Statement for Presentation in the

House of Commons

Bill C-235

May 27^th, 1998

Paul Steckle, M.P.,

Huron-Bruce

Mr. Speaker:

I rise today to address a matter that has again and again been brought to the attention of the Members of this place. A matter that seems to have induced public anger, as only a few other issues have been able to do. Perhaps it would be more appropriate for me to say that, I am on my feet today as a result of the constant public and media attention afforded to this topic. The issue to which I refer, is the matter of gasoline pricing and the factors that effect petroleum price setting in Canada. On a more specific note, I am pleased to lend my personal support to this Private Members Bill, Bill C-235, the issue currently before us.

On a historical note, this is not the first time that this particular piece of legislation has been placed on the order papers. In fact, Bill C-235 was first introduced to the Thirty-fifth Parliament, in 1997, as Bill C-238. Unfortunately, the Bill had not yet been fully considered when the House dissolved for last summer’s election. As a continuation of that process, last October, the Member for Pickering-Ajax-Uxbridge re-introduced the aforementioned measures with the hope that we would now have the opportunity to fully debate them. A debate that I am pleased to take part in today.

Before I proceed any further, I must admit that it would be inappropriate if I failed to acknowledge the tremendous initiative and leadership demonstrated on this matter by our colleague, the Member for Pickering-Ajax-Uxbridge. Not only did this Member commit to the establishment of the Caucus Committee on Gasoline Pricing, but he also agreed to act as our Chair. As Chair, he was guaranteed long and irregular hours, a hectic travel schedule and an endless barrage of what was, at times, a hostile media assault. Without his determination and guidance, I know that the so called “Gas Caucus,” would never have come to fruition.

With respect to the matter at hand; Bill C-235 would establish a legislated basis for the enforcement of industry wide, fair pricing policies. I submit that the proposed measures would go a long way toward improving the industry’s rapidly emerging anti-competitive atmosphere however, these concrete and long-overdue alterations also promise to have a profound, trickle-down effect at the pumps. A result that, especially with summer looming, I believe, that we can all applaud.

In an effort to promote fair pricing rather that just cheap pricing, Bill C-235 clearly establishes regulations for a manufacturer who sells a product, at the retail level, and one that sells either directly or through an affiliate while at the same time supplying the product to a customer who competes with the supplier at the retail level. To simplify, this Bill will give the customer a fair opportunity to make a profit similar to that of the supplier hence ending the practice known throughout the industry as predatory pricing.

In addition, this Bill also establishes a policy of governance that labels any supplier who attempts to bully or coerce a customer, in the establishment of retail marketing policy, as one who has committed an anti-competitive act. That in a nutshell, is what this Bill aims to resolve.

Over the course of the past several months, the Liberal Caucus Committee on Gasoline Pricing has extensively toured this country. During that time we have conducted a comprehensive series of public hearings. Further to that, when in Ottawa, we devoted a considerable portion of our efforts and time to direct consultations aimed at providing us with access to a wide cross-section of the opinions held by consumers, retailers, wholesalers and specialized interest groups. Although the formal results of the aforementioned study will soon be put forward in a report, at this time I can say that one of the most common sentiments expressed to us was a sense of fear, resulting from, the rapidly depleting pool of competition within the industry.

As each of us is aware, the Department of Industry holds the primary responsibility for ensuring that the provisions of the Competition Act are enforced. Eventhough the Department has, in good faith, conducted numerous investigations into specific case violations of the Competition Act, I fear that this would be similar to arming our current-day, active-duty military personnel, with only black powder muskets. In essence, the musket was at one time the most effective tool available to the police and to the military however, that is no longer the case. It’s not that the musket operates any differently today then it did one hundred years ago but, because the situation around us had evolved, so dramatically, we needed to develop new and innovative ways to deal with the new and innovative problems that we were faced with.

This analogy applies to the Competition Act more that most of us would care to admit. The Canadian oil industry looks very different today, then it did only a few short years ago. This has occurred, in part, as a result of the aggressive tactics and the predatory pricing policies of the industry majors. The resulting instability has placed the smaller, independent owned dealers, in serious jeopardy of becoming a thing of the past. One might wonder why Parliament should concern itself with the loss of a private, small and independently owned business. The fact is that the loss of one outlet, although not preferable, does not impact tremendously when viewed in context of the grand scheme of things however, when we start experiencing the loss of hundreds, or even thousands, alarm bells should start ringing.

