TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

                          SUBJECT:

Proceeding to establish a national do not call list

framework and to review the telemarketing rules /

Instance visant à établir le cadre de la liste nationale

de numéros de téléphone exclus et à examiner

les règles de télémarketing

HELD AT:                              TENUE À:

Conference Centre                     Centre de conférences

Outaouais Room                        Salle Outaouais

140 Promenade du Portage              140, Promenade du Portage

Gatineau, Quebec                      Gatineau (Québec)

May 2, 2006                           Le 2 mai 2006

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

bilingues en ce qui a trait à la page couverture, la liste des

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

textuel des délibérations et, en tant que tel, est enregistrée

et transcrite dans l'une ou l'autre des deux langues

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

               Canadian Radio‑television and

               Telecommunications Commission

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

                 Transcript / Transcription

    Proceeding to establish a national do not call list

     framework and to review the telemarketing rules /

  Instance visant à établir le cadre de la liste nationale

        de numéros de téléphone exclus et à examiner

                les règles de télémarketing

BEFORE / DEVANT:

Richard French                    Chairperson / Président

Elizabeth Duncan                  Commissioner / Conseillère

Barbara Cram                      Commissioner / Conseillère

Rita Cugini                       Commissioner / Conseillère

Stuart Langford                   Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Madeleine Bisson                  Secretary / Secrétaire

Stephen Millington                Legal Counsel /

Conseiller juridique

HELD AT:                          TENUE À:

Conference Centre                 Centre de conférences

Outaouais Room                    Salle Outaouais

140 Promenade du Portage          140, Promenade du Portage

Gatineau, Quebec                  Gatineau (Québec)

May 2, 2006                       Le 2 mai 2006

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

Presentation by Advocis                            10 /   57

    Questions by the Commission                    20 /  115

Presentation by CADRI                              60 /  405

    Questions by the Commission                    65 /  439

Presentation by the Canadian Bankers Association   96 /  672

    Questions by the Commission                    97 /  680

Presentation by the Association of                132 /  940

  Fundraising Professionals

    Questions by the Commission                   137 /  970

Présentation par l'Union des consommateurs        160 / 1127

    Questions by the Commission                   197 / 1307

Presentation by Primerica Financial Services      227 / 1499

    Questions by the Commission                   233 / 1534

Presentation by the Canadian Marketing Association 276 / 1865

    Questions by the Commission                   284 / 1914

                  Gatineau Quebec / Gatineau (Québec)

‑‑‑ Upon commencing on Tuesday, May 2, 2006

    at 0920 / L'audience débute le mardi

    2 mai 2006 à 0920

LISTNUM 1 \l 11                LE PRÉSIDENT : Mesdames et messieurs, à l'ordre, s'il vous plaît.  Order, please.

LISTNUM 1 \l 12                Good morning, ladies and gentlemen.  Welcome.

LISTNUM 1 \l 13                My name is Richard French.  I am the Vice‑Chairperson of Telecommunications for the Commission.

LISTNUM 1 \l 14                With me today on the panel:  on my left, Elizabeth Duncan, Commissioner for the Atlantic Region; Barbara Cram on my immediate right, Commissioner for Manitoba and Saskatchewan; extreme left, Rita Cugini, Commissioner for the Ontario Region; extreme right, Stuart Langford, National Commissioner.

LISTNUM 1 \l 15                We have a number of Commission staff here as well.

LISTNUM 1 \l 16                Seated at the table are Madeleine Bisson, Consultation Secretary; Commission counsel, Stephen Millington; Sean Kelly in the middle; Gerry Lylyk, Director of Consumer Affairs; and their team members across the back, Susan Gardiner, Mary‑Louise Hayward, Leah Ackerman, Kevin Pickel and Kelly Anne Smith.

LISTNUM 1 \l 17                Au cours des prochains jours, nous entendrons les présentations des parties intéressées à comparaître devant nous.  De plus, nous étudierons attentivement tous les documents déposés dans le cadre de la présente instance, tant ceux des parties qui comparaissent cette semaine que les autres parties.

LISTNUM 1 \l 18                De nombreux Canadiens considèrent les appels de télémarketing comme une atteinte à la vie privée.  De récentes modifications à la Loi sur les télécommunications, la Loi modifiée, visent à mettre en place un cadre permettant d'atténuer les inconvénients associés à certains aspects du télémarketing non sollicité.

LISTNUM 1 \l 19                So in that context and the framework of potential invasion of privacy by telemarketing, the amended Act, when proclaimed ‑‑ and it has not yet been proclaimed ‑‑ will provide the Commission with the authority to establish a national Do Not Call List and to delegate the administration of that national Do Not Call List and related functions to a third party.

LISTNUM 1 \l 110               The amended Act will also empower the Commission to levy administrative monetary penalties, so called AMPs, for violations of its telemarketing rules.

LISTNUM 1 \l 111               The amended Act sets out a list of telemarketing and telemarketing‑like activities which will be exempt from any of the requirements or prohibitions established by the Commission in relation to the national Do Not Call List.

LISTNUM 1 \l 112               Such telemarketing will not necessarily be exempt from other aspects of the framework which the Commission will establish consequent to the powers and responsibilities vested in it by the Act.

LISTNUM 1 \l 113               Just an impression that some of the exempt parties ‑‑ that is, exempted from the national Do Not Call List ‑‑ may also be exempt from any controls on telemarketing.  Not true, or at least not necessarily true under the Act.

LISTNUM 1 \l 114               As noted in the Public Notice CRTC 2006‑4, a key step in developing the national Do Not Call List will be the selection of the Do Not Call List operator and the development of the terms according to which it will be operated.

LISTNUM 1 \l 115               As you may be aware, a Consortium formation CISC subcommittee has been established.

LISTNUM 1 \l 116               For those of you who are not familiar with the delightful acronyms that festoon our business of regulation of telecom, CISC is the CRTC Interconnection Steering Committee.

LISTNUM 1 \l 117               In parallel with the operation of this subcommittee, a Do Not Call List operations CISC subcommittee ‑‑ how would you like to be the Chairman of that?

LISTNUM 1 \l 118               A Do Not Call List operations CISC subcommittee will examine a number of issues relating to the functioning of the national Do Not Call List.

LISTNUM 1 \l 119               The address and resolution of these matters should enable the Consortium to finalize the terms and conditions of the contractual arrangement with the Do Not Call List operator.

LISTNUM 1 \l 120               For today, you may assume that all of the Commissioners will have read your written submissions and are therefore familiar with your organization.  Unless otherwise indicated, parties will be allotted a maximum of ten minutes to make their presentation.

LISTNUM 1 \l 121               The consultation Secretary will advise you when you have one minute remaining.

LISTNUM 1 \l 122               I would ask parties to concentrate on the essential message which you seek to leave with the Commission and to do so within the time allotted.

LISTNUM 1 \l 123               Generally Commissioners' questions, as well as questions by Commission counsel, if any, will come after each party has completed its presentation.

LISTNUM 1 \l 124               Parties wishing to make a closing statement will be allotted five minutes in the reverse order of their presentation after all the parties have made their presentations.

LISTNUM 1 \l 125               Je voudrais préciser que le but de l'audience est d'établir des principes, des politiques et des pratiques qui serviront l'intérêt public en assurant l'efficacité de la mise en oeuvre de la Loi que le Parlement a adopté.

LISTNUM 1 \l 126               Je demanderais à tous les participants à cette audience de revoir la déclaration préliminaire à la lumière de ce principe.

LISTNUM 1 \l 127               I would like to point out that the purpose of the hearing is to help the CRTC to implement the revised law in an effective and efficient way.  What we are really looking for in your interventions today is specific suggestions and advice in that respect.

LISTNUM 1 \l 128               Parliament has passed a law.  We don't need to spend time reconsidering that law but rather how it will be applied, what the pros and cons of the various questions or aspects of application raise from the point of view of your organization and your expertise.

LISTNUM 1 \l 129               Si vous avez d'autres questions sur le déroulement de la consultation, je vous demanderais de vous adresser à la Secrétaire de la consultation, madame Madeleine Bisson.

LISTNUM 1 \l 130               If you have any other questions, please ask the Secretary of the proceeding, Madeleine Bisson.

LISTNUM 1 \l 131               I now invite her to review some additional housekeeping matters.

LISTNUM 1 \l 132               LA SECRÉTAIRE : Merci, Monsieur le Président.

LISTNUM 1 \l 133               Avant de procéder, seulement quelques mises au point qui contribueront au bon déroulement de cette consultation publique.

LISTNUM 1 \l 134               When you are in the hearing room, we would ask you to please turn off your cell phones, pagers, Blackberries and other text messaging devices as they are an unwelcome distraction for participants and Commissioners, and they cause interference on the internal communication system used by the translators and court reporter.

LISTNUM 1 \l 135               We are counting on your co‑operation in this regard throughout the consultation.

LISTNUM 1 \l 136               As indicated in the Organization and Conduct letter issued on 7th April 2006, except for today, we propose to sit from 9:00 a.m. to 6:00 p.m. each day.  We will take a 90‑minute lunch break, as well as a 15‑minute mid‑morning and mid‑afternoon break.

LISTNUM 1 \l 137               While we do not anticipate sitting into the evenings, it may be necessary if the consultation falls behind schedule.

