January 18, 1910

COMBINES INVESTIGATION ACT.


Hon. MACKENZIE KING (Minister of Labour) moved for leave to introduce Bill (No. 101) to provide for the investigating of combines, monopolies, trusts and mergers which may enhance prices or restrict competition to the detriment of consumers.


CON
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Did the hon. gentleman give any explanation?

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LIB

George Gerald King

Liberal

Mr. KING.

The somewhat lengthy title of this Bill may help to explain its scope and purpose. The short title is the Combines Investigation Act. As human

ingenuity has devised a great many forms of combination for the purpose of effecting an increase in prices, or the restriction of competition, an effort has been made in this measure to give a definition of the word 'combine' sufficiently comprehensive to embrace all forms of combination which may have this effect, and in particular to make it clear that this measure shall have reference to all such forms of combination as are popularly known as monopolies, trusts, mergers and combines. The legislation differs in some particulars from legislation of a like nature which has been introduced in other countries in that it is not aimed against combines or mergers as such, but rather against the exercise on the part of combines, mergers or monopolies, in an unfair manner, of the powers which they may get from that form of organization. This is an age of organization and not merely of local or national competition but of world-wide competition and any industry or any nation which wishes to hold its own in the field of com-petitipn must do much in the way of perfecting organization. A highly organized industry should, from the facilities it has of improving production, lead to greater efficiency and economies of one kind and another, which should, on the whole, benefit the consuming public. But, we know that in other countries, and possibly also in this country, organizations have not always used their corporate powers to the . advantage of the consumers, but have taken, in some cases, possibly, an unfair advantage to themselves. This measure seeks to afford the means of conserving to the public some of the benefits which arise from large organizations of capital for the purpose of business and commerce. It is organized society which alone makes the organization of capital and industry possible, and the people have a right to expect, and to look to the government to see that their rights shall be conserved and that their liberties shall not be curtailed by, privileges which they permit others to enjoy.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Who is to initiate the investigation?

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LIB

George Gerald King

Liberal

Mr. KING.

Perhaps it would be well if I were to explain somewhat in detail the procedure suggested by this measure. It is provided that the Act shall be under the Minister of Labour and that in connection with the administration of the Act a registrar of boards of investigation shall be appointed.

In all measures of this kind thataffect private interests and at the same time public rights there are two factors which have to be kept constantly in mind. There is first of all the desirability of securing the minimum of interference with private business where that business is conducted in a fairand proper way, and on the other

hand the desirability of providing a ready and efficient means for individuals or the public to secure their due rights where these rights are interfered with or encroached upon by any corporation. These two objects, have, it is hoped, been kept in mind in the drafting of this measure. It is believed that the Bill as introduced will afford a ready and convenient means whereby parties who have reason to believe that any combination is unduly enhancing prices or unfairly restricting competition, may obtain an investigation, and an effective remedy against evils which may be found to exist. This, it is sought to obtain in the first place by providing that six or more persons who feel that a combine exists and that prices have been enhanced or competition restricted by reason of such combine to the detriment of the consumer, may make application to a judge of the high court for an order to grant an investigation. The judge may, if he so desires, call before him witnesses, but all that is necessary is for the judge to assure himself before granting such order that a prime facie case has been made out. The judge, if satisfied there is reasonable ground for believing that a combine exists which is injurious to trade or which is operating to the detriment of consumers, and that it is in the public interest an investigation should be held, may direct or rather shall direct $n investigation under the provisions of this Act.

When the judge issues an order for an investigation the order is to be directed to the minister who is thereupon to call each of the parties concerned to name a member on the board of investigation. The Act in this particular proceeds along lines somewhat similar to the procedure under the Industrial Disputes Investigation Act. The parties who have made the complaint are called upon to name a representative on this board of investigation, the parties concerned in the alleged combine are called upon to name a representative on their behalf, and the two gentlemen thus chosen are given opportunity of centering together with a view of selecting a third person (who

must in this particular case be a judge) to act as chairman of the board of investigation. Failing agreement the minister appoints the chairman. The board thus constituted shall have all the powers of a court of record; it shall have power of summoning witnesses, of ordering the production of documents, of taking evidence under oath. When the board has duly investigated the matters before it, it is the duty of the board to draw up a report and submit that report to the minister who is obliged to give it publicity by publishing it in the ' Canada Gazette/ by sending copies to the parties concerned, by distributing copies to the press if so desired, and by supplying copies to any other parties who may make application. Perhaps it would be well to read the section which refers to the board of investigation:

The board shall expeditiously and fully and carefully inquire into the matters referred to it and all matters affecting the merits thereof, including the question of whether or not the price or rental of any article concerned has been unreasonably enhanced or competition in the supply thereof unduly restricted in consequence of a combine, and shall make a full and detailed report thereon to the minister, which report shall set forth the various proceedings and steps taken by the board for the purpose of fully and carefully ascertaining all the facts and circumstances connected with the alleged combine, including such findings and reeom-mendations as in the opinion of the hoard are in accordance with the merits and requirements of the case.

