June 10, 1952

SC

Victor Quelch

Social Credit

Mr. Victor Quelch (Acadia):

Mr. Speaker, the provisions of the resolution appear to be fair. Like the majority of amendments moved in relation to veterans affairs, I think this is a step in the right direction. I should like to join with those who have expressed appreciation* of the work being done by those peopie who have given their services on a voluntary basis in helping to administer the fund. I wonder if the minister intends to send the bill to the veterans affairs committee.

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
LIB

Hugues Lapointe (Minister of Veterans Affairs)

Liberal

Mr. Lapointe:

Yes.

Motion agreed to and the house went into committee, Mr. Robinson in the chair.

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
PC

William Joseph Browne

Progressive Conservative

Mr. Browne (St. John's West):

What

amount of interest will be paid on the amount of the fund which exceeds $5 million?

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
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LIB

Hugues Lapointe (Minister of Veterans Affairs)

Liberal

Mr. Lapointe:

The interest which is being paid at the present time, 2J per cent.

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
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PC

William Joseph Browne

Progressive Conservative

Mr. Browne (St. John's West):

According to the auditor general's report I believe there is a sum of $300,000 on which 3 per cent is paid.

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
LIB

Hugues Lapointe (Minister of Veterans Affairs)

Liberal

Mr. Lapointe:

Yes.

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
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PC

William Joseph Browne

Progressive Conservative

Mr. Browne (St. John's West):

That will still continue?

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
LIB

Hugues Lapointe (Minister of Veterans Affairs)

Liberal

Mr. Lapointe:

Yes. I think the amount is $309,000, which represent bonds bearing interest at 3 per cent. They axe in the oare of the securities division of the Department of Finance. The balance of the fund is an account in the consolidated revenue fund.

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
SC

Victor Quelch

Social Credit

Mr. Quelch:

Can the minister give the committee an idea of the approximate number of veterans who have benefited under this act?

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
LIB

Hugues Lapointe (Minister of Veterans Affairs)

Liberal

Mr. Lapointe:

I am afraid I have not that figure. As a matter of fact I was trying to get it just before I came into the house. However, I think that information will be available when the bill is referred to the special committee.

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
PC

Alfred Johnson Brooks

Progressive Conservative

Mr. Brooks:

I asked the minister a question about the $5 million.

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
LIB

Hugues Lapointe (Minister of Veterans Affairs)

Liberal

Mr. Lapointe:

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
PC

Alfred Johnson Brooks

Progressive Conservative

Mr. Brooks:

Was it because you were paying 3J per cent on similar funds like the annuities fund,?

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink
LIB

Hugues Lapointe (Minister of Veterans Affairs)

Liberal

Mr. Lapointe:

No. My understanding is that will meet the actuarial requirements to carry the fund for 50 years.

Resolution reported, read the second time and concurred in.

Mr. Lapointe thereupon moved for leave to introduce Bill No. 334, to amend the Army Benevolent Fund Act, 1947.

Topic:   ARMY BENEVOLENT FUND ACT
Subtopic:   INCREASE IN RATE OF INTEREST ON MINIMUM MONTHLY BALANCES
Permalink

COMBINES INVESTIGATION ACT TO PROVIDE FOR ADMINISTRATION

ESTABLISH- MENT OF RESTRICTIVE TRADE PRACTICES COMMISSION, ETC.

LIB

Stuart Sinclair Garson (Solicitor General of Canada; Minister of Justice and Attorney General of Canada)

Liberal

Hon. Stuart S. Garson (Minister of Justice) moved

the second reading of Bill No. 306, to amend the Combines Investigation Act and the Criminal Code.

He said: Mr. Speaker, the bill which is now before the house for second reading is the product of the report of the MacQuarrie committee which engaged in the first over-all review the act had had since 1923. It therefore seems appropriate at this time to review the principles and objectives of this legislation, and particularly the purposes which are intended to be served by combines legislation generally. The economic organization of our business in Canada is essentially one of free enterprise in a system of privately-owned business. It is true that there are exceptions such as certain kinds of public utilities of 55704-196

Combines Investigation Act which public ownership or public regulation has been considered more appropriate, but these are exceptions to the general rule.