LISTNUM 1 \l 138               L'offre de comparution pour cette consultation, telle que publiée à l'Annexe A de la lettre d'organisation et de déroulement de l'audience du 7 avril 2006 a été révisée.  Vous pouvez vous procurer une copie de l'agenda révisé à la Salle Papineau.

LISTNUM 1 \l 139               The Papineau Room will serve as the public examination room for this consultation.  The room is open to all parties and to the public for the duration of the consultation and contains a complete copy of the record.

LISTNUM 1 \l 140               Furthermore, please leave at the reception table 25 copies of the text of your oral presentation for the Commission's use and one copy for each of the 20 other parties presenting at the consultation.

LISTNUM 1 \l 141               Pour faciliter la distribution de vos présentations aux autres parties, vous pouvez déposer les 20 copies demandées sur la table à l'arrière de la salle.  Je rappelle aux parties que les présentations verbales sont distribuées par commodité seulement et ne font pas partie du dossier public de cette consultation.

LISTNUM 1 \l 142               Also, parties will be asked to come forward when making their presentation.  Spokespersons will be required to present themselves, their team members and to proceed with their presentation within the prescribed timeframe.

LISTNUM 1 \l 143               Finalement, afin d'assurer que la transcription de cette consultation soit la plus exacte possible, veuillez vous assurer que votre micro est ouvert lorsque vous vous adressez au Conseil.

LISTNUM 1 \l 144               A copy of each day's transcript will be available in the Papineau Room at the start of the next consultation day, and the full set of the transcripts will be posted on the Commission's website shortly after conclusion of this consultation.

LISTNUM 1 \l 145               Parties who wish to purchase copies of transcripts or other services from Media Copy should deal with them directly.

LISTNUM 1 \l 146               Maintenant, Monsieur le Président, nous allons poursuivre avec les comparutions.

LISTNUM 1 \l 147               LE PRÉSIDENT : Madame la Secrétaire, j'ai oublié.

LISTNUM 1 \l 148               My conscience and confessor in these matters, Commissioner Cram, reminds me that I had committed to our staff to underline to you that there are some specific areas, both empirical and normative, where we will be asking for some written support, further advice on your part, which we call in our jargon undertakings.

LISTNUM 1 \l 149               The Commission staff and/or the Commission's legal staff will be seeking those undertakings from you.

LISTNUM 1 \l 150               I would only request if you would be so kind as to consider whether you can make a further constructive contribution by responding to those undertakings.

LISTNUM 1 \l 151               Do we have any other details about that at this point?  No.

LISTNUM 1 \l 152               I just mention that.  You will be contacted if your organization is among those from whom we seek these undertakings.  Thanks.

LISTNUM 1 \l 153               Je m'excuse, Madame la Secrétaire.

LISTNUM 1 \l 154               LA SECRÉTAIRE : Merci, Monsieur le Président.

LISTNUM 1 \l 155               I will call on Advocis to make its presentation.

LISTNUM 1 \l 156               Mr. McLeod, could you please introduce yourself and your panel.

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 157               MR. McLEOD:  Good morning, Commissioners, Commission staff and fellow presenters.

LISTNUM 1 \l 158               I am Gary McLeod, Chair of the National Board of Advocis, which is the Financial Advisors Association of Canada.

LISTNUM 1 \l 159               I am joined by Sara Gelgor, our Vice‑President of Regulatory Affairs at Advocis.

LISTNUM 1 \l 160               Thank you for the opportunity to appear before you.  Before I proceed to the substance of my presentation, please allow me to provide a brief overview of Advocis.

LISTNUM 1 \l 161               Advocis is the largest voluntary professional membership association of financial advisors, with 12,000 members across Canada.  Our members are financial advisors licensed to distribute life and health insurance, mutual funds and other securities.

LISTNUM 1 \l 162               Advocis members provide financial and product advice to millions of Canadians across a variety of distinct areas, including estate and retirement planning, wealth management, risk management and tax planning.

LISTNUM 1 \l 163               Our association traces its origins to the founding of the Life Underwriters Association of Canada and this year marks our 100th anniversary.

LISTNUM 1 \l 164               Personal communication is an integral component of a professional financial advisor's business.  Professional financial advisors interact daily with numerous consumers, often for the first time through personal referrals and other means as part of their business development process.

LISTNUM 1 \l 165               Financial advisors compete effectively in the marketplace and have been successful in doing so, provided the established regulatory environment promotes a level playing field for all participants.  Financial advisors also serve to represent the views of their clients from a consumer protection standpoint in the important debates of the day.

LISTNUM 1 \l 166               We support the government's efforts to alleviate telemarketing irritations for Canadians, while striving to maintain a competitive environment for business.

LISTNUM 1 \l 167               Advocis educates its members through practice standards and an established Best Practices Manual.

LISTNUM 1 \l 168               Advocis standards are based on prescribed obligations and often exceed even the most stringent regulatory requirements.

LISTNUM 1 \l 169               Today we wish to highlight the following key issues pertaining to the framework of a national Do Not Call List:  exempting provincial financial services licensees; defining the existing business relationship exemption; referrals; access to the Do Not Call List; and investigation of complaints and assignment of penalties.

LISTNUM 1 \l 170               I will speak to the first three points and my colleague Sara Gelgor will address the final two.

LISTNUM 1 \l 171               Our comments focus on ensuring financial advisors are able to operate effectively within a national Do Not Call List framework that meets consumers' needs.

LISTNUM 1 \l 172               The financial services industry is one of the most heavily regulated sectors in Canada.  Financial advisors who sell insurance must be licensed by the appropriate government body or agency for the province in which they operate, as well as meet the requirements of any other jurisdiction in which they conduct business.

LISTNUM 1 \l 173               The respective securities commission or commissions must similarly license those who also sell securities.  Approximately three‑quarters of Advocis members are licensed to distribute both insurance and mutual funds and therefore are already subject to regulatory oversight my multiple regulators, possibly in multiple jurisdictions.

LISTNUM 1 \l 174               In addition to meeting requirements through regulation, proprietary codes of conduct are a cornerstone in protecting consumers within the financial services industry.

LISTNUM 1 \l 175               Advocis and its predecessor organizations have had a professional code of conduct in place for 100 years.  Advocis members must abide by our code of professional conduct in all of their business activities as a condition of membership.

LISTNUM 1 \l 176               Failure to comply with any of the code's nine overriding principles can lead to an investigation and possible disciplinary action, including expulsion from membership and reporting to the appropriate regulatory authority.

LISTNUM 1 \l 177               Furthermore, the financial services industry is a leader in administering effective and meaningful complaint resolution structures.  Given this backdrop of a stringent regulatory regime, coupled with well‑established self‑disciplinary safeguards, we strongly recommend individuals licensed by an insurance regulatory body or securities commission be exempt from the national Do Not Call List restrictions.

LISTNUM 1 \l 178               The ability to call those with an existing business relationship is key in operating a national Do Not Call List that supports business needs.  Financial advisors may find themselves in a unique position, although we suspect this applies to other professions which requires the Commission's attention.

LISTNUM 1 \l 179               When a financial advisor sells his or her block of business to another advisor, it is common practice for the purchasing advisor to often introduce him or herself to the new set of clients by phone.  While clients typically stay with the new advisor, some may choose to work with another advisor.

LISTNUM 1 \l 180               Clearly these calls of introduction if placed to a client registered on the national Do Not Call List should not be considered as unsolicited.  We recommend the rules support the existing business relationship exemption clearly provide for introductory calls where broker business has changed hands.

LISTNUM 1 \l 181               Another aspect requiring further clarification is the treatment of calls made under the existing business relationships exemption within a group of companies.

LISTNUM 1 \l 182               Specifically, would a company within the group without a direct relationship to a client of another member company be permitted to contact the client if they are registered on the national Do Not Call List?

LISTNUM 1 \l 183               We note that outside of the group of companies such calls would be prohibited.  The only reason such a call may be allowed within a group of companies is because one member company has a direct relationship, no matter how minor, with the individual being called.

LISTNUM 1 \l 184               Allowing a member company with a corporate group to contact a registrant of the national Do Not Call List who has a relationship with another organization within the group will give multi‑disciplinary companies an unfair advantage over companies outside of the group.

LISTNUM 1 \l 185               We do not believe that in striving to protect consumers from unsolicited telemarketing calls it was Bill C‑37's intention to tilt the playing field among large and small business.

LISTNUM 1 \l 186               We recommend the existing business relationship exemption be based on separate legal entities with a distinct product line or a function within a group of companies.

LISTNUM 1 \l 187               Personal referrals are the foundation upon which professional financial advisors develop their client base and occur only when an advisor and client have an existing bridge of trust.

LISTNUM 1 \l 188               Ideally, the client will personally introduce the individual to the financial advisor.  However, if this is not possible, it is common practice for the financial advisor to carry out the client's suggestion by providing background information about his or her services and placing an introductory call to the specific individual referred.

LISTNUM 1 \l 189               Even where the individual being called is registered on the national Do Not Call List, we suggest referral calls are not unanticipated and should not be considered as violating the Do Not Call requirements.

LISTNUM 1 \l 190               We strongly recommend that at a minimum individuals licensed by an insurance regulatory body or securities commission be permitted to undertake word‑of‑mouth and personal telecommunications within the framework of a national Do Not Call List registry.

