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Proceedings of the Standing Joint Committee for the
Scrutiny of Regulations

Issue 2 - Evidence,  April 15, 2010

OTTAWA, Thursday, April 15, 2010

The Standing Joint Committee for the Scrutiny of Regulations met this day at 8:35 a.m. for the consideration of a draft budget and the review of statutory instruments.

Senator Yonah Martin and Mr. Andrew Kania (Joint Chairs) in the chair.


The Joint Chair (Mr. Kania): Good morning. We have been asked to start with the budget. Does everyone have a copy of the budget? It has been distributed, I understand. There is a French version, which is at the back.

If you have questions on the budget, we can discuss them now. If no one has any questions, we will need a mover and we shall have it passed.

Mr. Lee: So moved.

The Joint Chair (Mr. Kania): It has been moved.

Senator Moore: Seconded.

The Joint Chair (Mr. Kania): Do all members agree to pass the budget as is?

Mr. Albrecht: Do we have a comparison? Never mind. I see them now at the back.

The Joint Chair (Mr. Kania): Are there any other questions? It is passed.


(For text of documents, see Appendix A, p. 2A:1)

Peter Bernhardt, General Counsel to the Committee: This instrument was made to correct an error concerning a previous amendment to the tariff. The previous amendment was not approved by the Governor-in-Council as required by the Pilotage Act. The end result of this error was that increased charges were collected without proper authority between January 1 and January 31, 2007. Apparently, some people also paid too little.

Initially, the Department of Transport advised that the Laurentian Pilotage Authority would reimburse any excess amounts collected. Later, however, the authority reported that its board made a decision not to reimburse. The decision was based on an opinion from the Office of the Auditor General that the fee increases had been validly fixed.

After ascertaining the basis for this opinion, the committee concluded that the opinion reflected some confusion as to the distinction between adoption of the tariff and approval of the tariff. It was also noted that the Auditor General had nevertheless expressed the view that "it would be reasonable for the Authority to reimburse users the difference between the intended rate and the applied rate or to consider the `net' effect for users.'' According to the pilotage authority, however, ship owners did not care to be reimbursed.

After its last consideration of the file, the committee wanted to know the amounts owed by or owed to users of the authority's pilotage services during the month in question, as well as the measures taken to inform ship owners of the situation. The authority now advises that, during the period in question, payments were made by 31 clients. Netting everything out, there was a net overpayment of some $2,900. On an individual basis, the amounts owed ranged from one client who owed just over $2,000 to another who is owed just over $1,000.

After the amounts in question were explained to the shipping associations, the board said it decided not to proceed with any reimbursement and it considered the amounts in question to be negligible. The authority also adds that in some cases it would be difficult to reimburse because certain shipping agents and certain ships no longer exist, and because shipping agents who paid the pilotage charges on behalf of the ship owners would likely not pass along the reimbursement.

In the past, the committee has been diligent in insisting on the principle that money collected without proper authority should be reimbursed. The question for the committee this morning is whether, in this context, the amounts can be considered so small that the fact that those to whom the money is owed have been informed and apparently cannot be bothered to collect it is sufficient to consider the matter at an end.

The Joint Chair (Mr. Kania): I have a feeling Mr. Lee will have a comment.

Mr. Lee: As counsel points out, our pristine orthodoxy in not allowing agencies to keep illegally charged fees is there, on the one hand. On the other hand, it is kind of a de minimis non curat lex principle.

However, the $2,900 here is not what they charged for the whole month. It could not be. The Laurentian Pilotage Authority has ships going up and down all over the place, with pilot boats zipping around there like nobody's business. I think the $2,900 is the differential referred to by the Auditor General. It may well be that all the fees charged that month may have been illegally charged, not just the differential. We have ourselves a multi-thousand-dollar overcharge here.

They are not being unreasonable in saying the difference is only $2,900 net if you take what we would have charged had we not changed the fees illegally and what we did charge illegally. It is a lot bigger than they are showing on paper, and it is still a 30-day illegality. On a technical basis, they were rogue in charging fees for a month.

I do not think anyone around the table would expect them to pay the whole thing back. However, technically, I believe — strictly in law — if a payer of amounts during that 30-day period insisted on a repayment, I think they could probably get it, subject to some kind of a set-off or quantum meruit argument.

Since they have agreed that there is a problem, I think we should insist on something more than just closing the file. I think we should ask them to send a letter to every payer, either directly or through their shipping agent, enclosing a copy of a letter that we will write and offering reimbursement of the differential.

Perhaps we are falling into the same trap if we suggest that the only problem here is the differential. The problem is the illegally charged fee. However, we would be offering reimbursement generally, and then those who take it up and demand it, we would insist that they accept. If they have no request for reimbursement, that is great.

We would have done our job conspicuously. They would have publicly acknowledged the problem and offered the reimbursement, which we have always suggested they should. If everything goes as planned, I would accept we could close our file.

Mr. Boughen: As I read the document, it looks like 31 people are owed $3,000.

Mr. Bernhardt: There are 31 people who paid some tariff during that month. Some people paid too much; some people paid too little.

Mr. Boughen: The total is $3,000.

Mr. Bernhardt: When you add up all that was collected too much and take away all that was collected too little, what they are saying is they end up with $2,900 more in their pocket than they should have.

As you say, some people may have been owed a couple of thousand dollars and some people may owe a thousand dollars.

Mr. Boughen: With all due respect to the legalese, it will cost us way more than $3,000 to disburse this money. There is a kind of break-even point here. Distributing that money to people — some who are not with us any longer, so now we are chasing down the estates — could mean another long delay. How long has this rascal been around — since 2007? We could be looking at this in 2013. I think we just admit that we made a mistake and let it go; close the file.

The Joint Chair (Mr. Kania): But it is not "we.''

Mr. Lee: We did not make a mistake.

Mr. Boughen: Then we recommend that this be handled in this manner.

The Joint Chair (Mr. Kania): I would like to have a full debate, obviously. I will say that based on my experience on the committee — and some people have been here a lot longer than I have — essentially the principle is that if someone overcharges, they pay back. With that general framework, I would like to have a discussion about what people believe is appropriate given these facts.

Senator Harb: The mere fact of setting up the precedent bothers me. I think counsel would agree that we should not be setting that precedent. I will go along with what Mr. Lee has stated. I think this should be brought forward both to satisfy the legal requirement and to not set a precedent.