The greater part of our industry consists of private business conducted without specific government regulation. We continue to rely upon a system of free enterprise because we are convinced that this system will produce the greatest benefits for the people of this country in terms of material well-being and political freedom. When we look around the world and see the results of other systems we are even more convinced of the soundness of our own. It is no accident, even when due allowance is made for the abundance of our natural resources, that the highest standard of living in the world today is enjoyed by Canada and the United States which are at the same time the outstanding examples of competitive free enterprise economies. However the winds of theory may appear at times to favour the socialist barque, this is the rock of fact upon which it must founder.

Our system of free enterprise cannot continue to produce these material gains unless the spirit of enterprise inherent in it is continually maintained and rejuvenated. It is competition which performs this function, but competition is not automatically self-perpetuating; and this is the reason we must constantly strive and take positive measures to maintain effective competition in Canadian business. If we fail to maintain competition; if we are beguiled by the argument that certain small groups of businessmen should regulate business in the interests both of themselves and those with whom they deal or whom they supply; if we once concede the regulation of business to those who want the gains of private business without having to meet the tests of efficiency, then we will lose the advantages of free enterprise and incur the disadvantages and restrictions of socialistic control but without any of the compensating advantages of that system.

This has been the experience of many industries in European countries. There great efforts have been made since the war to try to reawaken the spirit of competition and remove trade restrictions which hold back industrial recovery and growth which such countries need so much. Too frequently, perhaps, we are inclined to talk about maintaining competition in a free enterprise system in an abstract way without dwelling in sufficient detail upon the concrete considerations involved.

Sometimes it must seem to the man on the street that what is involved are mainly arguments among economists and other experts, which are very interesting for those who have the time and the inclination to follow

Combines Investigation Act them but which are of little practical significance to the ordinary man in his daily life. This, of course, is not the case; and that is one of the reasons it has seemed to me desirable to review, if only briefly, the major principles and objectives of our Canadian combines legislation.

At some danger, perhaps, of oversimplification I should like to put the point that the material welfare of the workingman-and in that term I include those who work at desks, in factories or the fields-depends upon two factors: the amount of currency he earns and its purchasing power. Some persons might say that in making this statement I am simply looking at two sides of the same coin. But I suggest that it helps the thinking of the man who is not an economist to break it down in this way. The entire significance in a pay increase of say from $1.50 to $2 per hour lies in what the original $1.50 and the additional 50 cents will buy in goods and services. To put it shortly, every earner has a natural and legitimate interest in the highest possible wage and the lowest possible prices.

Topic:   COMBINES INVESTIGATION ACT TO PROVIDE FOR ADMINISTRATION
Subtopic:   ESTABLISH- MENT OF RESTRICTIVE TRADE PRACTICES COMMISSION, ETC.
Permalink
L L

William Moore Benidickson (Parliamentary Assistant to the Minister of Transport)

Liberal Labour

Mr. Benidickson:

We are all consumers.

Topic:   COMBINES INVESTIGATION ACT TO PROVIDE FOR ADMINISTRATION
Subtopic:   ESTABLISH- MENT OF RESTRICTIVE TRADE PRACTICES COMMISSION, ETC.
Permalink
LIB

Stuart Sinclair Garson (Solicitor General of Canada; Minister of Justice and Attorney General of Canada)

Liberal

Mr. Garson:

As the hon. member says, we are all consumers. The only way to be able to pay the high wages and still have the low prices is by increasing the efficiency of the methods of production and distribution. Put a number of horsepower at the disposal of a skilled workman operating an ingenious machine, he can far out-produce a large number of workmen who are working with their bare hands. The same principle holds for all other technological improvements, whether they be by way of plant, process or materials, in either production or distribution. Good wages can be paid to the man who builds the machine and improves the process, and to the man who operates the machine or applies the process, and still a product can be turned out which can sell at reasonable prices and because it is sold at reasonable prices, it can be sold in large quantities.

