June 10, 1952

LIB

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

Liberal

Mr. Garson:

No, that is now in the act. The separation of functions, however, contemplated by the present bill between the director and the commission, makes it desirable to provide in the bill specifically for the procedure to be followed, and this has been done. As the director's functions are confined to those of securing information and presenting it for the consideration of the commission, the responsibility is placed

Combines Investigation Act on him of preparing for submission to the commission a statement of the evidence obtained in the inquiry which will serve also as notice to the parties concerned of the situation which the commission is being called upon to appraise.

The commission is to allow any person against whom an allegation is made in the statement submitted by the director full opportunity to be heard at the hearings to be held for that purpose, and to enable the director to submit representations with respect to his review of the evidence. So the two sides in the matter will be heard in a judicial manner by the commission. In one sense the provisions in the bill will codify the present practice under the Combines Investigation Act in this respect rather than introduce any change other than that arising out of the separation of functions as between director and commission. When this hearing has taken place, upon conclusion of the final argument the commission will prepare a report and submit it to the minister for publication.

More express provisions are also provided in the bill covering the removal and handling of documents required in the course of an inquiry. The present act provides for the copying of documents secured in an inquiry and for the return of such documents at the conclusion of an inquiry. No provision is made for furnishing the person from whom such documents were obtained with copies during the course of an inquiry, although this course has normally been followed if documents are required for any length of time. The bill provides that in the case of any documents removed for purpose of examination or copying, the original or a copy thereof shall be delivered to the person from whom it was obtained within sixty days unless the commission authorizes a longer period.

During the debate on the resolution the hon. member for Eglinton (Mr. Fleming) made particular reference to the recommendation of the MacQuarrie committee with reference to research in the field of monopolistic situations-I hope he will correct me if I am wrong when he takes part in the debate, if he chooses to do so-and I gathered that he thought greater emphasis on the work of research would be very desirable and advantageous. Hon. members will find that a section of the bill provides for investigation of monopolistic situations and authorizes for such purpose the same powers of investigation as are provided for other inquiries under the act.

It would not be appropriate for me to discuss at this stage the detailed provisions of

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Combines Investigation Act the bill, but I think I should elaborate to some extent on the brief comments I made on the resolution in regard to the new remedy of court order of prohibition which has some parallel with injunction orders in civil proceedings. Hon. members are aware that orders, of the nature of cease and desist orders, to be issued in discretion of an administrative tribunal were ruled ultra vires in the Board of Commerce cases.

The MacQuarrie committee stressed the desirability of providing for some form of judicial order which could be used to deal with combines offences in the incipient stage or to reach situations which might not be corrected by criminal prosecution. The committee pointed to the constitutional problems involved in devising legislation of this kind and suggested that the matter be studied by the law officers. The section in the bill is the result of such study, and in the opinion of the law officers there are strong reasons for believing that the section is within federal competence.

The orders envisaged by the section are, in contrast to those in issue in the Board of Commerce cases, to be granted by the courts by the application of general principles. In the case of a conviction for a combines offence it will enable the court to prohibit the continuance or repetition of the offence; and if the conviction is with respect to a combine by way of merger, trust or monopoly, the court may direct its dissolution. It will also be possible for the court to prohibit acts which are directed toward the commission of a combines offence or which are likely to constitute such an offence. In other words, it will not be necessary for the administration to wait until an offence has been committed before taking action in cases where it is apparent that restrictive practices are being developed which are likely to operate against the interest of the public.

Having indicated, in this and in previous speeches, the main provisions of the bill, I think this would be an appropriate time to indicate also some matters which it does not contain, and the reasons. At page 43 of the printed MacQuarrie committee report will be found the following recommendation:

2. That section 29 of the act dealing with tariff action and section 30 of the act dealing with patent action be amended in order to make the requirements of the public interest the condition justifying a recommendation and action in these respects.

Section 29 of the present act provides in effect that whenever as a result of an investigation or a court decision it appears to the governor in council that a combine exists to promote unduly the advantage of manufacturers or dealers at the expense of the public, and that the tariff has facilitated

such abuse, the governor in council may modify or remove the tariff from the article concerned. Section 17 of the Customs Tariff Act provides in effect that where a producer takes advantage of a duty to enhance prices the governor in council may remove or reduce the duty on the article concerned.

The MacQuarrie committee suggested that the provision which I have described, contained in the Combines Investigation Act, is too rigid since the governor in council has to find to his satisfaction that there exists a combine and the committee therefore proposed that the provision be amended and that the requirements of the public interest be made the condition justifying a recommendation by the new commission for remedial tariff action.

The decision not to modify section 29 at the present time is not by way of rejection of the MacQuarrie committee's recommendation. Having in mind, however, the really substantial powers that presently exist in section 29 of the Combines Investigation Act and section 17 of the Customs Tariff Act, to which I have referred, the government deemed it advisable to wait before making any change until a number of cases have come before the new commission which will point out in some detail the lines along which any amendment should proceed. To endeavour to catch the spirit of the recommendation in legislative form at the present time might result either in missing it or in vesting in the governor in council powers that would be so general as to be too arbitrary.

Similar considerations apply in respect of patents. The present section 30 of the Combines Investigation Act provides in effect that in any case where use has been made of a patent to restrain or injure unduly manufacture, trade or commerce in respect of any article the exchequer court on the information of the Attorney General of Canada may grant relief including the declaring void in whole or in part of any agreement relating to the use of the patent and including the directing of the grant of licences under the patent. The Patent Act also contains certain provisions for the safeguarding of the public interest in respect of patents.

Having regard to these existing remedies and to the same difficulty that was encountered in the case of tariffs, of trying to catch the spirit of the recommendation in legislative form without at the same time being too arbitrary, it was decided that no harm would result and that it would be the better course to have a number of cases before us that had come before the new commission and which

would assist in defining carefully the additional area to which the remedies might be extended.

The MacQuarrie committee recommended that the new commission should envisage the possible effectiveness of tariff action in every case presented to it and report its findings in this respect. It also recommended that the commission should consider the impact of patents in every case presented to it and report its findings. These recommendations will no doubt be carried out by the new commission, and their reports will enable the government to give the further consideration to these important matters which they deserve. In the meantime the existing provisions will enable a very considerable degree of remedial action in appropriate cases.

In conclusion, Mr. Speaker, I would say that the bill now before the house widens substantially the scope of the present act and introduces more suitable and workable provisions to carry out the administration of the legislation. It reaffirms public policy

Combines Investigation Act with respect to restrictive trade practices and demonstrates the desire of this government to see that policy applied in the most effective manner possible.

On motion of Mr. Fleming the debate was adjourned.

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

LIB

Alphonse Fournier (Minister of Public Works; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Fournier (Hull):

Tomorrow we will take up first the resolution in the name of the Minister of Agriculture to amend the Cold Storage Act; then the resolution in the name of the Minister of Finance respecting war risks insurance; then Bill No. 306, to amend the Combines Investigation Act and the Criminal Code. If we have time left we will take up Bill No. 279, to amend the Industrial Development Bank Act and the resolution in the name of the Minister of Resources and Development to amend the Northwest Territories Act.

Topic:   BUSINESS OF THE HOUSE
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At eleven o'clock the house adjourned, without question put, pursuant to standing order.



Wednesday, June 11, 1952


June 10, 1952