There are certain classes of evils in the remedying of which it is believed publicity is more effective than penalty. It may not be that publicity will in all cases prove an effective remedy, but certainly in industrial matters it has many times in the past proven to be effective. While this Act provides machinery of a nature calculated to let in the light on the workings of these , large corporations when it is believed they are operating in a manner unfair to the consumer, and while it is believed that much good will be accomplished in this way, the legislation does not rely entirely upon publicity to bring about the desired remedy. There are other remedies proposed, and one is the remedy already existing in connection under other legislation with respect in certain cases to such articles as are protected by the tariff. The statute in this particular gives authority to the Governor in Council where the board reports that prices have been unduly enhanced or that competition is being unfairly restricted in virtue of the protection given to a particular article to reduce the tariff on that particular article or to remove the duty altogether.

Then, there is another class of combination which it is hoped this measure may be the means of preventing. I refer to the Mr. KING.

case of persons holding patents and who exercise their exclusive rights and privileges to restrict competition. In section 22 of the Act there is this provision:

In case the owner or holder of any patent issued under the Patent Act has made use of the exclusive rights and privileges which, as such owner or holder he controls, so as unduly to limit the facilities for transporting, producing, manufacturing, supplying, storing or dealing in any article which may be a subject of trade or commerce or so as un- -duly to restrain or injure trade or commerce in relation to any such article or unduly to prevent, limit or lessen the manufacture or production of any article or unreasonably to enhance the price thereof, or purchase, barter, sale, transportation, storage or supply of any article such patent shall be liable to be revoked.

The clause then sets forth the steps that may be taken for the revoking of the patent where an adverse report has been made by a board in such a case.

Then there is a further clause which provides that where a board finds any combination has been guilty of enhancing prices or unfairly restricting competition to the detriment of the consumers, if the guilty parties persist in the conduct which has been reported against, they shall be guilty of an indictable offence and liable to a penalty not exceeding $1,000 and costs for each day that they continue to offend after the expiration of ten days from the date of publication of the report of the board in the 'Canada Gazette/

These are the main features of the measure, Mr. Speaker. A good part of the Bill is taken up with the setting out the machinery for investigation, a part of it relates to the meetings of the board, the remuneration and expenses of the board and the taking of evidence, and there are a few miscellaneous clauses. I think, however, what I have said will be sufficient as an outline of the Bill. [DOT]

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Motion agreed to, and Bill read the first time.


LONG SAULT RAPIDS.

CON

John Dowsley Reid

Conservative (1867-1942)

Mr. J. D. REID (Grenville).

I would ask the government if the rumour is true that a deputation from Montreal waited on the government yesterday to ask that they be granted the privilege of placing a dam across the St. Lawrence river. If so, has any decision been arrived at?

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LIB

William Pugsley (Minister of Public Works)

Liberal

Mr. PUGSLEY.

There was a deputation consisting of representatives of the company which proposes to develop the power, and that deputation presented certain statements to the Committee of the Privy Council.

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CON
LIB

William Pugsley (Minister of Public Works)

Liberal

Mr. PUGSLEY.

No, it was understood that they would present the modified plans to the International Waterways Commission, and that commission would give an opportunity to the navigation interests and those who might naturally be opposed to any obstructions to navigation, to be heard. After that the 'matter would come again before the government for consideration.

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CON

Francis Ramsey Lalor

Conservative (1867-1942)

Mr. LALOR.

Has a day for hearing that deputation been arranged for?

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LIB

MANITOBA FISHERY COMMISSION.

CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Referring to the request preferred yesterday that the report of a certain fishery commission should be laid on the table, so far as I understand the case, it is this. Three commissioners were originally appointed. One of them was afterwards elevated to the bench and consequently ceased to act as a commissioner. Another was appointed in his place, and these three commissioners, duly constituted, made their report. The cause of the delay, as I understand it, is that the commissioner, who was elevated to the bench, has not signed the report. I do not see that he has any jurisdiction to sign, and therefore the reason given by the Prime Minister yesterday is not a good one for withholding the report.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

I am not personally familiar with the matter, but will draw the attention of the right hon. the Prime Minister to it.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

I am glad my hon. friend will do so because there has been unreasonable delay.

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BANK ACT AMENDMENT.

January 18, 1910