It has been calculated that today's workman has available in his own physical resources an average of 1/5 0th horsepower, but in the machine he operates he has, on an average, in this country about 8 horsepower. New and better machines, improved processes, and new and improved materials- all that we include in the expression technological advances-mean more production per man hour. Under some less fortunate systems of society than that which we have in Canada the workman immediately concerned may derive little or no benefit from such increases in technological advances.

Under our system, however, each such improvement works in the direction of higher wages, lower prices and additional leisure. Here then is the point. Competition among producers and distributors encourages the creation of the improvements to which I have referred, and makes them available to all. Illegal price fixing agreements amongst purchasers and distributors, by destroying competition, discourages those improvements and operates to prevent existing improvements being as generally available for the benefit of all as would otherwise be the case.

The existence of arrangements relating to prices lessens the necessity to toe on the lookout for a better machine or an improved process lest another find it first. Not only does a combine decrease that necessity; it may also enable the participants to defer the use of improvements already known but the utilization of which would involve the group in some immediate outlay for new capital equipment. By the same token the drive to seek economies of operation and administration is tempered. In the train of the principal arrangements upon prices come other restraints upon production and distribution. When consumer demand falls off, as it must from time to time, we encounter under such an arrangement the ability and frequently the tendency to keep prices up, even if it may mean less production for the time being or even over a longer period. This, of course, means a fall-off in employment. So all along the line, when industry is governed by combines and not by competition, the natural results are likely to be lower wages, less leisure, higher prices and often failure to adjust to consumer demand, which results in recurrent unemployment.

It will be seen from the foregoing that competition affects -more than today's price on an article or a commodity. Competition produces not only better immediate prices but the development as time goes on of greater efficiency. It necessitates the improvement of existing processes and products and the introduction of new processes and new products. In a genuinely competitive market no manufacturer can rest upon his laurels. Continued success for him depends upon keeping in the vanguard of industrial advances. This benefits the whole society. Moreover the maintenance of a free enterprise system under competitive conditions is, I suggest, closely linked with a healthy democracy. The expansion of the economy produced by competition provides more equitable distribution of wealth and savings amongst most of the people.

Competition provides, moreover, economic opportunities for the talents and diligence of

those who have only talents and diligence to offer, and who might not get a chance to offer them under a business system which was under the control of a small minority of businessmen responsible to themselves alone. The results of private industrial control would be a serious curtailment of economic freedom which, in turn, would inevitably have its effect upon our democratic way of life.

There are those who would contend that in our efforts to maintain competition we are overlooking the changes that have taken place in industrial organization since anti-combines laws were first adopted sometime before the turn of the century. It is true that the competition we have today, under conditions of large scale industry and mass markets, is not the competition envisaged by early economists looking at local markets and small scale industry. But because the structure of industrial organization has changed, and may continue to change, is no reason to abandon our conviction in the efficacy of competition. We can look around and see what results follow when restrictive practices are tolerated or even in some cases encouraged. Pessimism over the ability of competition to exert itself effectively is by no means a phenomenon of recent years. A writer of authority, the late E. R. A. Seligman, of Columbia university, in an article in the Political Science Quarterly of 1887 said:

Competition has had its day and has proved ineffective.

That was his suggestion at that time.

Recognize the combinations but regulate them.

One could only imagine what the result might have been if the United States had accepted the principle suggested by Professor Seligman and had undertaken the governmental regulation of business instead of seeking to maintain competition. But in contrast with this 1887 quotation from Professor Seligman is another very recent statement of Professor R. B. Tennant in a recent volume of the Yale studies in economics when he says this with respect to the continued effectiveness of the Sherman Act in the United States:

It is strange and unsatisfactory that criminal prosecution of actions which result from market structure should produce desirable results, while the planned reform of that structure does not seem desirable. But in the present state of knowledge this may be the best that we can do. We are not yet ready to blueprint a new economic order, yet the effects of the anti-trust laws seem clearly desirable. The latent power of the Sherman Act is undoubtedly unpleasant for businessmen to live with, yet the act still appears to be, for all its untidiness, one of the most useful expressions of public policy.

