MONTREAL - Quebec's proposed crackdown on the flourishing online ticket resale business would only drive customers to the black market or outside the province, opponents warned Monday.
The Quebec government has tabled a bill that would make it illegal to sell sports and entertainment tickets at a higher price than the one authorized by the original vendor.
The bill is aimed at local online web brokers like billets.ca and Quality Plus Tickets.com, Quebec-run sites that resell tickets and draw a commission from the buyer and seller. Outdoor scalpers would not be affected.
Hearings on the bill, tabled by Justice Minister Jean-Marc Fournier in June, begin this week at the provincial legislature.
Several provinces already have laws against reselling tickets but at least one of them, Alberta, has rescinded its legislation because it was too difficult to enforce.
Quebec says its law is aimed at giving people a fair shot at getting tickets to events. Some powerful promoters and a union representing Quebec musicians have argued that brokerage websites create a scarcity of tickets by scooping them up in bulk, artificially driving up prices.
But a prominent Montreal lawyer for one of the firms, Julius Grey, says that notion is false and says eliminating legal brokers is not the answer.
"The solution is consumer protection legislation — not a prohibition of the whole resale system," Grey said during a news conference Monday.
"There is simply no history of a large percentage of the tickets being in the hands of resellers; it's a small percentage of tickets that has no effect on the price and makes the availability more even."
Grey points to the example of Montreal Canadiens tickets. Already difficult to obtain, he said it would be next to impossible to find the tickets without the help of a broker. The only other possible source would be scalpers.
Grey argues that a new law would simply move the reselling business outside Quebec, where it would be impossible to enforce.
But major event promoters in Quebec are urging the government to shut the door on brokerage firms, calling them "parasites" and comparing them to a deadly illness.
"It's a cancer that has been around for a long time and we're trying to deal with it," said Andre Menard with Spectra, which is behind such events as Montreal's International Jazz Festival.
"Certainly there isn't a panacea that will solve all the problems, but it's a step in the right direction and a big step in the right direction."
If the bill becomes law, it would be up to Quebec's Consumer Protection Office to enforce it.
Fines would range from $2,000 to $100,000 for a first offence and up to $200,000 if violators break the law again.
But the local brokers argue that in the Internet-driven world, business would simply move out of Quebec. It would also create a black market as people would go underground to sell tickets.
They say it would cause other problems.
"We have no control over those (international) sites, we can't collect taxes, we can't guarantee the authenticity of the tickets, we cannot guarantee reimbursement in case of cancellation," Grey warned.
"Prohibition is an impossible goal."
A number of provinces have rules governing ticket sales, including Saskatchewan, which prevents resellers from getting access to tickets before the general public does.
Alberta had anti-scalping legislation that that was repealed in 2009 because it wasn't being enforced.
"All the jurisdictions that have tried to prohibit have not enforced it," Grey said.
"Ontario has not enforced this law because it's very difficult to enforce."
In Ontario, the Ticket Speculation Act was amended in 2010 to stop U.S. entertainment giant Ticketmaster from selling tickets to an event, then reselling those same tickets through another site. It introduced fines of up to $5,000 for both sellers and purchasers of tickets on the secondary market.
Manitoba's Amusements Act says it's illegal to sell tickets for more than face value.
At Monday's hearings, promoters asked the government to pass new legislation as quickly as possible. The ticket resellers will make their presentation Tuesday in Quebec City.
Grey said the new rules would only force completely legal companies that offer a service and pay taxes to shut their doors.
"This particular law doesn't effect what a particular person does in the street, it only effects the merchants," Grey said.
"It completely snuffs out the legitimate businesses."
(With files from Martin Ouellet in Quebec City)