1st Session, 36th Parliament,
46-47 Elizabeth II, 1997-98

The House of Commons of Canada

BILL C-393

An Act to amend the Competition Act, 1998 (negative option marketing)

R.S., c. C-34; R.S., c. 27 (1st Supp.), c. 19 (2nd Supp.), c. 34 (3rd Supp.), cc. 1, 10 (4th Supp.); 1990, c. 37; 1991, cc. 45, 46, 47; 1992, cc. 1, 14; 1993, c. 34; 1995, c. 1

      Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

1. The Competition Act is amended by adding the following after section 53:

53.1 (1) The definitions in this subsection apply in this section.

``client''
« client »

``client'' means a person who receives a regular service from an enterprise in return for which the person pays the enterprise a fee periodically or according to the frequency with which the person uses the service.

``enter-
prise''
« entre-
prise »

``enterprise'' means

    (a) a bank to which the Bank Act applies;

    (b) a company to which the Trust and Loan Companies Act applies;

    (c) an association to which the Cooperative Credit Associations Act applies;

    (d) a broadcasting undertaking within the meaning of the Broadcasting Act;

    (e) a telecommunications undertaking within the meaning of the Telecommunications Act; and

    (f) a body corporate to which the Insurance Companies Act applies.

``service''
« service »

``service'' excludes services prescribed by the Governor in Council under section 128.

Prohibition

(2) A payment for the provision or sale of a new service shall not be charged or taken from a client by an enterprise unless

    (a) the enterprise sends to the client at least once a month for three consecutive months a notice in the prescribed form containing

      (i) a description of the new service,

      (ii) the date the new service is to begin,

      (iii) the cost of the new service calculated monthly and annually,

      (iv) a statement that the new service is not mandatory,

      (v) a statement that the client may obtain the new service by signing a business reply card and sending it to the enterprise, and

      (vi) any other matter that may be prescribed; and

    (b) the enterprise has received the express consent of the client for the purchase or reception of the new service by the client.

Exception

(3) Subsection (2) does not apply

    (a) where the new service replaces another service for which the client has already paid a fee and the same fee or a lesser fee is charged to the client; or

    (b) where the service offered is not the subject of a separate and specific charge.

Offence and punishment

(4) Any person who contravenes subsection (2) is guilty of an offence and liable

    (a) on conviction on indictment, to a fine not exceeding $100,000; or

    (b) on summary conviction, to a fine not exceeding $25,000.

Liability of officers and directors

(5) Where a corporation commits an offence under this section, any officer or director of the corporation who is in a position to direct or influence the policies of the corporation in respect of conduct prohibited by this section is a party to and guilty of the offence and liable to the punishment provided for the offence, whether or not the corporation has been prosecuted or convicted, unless the officer or director establishes that the officer or director exercised due diligence to prevent the commission of the offence.

2. Subsection 73(1) of the Act is replaced by the following:

Jurisdiction of Federal Court

73. (1) Subject to this section, the Attorney General of Canada may institute and conduct any prosecution or other proceedings under section 34, any of sections 45 to 51 and section 61 or, where the proceedings are on indictment, under section 52, 53, 53.1 , 55, 56, 59 or 74, in the Federal Court - Trial Division, and for the purposes of the prosecution or other proceedings, the Federal Court - Trial Division has all the powers and jurisdiction of a superior court of criminal jurisdiction under the Criminal Code and under this Act.

3. Section 127 of the Act is replaced by the following:

Annual report

127. (1) The Director shall report annually to the Minister concerning

    (a) any proceedings under this Act; and

    (b) the number of complaints received from the public pursuant to section 53.1, a description of the complaints and proceedings undertaken under this Act pursuant to the complaints received and the disposition of the proceedings.

Tabling of report

(2) The Minister shall cause a copy of the report to be laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the report is received by the Minister.

4. Subsections 128(1) and (2) of the Act are replaced by the following:

Regulations

128. (1) Subject to subsection (1.1) , the Governor in Council may make such regulations as are necessary for carrying out this Act and for the efficient administration thereof.

Regulations

(1.1) The Governor in Council may, by regulation, exempt from the definition of ``service'' in section 53 any service that, in the opinion of the Governor in Council, should be exempted in order to allow enterprises to which this section applies to remain competitive in their sector of activity, provided that the exemption does not deprive consumers of their right to competitive prices and product choices.

Prior notice

(2) Subject to subsection (3), a copy of each regulation that the Governor in Council proposes to make under subsections (1) and (1.1) shall be published in the Canada Gazette at least sixty days before the proposed effective date thereof and a reasonable opportunity shall be given for interested parties to make observations with respect thereto.

5. The Act is amended by adding the following after section 128:

Regulations

128.1 (1) Notwithstanding any other provision of this Act, within three months following the coming into force of this section, the Governor in Council shall make regulations

    (a) for the operation of section 1 of An Act to amend the Competition Act, 1998; and

    (b) amending sections of this Act to make them more consistent with section 1 of An Act to amend the Competition Act, 1998.

Effective date of certain regulations

(2) Subject to subsection (3), regulations made under subsection (1) shall come into force three months after this section comes into force.

Approval of the House of Commons

(3) The coming into force of any regulations that repeal a regulation made by the Governor in Council under paragraph (1)(b) is subject to approval by resolution of the House of Commons, and the regulations shall come into force on the day after the House of Commons approves the regulations by resolution.

CONDITIONAL AMENDMENTS

6. If Bill C-20, introduced during the first session of the thirty-sixth Parliament and entitled An Act to amend the Competition Act and to make consequential and related amendments to other Acts, is assented to and section 21 of that Bill comes into force before section 2 of this Act, section 2 of this Act is replaced, on the day section 21 comes into force, by the following:

2. Subsection 73(1) of the Act is replaced by the following:

Jurisdiction of Federal Court

73. (1) Subject to this section, the Attorney General of Canada may institute and conduct any prosecution or other proceedings under section 34, any of sections 45 to 51 and section 61 or, where the proceedings are on indictment, under section 52, 52.1, 53.1 , 55, 55.1 or 66 , in the Federal Court - Trial Division, and for the purposes of the prosecution or other proceedings, the Federal Court - Trial Division has all the powers and jurisdiction of a superior court of criminal jurisdiction under the Criminal Code and under this Act.

7. If Bill C-20, introduced during the first session of the thirty-sixth Parliament and entitled An Act to amend the Competition Act and to make consequential and related amendments to other Acts, is assented to and section 22 of that Bill comes into force after section 1 of this Act, subsection 74.07(2) of the Competition Act, as enacted by section 22 of Bill C-20, is replaced, on the day that section 22 comes into force, by the following:

Non-
application
of sections

(2) Sections 74.01 to 74.06 do not apply to any acts prohibited by sections 52.1, 53.1, 55 and 55.1.

8. If Bill C-20, introduced during the first session of the thirty-sixth Parliament and entitled An Act to amend the Competition Act and to make consequential and related amendments to other Acts, is assented to and section 36 of that Bill comes into force before section 3 of this Act, section 3 of this Act is replaced, on the day that section 36 comes into force, by the following:

3. Section 127 of the Act is replaced by the following:

Annual report

127. (1) The Commissioner shall report annually to the Minister on

    (a) the operation of the Acts referred to in subsection 7(1); and

    (b) the number of complaints received from the public concerning the application of section 53.1, a description of the complaints, the proceedings brought under this Act after receiving the complaints and the outcome of such proceedings.

Tabling of report

(2) The Minister shall cause a copy of the report to be laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the Minister receives it .

Coming into force

9. Sections 1 to 4 and 6 to 8 come into force three months after this Act is assented to.