LISTNUM 1 \l 191               We also recommend calls to a related person as defined by the Income Tax Act be supported.  Limiting calls to the Income Tax definition of a related person, individuals connected by blood, marriage, common law partnership or adoption, will set clear parameters and restrict range of calls placed.

LISTNUM 1 \l 192               I would like now to invite my colleague, Sara Gelgor, to comment on the operations of the national Do Not Call List framework.

LISTNUM 1 \l 193               MS GELGOR:  Thank you, Gary.

LISTNUM 1 \l 194               On the issue of access, we believe the national Do Not Call List must be easy to access.  Many financial advisors are small business operations without sophisticated computer networks, often due to cost considerations.  Financial advisors must be able to obtain and manage the information required easily and at minimal cost.

LISTNUM 1 \l 195               The fee to access the registry must be fair and reflective of a business' size and usage of the Do Not Call List information.

LISTNUM 1 \l 196               Advocis has many years of complaint resolution experience through the Chartered Life Underwriter Institute's well established process.  The various exemptions to the national Do Not Call List framework and potential imposition of violation penalties makes it critical that clear guidelines on the investigation of complaints, issuance of violation notices and imposition of penalties be developed to ensure all stakeholders have a clear understanding and accurate expectation of the Do Not Call framework.

LISTNUM 1 \l 197               Establishing a threshold to investigate complaints will help apply investigative resources efficiently and follow a risk‑based approach to regulation, a concept Advocis strongly endorses.

LISTNUM 1 \l 198               Also, defining the timeframe in which consumers must log any complaints of violating calls to the Do Not Call List operator will help identify patterns of non‑compliance and allow timely action to be taken to clamp down on any troubling trends.

LISTNUM 1 \l 199               Advocis supports a 30‑day grace period during which time calls made to a new registrant would not be considered as being in violation.  In other words, the clock should not start to tick until 30 days after an individual has joined the Do Not Call registry.

LISTNUM 1 \l 1100              We believe a 30‑day time period will give businesses the flexibility to access and analyze the Do Not Call List on a periodic basis ‑‑

LISTNUM 1 \l 1101              THE SECRETARY:  I'm sorry, Ms Gelgor, you have one minute to conclude.

LISTNUM 1 \l 1102              MS GELGOR:  All right.

LISTNUM 1 \l 1103              ‑‑ while protecting consumers by ensuring the overall integrity of the list itself.

LISTNUM 1 \l 1104              Prolonging this grace period will simply allow companies engaged in telemarketing campaigns to extend their access to consumers registered on the Do Not Call List unnecessarily.

LISTNUM 1 \l 1105              The application of penalties to violators of the national Do Not Call List must balance the need to effectively deter future non‑compliance against the need to ensure penalties are proportionate to the infraction at hand and applied fairly.

LISTNUM 1 \l 1106              We support a graduated penalty scheme with a range of punishments of both a monetary and non‑monetary nature and an escalating scale based on the severity and repetition of infractions.

LISTNUM 1 \l 1107              The legislation sets monetary penalties at a maximum of $1,500 for an individual and $15,000 for corporations per infraction.  We recommend these categories be further defined to ensure penalties are applied fairly and consistently.

LISTNUM 1 \l 1108              For example, financial advisors may incorporate their businesses primarily for succession planning reasons but in reality may operate as a one‑person shop.

LISTNUM 1 \l 1109              We believe it would be unfair to penalize such a person at the corporate level when the individual is essentially self‑employed.  Therefore, we would recommend at a minimum a single shareholder corporation be defined as an individual for the purpose of assigning penalties.

LISTNUM 1 \l 1110              We applaud the establishment of a cost‑effective, simple‑to‑use national Do Not Call List registry that meets consumers' desire to reduce unwanted calls from telemarketers while fostering an environment conducive for business.

LISTNUM 1 \l 1111              The final outcome must provide an appropriate balance to ensure the needs and specific circumstances of business, in this case the thousands of professional advisors offering advice to millions of Canadians, are supported.

LISTNUM 1 \l 1112              Thank you for your time and attention today.  We would be pleased to answer any questions you may have.

LISTNUM 1 \l 1113              THE CHAIRPERSON:  Thank you very much.  Welcome to the hearing.

LISTNUM 1 \l 1114              Commissioner Duncan.

LISTNUM 1 \l 1115              COMMISSIONER DUNCAN:  Good morning.

LISTNUM 1 \l 1116              First of all, with respect to the overriding Do Not Call List rule, in paragraph 22 of its submission The Companies propose that the key Do Not Call List rule should read as follows:

"No person or organization shall initiate a telemarketing call to a person or organization who is validly listed in the National Do Not Call database unless the person or organization from whom the telemarketing call originates is exempt pursuant to section 41(7)(1) of the amended Telecommunications Act."

LISTNUM 1 \l 1117              We are first interested in your view on the definition they have recommended and if you think there are any changes necessary.

LISTNUM 1 \l 1118              MS GELGOR:  As we had indicated in your remarks, we believe that the definition should be limited to the separate legal entities as opposed to the group of companies.

LISTNUM 1 \l 1119              COMMISSIONER DUNCAN:  I think probably the definition would cover that when it refers to "person or organization".

LISTNUM 1 \l 1120              MS GELGOR:  But the organization is the entire group of companies.

LISTNUM 1 \l 1121              COMMISSIONER DUNCAN:  So you would rather see a reference to separate legal companies?

LISTNUM 1 \l 1122              MS GELGOR:  That is correct.

LISTNUM 1 \l 1123              COMMISSIONER DUNCAN:  Thank you.

LISTNUM 1 \l 1124              With respect to the application of the DNCL rules to faxes, we are wondering if you feel the DNCL rules should apply to unsolicited faxes and if there are any technical, financial or administrative issues with applying those rules to unsolicited faxes.

LISTNUM 1 \l 1125              MS GELGOR:  We do believe that they should apply to unsolicited faxes.  We do not have any comments with regard to the cost implications.

LISTNUM 1 \l 1126              COMMISSIONER DUNCAN:  And no comments on the technical.  You are satisfied.

LISTNUM 1 \l 1127              MS GELGOR:  Yes.

LISTNUM 1 \l 1128              COMMISSIONER DUNCAN:  Thank you.

LISTNUM 1 \l 1129              With regard to access to the list by small telemarketers ‑‑ and you have sort of touched on that ‑‑ we are wondering do smaller sized operators require a different Do Not Call List regime to ensure their viability?  And how would you define such a regime?

LISTNUM 1 \l 1130              Should the operators be classified by certain quantifiable data such as gross income and given alternatives to accessing the database based on their classification?

LISTNUM 1 \l 1131              MS GELGOR:  We do not have a position as to how the smaller operators might be classified.  We have certainly identified that there may be different implications, both from a cost and compliance perspective.

LISTNUM 1 \l 1132              We have looked at either gross income or number of employees and our concern is where do you draw the line?

LISTNUM 1 \l 1133              For example, if you are looking at employees and you set the line at five employees, if somebody has six employees is that really equitable treatment?

LISTNUM 1 \l 1134              We do not have any recommendations as to where you would draw the line, but in talking about the imposition of the penalties and infractions we have suggested that there be a range and that there be discretion.

LISTNUM 1 \l 1135              We recommend a similar approach with respect to how small operators would be treated with respect to accessing the list.

LISTNUM 1 \l 1136              COMMISSIONER DUNCAN:  That leads into my next question.

LISTNUM 1 \l 1137              In your submission, and I think again in your remarks this morning, you indicate a financial advisor may decide it is best to operate his or her business as an incorporated entity.

LISTNUM 1 \l 1138              MS GELGOR:  Right.

LISTNUM 1 \l 1139              COMMISSIONER DUNCAN:  But in reality really operate as a one‑person shop.

LISTNUM 1 \l 1140              I am wondering, first of all, what percentage of your 12,000 members would fall into this category, would you estimate?

LISTNUM 1 \l 1141              MR. McLEOD:  I wish I could give you an exact answer.  It is a high percentage of our members, given the changes in the industry over the last few years.

LISTNUM 1 \l 1142              It would be greater than 60 percent.

LISTNUM 1 \l 1143              COMMISSIONER DUNCAN:  You suggest some consideration be given to defining a single shareholder corporation as an individual rather than a corporation for the purpose of assigning penalties.

LISTNUM 1 \l 1144              I think some of the single shareholder corporations could grow to be quite large in terms of revenue and employees, and I think we sort of touched on that a few moments ago.

LISTNUM 1 \l 1145              Can you suggest what other criteria we might take into consideration to determine whether a single shareholder corporation should be considered as an individual rather than a corporation for the purpose of assigning penalties?

LISTNUM 1 \l 1146              MS GELGOR:  Again, you are right in touching on the point that some of these corporations do grow to become very large, even family owned, businesses.

LISTNUM 1 \l 1147              Our members typically are small businesses and they remain as such.  When I talked about the example of a single shareholder corporation, that would be one way of looking at it.

LISTNUM 1 \l 1148              Typically the businesses are inter‑generational and the business is passed on to family members.  But they do remain fairly small.

LISTNUM 1 \l 1149              COMMISSIONER DUNCAN:  You see, my concern is with ‑‑ you could still be small in terms of ownership but have a very successful large business in terms of revenue and even the number of employees.