The industry majors will freely admit that the little guy is their best single source of competition; the most effective method of keeping them honest. With that in mind, would it not stand to reason that each time the market loses an independent, that safeguard is weakened. Regretfully, over the course of the last twenty years a disturbing trend has emerged within the industry. We are losing independently owned establishments left, right and CENTER.

Some would argue that this is a result of the reduced access to capital or any number of other factors that small businesses routinely face. I would say that the banks won’t lend money because of the increasing risks involved. Risks that are skyrocketing because of unfair competition within the market. The point being that, if we do not act immediately to rectify the problem, we run the risk of missing the boat on this issue. When the independents are gone, they are gone forever.

My point is very basic; the Competition Act, as it exists today, is not properly equipped to deal with the complicated issues being generated by this sector of our economy. The oil industry is unlike any other area of commerce. As such, it requires highly specialized rules of governance, rules such as those contained in Bill C-235. Bill C-235 is not a blanket solution for all of the regulatory problems that face us, as legislators. It is however, an important first step. Later this month the Committee will be formally releasing a comprehensive report, which will include a synopsis of the problems that exist within the oil industry along with a series of potential solutions. We need to take the initiative and move forward with this step now, if we are to prove to the public that we are indeed committed to resolving this matter.

I recall the gas prices of last summer and how my constituency office was flooded with angry calls demanding that I do something, anything, to deal with the exorbitant and rapidly fluctuating pump price of gasoline. Unfortunately, I could do little to ease the concerns of my constituents as the Competition Act only applies in instances when there is collusion. An act which represents only a very small part of a much larger problem. Since that time, I have taken an active roll as a member of the Committee. In fact, in January I hosted a well-attended public consultation session, with the Gasoline Pricing Committee, in my own riding. Further to that, I have been on my feet in the House on several different occasions presenting constituent petitions that were asking the government to enact legislation that would require the oil companies to justify, in writing to the Minister of Natural Resources, the reasons for any substantial fluctuation in the pump price per litre.

I have said it before, and I will say it again, if we opt for inaction then we opt for a continuation of the unfair, anti-competitive and highly unjustifiable pricing policies of this country’s major oil companies. That is unacceptable to me and it is unacceptable to the constituents that I represent.

I do want to clarify that I am not attempting to paint the majors as evil villains. What I want to do is to ensure that adequate statutes are in place to ensure that they are accountable to individuals who rely on them and their product. In rural Canada, as in many other sectors of this nation, public transportation is simply not available. Services are miles apart and therefore personal transportation is a necessity rather than a luxury. We would not stand for unwarranted and unexplained vacillation in the price of food, home rental costs, medicine or other basic essentials. With that in mind, I would ask, why have we accepted it with respect to gasoline? We need to establish accountability.

I would urge each and every one of my colleagues to support Bill C-235. It’s a good Bill and it’s deserving of our support. I understand that pump prices are low right now. In fact, they are as low as they have been in months, but that is not the point. This Bill is not demanding bargain basement prices. It’s calling for fair prices, high or low is not necessarily the issue. Often, as a result of predatory pricing, extremely low prices cause the most difficulty for the aforementioned independents. Selling at less than the rack price allows the majors to undercut their competition hence eliminating any recognizable profit margin and, we are all aware of what profit loss means to a business.

A continuation of predatory prices is a prime example of short-term gain for long-term pain. Right now Parliament has the ability to prevent a looming disaster from occurring. If we wait for all of the competition to be eliminated from the market, then what we have remaining is an uncontrollable monopoly that has the ability to unilaterally dictate the price, and availability, of one of this country’s most essential commodities.

I would conclude Mr. Speaker, simply by re-iterating my support and gratitude for the actions taken, and proposed by, the Member of Parliament for Pickering-Ajax-Uxbridge. I will be supporting this Bill and I would sincerely hope that each of my colleagues will be doing the same.

Thank you.