Senator Hervieux-Payette: When you owe the Canada Revenue Agency $15 in taxes, they go after you for that $15. The opposite is also true; when you owe the government money, the debt is not written off. If there is an error, you admit the error and you reimburse the person. If they are not alive, that is another matter, but those people who can be found must be reimbursed. It is the idea of setting a precedent that concerns me. We are not a convenience store that can settle its accounts with customers over the counter. We are parliamentarians who apply rules, and in this case, if there are amounts owed to certain people who can be located, we should pay and reimburse those individuals.


Mr. Szabo: The key issue here is that the Governor-in-Council established tariffs, which they cannot do, on behalf of the authority. That is the most important thing, that they understand that the Governor-in-Council was in error and caused this problem.

I share the concern. My first note was materiality versus legality. I agree with Senator Harb; we are talking about a precedent. What if we had a much larger case where the net was only $3,000 but there happened to be $3 million owing to one person and $2,999,997 million owed by someone else? That is not a reason to do it.

I concur with Mr. Lee. He has come up with an eminently good way to get a win-win here in that we can reinforce the findings of the committee, and the authority would then have the opportunity to put things right.

I do not know what their initial letter said. If someone wrote me a letter and I did not write back, it would probably be because the letter did not offer me the money. It probably just said something like, "We have a rate thing; it is not really a lot of money, but we thought we would let you know.'' If the letter said instead, "We have overcharged you $3,000. Do you want the money back?'' that would probably prompt a different response.

I would like to endorse Mr. Lee's proposal to the committee.

The Joint Chair (Mr. Kania): I have a thought. The way I read this, it says that given these reasons, the authority continues to believe that it would be unnecessarily complicated and pointless to return the sum to clients. Essentially, it is talking about an administrative matter.

If this is accurate, that it is $2,900 for 31 clients, why not just send 31 letters with 31 cheques to the last known address and say, "You are paid back.'' Then it is over. What do you think about that?

Senator Harb: Yes, let us do it.

The Joint Chair (Mr. Kania): That is 31 stamps.


Mr. Asselin: This is not the first time we have talked about this. As a member, I do not think it is acceptable for us to close our eyes and shut the file, given that we know we made a mistake and collected too much money. As Senator Hervieux-Payette said, if I owe the Canada Revenue Agency money, no matter how negligible the amount, I will receive a statement of account and be required to pay it. And if I do not pay it on time, I will have to pay interest on top of it.

That being said, we have already sent out letters, we probably know which ones came back to us, either because the person no longer lives at the address indicated or some other reason. So we should send out letters to admit our mistake and say that, according to our records, we owe you X amount because you were overcharged. If we do that, you can let us know at an upcoming meeting once they have been mailed. And once we know that the cheques have gone out with a letter explaining the situation, if there are people who have underpaid, we should request payment of the amounts in question.


Senator Wallace: As we sit around the table talking about $3,000 and we are spending the time and effort we are, it can seem a bit impractical.

However, the issue to me is that if we deviate from the principle in this case, we are setting a precedent. How would we distinguish this circumstance from another in the future? We are saying that the difference was the amount. If we are distinguishing on the basis of amount, what is the break point? I do not think we want to get into that discussion.

As much as we would like to dispense with this, I think the principle is important. I think your suggestion, chair, is a good one. I do not particularly disagree with Mr. Lee. I think we have to move on with it because of the principle and not being able to distinguish this in the future.

The Joint Chair (Mr. Kania): I also think Mr. Lee's suggestion is good. I wanted to provide a different alternative for people to consider. Do people have a preference between those two options?

Mr. Lee: You can do both.

Mr. Szabo: It is fine to go with the chair's prerogative.

The Joint Chair (Mr. Kania): We will write and tell the authority that given that these monies were not properly collected, we want the authority to write to these 31 clients to provide cheques reimbursing them. The letter should go to the last known address of the clients. It is okay if for some reason they cannot find the clients. We do not expect them to work miracles, but they should at least try.

Mr. Albrecht: Will those who underpaid also receive an invoice for the part they did not pay?

Mr. Lee: It is their call.

The Joint Chair (Mr. Kania): Is everyone agreed with that?

Hon. Members: Agreed.


(For text of documents, see Appendix B, p. 2B:1)

Mr. Bernhardt: Section 14 of these regulations purported to authorize the minister to deem certain persons to be the widow of a deceased Indian for intestate succession. This practice was typically followed to allow common law spouses to inherit. Following the report of the committee in 1999, the government conceded there was no authority for this, and the provision was revoked. The government also accepted that any complete solution would have to involve introducing a bill to validate the 3,000 orders that had been made under section 14 in the past.

In November, the minister indicated that consultations with the Department of Justice had been completed and that Indian and Northern Affairs Canada was looking for an appropriate opportunity to introduce the validating legislation. Perhaps at this point a further update can be sought.

The Joint Chair (Mr. Kania): Agreed?

Hon. Members: Agreed.



(For text of documents, see Appendix C, p. 2C:1)

Mr. Bernhardt: Fees for use of national parks are, at present, fixed on an administrative basis by the minister under the Parks Canada Agency Act.

In report No. 74, this committee took the position that because of subsection 4(1) of the Canada National Parks Act, the imposition of fees for access to and use of national parks under the Agency Act was precluded. Section 4(1) of the Canada National Parks Act states that:

The national parks of Canada are hereby dedicated to the people of Canada for their benefit, education and enjoyment, subject to this Act and the regulations . . .

The committee takes this to mean that it was Parliament's intent that Canadians had the right to use national parks. This right could only be restricted or limited in accordance with the Canada National Parks Act or its regulations. Obviously, the imposition of fees is a restriction on the right to access and use of the park. Therefore, these fees have to be imposed by regulations made under the Canada National Parks Act by the Governor-in-Council.

In other words, whatever fees can be imposed by the minister administratively under the Parks Canada Agency Act may not include fees for the actual use of the parks.

The agency disagrees that the phrase "subject to this Act and the regulations'' precludes other statutes from restricting the right of Canadians to access and use of national parks. The reasons for their position have varied over the years. There is a note in the materials for members this morning that goes through the various arguments in detail.

In essence, the agency argues that the fee-setting provisions in the two acts are intended to operate together. This goes without saying. The question is how they operate together. For the agency, it is a matter of choice for the government as to which mechanism it wishes to use and under which statute it wishes to operate.