LISTNUM 1 \l 1150              MS GELGOR:  Right.

LISTNUM 1 \l 1151              COMMISSIONER DUNCAN:  That is just one of the things we will have to consider.  Thank you.

LISTNUM 1 \l 1152              MS GELGOR:  Okay.

LISTNUM 1 \l 1153              COMMISSIONER DUNCAN:  In paragraph 77 of the CMA submission, the CMA submitted that the Commission should adopt a regulation that would clarify that telemarketers may contact a consumer by telephone even if he or she is on the Do Not Call List if the telemarketer has received consent to do so.

LISTNUM 1 \l 1154              So the consent would override the Do Not Call List.

LISTNUM 1 \l 1155              First of all, do you agree with the CMA's position that telemarketers should be able to contact a consumer by telephone if the marketer has received consent to do so, even if that person is on the Do Not Call List?

LISTNUM 1 \l 1156              MS GELGOR:  The consent would have to be very specific rather than a broad consent that one might sign in some kind of an application form.

LISTNUM 1 \l 1157              The concerns that we would have would be that there would be the overriding of the original intention that was expressed by the consumer.

LISTNUM 1 \l 1158              I think there would have to be some kind of parameters within which a consumer might provide specific consent, but it would have to be very, very specific to the contact.

LISTNUM 1 \l 1159              COMMISSIONER DUNCAN:  I think we agree on that point, especially if it were to lead to an investigation at some point.  It would have to be documented or in some form that would substantiate or justify the contact.

LISTNUM 1 \l 1160              Would you agree?

LISTNUM 1 \l 1161              MS GELGOR:  Yes.

LISTNUM 1 \l 1162              COMMISSIONER DUNCAN:  Thank you.

LISTNUM 1 \l 1163              I would like to get your comments on the value and need to maintain internal Do Not Call Lists.

LISTNUM 1 \l 1164              What are the issues associated with specific organizations maintaining their own Do Not Call Lists in addition to the national Do Not Call List?

LISTNUM 1 \l 1165              I have four questions, so I will read you all four and then I can review them as we go, so you don't have to feel like you have to remember them all at once.

LISTNUM 1 \l 1166              In your response, could you:

LISTNUM 1 \l 1167              (1) explain the benefits of such an approach, having both lists, or not;

LISTNUM 1 \l 1168              (2) whether there are specific circumstances that necessitate the need to maintain internal Do Not Call Lists;

LISTNUM 1 \l 1169              (3) how internal Do Not Call Lists would integrate with the national list; and

LISTNUM 1 \l 1170              (4) how such an approach would not introduce complexity, duplicate effort or increase regulatory burden that is not cost justified or warranted.

LISTNUM 1 \l 1171              Before we start to deal with each question, I will just preface the comment with a recommendation or a comment from the Registered Education Savings Plan Dealers Association.

LISTNUM 1 \l 1172              They feel that it is reasonable to require telemarketers to maintain internalists to accommodate consumers who may not wish to register on the national list for all purposes but would like to prevent contact from specific companies.

LISTNUM 1 \l 1173              I mention that sort of to set the stage.  That is one reason that we have been given for maintaining two lists.

LISTNUM 1 \l 1174              So the first question is if you could explain in your view how maintaining individual internal Do Not Call Lists would be a benefit to the system.

LISTNUM 1 \l 1175              MS GELGOR:  Certainly the point that you have just addressed I think would be a primary reason where a consumer does not want to block out all calls but there may be particular companies with which the consumer does not want to have dealings.

LISTNUM 1 \l 1176              So that would probably be the most clear example of where two lists would benefit.

LISTNUM 1 \l 1177              My concern with having the two lists, again focusing on the types of businesses our association represents, is really the burden and the cost that it would impose, where we are talking about a small business having perhaps a single or two people operating the business.

LISTNUM 1 \l 1178              It is very difficult to comply with all of the provincial licensing requirements, the regulatory requirements, the anti money laundering requirements.  And then a Do Not Call List requirement that is internal and specific to the company over and above any national list, our worry is that it would impose undue costs and compliance requirements.

LISTNUM 1 \l 1179              Short of areas where there would be a clear benefit to consumers ‑‑ and the one that we have just talked about is one ‑‑ where there may be exemptions in place, you would certainly want to have internal lists there as well.

LISTNUM 1 \l 1180              We would not support a broad recommendation for having two lists across the board for everybody.

LISTNUM 1 \l 1181              COMMISSIONER DUNCAN:  The challenge we get into then of course is administering.  It is easier if the rules are sort of across the board.  But that's all right.

LISTNUM 1 \l 1182              Currently you mention 12,000 members.  Those members would currently maintain a Do Not Call List, so they would have the processes in place for that.

LISTNUM 1 \l 1183              Would that be correct?

LISTNUM 1 \l 1184              MS GELGOR:  They may or they may not.

LISTNUM 1 \l 1185              COMMISSIONER DUNCAN:  All right.

LISTNUM 1 \l 1186              I am just wondering, trying to imagine.  How many calls would we be talking about that they would be making in the run of a month?  How difficult would it be?

LISTNUM 1 \l 1187              I am thinking if you had the numbers entered in some type of a computer program that sorted them in numerical order, how difficult would it be to maintain an internal list?

LISTNUM 1 \l 1188              MS GELGOR:  It would vary depending on the type of business and what stage of maturity it would be at.  Somebody in a situation like Gary, our Chair, would not be severely impacted.  But a new advisor in the community certainly has to start out his or her business and is looking at opportunities to reach out to potential new clients.

LISTNUM 1 \l 1189              Similarly, Gary pointed to the example where a broker business is sold.  Clearly there an advisor would need to be able to make introductory calls.

LISTNUM 1 \l 1190              So keeping the list and trying to grow and market a business while respecting consumers' privacy is certainly going to be a challenge.

LISTNUM 1 \l 1191              COMMISSIONER DUNCAN:  Would you agree, though, that with all the software programs that we have available, it probably wouldn't be too difficult to maintain an internal list?

LISTNUM 1 \l 1192              And of course that is the expectation today.

LISTNUM 1 \l 1193              So what would follow from that, then, would be what would be involved.  And I am taking into consideration your concerns.

LISTNUM 1 \l 1194              What would you see being the difficulty with integrating that list with a national list?

LISTNUM 1 \l 1195              MS GELGOR:  Again, it would depend on the size and the nature of the business.  For a very small company, for a financial advisor who is starting out, the requirements may be significant.

LISTNUM 1 \l 1196              COMMISSIONER DUNCAN:  And that I suppose will be an aspect of what the CISC Operation Committee is working on, because they will determine the costs and the manner in which smaller operators would be able to check the numbers.

LISTNUM 1 \l 1197              You don't need to check against thousands of numbers if you are only operating in one exchange.  So I am sure that they will take all of that into consideration.

LISTNUM 1 \l 1198              That's fine.

LISTNUM 1 \l 1199              Is there anything else you would like to add to that?

LISTNUM 1 \l 1200              MS GELGOR:  No.

LISTNUM 1 \l 1201              COMMISSIONER DUNCAN:  Thank you.

LISTNUM 1 \l 1202              I think that is a big issue, the requirement to maintain both.  So it is good to get as much on the record as we can.

LISTNUM 1 \l 1203              With respect to automatic dialling announcing devices, ADADs, the CMA has recommended the Commission allow for companies to make digitally pre‑recorded voice calls through ADADs for business‑to‑business relationships, telemarketing to consumers with whom there is an existing business relationship, and for telemarketing to consumers who have provided their consent to receive such calls.

LISTNUM 1 \l 1204              Could you comment on the CMA's recommendation.

LISTNUM 1 \l 1205              So that is that people be allowed to use the ADADs for business‑to‑business, telemarketing to consumers with whom they have an existing business relationship and for telemarketing to consumers who have provided consent to receive such a call.

LISTNUM 1 \l 1206              MS GELGOR:  We believe that the general Do Not Call framework should apply.

LISTNUM 1 \l 1207              COMMISSIONER DUNCAN:  Okay; thank you.

LISTNUM 1 \l 1208              Right now they are not allowed.  ADADs are not allowed.

LISTNUM 1 \l 1209              So you don't have any opinion.

LISTNUM 1 \l 1210              MS GELGOR:  We do not have an opinion on that.

LISTNUM 1 \l 1211              COMMISSIONER DUNCAN:  That's fine; thank you.

LISTNUM 1 \l 1212              In paragraph 12 of Contact New Brunswick's submission, they raise the question, and I quote:

"If all businesses that call their customers are required to comply with the legislation, what will be the impact on those businesses of installing the necessary telephony customer relationship management software and systems required to keep them compliant?"

LISTNUM 1 \l 1213              Based on your experience, what would you estimate it would cost for a new business or a business that has not previously had to adhere to the Do Not Call List to access and adhere to the Do Not Call List system?

LISTNUM 1 \l 1214              That is outside of the fee that you pay for accessing the data.

LISTNUM 1 \l 1215              I am thinking here in terms of any capital cost computers or software, any other items.

LISTNUM 1 \l 1216              MS GELGOR:  We do not have that information in front of us, but we could undertake to provide it to you at some point.

LISTNUM 1 \l 1217              COMMISSIONER DUNCAN:  That would be great, thank you, if you would.