55704-196i

Combines Investigation Act

Sometimes it is suggested-and I think wrongly so-that what are frequently attacked under the anti-combines legislation are situations that arise inevitably from today's conditions under which in many fields of industry the country is supplied by a small group of manufacturers. Such, of course, I would submit is not the case. It would not be denied that in a field where suppliers are few, each will have a fairly good idea of what reaction any step taken by this manufacturer or that manufacturer will produce among the others, and for this reason he may change his prices more slowly and with more regard to what his competitors will do than if all the suppliers were smaller and more numerous. That natural regard for the counteraction of others, however, is an entirely different thing from the positive degree of collusion which is the subject of attack under anti-combines legislation.

I think no one can look at the development of industry on this continent during the present century and fail to be impressed by the effective part which competition has played and continues to play in our industrial life, and the beneficial results which flow from such competitive activity. The fact that in a particular industry, whether from technological or other causes, production is concentrated in a few large producers does not necessarily result in the disappearance of competition in that industry. Vigorous competition may exist among a few large firms; and while it may not be the automatic competition envisaged when there are a multitude of sellers, it may still be effective competition benefiting consumers and others-dependent on the industry. The policy of the Combines Investigation Act directed against collusive agreements is thus an effective force even when competitors are so few that each acts with the knowledge that no significant change in his activity will pass unnoticed by his competitor.

Investigations under the Combines Investigation Act have disclosed the elaborate and persistent efforts which are made by large firms when they seek to eliminate price and other competition. Typical investigations show, for example, that seldom can a combine rest upon price arrangements alone. If manufacturers who are parties to price arrangements on certain lines of goods can make substitute lines and price them at will, the principal agreement will be ineffective. The usual combine therefore involves some restriction upon production.

Again, a price arrangement may be upset if one supplier ships collect and another freight prepaid; so frequently a combine embraces strict rules governing this and all

Combines Investigation Act other significant conditions of sale. The great variety and detail of the arrangements which are considered necessary to suppress competition in such ways demonstrate how various and how pervasive competition will be if it is not blocked. These elaborate arrangements to prevent competition also point to the value *of legislation such as the Combines Investigation Act; for the more difficult it is made to effect such arrangements to stifle competition, the more opportunity there obviously will be for competition to make itself felt. To the extent, then, that combines legislation assists in preventing rigidities and restrictions and in maintaining flexibility in the industrial field, it will contribute to the health of Canadian business.

Many of those who would deny the vitality of the competitive system fail to grasp that it stands as the only real alternative to state control. If competition is not to be maintained as an effective means of seeing that the benefits of industrial progress are equitably shared among the different sections of the population, it is clear that the mass of the people would not remain content to have industrial control exercised by large corporations not subject to government regulation. If we consider the abandonment of competition because of the difficulties which certain situations create in maintaining it, we must be prepared to face the much greater difficulties which would be created in trying to develop effective government regulation over widespread and complex industrial and trade operations. Not only would there be the difficulties of administration of such detailed regulations, but more serious by far in the long run would be the depressing effects, on innovations and industrial improvements, of the imposition of such government controls. Ultimately they would lessen in significant degree the standard of efficiency throughout our business life. Such a prospect, it seems to me, would dismay all but the most outright socialist. I think the majority of Canadians remain convinced -that the maintenance of competition is a much more advantageous and effective course of action.

The next question is "How best can we assure and protect competition?" This is most important. We require a method, I suggest, which will provide continuity in policy and some measure of zeal in administration. A brief examination of the various types of agencies which have been provided over the years will serve as a useful background for the consideration of the present proposals. When the Restraint of Trade Act was passed in 1889, which eventually became section 498 of the Criminal Code, no special provision was made for the investigation of

alleged offences and no special administrative agency was established to enforce that law.