The problem is that this raises the possibility that two separate fees could be imposed — one by the minister, one by the Governor-in-Council — in respect of the same permit, licence or use of a facility.

The note concludes by suggesting that subsection 4(1) of the Canada National Parks Act means that use of the park may only be limited by that act. This is simply what is clearly implied. It dictates how the two statutes are to be read together.

For the committee, you have a situation where fees in respect of services, facilities, products, rights and privileges that the Parks Canada Agency provides generally can be established on an administrative basis. This includes fees in respect of national historic sites, national marine conservation areas, park reserves, related heritage sites, heritage railway stations and federal heritage buildings. It also includes fees with respect to national parks that do not interfere with the rights conferred under the Canada National Parks Act.

In turn, the Canada National Parks Act is a more specific statute. It provides for the determination of fees for the use of park resources and facilities and the issue of permits and licences only by way of regulations made by the Governor-in-Council.

The committee's last suggestion was that at the very least there is a need to clarify how the powers set out in these two statutes operate together. For example, the Parks Canada Agency Act could be amended to make it clear that the powers conferred under that act operate notwithstanding the powers conferred by any other act, and to deal with the question of whether once a fee is established for a certain benefit under one statute, the other statute may not be used to impose a second fee for the same benefit.

The agency's latest reply does not address this proposal, although by the tone of other comments I think it can be assumed that it considers such amendments unnecessary. I suggest that if nothing else, the length and complexity of the various arguments that have gone back and forth over the years is ample evidence of the need for some clarification. Perhaps that point can be made again to the minister. I suppose if members feel things have reached an impasse, the committees could report again to the houses. We are in a bit of a stalemate situation at this point.

The Joint Chair (Mr. Kania): Comments?

Mr. Lee: Does the word "facility'' in the Parks Canada Agency Act include a national park? Is "facility'' defined?

Mr. Bernhardt: I am not sure it would include the park itself. However, it would include things like serviced camp sites. I suppose that would be part of a use of a facility.

Mr. Lee: Our position that a national park is dedicated to the people of Canada and that a fee charged for access would, prima facie, be illegal would still hold water, unless there was something in the original act to charge a fee.

I do not see any easy way out of this. I appreciate the intention of the second statute, which was to bundle everything together and get a modern fee system in place. I do not see how we can move.

What do other members think?

Senator Harb: I think the issue here is coexistence. As far as they are concerned, coexistence is complementary, while we consider it to be two separate entities. What about the possibility of getting them to come before the committee and further elaborate on that position? Based on that, we would decide what we want to do.

It looks like they are digging their heels in and preparing for a fight because they believe we are totally off-site here. They are reading the law as stated, and they are doing exactly what the law allows them to do.

The Joint Chair (Senator Martin): I have a question for counsel and perhaps for members who have experience with other situations where we have reached an impasse. What are ways in other cases that we have moved forward, and what are some of the specific strategies, catalysts or solutions to such a situation?

Mr. Bernhardt: In this case, the one option the committee often follows is to keep knocking on the door by continuing to write back, try to make arguments and then try to deal with the counter-arguments. We have already had a considerable amount of that.

The other option would be to report. The committee did report back in 2003, I believe. At that time, again, the committee's position was not accepted. There was once some indication that subsection 4(1) might be taken out of the Canada National Parks Act. That is the dedication clause, if you will.

The government has since backed away from that, though it was never a clear undertaking in the first place. Things have basically become a series of arguments back and forth on the legal merits.

I should add that disallowance is not an option here because the committee is taking issue with fees that are fixed administratively. Under the Parks Canada Agency Act, those fees are referred to this committee. However, because they are fixed administratively, they are not regulations: That limits the options, as well.

The Joint Chair (Senator Martin): I was about to say there are not that many options. Perhaps there are other examples.

Mr. Szabo: I come back to the very end of the letter in your package, which we sent on April 30, 2007. The bottom line was that a couple of amendments to sections 23 and 24 of the Canada National Parks Act would be able to clarify these things. It is not a major surgery to legislation. We even allowed or offered to them that, "Perhaps such amendments would be appropriate for inclusion in the next set of proposals for a miscellaneous statute law amendment bill.''

In other words, they change these things often. It is not a grave undertaking for them to do this. That tells me that, if they are not prepared to do it, they disagree with the premise of our concern.

The question for us is whether we still uphold the concern. I think we do. Mr. Lee has raised one of the issues, certainly on whether there is an understanding or an application that is appropriate. Someone is concerned about money; we have been playing around with this one and others for a long time. The letter we got back in May and June was dismissive. I found it dismissive: "Thank you very much, but we will just carry on.''

A recommendation was, again, offered to them. The committee is standing firm on our assessment of the situation and we asked for their undertaking to propose the necessary amendments in the next legislative bill. If you would like to come before the committee to duke it out, let us get it over with, but I think we have to stop.

Senator Moore: In view of Mr. Szabo's comments, how does the agency reconcile its position with the statement made by counsel in this report to the effect that Parliament cannot have intended that users could be subject to a double fee for the same benefit?

Mr. Bernhardt: They basically appeal to what they would consider practicalities. In short, their response is essentially, "Do not worry; we would never do that.'' That may be a reasonable, practical argument on some level. It is not a legal argument. In law, the possibility would still exist.

Senator Moore: Exactly.

Mr. Bernhardt: When you read the statute, you are left trying to reconcile whether Parliament would have intended to create that possibility or not.

The Joint Chair (Mr. Kania): What would people think about a hybrid approach in terms of doing what Mr. Szabo suggested — writing the letter asking for the appropriate undertaking, say, within 30 days, and letting them know that if it is not provided within 30 days, we want a witness to appear within the next 30 days?

Mr. Lee: I have a question and a statement. Is it counsel's view that, even under the older statute — because the parks were dedicated — the government could not have charged an admission fee?

Mr. Bernhardt: They could have charged an admission fee but only by making a regulation, fixing that fee under the Canada National Parks Act. They clearly do have the power. It is not a question of power. It is a question of the appropriate vehicle.

We have two statutes or two different ways of fixing a fee by two different people. In reading those together, the committee looked at that dedication clause and said, "If this fee will be a restriction on your use and enjoyment of the park, it must be established by regulation under the Canada National Parks Act, not by an administrative fee fixed under the Parks Canada Agency Act.''