LISTNUM 1 \l 1218              What are your views on whether third party providers such as call centres, ad agencies and call brokers should be allowed to access the Do Not Call system on behalf of another organization in order to scrub the list?

LISTNUM 1 \l 1219              Should such access be granted and controlled?

LISTNUM 1 \l 1220              And should third party providers be required to identify on whose behalf they are accessing the list?

LISTNUM 1 \l 1221              MS GELGOR:  Sorry, could you repeat that question, please.

LISTNUM 1 \l 1222              COMMISSIONER DUNCAN:  Sure.  This is dealing with third party providers, so somebody subcontracting the job to a call centre or an ad agency or a call broker.

LISTNUM 1 \l 1223              We are wondering if those parties should be allowed to access the list or if access should just be limited to telemarketers or the organizations themselves.

LISTNUM 1 \l 1224              And should such access be granted, how would it be controlled?

LISTNUM 1 \l 1225              And should third party providers be required to identify on whose behalf they are accessing the list?

LISTNUM 1 \l 1226              I guess the first thing is:  Do you think that those third party providers should be allowed to access the system?

LISTNUM 1 \l 1227              MS GELGOR:  I'm sorry, I don't have a view on that.  The Association does not have a view.

LISTNUM 1 \l 1228              COMMISSIONER DUNCAN:  That's fine; thank you.

LISTNUM 1 \l 1229              With respect to fees or potential rate structure, I know you have made a couple of comments on the fees being graduated or at least taking into consideration the size of different organizations.

LISTNUM 1 \l 1230              The Companies have suggested the fees for making use of the national Do Not Call List could be applied annually, quarterly, monthly or each time the list is accessed.

LISTNUM 1 \l 1231              The Companies suggest the fees could be charged on a per‑access basis, which they suggest might be the most equitable.

LISTNUM 1 \l 1232              In the U.S. the fees are charged based on the number of area codes for which information is retrieved, with the first five being provided at no charge.

LISTNUM 1 \l 1233              In the U.K. the fee structure is based on the type of licence ‑‑ and I think there are four types of licences ‑‑ and the quantity of area codes an entity wishes to access.

LISTNUM 1 \l 1234              What type of rate structure do you think would best serve Canadian organizations?

LISTNUM 1 \l 1235              Is there a particular structure that would be better suited to smaller organizations?

LISTNUM 1 \l 1236              MS GELGOR:  We support an approach that would be based on a per‑use basis.  For our members, depending on the size, they would be impacted differently.

LISTNUM 1 \l 1237              COMMISSIONER DUNCAN:  So as long as it is technologically cost‑effective to do so, you would certainly agree that would be an equitable way to do it?

LISTNUM 1 \l 1238              MS GELGOR:  That's right.

LISTNUM 1 \l 1239              COMMISSIONER DUNCAN:  That's great.

LISTNUM 1 \l 1240              That concludes my questions, Mr. Chairman.

LISTNUM 1 \l 1241              THE CHAIRPERSON:  Thank you, Madam Commissioner.

LISTNUM 1 \l 1242              Mr. Langford.

LISTNUM 1 \l 1243              COMMISSIONER LANGFORD:  Very quickly.  Thank you very much.

LISTNUM 1 \l 1244              I have just a couple of very tiny matters arising out of your comments this morning and a couple of your answers to Commissioner Duncan.

LISTNUM 1 \l 1245              Then I might ask you one or two questions about penalties that you spoke about.

LISTNUM 1 \l 1246              I want to talk to you about the sensitivity you have for small business because a lot of your members ‑‑ over 60 percent, I understand from what Mr. McLeod said ‑‑ are small businesses, very small businesses.

LISTNUM 1 \l 1247              Do you have any views on how they feel about the notion of business‑to‑business soliciting, telemarketing?  Would they like to be able to put themselves on the list so they are not bothered?

LISTNUM 1 \l 1248              MR. McLEOD:  We haven't specifically polled our members in terms of that specific question.  Certainly that is one of the things that we are effective at, and if we can be helpful in that way we are glad to do it.

LISTNUM 1 \l 1249              My sense is that they would not be concerned about being on the list for that type of solicitation.

LISTNUM 1 \l 1250              COMMISSIONER LANGFORD:  I am going to leave it to legal counsel as to whether he would like some follow‑up on that and your offer to follow up.  If they would, they will certainly tell you.

LISTNUM 1 \l 1251              We don't want to put you to having to hire Decima or something, although at least you know with the surveyors they've got a right to get through.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1252              COMMISSIONER LANGFORD:  How big is your own office, the Advocis office?

LISTNUM 1 \l 1253              MR. McLEOD:  We have about 60 employees.

LISTNUM 1 \l 1254              COMMISSIONER LANGFORD:  Is that big enough in your mind to handle telemarketing calls during business hours to you, or would you prefer they never happened: faxes, telemarketing calls?

LISTNUM 1 \l 1255              Do they tie up a lot of your time?

LISTNUM 1 \l 1256              MR. McLEOD:  They can.  They certainly can.

LISTNUM 1 \l 1257              The requirement of an organization such as ours, where it is voluntary membership and you run an organization like that on behalf of the members, is to run it as efficiently and cost‑effectively as possible.

LISTNUM 1 \l 1258              So there aren't a lot of extra bodies around.  If you are having to perform those types of tasks, it adds to your costs significantly.

LISTNUM 1 \l 1259              COMMISSIONER LANGFORD:  Interesting to know.

LISTNUM 1 \l 1260              With the notion on page 5 of your comments this morning, just at the end of your comments, Ms Gelgor, I think:  We also recommend, you say, that calls to related persons as defined in the Income Tax Act be allowed.

LISTNUM 1 \l 1261              How necessary is it?  Sometimes exemptions can really confuse things.

LISTNUM 1 \l 1262              If my brother‑in‑law wants to call me to sell me insurance, he can get me.  He knows where I live.  He knows where I play tennis.  He knows my wife because he's my brother‑in‑law.

LISTNUM 1 \l 1263              Is it really necessary to have this kind of an exception in there, or can these conversations take place in just the course of normal life?

LISTNUM 1 \l 1264              MS GELGOR:  Well, you are absolutely right.  We struggled with how we deal with referrals and that, as we indicated in our remarks today, can be a key component in growing a business for financial advisors.

LISTNUM 1 \l 1265              We struggled specifically with the issue of do we want to put a recommendation that would narrow definition as to referral.

LISTNUM 1 \l 1266              We looked to the Income Tax Act as a possible example of where there may be a definition in the Income Tax Act, that being the related parties.

LISTNUM 1 \l 1267              What we didn't want to see is an outright ban or prohibition on making calls to individuals who may be on the Do Not Call List but are in fact made by referrals where there is a relationship already in place with another party.

LISTNUM 1 \l 1268              So we tried to find a balance that would allow financial advisors to carry on their business while still respecting the privacy that consumers are asking for and look to this as a possible example.

LISTNUM 1 \l 1269              That really is the crux of it, is finding the right balance but making sure that referrals are not prohibited.

LISTNUM 1 \l 1270              COMMISSIONER LANGFORD:  It's a tough one, though, isn't it, because what is a referral?  It really opens it up to abuse.

LISTNUM 1 \l 1271              Somebody happens to mention "hey, call Fred" and Fred has no interest in that at all and doesn't take it well that he is being called when he is on a Do Not Call List and would like to stay there.

LISTNUM 1 \l 1272              It's a tough one to define, it seems to me, precisely how strong the referral would have to be before you would look upon it as some kind of an overriding factor.

LISTNUM 1 \l 1273              I just wonder whether it wouldn't be simpler administratively that if there is a referral to be done, the existing client does it or somehow makes the introduction or suggests that one of your members sends out a package or something like that so that you err on the side of caution but still be able to reach out.

LISTNUM 1 \l 1274              Can you not see the scope for abuse in this type of ‑‑ although I can see why you want it.  You have been very clear.  But can you see the scope for abuse in this type of an exception?

LISTNUM 1 \l 1275              MR. McLEOD:  For sure.  You can see where that possibility exists.  We have several concerns around the fact of, what we talk about being level playing field.  And I think it enters into this discussion.

LISTNUM 1 \l 1276              That is that if you limit in one area, you have an exemption within a group of companies, an example where there is that related situation.

LISTNUM 1 \l 1277              Our members are small business people in Canada and we don't want them to be disadvantaged in terms of this.  It's not so much the issue ‑‑ I could easily agree with you in the sense of your referral comment, but having it apply equitably across all parties is the important point in my line.

LISTNUM 1 \l 1278              COMMISSIONER LANGFORD:  If that is your real fear, surely our best move here is to not have this group of company connection, to not have the notion of organization so wide, so that Rogers Cablevision, for example, can phone me if I want them to because I'm a subscriber but their publication arm can't phone me and try to flog Macleans to me because it's a totally different company within their organization.

LISTNUM 1 \l 1279              Surely that would be the better way to go than to try to sort of offset it with some special case for referrals.

LISTNUM 1 \l 1280              MR. McLEOD:  Yes, you may be correct in that.

LISTNUM 1 \l 1281              COMMISSIONER LANGFORD:  Well, thank you for that.

LISTNUM 1 \l 1282              The other problem, very quickly ‑‑ and I don't want to drag this out.

LISTNUM 1 \l 1283              This notion that you had that when a business is sold and there has to be an introduction of a new owner, that is not a solicitation.  That wouldn't be a violation, would it?