The Combines Investigation Act of 1910 provided for a preliminary inquiry by a supreme court judge and subsequent investigation by a board of three members nominated for the purpose of the particular case which was under consideration. It is of more than passing interest, I think, to refer to the debate which took place in the House of Commons in 1910 when this important measure was introduced by the late Right Hon. W. L. Mackenzie King who at the time was minister of labour. The legislation then introduced was entirely novel, providing for the first time in democratic countries an orderly procedure for investigating the operation of business combines and providing further for publicizing the results of such investigation. These are the two principles which have governed combines legislation since that time; and in considering the present bill the house will understand that it is affirming the principles of anti-combines policy enunciated in 1910 and following the historic pattern of this legislation in devising means whereby those principles can be given greater practical effect at the present time.

There is some topical interest in recalling the legislation of 1910, and that it was passed at a time when prices had risen very substantially; and those hon. members who are familiar with that interesting address made by Mr. King on this occasion will recall that he devoted a considerable amount of his time-I think he spoke on that occasion for four hours, which I shall not attempt to emulate on this occasion-to a discussion of the basic causes for the movement in price levels which was taking place then. Indeed, 1910 was a time not unlike our own, when the nation was expanding, when the productive resources of the nation were being strained to the utmost to meet the demands of a rapidly-growing and prosperous economy. A good many of the things which Mr. King said on that occasion still have considerable validity more than forty years after.

In discussing prices Mr. King said, as reported in Hansard of 1909-10 at column 6810:

The legislation we are proposing is legislation which will afford an examination into the business of every large concern, where there is reason to believe that a combine is operating to an undue disadvantage of the public; and until an examination of its business had taken place, I would hesitate to say that it has been acting unfairly. The fact that the increase in prices, and the formation of these large mergers, and combines have taken place simultaneously, has created in the minds of the people a strong impression that the two are intimately connected, and the public are demanding some kind of legislation which will enable them to see whether they are right or wrong in that particular. [DOT] .

Mr. King then felt that it was imperative that these combines should be exposed, as he said, to the "light of day" in order that people should understand their significance in the nation.

The legislation of 1910 provided for a preliminary inquiry by a supreme court judge, which could be instigated by any six persons applying to the judge for an order directing an investigation into the alleged combine. If the judge so ordered, the investigation was conducted by a board of three members, one selected by the applicants, one by the parties against whom the application was made, and the third to be a judge nominated by the other two members.

In practice certain weaknesses were revealed in this legislation, but the outbreak of the first great war postponed any fundamental reconsideration of the problem of those weaknesses. At the end of the war, in the year 1919, under the union government, parliament passed the Board of Commerce Act, creating a board of commerce which was to administer the Combines and Fair Prices Act which supplanted the statute of 1910. This legislative scheme was declared ultra vires in 1921, but it did add to the scheme of the legislation the creation of a continuing enforcement authority.

Under the Combines Investigation Act of 1923, which is the one, with a number of amendments, which is still on the statute books, and to which the bill now before us provides for a number of amendments, it was contemplated that investigation could be made by special commissioners appointed for the purpose of each inquiry; but preliminary investigations were to be made by a permanent official, the registrar. In introducing this legislation in 1923 Right Hon. Mr. King said in Hansard for that year at page 988:

Now, it is recognized that there are distinct limitations in the matter of the protection of the public under the provisions of the Criminal Code. The legislation which the government is introducing proceeds on the theory that the reason why section 498 of the Criminal Code is of so little effect is not that there are no combinations that are detrimental to the public or that such combinations are rare, but rather that the existence of these combinations, and their method of operation is difficult to discover; that what is needed is effective machinery of investigation which will disclose the existence of combines operating to the detriment of the public, and afford the information whereby proceedings under the Criminal Code can be made really effective in the case of individuals who are violating its provisions, or who are associated with combines that are operating to the detriment of the public. The legislation to be introduced provides machinery for investigation, which it is hoped and believed will be effective toward this end.