Mr. Lee: I have a comment. Counsel indicated that, for whatever technical reasons, a disallowance procedure might not be viable here. However, I actually do not accept that we could allow a fee charged by the government to go unnoticed or not responded to if we thought the fee was illegal. We would find a way. I guarantee you we would find a way.

Mr. Bernhardt: Lawyers can be very creative.

Mr. Lee: I know. I just do not accept that we cannot do anything about it because they used route A instead of route B. That is our job. We might be able to get creative about this later.

To get back to the academic point, this file is 14 years old. We cannot send this down the pike again. I do not think so, at least. Did Mr. Szabo have a suggestion? I do not recall whether we had a solution on the conveyer belt.

Mr. Szabo: I think it just means we stop exchanging correspondence. I think we go to them with the final offer, saying, "Here is how we will proceed.'' They either undertake to make the changes, or we will have them before the committee. Then the committee will consider its options subsequent to that.

The Joint Chair (Mr. Kania): Are there any further comments?

Hon. Members: Agreed.


Mr. Asselin: I am on page 1 of the appendix, subsection 4(1) of the Canada National Parks Act. We submit that the structural difference between the French and English versions does not warrant the setting aside of the French version. With respect to subsection 4(1) and the Canada National Parks Act, it reads as follows:

We do not agree with the committee's position that, because there is a difference between these two versions, the French version must be set aside and the English version be the only applicable version.

I would like to know which committee is being referred to.

Senator Hervieux-Payette: It is from the letter of July 13.

Jacques Rousseau, Counsel: I am a bit surprised by how it is presented.

Mr. Asselin: I would add that if a committee, in the public service or otherwise, actually issued such an opinion, I would like to file an official languages complaint.

Mr. Rousseau: I can assure you that it is not this committee that submitted that the French version should be disregarded. That is why I am surprised, and I wonder whether there is not a translation error. And I am looking through our notes to try to see how the matter was explained.

Senator Hervieux-Payette: The translation is correct, it is not the translation.


Mr. Bernhardt: There is clearly a discrepancy between the two versions. As Mr. Rousseau is alluding to, in the note we have prepared for members, that point is discussed, beginning toward the bottom of page 2 of that note and carrying on through page 3 and to the top of page 4, I think.

The difficulty with the nature of the discrepancy is that in English there is a clear indication as to the manner by which access and rights to parks may be restricted — that is, may be restricted pursuant to that act and those regulations.

The French version seems to be a more general statement that simply states that the parks should be maintained and used in a lawful manner, which, taken on its face, would go without saying. Obviously, you do not expect the Parks Canada Agency to maintain the parks in an illegal manner, and you do not need a provision to tell you that.

Trying to reconcile the two leads to the conclusion that the drafting of the French version of the statute is defective. That should be corrected as well. If you are going to clarify how the two operate together, you should also reconcile the two versions of the act.

I think it is pointed out, as well, that that was introduced, if I am not mistaken, when the new Canada National Parks Act was passed several years ago. It altered the French version. It re-enacted the English version of that provision word for word. Alterations for some reason were made by the drafters to the French version, which seems to have led to this result.


Mr. Rousseau: I am reading the English version of the notes prepared for the committee. On page 3 of the English version, in the first paragraph, it is explained that a substantive purpose appears on the face of the English version whereas the French version amounts to little more than a recital of the obvious, and that to read the English version as merely stating that the act and its regulations take precedence over the dedication renders it as devoid of substance as the French.

The obvious conclusion is not that the entire provision is pointless, but rather that the wording of the French version is flawed. I think that the committee's argument is exactly that. There is a discrepancy between the French and English versions of the act. The issue is to interpret this provision so as to give it meaning. The meaning that can be attributed to it is that found in the English version, in terms of context, and consequently the committee requested that the French version be made consistent with the English version so as to give it meaning.

Mr. Asselin: I agree that consistency is necessary between the French and English versions of the legislation, whether the act or the regulations, and vice versa. It goes without saying. Except that these are documents that will be kept on record, so if that is not what is meant, and we are not the ones who said it and we are not too sure who did, I would like an explanatory note to accompany the paragraph because, as it stands, it simply says that the French version is not correct, that it will be set aside and that the English version will be applied. That makes everyone a bit uneasy. If that is not what was meant, could we add a correction or an explanation somewhere?

Mr. Rousseau: A few years ago, we obtained a certain commitment from the minister of the day to amend the French version of section 4. Since then, the department has distanced itself somewhat from that commitment. And as legal counsel explained, that is one of the problems we have.

As I told you, there was a previous commitment, and the department went back on that commitment to amend section 4 so that both versions say exactly the same thing.

Mr. Asselin: In that case, if the department does not want to change its position, the only solution is to complain to the official languages program.

Mr. Rousseau: Perhaps, but — at first glance, that is not my —


The Joint Chair (Mr. Kania): Regarding getting this to a solution, we had the idea that we would seek the undertaking to correct all this, and we could seek an explanation as well within the 30-day period. If we are not satisfied with their response, within the next 30 days we will bring someone here to testify and we will ask them specifically to testify on that point as well.

Why not seek the solution from them within the 30 days, including the answer, and if they do not provide it properly, then we bring them here and ask them. After the testimony, if we are still not satisfied, we can discuss options of how we will move. Is everyone okay with that?

Hon. Members: Agreed.

The Joint Chair (Senator Martin): I have one comment or question regarding the 30-day deadline for such a response. I know that in Ottawa, with this very interesting time warp, 30 days can go very quickly. I know this is a 14- year file, but would 60 days be better?

Senator Harb: Too late.

The Joint Chair (Senator Martin): Everyone here wants 30 days — okay.

Senator Harb: May I make a suggestion? Perhaps what we should do also is give them a date for when we expect them to appear. If they do not give us the proper response within 30 days, we say the committee has set aside this particular date in order to bring you as witnesses before the committee.

The Joint Chair (Mr. Kania): For me, when I was thinking of the 30 and the 60, I want to get this done before Parliament breaks for the summer.

Senator Harb: So as not to have to go back to them saying the 30 days have gone by so now we want to schedule you, would it be possible with the secretariat of the committee to set the date when we want them to appear, which is beyond the 30 days, so that we can say, "Unless your response is satisfactory to the committee, on this particular date at this time, we expect you to appear before us''? Then you close it down.

Then if you want to do it sometime in early June, that is good enough. That is plenty of time for them.

The Joint Chair (Mr. Kania): Do people like that idea?