LISTNUM 1 \l 1284              If you are phoning up to say that you have sold your insurance company to me and you are saying Stuart will phone you and he will introduce himself, you are not selling anything.

LISTNUM 1 \l 1285              MR. McLEOD:  Our concern would be ‑‑ because that is a common occurrence in our industry, that when someone comes to retire they may sell their broker business to someone else.  That person then, because they have made an investment, needs to introduce themselves to that particular clientele.

LISTNUM 1 \l 1286              The concern would be that if someone were on the Do Not Call List, would they be prohibited from doing that?

LISTNUM 1 \l 1287              COMMISSIONER LANGFORD:  I think the Chair would like to follow up on that.

LISTNUM 1 \l 1288              THE CHAIRPERSON:  Just on this subject, if you don't mind, Stuart.  Thank you for your indulgence.

LISTNUM 1 \l 1289              Clearly Stuart, it seems to me, is onto something.  What he is basically saying is the clientele consists of people who already have a business relationship with the seller of the broker business.  The purchaser of the broker business is calling to say I now own this business.  I am going to service your account.

LISTNUM 1 \l 1290              I think Stuart's argument is that that does not fall in the definition of solicitation for money's worth, I think.

LISTNUM 1 \l 1291              So the question for you and we to reflect on is whether or not in fact this is the problem that you have, I think, appropriately raised to our attention, and ask ourselves whether this would in fact be a violation because: (a) the clientele consists of a group who have already signalled some sort of willingness to transact with the seller; and (b) the contact is made only to change the identity of the servicing and not necessarily to sell another $50,000 worth of insurance.

LISTNUM 1 \l 1292              MR. McLEOD:  And that is our concern.

LISTNUM 1 \l 1293              COMMISSIONER LANGFORD:  Yes, as long as you are not selling anything new, you are just introducing.  I mean, I guess I can phone anybody and introduce myself, you know, as long as I don't offer to cut their grass or, you know, sell them a water softener, and I'm finished.

LISTNUM 1 \l 1294              It would have to be a kind of lonely hearts club to get into that way of life, but I suppose it would fall into an exception.

LISTNUM 1 \l 1295              Very quickly on penalties.  It seems to me that it's tough for you folks to have it both ways.  If you want to be incorporated and have all of those advantages of income splitting and taking dividends instead of income and hiding stuff away or maybe putting the wife on the payroll as a separate little company or whatever.

LISTNUM 1 \l 1296              Then, you know, for your tax planning and your protection for your liability so that if you get sued, you know you've got ‑‑ the wife is running the insurance company, she has got the house in her husband's name and, you know, all of those little benefits that small companies do quite legitimately and quite rightly to protect themselves against the horrors of law suits and the income tax collectors, then you're a corporation.

LISTNUM 1 \l 1297              And I guess you leave us into a bit of a mug's game.  You are saying at the very least: leave it for single corporations but, you know, it's a mug's game, isn't it?

LISTNUM 1 \l 1298              I mean, we can't really say: well, okay, one shareholder, then somebody will say: what about two, my wife and I own it and someone will say three, we've got the brother‑in‑law on board and it does seem a little picky.

LISTNUM 1 \l 1299              Isn't the answer for us to develop sentencing guidelines, if you want to call it that, guidelines on how we are going to ‑‑ we are going to enforce this thing and to adopt sort of a case by case on the facts basis?

LISTNUM 1 \l 1300              I mean, this isn't one size fits all sentencing here, if I can use it, and maybe even the courts of the land look at the circumstances.  Not everybody gets ten years for every offence that has a maximum penalty of ten years.  You know, if a man steals a little loaf of bread because he is hungry, he is not up there with a bank robbery.  He just doesn't get the same sentence.

LISTNUM 1 \l 1301              Don't we leave that sort of thing to the organization that's making the judgment calls and rely on guidelines rather than try to parse it as to membership and size and corporate structure?

LISTNUM 1 \l 1302              MS GELGOR:  We certainly do highlight in our remarks this morning that there should be discretion and there should be a range looking at things like severity and number of occurrences and perhaps so we would throw into the mix, is looking at the nature of the operation.

LISTNUM 1 \l 1303              So where you have not necessarily the one person or one shareholder corporation, but if you have a very small family on business, perhaps that business should not be treated the same way as you would have a national organization with thousands or hundreds of thousands of employees.

LISTNUM 1 \l 1304              COMMISSIONER LANGFORD:  So we leave that up to the discretion of the people examining the case, but have that as perhaps part of the guidelines in looking at how you treat a case.

LISTNUM 1 \l 1305              MS GELGOR:  Yes.

LISTNUM 1 \l 1306              COMMISSIONER LANGFORD:  Or an alleged violation.

LISTNUM 1 \l 1307              Those are my questions.  Thank you very much, Mr. Chair.

LISTNUM 1 \l 1308              THE CHAIRMAN:  Thank you, Commissioner Langford.

LISTNUM 1 \l 1309              Commissioner Cram.

LISTNUM 1 \l 1310              COMMISSIONER CRAM:  Thank you and thank you for coming today.  Ms Gelgor, I was looking at page 6 on your presentation today.

LISTNUM 1 \l 1311              In the second paragraph you refer to a range of punishments of both a monetary and non monetary nature.

LISTNUM 1 \l 1312              What punishment is of a non monetary nature?

LISTNUM 1 \l 1313              MS GELGOR:  Well, to the extent that there might be any, we would suggest that it, you know, you would look at all of the variables that we have just talked about.

LISTNUM 1 \l 1314              COMMISSIONER CRAM:  Do you know what else we would have into our tool kit, what would be a non monetary?

LISTNUM 1 \l 1315              MS GELGOR:  I don't have any examples now.

LISTNUM 1 \l 1316              COMMISSIONER CRAM:  Okay.  The fact that we could publish names of violators, do you think that would have a salutary effect or would be really not effective?

LISTNUM 1 \l 1317              MS GELGOR:  I think it would be an approach that is worth looking at, certainly.

LISTNUM 1 \l 1318              COMMISSIONER CRAM:  Is your group self‑regulating or are you regulated by either the Securities Commission or the Provincial Insurance Regulator?

LISTNUM 1 \l 1319              MS GELGOR:  We are an ‑‑ in our Association, we are incorporated by an active parliament, but we are not a self‑regulatory organization.

LISTNUM 1 \l 1320              COMMISSIONER CRAM:  Okay.  And you talked about your codes, Professional Code of Conduct and Best Practices Manual.

LISTNUM 1 \l 1321              What do you presently suggest or do you, in relation to when you obtain people's names, addresses and phone numbers?

LISTNUM 1 \l 1322              What do you do and I'm actually going to refer to it for you, what do you suggest to your members, how they would comply with PIPIDA and specifically Schedule 14.2, Principle 2, that when you obtain this information, you have to provide the identifying purposes of it and the purposes for which the personal information is collected shall be identified by the organization at or before the time the information is collected?

LISTNUM 1 \l 1323              What that says to me is once you have somebody who has bought an insurance contract, you would be saying to them: I've got your address and your phone number and I will be phoning you to sell you more insurance and you would have to be telling that in order to comply with PIPIDA.

LISTNUM 1 \l 1324              Am I correct?

LISTNUM 1 \l 1325              What do you tell ‑‑ what do you tell people when you get their name and number, that what use you're putting that information to?

LISTNUM 1 \l 1326              Mr. McLEOD:  As you have suggested, it would be for the purposes of talking to them about their particular financial planning advice, et cetera.

And so that you must be clear about that and in terms of the introduction of those services and then, that's how we prescribe that in terms of practices, et cetera, within the norms of the industry.

LISTNUM 1 \l 1327              COMMISSIONER CRAM:  So, it wouldn't be a stretch for us to say in any existing business relationship exemption, that you would be required to inform people that you are keeping their number and their name for the purposes of telemarketing at the time?

LISTNUM 1 \l 1328              Mr. McLEOD:  It would not ‑‑ it would not be a stretch.

LISTNUM 1 \l 1329              COMMISSIONER CRAM:  Thank you for that.

LISTNUM 1 \l 1330              I need to understand calls to related person.

LISTNUM 1 \l 1331              My brother lives in Red Deer, let's say he has a broker and he, my brother, says: sure, phone my sister in Regina and even though I am on a Do Not Call List, I get a cold call from a broker in Red Deer and you are suggesting that that would be ‑‑ that would be acceptable?

LISTNUM 1 \l 1332              Mr. McLEOD:  Within the context of what Sarah has suggested, in terms of a definition, the answer to that would be: yes.

LISTNUM 1 \l 1333              Your comment about ‑‑ in our world, that's not a cold call, that's a referral.

LISTNUM 1 \l 1334              COMMISSIONER CRAM:  Yes.

LISTNUM 1 \l 1335              Mr. McLEOD:  And a cold call would be a all to someone that, you know, let's pick this name out of the phone book and I have no idea who they are or what they do, but I'm going to phone and introduce myself to them.  That's cold.

LISTNUM 1 \l 1336              In the sense that you have been referred through a family member, et cetera, that's a direct referral.

LISTNUM 1 \l 1337              COMMISSIONER CRAM:  Okay.  Thank you.  That's ‑‑ oh! wait.  No.  Thank you.  Thank you very much, Mr. Chair.

