Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce

Issue 42 - Seventeenth and Eighteenth Reports of the Committee

WEDNESDAY, December 2, 1998

The Standing Senate Committee on Banking, Trade and Commerce has the honour to table its

SEVENTEENTH REPORT

Your committee, which was authorized by the Senate on Wednesday, October 22, 1997, to examine and report upon the present state of the financial system in Canada, now tables an interim report entitled A Blueprint for Change.

Respectfully submitted,

MICHAEL KIRBY

Chairman

(Text of the Seventeenth Report)

THURSDAY December 3, 1998

The Standing Senate Committee on Banking, Trade and Commerce has the honour to present its

EIGHTEENTH REPORT

Your committee, to which was referred the Bill C-20, An Act to amend the Competition Act and to make consequential and related amendments to other Acts, has examined the said Bill in obedience to its Order of Reference dated Tuesday, November 17, 1998, and now reports the same without amendment, but with observations which are appended to this report.

DAVID TKACHUK

Deputy Chairman

OBSERVATIONS ON BILL C-20

On November 24, 26 and December 3, 1998, the Standing Senate Committee on Banking, Trade and Commerce (the "comittee") considered Bill C-20, An act to amend the Competition Act and to make consequential and related amendments to other Acts. The committee heard from The Canadian Bar Association and others who expressed concerns about certain provisions of Bill C-20.

Bill C-20 is a modification of Bill C-67 which died on the Order Paper of the last Parliament. Bill C-67 was the result of, lengthy consultation process.

The committee wishes to make the following observations about Bill C-20.

In light of the independent analysis sponsored by the Bureau, some members of the committee are strongly opposed to provisions of this Bill relating to whistleblowing provision.

Some witnesses before the committee were disquieted that the additional elements in the new Bill C-20 had not been subjected to the same public consultation. The growth of fraudulent telemarketing in Canada and the US had led to certain new major provisions in Bill C-67 that were carried over to Bill C-20. These were supported by responsible firms in that industry who favoured strong legislation to maintain customer confidence in buying over the phone. Wiretapping without consent was introduced in Bill C-20 as an investigative tool for deceptive telemarketing, as well as conspiracy and bid-rigging. The House of Commons Standing Committee on Industry further amended Bill C-20 to limit wiretapping to only the most serious offences such as deceptive telemarketing practices, and price-fixing and market sharing conspiracies. Amendments to protect whistleblowers and to make the Act applicable to fund-raisers for charitable and non-profit purposes were also made in the House of Commons.

Bill C-20 would convert some criminal matters to civil reviewable ones. Although it was strongly argued before the comittee that decriminalizing false or misleading representations was inconsistent with other laws and that criminal conviction would have a greater symbolic effect, the comittee found more convincing the conclusion of the consultation process, that is, that a hybrid process would be more efficient. The criminal regime remains for intentional or reckless conduct. However, moving from a criminal to a civil resolution should not add new uncertainty to the adjudication process. Where the law is reasonably settled in respect of a current criminal provision, precedents should not be opened up again for debate simply because of the shift from criminal to civil adjudicative jurisdiction.

The propriety of wiretapping without consent is still a divisive issue in spite of the amendments made in the House to further limit this potentially invasive investigative tool. Deleting this part of the Bill would deprive the Bureau of perhaps the most effective, technologically appropriate means to go after unscrupulous telemarketers who target the most vulnerable groups in our society. However the concern of invading privacy has to be faced. The comittee has decided against delaying this proposal. Proof that wiretapping without consent works efficiently and without peril can only be demonstrated by practice. The comittee therefore wishes to receive a future report from the Competition Bureau analysing the first full year of wiretapping experience after the Bill has come into force.

It was argued before the comittee that the proposed Part VII.1 (reviewable transactions) lacks provision for restitutionary orders, private rights of action or class action rights. These are matters that ought to be addressed by the Bureau in the next round of consultations. The question of how telemarketing ought to be defined is made more difficult by the unforeseeable possibilities of new technologies. The comittee has decided against adding the limitation of "live-voice" to the telemarketing definition in Bill C-20, but feels that this question ought to be kept under constant review. Although some witnesses felt that lowering the minimum number of persons necessary to institute an inquiry would trigger more telemarketing investigations, the comittee sees the wide geographic diffusion of victims putting a special responsibility on the Bureau, the police, and social services to act together to recognise patterns of fraudulent activity and to investigate speedily.

A majority of the comittee believe that greater clarity is given in the Competition Bureau's proposed guidelines, which distinguish between buying a legitimate ticket to enter a lottery and the scam of being told you have won an apparently valuable prize but must pay tax, delivery charges, or registration fees before even seeing what has been won. Some members object to Section 52(1), which they believe may discourage and impede legitimate fundraising activities by way of lotteries.