Mr. Albrecht: Obviously we will go with the 30 days, but I do think Senator Martin makes a good point, that 30 days is a very short time for a department to turn this around. With all due respect, it has been 14 years. Why the sudden rush 30 days from now on a 14-year-old file? However, we will live with it.

The Joint Chair (Mr. Kania): Do you want to select a date? We will select a date for June.

Mr. Bernhardt: Tentatively, we are scheduled for June 3 and June 10.

The Joint Chair (Mr. Kania): Why not give them the 10th, so they have lots of time. The point is that we would like them to solve the problem before coming here. Is that okay with everyone?

Hon. Members: Agreed.


(For text of documents, see Appendix D, p. 2D:1)

Mr. Bernhardt: Amendments to the act and the regulations to address the committee's concern with the legality of section 69.41(b) were promised in the January 6 letter from the minister. He advised that the matter would be brought to cabinet early in the new year and a bill introduced shortly thereafter. At this point, it is a question of asking the department whether things are still on track.

The Joint Chair (Mr. Kania): Agreed?

Hon. Members: Agreed.


(For text of documents, see Appendix E, p. 2E:1)

Mr. Bernhardt: In May 2006, Industry Canada agreed to make several minor amendments to these regulations at the same time as other planned amendments were made. The committee accepted this with the proviso that if amendments were not made within two years, it wished to see amendments resolving its concerns proceed independently.

The amendments to the regulations not having been made, confirmation was sought that amendments addressing the committee's concerns would proceed without delay. Last September, the department indicated it was not possible to provide a date for the making of the amendments and that they were still to be made in conjunction with other amendments to the same regulations. The committee did not find this reply to be satisfactory, and counsel was instructed again to seek both an assurance that the promised amendments would be made without further delay and a firm date by which action would be taken. At the same time, the department was advised that in the absence of an assurance, the committee would consider whether to request the appearance of officials.

The department's latest reply is dated February 2. It simply states that they cannot provide more details at this time regarding the timing of what are now called "potential amendments.''

The Joint Chair (Mr. Kania): Should we call a witness for this one?

Ms. Cadman: Yes.

Senator Moore: Yes.

The Joint Chair (Mr. Kania): Should we do that?

Hon. Members: Agreed.

The Joint Chair (Mr. Kania): When?

Ms. Cadman: As soon as possible.

The Joint Chair (Mr. Kania): We will let them coordinate.

Mr. Bernhardt: We will get in touch with them and make arrangements.

The Joint Chair (Mr. Kania): With a goal of May.

The Joint Chair (Senator Martin): In the other case, we had a letter giving them 30 days to respond before witnesses were called. Is there something more urgent in this particular file that the committee feels a witness should simply be called rather than sending another letter? I know there is a series of letters. What is the difference between the last topic and this one?

Mr. Bernhardt: It is a legitimate question. The last time this topic was in front of the committee was in December. That was the wish of members at that time. They basically wanted a firm timetable or they wanted someone to appear. That could be put in a letter. It may be sufficient to state that unless a firm undertaking is given, staff will be in touch to arrange an appearance.

The Joint Chair (Senator Martin): When I look at the files given for each committee session, we meet only every second week. We are already calling a witness perhaps for the end of the session. From members' comments, I thought it is rare to call a witness to this committee. Therefore, I am simply curious. Now we are talking about two witnesses.

Is it something that we should be doing? Should a strongly worded letter be sent, or has that already been done and members feel we should call them in at this time? I am simply curious.

The Joint Chair (Mr. Kania): I suggested a witness right off the bat because the December 10, 2009, letter makes reference to calling a witness.

The Joint Chair (Senator Martin): Does this warrant the next step?

The Joint Chair (Mr. Kania): If other people agree.

The Joint Chair (Senator Martin): I am asking the question only for clarification.

Mr. Szabo: That last sentence of the letter of February 2 was a loaded statement emphasizing the word "potential.'' This is not definitive enough. I think we can get a commitment that the amendments will be made within a set horizon. This is not a major process for them to go through to do this.

The Joint Chair (Mr. Kania): Mr. Szabo, are you suggesting we write a letter first?

Mr. Szabo: No, I am suggesting we call a witness to clean up the last sentence and get a commitment.

Mr. Lee: I want to reinforce that comment. Given the history of the file, the last sentence in that letter from the department is similar to their dropping the file in front of our face and slamming the door. It falls far short of where we were previously with this file and where we should be now.

The Joint Chair (Mr. Kania): Is everyone in agreement?

Hon. Members: Agreed.

The Joint Chair (Mr. Kania): We will call a witness.



(For text of document, see Appendix F, p. 2F:1)

Mr. Rousseau: When it reviewed these regulations at its May 28, 2009 meeting, the committee decided to send a letter regarding three points, which were identified in the letter of June 4, 2009 and the response dated July 23, 2009.

Point 7 addresses section 37 of the regulations. It sets out a regulation regarding the transfer of payments between financial institutions. Section 37 states that it applies "subject to any statutory or regulatory constraints.''

The meaning of this wording is not clear and is therefore subject to interpretation.

The correspondence exchanged indicated that this section pertains to federal statutes and regulations. The department also wrote that, in addition to the requirements set out in the statutes and regulations, "constraints'' could also derive, for instance, from a directive issued by one of the regulatory bodies or an order issued by a court.

To clarify the meaning of "subject to any statutory or regulatory constraints,'' the committee used the explanation provided by the department and suggested that the regulations indicate that the constraints can be imposed on members of the large value transfer system, under the Canadian Payments Act, the Compensation and Payments Act, the Bank Act and the Superintendant of Financial Institutions Act.

In its July 23, 2009 response, the department wrote that to address the committee's concerns, it was prepared to include a non-exhaustive list of statutes and/or regulations. The department's proposal to include a non-exhaustive list may help to clarify the meaning of the expression in question. The committee should request to see the exact wording of the proposed amendment.

Point 11 addresses section 51 of the regulations. According to this section, nothing in sections 43 to 50 of the by-law

affects any right or remedy that a participant or any person may have under the general law, including, without limitation, the law governing mistake, unjust enrichment or restitution, in the case mentioned.

The department recognized that the purpose of this section is to provide greater clarity to participants and to anyone else with regard to their right to recourse.

The committee is of the opinion that section 51 is legally superfluous and should therefore be dropped.