LISTNUM 1 \l 1338              THE CHAIRMAN:  Commissioner Duncan.

LISTNUM 1 \l 1339              COMMISSIONER DUNCAN:  I just have one last question as a result of something that Steward asked.

LISTNUM 1 \l 1340              You mentioned that you have a staff of 60 members at your Association, 60 employees at your ‑‑

LISTNUM 1 \l 1341              MS GELGOR:  Yes.

LISTNUM 1 \l 1342              COMMISSIONER DUNCAN:  And so, they are all located in Toronto; are they?

LISTNUM 1 \l 1343              Mr. McLEOD:  Correct.

LISTNUM 1 \l 1344              MS GELGOR:  Yes.

LISTNUM 1 \l 1345              COMMISSIONER DUNCAN:  I am just wondering just in exploring the idea of Internal Do Not Call List and the process for matching them with the national list, if you might consider, because you have obviously many members across the country, if you might consider having provincial or even regional lists that could be managed from your office in Toronto.

LISTNUM 1 \l 1346              I'm assuming ‑‑ and correct me if I'm wrong ‑‑ that the 60 employees that you have do not do telemarketing, that they support the members.  Is that the idea or do you do telemarketing from Toronto?

LISTNUM 1 \l 1347              Mr. McLEOD:  In terms of our membership renewals, et cetera, within the Association, but not, no.

LISTNUM 1 \l 1348              COMMISSIONER DUNCAN:  Not the customers for finance purposes.

LISTNUM 1 \l 1349              Mr. McLEOD:  Correct.  That's correct.

LISTNUM 1 \l 1350              COMMISSIONER DUNCAN:  So, what would you, or would you consider ‑‑ I mean I'm just asking the question now so you maybe have another chance to think about it ‑‑ but it just seems to me that you have a large staff ‑‑ well, large, you have a number anyway and whether it would be possible to support those Do Not Call Lists from a central point so that each of your individual members don't have to incur the expense or take the time managing it.

LISTNUM 1 \l 1351              It may not involve too many employees to do such a thing, given the ‑‑

LISTNUM 1 \l 1352              Mr. McLEOD:  The concerns that I would see in that are several.

LISTNUM 1 \l 1353              Number 1, I can assure you that 60 employees to service 12,000 members is not a big staff and so we don't have a lot of additional capability within that.

LISTNUM 1 \l 1354              As I mentioned to one of your colleagues a little earlier on, it is the responsibility of, say, (inaudible) too because it's a long term membership type organization to take the utmost care in terms of keeping the costs in line in that regard.

LISTNUM 1 \l 1355              So, it would involve us increasing our costs and thereby our fees to the members to do that and that may be an appropriate result.

LISTNUM 1 \l 1356              However, I think that the other issue is that although we have 12,000 members in that sense in terms of the financial services industry, having us do it when there are ‑‑ when there are more than 12,000 people who are out there because it's a voluntary organization, doesn't really solve the problem of catching everybody in that net.

LISTNUM 1 \l 1357              COMMISSIONER DUNCAN:  I'm just ‑‑ I guess first of all, on your point about costs and you've probably touched on it anyway because, you know, your members may consider that it's cost effective way to do it.

LISTNUM 1 \l 1358              Mr. McLEOD:  They may, I agree.

LISTNUM 1 \l 1359              COMMISSIONER DUNCAN:  You know.  And administratively, they might be happy to have the burden taken off their hands, so ‑‑ Anyway, it's just food for thought.

LISTNUM 1 \l 1360              MS GELGOR:  I would just add, it could turn out to be a bit of an administrative headache for us.

LISTNUM 1 \l 1361              While we do have 12,000 members, there are new members coming into the industry or coming into the Association certainly and our members do retire from time to time as well.

LISTNUM 1 \l 1362              So, managing which lists we have in place and whether or not it's still in effect and making sure on the part of the Association that it's up to date would certainly be adding layers of compliance for the Association that are not in place today.

LISTNUM 1 \l 1363              COMMISSIONER DUNCAN:  Right.  I just thought it might be a way to facilitate your members, but anyway it's something to think about.

LISTNUM 1 \l 1364              Thank you very much both of you, thanks.

LISTNUM 1 \l 1365              THE CHAIRMAN:  Mr. Langford.

LISTNUM 1 \l 1366              COMMISSIONER LANGFORD:  Sorry for dragging this out, but something finally occurred to me just hearing this last exchange.

LISTNUM 1 \l 1367              Do you sell your membership list?

LISTNUM 1 \l 1368              MS GELGOR:  No.

LISTNUM 1 \l 1369              Mr. McLEOD:  No.

LISTNUM 1 \l 1370              COMMISSIONER LANGFORD:  Never.  Do you get consent from your members to try and negotiate deals with hotel chains, CAA, that kind of thing and then, in that way make them subject to kind of business offerings of some sort?

LISTNUM 1 \l 1371              Mr. McLEOD:  We do have supplementary services for our members on the basis of if they are a member of the Association, that they might qualify for a discount in such a situation.

LISTNUM 1 \l 1372              COMMISSIONER LANGFORD:  How do they become informed of these deals?  Through you or through ‑‑

LISTNUM 1 \l 1373              Mr. McLEOD:  Simply part of their annual membership package as a member here of the following benefits.

LISTNUM 1 \l 1374              COMMISSIONER LANGFORD:  Right.  And then, it's up to them to exercise their rights?

LISTNUM 1 \l 1375              Mr. McLEOD:  Correct.

LISTNUM 1 \l 1376              COMMISSIONER LANGFORD:  Thank you very much.  That's my question.

LISTNUM 1 \l 1377              THE CHAIRMAN:  Thank you very much for your presence here.  I am not sure if we want to pursue further, counsel.

LISTNUM 1 \l 1378              MR. MILLINGTON:  Merci, monsieur le président.

LISTNUM 1 \l 1379              My first question is I want a clarification from Commissioner Langford.

LISTNUM 1 \l 1380              Were you leaving it up to me to determine whether we want to follow up on that question with respect to their membership and the business to business telemarketing?

LISTNUM 1 \l 1381              COMMISSIONER LANGFORD:  Yes, please.  I think you folks, having prepared the briefings and anticipating what may be necessary and what holds need to be filled, I would rather leave it to you now you see the way this thing works out.

LISTNUM 1 \l 1382              But I would rather leave it to you as to whether you want to follow up on an offer which would require an undertaking of some sort.

LISTNUM 1 \l 1383              MR. MILLINGTON:  Yes.  I think it would be ‑‑ yes.

LISTNUM 1 \l 1384              I think there would be an ‑‑ given the demographics of your organization, Mr. McLeod, given the fact that they're on the small end of corporations, it would be interesting to hear from your membership with respect to whatever inconvenience they may determine telemarketing from other business would constitute.

LISTNUM 1 \l 1385              So, if you could undertake to pull your members and find out what their views would be on that.  In fact, you can include in that your own views as an organization, with respect to being telemarketed from by other organizations.

LISTNUM 1 \l 1386              The second question I have is also for you, Mr. McLeod.  You mentioned in your remarks this morning that Advocis has many years of experience in the complaint resolution process through the Chartered Life Underwriters processes and I am wondering if there is anything in those processes that you believe would be of assistance to the Commission in elaborating its own guidelines with respect to complaint resolution?

LISTNUM 1 \l 1387              Mr. McLEOD:  As we mentioned, because we are not an S.R.O., our role in terms of complaint and the resolution of any complaint against the member is a sanction in terms of membership and/or reporting to a regulatory body, which we might do in the appropriate, in the appropriate circumstance.

LISTNUM 1 \l 1388              And both of those are significant issues for any licensed member of our organization and that works very well and effectively and has for many years in that regard since in all provinces members of our Association must be licensed to be able to transact business.

LISTNUM 1 \l 1389              So, our mechanism is effective and I would suggest to you is a model that is worth looking at in that sense.

LISTNUM 1 \l 1390              MR. MILLINGTON:  So, this is a publicly available set of guidelines that we could consult then?

LISTNUM 1 \l 1391              Mr. McLEOD:  Yes.

LISTNUM 1 \l 1392              MR. MILLINGTON:  Okay.  And, for example, you mentioned also that the size of an organization should be considered by us in terms of one of the criterian to look at with respect to our own complaint resolution process.

LISTNUM 1 \l 1393              Is that a criterian that you use in your own complaint resolution process, how big the operator is?

LISTNUM 1 \l 1394              Mr. McLEOD:  Our members are all individual members, so we don't look at that in terms of our organization.

LISTNUM 1 \l 1395              MR. MILLINGTON:  Would you undertake to send me those ‑‑ that process that you use, so that we could take a look at it?

LISTNUM 1 \l 1396              Mr. McLEOD:  We'll send you information on that, for sure.

LISTNUM 1 \l 1397              MR. MILLINGTON:  Yes.

LISTNUM 1 \l 1398              THE CHAIRMAN:  There was one other undertaking.  You've got it Shawn?  Mr. Kelly?

LISTNUM 1 \l 1399              MR. KELLY:  Yes, Mr. President.

LISTNUM 1 \l 1400              THE CHAIRMAN:  Thank you.  Thank you very much.

LISTNUM 1 \l 1401              Madame la Secrétaire?