Combines Investigation Act

Later, on second reading, Mr. King explained the fundamental principles underlying the legislation at page 2522 of Hansard, in the following terms:

. . . what is fundamental in this legislation is summed up in the words that private rights cease when they become public wrongs. In other words,, the bill does not in any way seek to restrain private individuals in the making of any contracts or agreements, tacit or implied or open, which they may wish to make, so long as in the exercise of their private rights they do not carry matters to, a point where their joint action becomes a public wrong in the form of a combination operating to the detriment of the public. .,

This act of 1923 carried on very effectively' from that time until 1935, when the dominion trade and industry commission was set up; consisting of three members. But these three members were also members of the tariff board, who had the responsibility for making-tariff inquiries and then were given the added duties of administering the Combines Investigation Act. The functions of this commission under the Combines Investigation Act itself were somewhat in opposition to one another, because on the one hand the commission was to approve certain agreements between firms in an industry which fixed prices and regulated production when it seemed that this course was advisable; and on the other hand they had also to administer the Combines Investigation Act which applied against arrangements unduly restricting competition. Therefore the same body was in the one case expected to investigate companies in respect of agreements, and in other cases they were authorized to approve of other types of agreements. However, that did not present a problem for too long because thp Dominion Trade and Industry Commission Act was also declared unconstitutional in part by the privy council, and in any event its period of administration was of brief duration. ,

The third great development in this legislation occurred in 1937 when the Combines Investigation Act was substantially amended,, and the act was passed as we know it now, apart from amendments which have since been effected. The main departure here was to provide for a single commissioner to conduct both preliminary and full investigations. The purpose of these amendments was stated by the then minister of labour, the late Hon. Norman McLeod Rogers as being "to restore the vigour of the Combines Investigation Act." And dealing more generally with the. new legislation Hon. Mr. Rogers said in Hansard of 1937 at page 1347:

The Canadian legislation in connection with combines represents an orderly and progressive development over a period of almost fifty years. In reshaping the legislation, as we are seeking to do at this time, we have sought to incorporate the best features of the several acts which have preceded

Combines Investigation Act the present act. The type of administrative agency is naturally one of the most important considerations to be kept in view.

This outline of legislative history shows that, as experience has indicated, the anticombines administration has been strengthened and confirmed by successive Liberal governments. In a very real sense the important changes now being proposed in this bill represent a continuance of this historical evolution of our combines legislation.

Looking back on these various developments, I think it can be said that the process has been one of working out within the constitutional powers of this parliament the most effective machinery possible. On the constitutional side, the goal has been to develop general principles which apply in all cases. When the procedure has been found to go beyond federal authority, as was the case with respect to the Board of Commerce Act and with respect to section 14 of the Dominion Trade and Industry Commission Act, it was because attempts were made to apply particular forms of regulation to local industries or trades. Aside, however, from constitutional considerations, it is obvious that a system which proceeds by a statement of general principles to be applied in a judicial or quasi-judicial manner has the advantage, among others, of getting as far as possible away from direct state intervention, which is necessarily present when an administrative body may give particular direction in every particular case which arises before it.

This brief historical review serves, I hope, to point up the fact that in all the various forms of administration I have mentioned, with the possible exception of the short-lived attempt to supervise price and production agreements in the depression period, the endeavour has been to find the most effective machinery to apply the principle of maintaining competition.

It is also noteworthy that the general principle of public policy in this regard as expressed in section 498 of the Criminal Code has remained the basic feature and has retained its significance through the lengthy period from its enactment in 1889 until the present time of 1952.