However, in its response dated July 23, 2009, the department wrote that section 51 sets out the right to recourse available to participants and other parties to recover a payment. It stated that the section is necessary for the attainment of the Canadian Payments Association's objectives but did not explain why.

To the extent that section 51 can be interpreted as an attempt to affect the civil recourse of the persons in question, Parliament must have clearly set out such regulatory authority in the legislation. None of the regulatory provisions cited by the department clearly addresses this matter. Either section 51 is illegal or it serves no legal purpose.

It is the opinion of legal counsel that the department did not give the committee any reason to change its position on dropping section 51.

Last, point 15 addresses section 63 of the regulations. This section pertains to the suspension of a participant's status from the large value transfer system if, for instance, the participant is no longer viable.

Section 63 adds that the suspension is applicable "unless otherwise indicated by the General Manager.''

A participant may be exempted from section 63 at the general manager's discretion.

This decision has the effect of exempting a specific participant from section 63 of the regulations. The committee noted that the general manager has the discretionary power to exempt a participant from section 63 of the by-law and that the by-law does not contain any criteria to guide the general manager, thereby creating an arbitrary risk.

In its response dated July 23, 2009, the department recommends leaving this discretionary power in place without amending it, but this response clearly sets out the criterion that should guide the general manager. As the department's response indicates, the general manager must be able to exercise this power if a participant's suspension could negatively affect the operation of the Canadian Payments Association's clearing and settlement systems.

It is the opinion of committee counsel that inclusion of this criterion in the regulations would solve the problem raised by the committee. If the committee agrees, counsel will write to the department with respect to these three points to obtain an update on the promised amendments.


The Joint Chair (Mr. Kania): Are there any comments? Are members agreed?

Hon. Members: Agreed.


(For text of documents, see Appendix G, p. 2G:1)

Mr. Bernhardt: Mr. Chair, following the committee's initial consideration of these regulations, five points were pursued further. These were the ones numbered 1, 5, 16, 18 and 20 of the correspondence.

On point 1, amendments are promised to the regulations. Unfortunately, the department's reply does not deal with the question of the inconsistent terminology used in the act itself.

Point 5 concerns a discrepancy between the English and French versions of certain provisions. To be technical, the department's reply argues that no discrepancy exists because the word "tout'' as used in the French version is an indefinite adjective, which is equivalent to "any'' in the sense of "some'' in English as opposed to "every'' in English. After consulting with various grammar texts, we have come to the view that, when used as an indefinite adjective, "tout'' does mean "every.'' This being the case, there is a discrepancy, and it must be corrected.

Point 16 concerns the use of a formula based on a variable element to determine an amount by which a person's disability or death benefit will be reduced. As experienced members know, this is not a new issue. The committee considers that the use of such a formula does not prescribe an amount; what has been prescribed is merely a method for determining the amount. The department's reply simply states a contrary conclusion without advancing any arguments.

Turning to point 18, there is still no reply on the question referred to in the first paragraph of counsel's last letter. As for the issue of duplication, the department replies that any duplication will be addressed, although it is not entirely clear whether this means they agree that any duplication actually exists.

Finally, their reply on point 20 seems to indicate that corrective amendments will be made, although perhaps confirmation of this should be sought. In short, I suggest pursuing these matters in a further letter to the department.

The Joint Chair (Mr. Kania): Are there any comments? Is it agreed?

Hon. Members: Agreed.



(For text of document, see Appendix H, p. 2H:1)

Mr. Rousseau: The issue in this file is the deletion of the definition of "serious epizootic disease'' from section 2 of the Health of Animals Regulations, but this term continues to be used throughout the regulations. Therefore, legal counsel asked the Canadian Food Inspection Agency what would be considered to constitute a "serious'' epizootic disease, how this determination would be made and how it would be made known. Although the agency states that the commonly understood meaning will govern what constitutes a "serious'' epizootic disease, there is no objective meaning that a regulated party could ascertain, for example, by consulting a dictionary or some scientific standard.

As the agency states, the only way an importer can know which diseases are considered to be "serious epizootic diseases'' is to consult the agency itself. In reality, the agency is creating an administrative list of "serious epizootic diseases'' to which the regulations are then applied.

The former definition of "serious epizootic disease'' in section 2 of the regulations read as follows: "a disease which the minister considers to pose a serious economic threat to Canada's agricultural economy or to human health.''

While the effect of the definition was the creation of an administrative list by the department, the definition set out the criteria on which the minister's decision was to be based, namely that a disease pose a serious economic threat to Canada's agricultural economy or to human health.

Obviously, there are no longer any such criteria in the regulations. While the agency claims that a "serious epizootic disease'' by definition could have an effect on human health, the fact is that there is no definition and, as a result, no criteria to determine whether a disease constitutes a "serious epizootic disease.'' If, as the agency explains, the intent is to capture any disease identified as a serious and new threat by the World Health Organization for Animal Health or the World Health Organization, perhaps this should be clearly reflected in the regulations.

If the committee agrees, legal counsel will send the agency a letter with that suggestion.


The Joint Chair (Mr. Kania): Are all agreed?

Some Hon. Members: Agreed.

Mr. Lee: I do not disagree with counsel at all, but I thought our perception of this file was somewhat muddled by the fact that they used this strange word "epizootic.'' All it really means is a serious disease that has some implications. However, we still end up with the same problem where we do not have a definition. My first reaction is we need to go to a dictionary here to figure out what this word means. I have not used it in my whole life until this file came up.

Senator Moore: That means symptomatic of the condition.

Mr. Lee: I agree fully. I thought I better back off a couple of notches. I do not want to panic because I have never seen this word before. In the end, we still do not have a clear window when the department starts recording these things as bad for the economy. I just wanted to make that point.

Mr. Albrecht: In fairness, there is a lot of subjectivity in this whole file and there always will be. You use terms like "virulence,'' "transmissibility,'' "susceptibility'' and "serious.'' The minister will always have discretion. From my understanding, "epizootic'' means it is normally a disease in animals that sometimes gets transferred to humans. These are all subjective things. Go ahead and try to get it, but I am not sure we will ever nail it down.

The Joint Chair (Mr. Kania): Are we okay, then?

Hon. Members: Agreed.



