being put on the amendment, it was adopted on division.

On Clause 14

Dan McTeague moved, -- That Bill C-23, in Clause 14, be amended by replacing lines 38 to 40 on page 29 with the following:

the Tribunal against that person.

After debate, the question being put on the amendment, it was adopted on division.

Dan McTeague moved, -- That Bill C-23, in Clause 14, be amended by

(a) replacing line 34 on page 29 with the following:

103.3 or a temporary order under section

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

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

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

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

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

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

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

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

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

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

After debate, the question being put on the amendment, it was adopted on division.

Claude Drouin moved, -- That Bill C-23, in Clause 14, be amended by

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

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

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

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

After debate, the question being put on the amendment, it was adopted on division.

Clause 14, as amended, carried on division.

On Clause 15

Claude Drouin moved, -- That Bill C-23, in Clause 15, be amended by replacing line 23 on page 31 with the following:

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

(4) The Tribunal shall decide the questions

After debate, the question being put on the amendment, it was adopted on division.

Clause 15, as amended, carried on division.

Clause 16, carried on division.

New Clause 16.1

Claude Drouin moved, -- That Bill C-23 be amended by adding after line 34 on page 31 the following:

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

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

After debate, the question being put on the amendment, it was adopted on division.

On Clause 17

Claude Drouin moved, -- That Bill C-23, in Clause 17, be amended by replacing lines 4 to 7 on page 32 with the following:

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

After debate, the question being put on the amendment, it was adopted on division.

Clause 17, as amended, carried on division.

Clause 18, carried on division.

On Clause 19

Claude Drouin moved, -- That Bill C-23, in Clause 19, be amended by replacing line 7 on page 33 with the following:

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

After debate, the question being put on the amendment, it was adopted on division.

Clause 19, as amended, carried on division.

The Bill, as amended, carried.

ORDERED, -- That Bill C-23, An Act to amend the Competition Act and the Competition Tribunal Act, as amended, be reprinted for the use of the House of Commons at Second Reading and Report Stage.

ORDERED, -- That the Chair report Bill C-23 with amendments to the House as the Seventh Report of the Committee.

At 5:20 p.m., the Committee adjourned to the call of the Chair.

Normand Radford

Clerk of the Committee