When I discussed this legislation during the debate in the house on the resolution I indicated in general terms the main changes which are included in the bill now before the house. I do not think it is necessary for me to repeat any of my remarks, but I believe I should indicate in a somewhat more definite manner the changes in procedure which are contemplated in the present bill. The act which is now to be amended provides for the initiation of an inquiry either by IMr. Garson.]

formal application of six citizens or by direction of the minister, or by the commissioner himself on his own motion whenever he, the commissioner, has reason to believe that a combine exists or is being formed. The first two bases of inquiry have been used rarely in recent years and ordinarily an inquiry is commenced because of information coming to the attention of the commissioner, either directly from members of the public or through the minister; that is, letters I receive from members of the house or members of the public, and which I pass on to the commissioner with the suggestion that he investigate them immediately.

The bill now before us makes no change in the ways in which an inquiry may begin, except that the director will have the status of the commissioner in this regard. That is to say, we have divided up the functions now being discharged by the commissioner into those of investigation, which the new director will discharge, and those of considering the material gathered by the director, and passing upon it in a quasi-judicial manner and making a report, which will be done by the new commission. The director in the first instance will initiate the inquiry and the investigation.

The progress of an inquiry normally extends through a number of stages from the informal collection of information, to begin with, to the examination of witnesses under oath, if the proceedings culminate in a formal investigation. At the preliminary stage, therefore, there is the assembly of information from available sources bearing on the question of whether there is a possibility of a situation existing in contravention of the act.

After a few preliminary inquiries of this kind it may appear to the commissioner that there is no ground for suspicion of contravention; the inquiries may end there, and the files would be closed. If the information obtained, however-and this is what happens in the minority of cases-does not dispel but rather strengthens the suspicion of the existence of practices in contravention of the act, then more intensive inquiries are undertaken, usually involving the examination of business records obtained from the premises of those believed to be involved in these arrangements.

Under the present act powers to issue orders for the entrance into and examination of premises and records are conferred on the commissioner. Under the bill similar authority is given to the director, subject to a certificate being issued by a member of the commission on ex parte application of

the director. That is, where the commissioner now can proceed to take these steps on his own motion, under the new arrangement he will have to apply to the commission on ex parte application for authority to do so. In effect, the initiative with respect to the commencement of investigation will rest with the director, but where he finds it necessary to exercise formal powers of entry and examination he will inform a member of the commission of the need for such action and secure a certificate such as that to which I have referred.

Somewhat the same situation will prevail with respect to the examination of witnesses under oath in the course of an inquiry. At present such witnesses are summoned by and examined before the commissioner or his delegate. Orders for the attendance of witnesses henceforth will be issued by a member of the commission on ex parte application of the director, or on the member's own motion. The witnesses will be heard by the member or by a person designated by the member of the commission.

Under the present act, hearings before the commissioner have usually been conducted by counsel appointed for the purpose by myself as Minister of Justice, and provision is made in the present bill for the appointment of counsel to conduct hearings before a member of the commission. The usual procedure under the present act, after the hearings have been concluded and if the circumstances then appear to warrant it, has been for the commissioner to request counsel appointed by the minister to review the evidence in the inquiry and prepare a statement as to its effect, including what are called allegations of misconduct, so that these may be submitted to the parties concerned for the purpose of affording them an opportunity, as the Inquiries Act requires, to be heard before the commissioner reaches conclusions and makes his report. In other words when a case has been built up it is submitted to the concerns affected, and an opportunity is given them to appear and show cause before the commissioner as to why no adverse report should be made against them.

Topic:   COMBINES INVESTIGATION ACT TO PROVIDE FOR ADMINISTRATION
Subtopic:   ESTABLISH- MENT OF RESTRICTIVE TRADE PRACTICES COMMISSION, ETC.
Permalink
LIB

Edward Turney Applewhaite

Liberal

Mr. Applewhaile:

Is that new?

Topic:   COMBINES INVESTIGATION ACT TO PROVIDE FOR ADMINISTRATION
Subtopic:   ESTABLISH- MENT OF RESTRICTIVE TRADE PRACTICES COMMISSION, ETC.
Permalink

June 10, 1952