(For text of document, see Appendix I, p. 2I:1)

Mr. Rousseau: There has been correspondence exchanged regarding this file since the meeting of March 5, 2009. It addressed two points. The first was that an amendment, in accordance with the committee's suggestion, was promised with respect to point 14. On the other point, which pertains to the power to adopt sections 54(2), 55 and 56 of the regulations, the committee determined that the Canadian Business Corporations Act should be amended to include the powers to make rules governing the manner in which a proxy holder may be authorized to act on behalf of a shareholder at a meeting and the extent of the authority that may be conferred to the proxy holder. The department committed to reviewing the act in order to provide clarification and ensure that the statutory authority is clearer.

The committee asked whether the department could be more specific as to when this review would be completed or at least undertaken. In response, the department said it was waiting for the first available opportunity and indicated that a parliamentary review of the act was to be undertaken before November 21, 2006, which has not been done yet.

The minister should be reminded that the act has nevertheless been amended twice, in 2007 and in 2009. Since, according to the department, it is simply a matter of clarifying the act, we fail to see why it is necessary to wait for the outcome of a parliamentary review. If the committee agrees, counsel will write to the department to recommend that it consider including these statutory amendments in the next miscellaneous statute law amendment bill.


The Joint Chair (Mr. Kania): Are there any comments? Are members agreed?

Hon. Members: Agreed.


(For text of document, see Appendix J, p. 2J:1)

Mr. Bernhardt: With the exception of two small loose ends, amendments have been promised to resolve all of the concerns raised.

On point 2, as identified in the correspondence, the commission's reply indicates that it might prefer to remove all requirements to inform the parties when it takes action under a number of provisions rather than setting out such a requirement in each provision. At present, the regulations are somewhat inconsistent in this regard.

This would certainly resolve any inconsistency. However, one wonders why the regulations would not simply reflect what the commission's actual practice currently is by setting out a notice requirement in each instance where the commission already gives notice anyway. That is a question that might be worth asking.

On point 9, the commission states it is prepared to consider amendments. Again, perhaps confirmation should be sought that the amendments will in fact be made. As well, there is some misunderstanding as to the nature of the argument set out in counsel's last letter that we could clear up at the same time. It would simply be a case of writing back to the commission to clear those things up.

The Joint Chair (Mr. Kania): Agreed?

Hon. Members: Agreed.


(For text of document, see Appendix K, p. 2K:1)

Mr. Bernhardt: Mr. Chair, 20 points were raised after the initial review of these regulations. Five were resolved after the first exchange of correspondence and 15 were pursued further after the file was considered by the committee. There are now further promises of amendments on almost all of these 15 points.

On point 6, however, while there is agreement to amend section 5 of the regulations to make it clear that an existing licence terminates when a new one is issued, there is no response to the suggestion that the section should also clearly state that a licence may be terminated when the circumstances relating to the licence change. That should be followed up.

On point 10, I suggest that the explanation given in the department's reply is satisfactory, and therefore no amendment is required.

Point 11 concerns section 9(c)(ii), which unnecessarily states that other applicable laws must be obeyed. The latest reply suggests rewording the provision, but the fact remains that it is entirely unnecessary and pointless to provide in one law that those governed by that law also have to obey whatever other law might apply to them anyway.

On points 14 and 15, possible amendments were to be the subject of talks with the Department of Justice. We could perhaps ask whether they can now confirm that the amendments will be made.

All of these would be followed up in a further letter, and at the same time we would also ask for a progress report on the promised amendments.

The Joint Chair (Mr. Kania): Agreed?

Hon. Members: Agreed.



(For text of document, see Appendix L, p. 2L:1)

Mr. Rousseau: As indicated in the notes prepared for the committee, the amendments in SOR/2008-119 correct 12 drafting problems identified by the committee. In addition, in the letter of October 29, 2008, committee counsel raised six new points. The commission promised to undertake amendments in response to points 1, 3, 5 and 6, and provided a satisfactory reply to point 2, which pertains to a drafting problem.

The committee must decide whether the reply to point 4 is satisfactory. Pursuant to the Nuclear Substances and Radiation Devices Regulations, a person does not require a licence to possess, use, store, transfer or manage any quantity of depleted uranium when used as a counterweight in aircraft if, among other things, each counterweight bears a visible and permanent impression or label listing the name of the manufacturer, its unique identification number and the statement "unauthorized alterations prohibited.''

Committee counsel asked the commission who is supposed to authorize alterations to a counterweight, what criteria need to be respected and whether this information should not be included in the regulations. The commission responded no, likening the label or impression to the statement "unauthorized entry prohibited'' appearing on access doors to controlled areas. The commission indicated that this information was easily available to workers and pointed out that the name of the manufacturer must appear on the label or impression.

The committee has reason to wonder whether these reasons are valid. On one hand, the regulations set out a statutory rule of conduct whereas the sign on a door can simply reflect an administrative decision. On the other hand, it is at best implicit that this authorization must be obtained from the manufacturer. In its July 27, 2009 letter, the commission added that this wording mirrors that used in the United States and that it would be wise to retain the wording used in the United States. There is reason to wonder whether it would really be ill-advised to clarify that authorization must be given by the manufacturer. The commission seems to be exercising extreme caution, perhaps to the point of being excessive.

If the committee is of the opinion that the relevant information should appear on the label or impression, counsel will send the commission a letter to that effect.


The Joint Chair (Mr. Kania): Comments? Should we send another letter?

Hon. Members: Agreed.

Mr. Szabo: This subject matter is not insignificant. I have more questions than answers. This cannot be the only time or only piece of legislation in which the proper handling of spent uranium or something like that comes up.

Obviously, I would want to know whether there is consistency among legislation within Canada and whether there have been any incidents or problems in terms of the issue. I want to know more rather than to say I think we will accept that.

My political instincts are to continue to show an interest in trying to resolve any questions that members may have. I cannot help you any further. Just because the United States does something — we have legislation here. We have a made-in-Canada solution here. I would like to pursue it one more round at least.

Senator Harb: I think what is really telling, along with what Mr. Szabo is saying, is that section 5(1), on page 2, No. 4, says "In keeping with section 5(1)(e) of the Nuclear Substances and Radiation Devices Regulations, made under the Nuclear Safety and Control Act, a person must have a licence.''

Then the translator's note in brackets says "the legislation states the opposite.'' I think that, by itself, is extremely telling. If we were to disregard everything else and focus on that alone, I think we have grounds to seek clarification. What exactly do they mean by that?


Mr. Rousseau: Initially, in its response, the agency forgot to use the negative. The English version of the letter sent by the agency should have read:


If the conditions outlined in the paragraphs are not respected.


