Government of Canada Takes Action to Ensure Fairness at the Gas Pumps

ANJOU, Quebec, April 15, 2010 — The Honourable Denis Lebel, Minister of State (Economic Development Agency of Canada for the Regions of Quebec), on behalf of the Honourable Tony Clement, Minister of Industry, today announced that the Government of Canada has introduced measures to protect Canadian consumers from inaccurate measurement when purchasing gasoline or other measured goods. The proposed Fairness at the Pumps Act will make retailers more accountable for the accuracy of their pumps and other measuring devices.

“Canadians’ confidence in the accuracy of measurement-based transactions is vitally important to our economy, especially at a time when family budgets are spread thin,” said Minister of State Lebel. “The proposed Fairness at the Pumps Act means Canadian consumers will be protected against unfair practices and can be more confident in everyday transactions that involve measurement.”

“When Canadians pull into a station to gas up, they want to know that what’s on the pump is what’s in the tank,” said Minister Clement. “The proposed act gives businesses strong incentives to ensure the accuracy of their devices.”

The Fairness at the Pumps Act proposes to increase retailer accountability for measuring device accuracy by requiring that they have devices such as gas pumps and retail food scales inspected at regular intervals. Additionally, increased court-imposed fines of $10 000 for minor offences, $25 000 for major offences, and a new fine for repeat offences of up to $50 000 are proposed in combination with the introduction of a system of administrative monetary penalties to ensure appropriate deterrence against measurement inaccuracy.

The new act also proposes the creation of a system of authorized service providers, trained and certified by Measurement Canada, to perform inspections. The proposed use of non-government inspectors to fulfill mandatory inspection requirements would create or expand business opportunities in communities, as well as allow Measurement Canada to leverage its resources to improve measurement accuracy and raise consumer confidence in the marketplace.

Under the Fairness at the Pumps Act, Measurement Canada inspectors would continue to assess accuracy of measurement devices through independent inspections, as well as responding to complaints of inaccurate measure and performing follow-up inspections of non-government inspectors. Measurement Canada inspectors would be solely responsible for taking enforcement actions when offences are identified.

For further information (media only), please contact:

Lynn Meahan
Press Secretary
Office of the Honourable Tony Clement
Minister of Industry
613-995-9001

Media Relations
Industry Canada
613-943-2502

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Backgrounder
Proposed Fairness at the Pumps Act: An Act to Amend the Weights and Measures Act and the Electricity and Gas Inspection Act

On April 15, 2010, the Government of Canada introduced in the House of Commons legislation entitled the Fairness at the Pumps Act. This legislation is a comprehensive package that proposes to strengthen consumer protection against inaccurate gas pumps, as well as unfair retailer practices. It proposes to improve consumer confidence in the accuracy of financial transactions that involve measurement. Business and consumer confidence in the accuracy of goods bought and sold on the basis of measurement is key to an efficient and fair Canadian marketplace.

The marketplace has changed significantly since the Weights and Measures Act and the Electricity and Gas Inspection Act were last reviewed. These acts require updating to ensure they provide appropriate levels of consumer protection and adequate deterrence against inaccurate measurement.

Increased fines and introduction of administrative monetary penalties

The Fairness at the Pumps Act proposes to strengthen consumer protection and provide greater deterrence against inaccurate measurement by increasing the court-imposed fines under the Electricity and Gas Inspection Act and the Weights and Measures Act. Fines under the two acts would rise from $1000 up to $10 000 for minor offences, and from $5000 up to $25 000 for major offences. The amendments also introduce a new fine of up to $50 000 for repeat offences.

The introduction of administrative monetary penalties for contraventions under both acts would also permit Measurement Canada to employ a graduated enforcement approach in which the government could apply an enforcement strategy appropriate to the severity of the offence — with monetary penalties for relatively minor offences and prosecution for serious or repeated offences.

Currently, prosecution is the only means available to levy fines for non-compliance. Prosecution is not always the most appropriate mechanism for punishing relatively minor contraventions, as it leads to a criminal record, a punishment often not in line with the severity of the offence.

Mandatory inspection frequencies

The Fairness at the Pumps Act proposes to increase retailer accountability for measuring device accuracy by requiring that retailers have their devices inspected at regular intervals. Mandatory inspection frequencies are proposed that would use a phased-in approach for measuring devices used in eight trade sectors: (1) retail petroleum, (2) downstream (or wholesale) petroleum, (3) dairy, (4) retail food, (5) fishing, (6) logging, (7) grain and field crops and (8) mining.

Other sectors could be added in the future, based on the results of stakeholder consultations.

Mandatory inspection frequencies are used by the majority of industrialized nations (e.g., France, Germany and most U.S. states) and, in Canada, currently exist for electricity and natural gas meters under the Electricity and Gas Inspection Act. Measurement Canada data shows devices inspected at regular intervals measure more accurately.

Through consultations, stakeholders recommended mandatory inspection frequencies as a means to improve measurement accuracy.

Use of private-sector authorized service providers

Another important proposal under the Fairness at the Pumps Act is the creation of the authority for the Minister of Industry to appoint non-government inspectors, or authorized service providers, under the Weights and Measures Act to perform inspections, thereby allowing  Measurement Canada to leverage its resources and fully enforce its mandate. The use of non-government inspectors has been successfully employed for many years for inspections under the Electricity and Gas Inspection Act.

Mandatory inspections would be conducted by authorized service providers. Measurement Canada inspectors would continue to assess marketplace performance through independent inspections, respond to complaints of suspected inaccurate measurement and perform follow-up inspections of authorized service providers to ensure they are doing their jobs correctly. Measurement Canada inspectors would be solely responsible for enforcement actions.

Fees for independent inspection services would be determined by market forces, ensuring that there is competition in the marketplace and that retailers would be charged fairly for these services.

As an added value, the proposed use of non-government inspectors to perform mandatory measuring device inspections would provide new or expanded business opportunities for small businesses to become authorized service providers. For example, it is estimated that the number of annual gas pump inspections would increase from 8000 to approximately 65 000.

A case study conducted by the International Organization of Legal Metrology in 2003 used Canadian device compliance rates to estimate the “dollars at risk” for each type of device. When these figures were related to the cost of certification activities, it was found that for each dollar spent, $11 of inaccurate measurement was corrected.

The Fairness at the Pumps Act would help Measurement Canada leverage its resources to improve measurement accuracy, raise consumer confidence in the marketplace and save consumers millions of dollars annually.