LISTNUM 1 \l 1402              THE SECRETARY:  Mr. Chairman, CADRI and AFP informed me this morning that they have mutually agreed to change the time of their presentation.

LISTNUM 1 \l 1403              Par conséquent, j'appellerais maintenant monsieur Louis Guay de CADRI et son équipe.

Bonjour.

LISTNUM 1 \l 1404              Monsieur Guay, je vous demanderais maintenant de nous présenter votre groupe, après quoi vous aurez dix minutes pour votre présentation.  Merci.

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 1405              MR. GUAY:  Mr. Chairman, Commissioners and Commission staff, good morning.  My name is Louis Guay.  I am both a member of the CADRI Operations Committee and manager Legal and Regulatory Affairs for TD Meloche Monnex.

LISTNUM 1 \l 1406              With me today are my colleagues, Lucie Sanscartier, at the far left.  Also from TD Meloche Monnex,   Denis Guertin here at my left, from Belair Direct who is the CADRI's Incoming President and to my right, Laura Gunn, advisor for CADRI.

LISTNUM 1 \l 1407              CADRI is a Canadian Association of direct response insurers.  We appreciate the opportunity to present our views today on the establishment of the Do Not Call List.

LISTNUM 1 \l 1408              We should state at the outset that we understand the need in principle for a national Do Not Call List.  It is clear that the public broadly supports this idea.  Our concerns are focused on how such a system will be implemented and what operational impact this will have on our industry.

LISTNUM 1 \l 1409              CADRI represents a particular kind of insurance company.  Our members are mostly active on auto, on the auto insurance market and home insurance market.

LISTNUM 1 \l 1410              We have a particular way of distributing to consumers, we sell direct, meaning that we sell without intermediaries or middle men.  Consumers contact us through call centres and web sites, often in response to a direct mail campaign.

LISTNUM 1 \l 1411              Sometimes we contact consumers through telemarketing and other methods to offer competitive quotes on insurance products.

LISTNUM 1 \l 1412              I emphasize our business model because the insurance market place is complex today  with many products and ways of selling them.

LISTNUM 1 \l 1413              CADRI represents a simple low cost f distribution.  Our members are respected financial institutions subject to regulatory oversight on all of our activities by Federal and Provincial government agencies.

LISTNUM 1 \l 1414              We offer consumers value, convenience, accessibility and speed and we do that by relying on technology and efficient business processes, including telemarketing.

LISTNUM 1 \l 1415              We account our members account for approximately 20 per cent of the auto insurance market and 10 per cent of the home‑owners insurance sold in Canada today.

LISTNUM 1 \l 1416              We are also as individual companies member of the Canadian Marketing Association.  We abide by the CMA's rule on telemarketing which are mandatory for our members.

LISTNUM 1 \l 1417              In our written submission CADRI comments here on a number of issues under consideration in this proceeding, but today we would like to focus on one issue that is critical to our ability to continue delivering superior value to insurance consumers.  That is follow‑up phone calls to consumers who have requested insurance quotations.

LISTNUM 1 \l 1418              It is common practice for home and auto insurers to collect expiry dates, meaning the dates when a potential customer current insurance policy will expire.

LISTNUM 1 \l 1419              As you may know already, auto insurance and home insurance policies are one‑year contracts.

LISTNUM 1 \l 1420              This practice allows us to time our follow‑up contact precisely so that our approach will come when it is the most useful to consumers, just when they are thinking about renewing their policies and hopefully they are shopping around and doing some price and value comparisons.

LISTNUM 1 \l 1421              This is a service to consumers that also enhances competition in the marketplace because it gives consumers more information before they make their decision about the insurance protection that best suits their needs.

LISTNUM 1 \l 1422              When our follow‑up calls are made, we remind customers that they have expressed interest in receiving a quotation.  They always have the option of discontinuing the conversation if they wish and we will respect that.

LISTNUM 1 \l 1423              Most importantly this type of follow‑up call is one that the consumer has already consented to in providing the expiry date.  Therefore, our view is that this is not an unsolicited call.

LISTNUM 1 \l 1424              The Commission has defined telemarketing as the use of telecommunication facilities to make unsolicited calls for the purpose of solicitation and goes on to give further nuance to the concept of solicitation.

LISTNUM 1 \l 1425              Solicited calls are not telemarketing as defined above, in our opinion.  They should be allowed, regardless of whether a person has registered for the Do Not Call List.

LISTNUM 1 \l 1426              some might say that this situation is already covered under the exemption for existing business relationships.  That is defined to include those who have requested information from a company within the last six months.

LISTNUM 1 \l 1427              However, the collection of expiry dates takes place all year long.  A follow‑up call might not take place within the six‑month window.  It might take longer because it is linked to a specific event: the consumer's expiry date expiry of his policy.

LISTNUM 1 \l 1428              You might ask:  Why should we call someone if they have registered for the Do Not Call List?  Isn't that self‑defeating from a sales perspective?

LISTNUM 1 \l 1429              Well, there is a difference in our opinion between wanting protection from dinner time phone calls from the whole universe of people selling things or asking for donations over the phone and a specific product that you are interested in.

LISTNUM 1 \l 1430              It isn't difficult to imagine someone registering for the Do Not Call List and not remembering that they have also asked specifically for an insurance quote.

LISTNUM 1 \l 1431              So generally a Do Not Call registration should not cancel out a specific request for information.

LISTNUM 1 \l 1432              From an operational standpoint, we should not have to incur the cost and time involved in vetting our expiry date calling lists against a Do Not Call List.  As we have stated, our expiry date lists are comprised of people who have already given consent to be called.  So they are not unsolicited calls.

LISTNUM 1 \l 1433              It should also be noted that the legislation providing for the Do Not Call Lists complement existing federal and provincial privacy legislations, as well as insurance legislations.

LISTNUM 1 \l 1434              Our phone calls geared to expiry dates comply with all applicable privacy and insurance legislations.  These are the issues that we hope you will consider in developing the interpretative rules for the Do Not Call List regime.

LISTNUM 1 \l 1435              The system ultimately adopted should allow calls to provide specifically requested information to continue regardless of the date of the request.  Therefore, we recommend that the Commission adopt interpretative guidelines to provide greater clarity on that issue.

LISTNUM 1 \l 1436              Thank you for allowing us to share CADRI's comments about the implementation of the Do Not Call List.  We would be happy to take your questions.

LISTNUM 1 \l 1437              THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 1438              Commissioner Langford.

LISTNUM 1 \l 1439              COMMISSIONER LANGFORD:  Thank you very much.

LISTNUM 1 \l 1440              Your source of interest is clear, but I actually do have a couple of questions about it.

LISTNUM 1 \l 1441              I have read your written submission, I heard you this morning and there is a couple of things about the mechanics of what you are doing that I just don't get.

LISTNUM 1 \l 1442              You refer on page 3 to potential clients, potential customers.

LISTNUM 1 \l 1443              Are you saying that you are somehow collecting the expiry dates of insurers who are not now customers of yours?

LISTNUM 1 \l 1444              MR. GUAY:  That is correct, sir.

LISTNUM 1 \l 1445              COMMISSIONER LANGFORD:  How do you get those?

LISTNUM 1 \l 1446              MR. GUAY:  We get that through a variety of means.  We get it through the internet.  Typically what we do is we send our clients information about insurance products ‑‑ potential clients, that is.

LISTNUM 1 \l 1447              We often get ‑‑ in the case of our company, TD Meloche Monnex, we are a major group insurer.  So we get information about potential clients from the groups with whom we have affinity agreements.

LISTNUM 1 \l 1448              We send information to these potential clients and we invite them ‑‑ one of the things that we do in this publicity is we invite those potential clients to let us know if they are interested in getting a quote, a quotation.

LISTNUM 1 \l 1449              One way we do that, one of the things we are offering is to these potential clients to give us their expiry dates.  So they can go on the internet, log on one of our internet sites and just fill in the information that we need.

LISTNUM 1 \l 1450              They can send us, they can write down ‑‑ we typically include sometimes a coupon and they can fill it out and send it back.

LISTNUM 1 \l 1451              COMMISSIONER LANGFORD:  Can I break this down?  I don't want to interrupt but it is getting too much for me.

LISTNUM 1 \l 1452              MR. GUAY:  I'm sorry about that.

LISTNUM 1 \l 1453              COMMISSIONER LANGFORD:  Some of these expiry dates and the names that go with them, you just find yourself.  You have tools of getting on the internet, of digging into this kind of information and finding out, for example, that my insurance expires August 31st or something, and then you would contact me.

LISTNUM 1 \l 1454              Is that how it works?

LISTNUM 1 \l 1455              MR. GUERTIN:  No.  If I may try to answer your question, I think what we do is we have several ways to propose to you, if you are a member of an association that we have an agreement with.  It could be through a welcome package.

LISTNUM 1 \l 1456              I will give you an example.

LISTNUM 1 \l 1457              I am for Belair Direct and we have groups with policemen.  So when they have new policemen, they have packages and in those packages they say there is benefit for you.  If you want to have a quote from Belair Insurance, you send them this coupon with the expiry date and information.  And then we follow up.

LISTNUM 1 \l 1458              COMMISSIONER LANGFORD:  And you would categorize that as you do on page 4 as not unsolicited because you have a request.

LISTNUM 1 \l 1459