That is why the translator, seeing the French version, the provision itself, said that something was wrong. It is due to a mistake made by the agency in its response.

Senator Harb: Very well.


(For text of document, see Appendix M, p. 2M:1)

Mr. Rousseau: In this file, two amendments were promised: one to correct a drafting problem, and the other to allow a business not to keep copies of reports that it already provided to the minister. The department indicated that it would make these amendments after reviewing the effectiveness of the regulations, along with any other amendments that may be proposed further to the review.

According to the department, the intention is that the review be done in 2009, in which case, the amendments would be made in 2010. The committee wanted a commitment from the department that the proposed amendments be made in 2010 separately from any other amendment if the review were delayed.

In its letter of July 9, 2009, the department wrote that it could not confirm that, if there were a delay, the proposed amendments would be undertaken in 2010 independently of the review, but that it would reconsider its position in 2010 and then decide on a time frame for the proposed amendments. I have checked, and no amendment has been put in place and no proposed amendment has been published to date.

If the committee is satisfied with the department's commitment to reconsider its position in 2010, committee counsel can write to the department again to ask whether it has decided on a time frame for the amendments to the Solvent Degreasing Regulations.


The Joint Chair (Mr. Kania): Agreed?

Hon. Members: Agreed.



(For text of document, see Appendix N, p. 2N:1)

Mr. Rousseau: In this file, amendments that were promised have yet to be made with respect to three points in which the committee identified drafting problems. In its letter of September 11, 2009, the department expected to publish the proposed changes in early 2010. I have checked, and no proposed regulations have been published to date. Committee counsel should write to the department for a progress report on the status of the amendments.


The Joint Chair (Mr. Kania): Agreed?

Hon. Members: Agreed.



(For text of document, see Appendix O, p. 2O:1)

Mr. Rousseau: In this file, three amendments were promised. The correspondence exchanged since March 14, 2008 shows that the department initially planned to make the amendments in 2009. In its October 19, 2009 letter, the department indicated that the new regulations should be published in the spring of 2010. The new regulations have not been published to date. Committee counsel should once again write to the department to ask whether it still plans to publish them this spring.


The Joint Chair (Mr. Kania): Agreed?

Hon. Members: Agreed.

The Joint Chair (Mr. Kania): Moving to Action Promised, part 8 of the agenda, pursuant to convention, we will let counsel take us through the remainder of the items.


(For text of documents, see Appendix P, p. 2P:1)


(For text of documents, see Appendix Q, p. 2Q:1)


(For text of documents, see Appendix R, p. 2R:1)


(For text of documents, see Appendix S, p. 2S:1)

Mr. Bernhardt: We can take the next three agenda items as groups. Under Action Promised, a total of 13 amendments are promised in connection with the four instruments listed. Progress of these will be followed up in the usual fashion. I note also that the instrument registered as SOR/2008-202 actually made two previously promised amendments.


(For text of documents, see Appendix T, p. 2T:1)


(For text of documents, see Appendix U, p. 2U:1)


(For text of documents, see Appendix V, p. 2V:1)


(For text of documents, see Appendix W, p. 2W:1)

Mr. Bernhardt: Turning to Action Taken, four instruments are listed. Together they make 42 requested amendments. In particular, some of the amendments made by SOR/2009-322 addressed concerns relating to administrative discretions either by removing unnecessary conferrals of discretion or by removing subjective elements pertaining to their exercise.































Mr. Bernhardt: Finally, under Statutory Instruments without Comment is a list of 30 instruments that have been reviewed by counsel and found to have complied with all of the committee's criteria. Copies of those are available should members have questions or wish to inspect any of them.

The Joint Chair (Mr. Kania): Does anyone have final comments on anything?

Mr. Boughen: With all due respect and fairness to counsel, do we need all this paper? For example, these two sheets distributed after the big book was published really tell the story. Counsel is well versed in the background information. We, at the committee level, may ask you questions if it is not covered. We must have wiped out a forest or two with all this paper. It does not fill any need.

The summary completes it for me. I cannot speak for all of the members around the table. I am okay with your highlighting of points and the documentation. I have a flavour of what you are doing. I am not an expert in all fields, and I do not pretend to be. If it is boiled down into this kind of format, I am okay with this.

Senator Harb: I suggest that the member not be given any more notes; take him off the distribution list. If any other members do not want notes, also take them off the list. I would like to get them.

Mr. Hiebert: I generally have my laptop computer with me. Can this be made available in a PDF format with chapter heading so we may skip through the document electronically?

Mr. Bernhardt: At present, the difficulty is that the correspondence we receive from the departments comes to us in paper form. I have been trying to digitize all our files for some time. As you can imagine, that will require a lot of scanning. Unfortunately, we simply do not have the capacity currently. I would like to be able to do precisely that in the near future. I hope to have the capacity before much longer.

Obviously, everything that comes from our office is available in electronic format and could be sent. The problem is with the other half of each file, which comes to us in paper that is not currently scanned. Only recently have we had any scanning capacity in our office. We are somewhat in the Stone Age, and we have been trying to address that for some time. It is a question of resources and getting the powers that be to focus on us as a priority as opposed to something else.

The Joint Chair (Mr. Kania): Any other comments on this point?

Mr. Hoback: I am curious why the departments cannot send an electronic copy themselves in addition to the paper version. It would save a lot of effort.

Mr. Bernhardt: We can ask them. I assume government departments have more resources than us. They might be amenable to that. That is a possibility we could explore.

Mr. Hoback: It may be cost-effective.


Senator Hervieux-Payette: As far as I know, there is recycling on the Hill. I put it in the recycling, otherwise I would need two offices to store everything after ten years. I would like to point out that, short of giving subsidies to the forest industry, which is going through a difficult period right now, my modest contribution to the industry in Quebec is that I recycle the paper I use.

We do not even have an electronic voting system on the Hill, so to think that we are going to receive all mail in electronic format — It may happen before I retire, but it may take a few years yet. Since people take five or six years to reply to us, perhaps their response would come more quickly in electronic format, but I would say that sometimes has more to do with people's goodwill.

Mr. Asselin: It is no better to send letters electronically, because people often need to print them for reading.


The Joint Chair (Mr. Kania): For now, we will keep things the way they are. We can discuss this at a different time.

The next meeting is April 29 at the same time. Thank you. The meeting is adjourned.

(The committee adjourned.)

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