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Proceedings of the Standing Joint Committee for the
Scrutiny of Regulations

Issue 12 - Evidence, June 16, 2005

OTTAWA, Thursday, June 16, 2005

The Standing Joint Committee of the Senate and the House of Commons for the Scrutiny of Regulations met this day at 8:30 a.m. for the review of statutory instruments.

Senator John G. Bryden (Joint Chairman) in the chair.


The Joint Chairman (Senator Bryden): The first item on the agenda this morning is to elect the joint chair to fill the vacancy left by Mr. Grewal's resignation.

I would ask the joint clerk from the House of Commons to preside over the election of the joint chair.


Mr. Jean-François Lafleur, Joint Clerk of the Committee: As you said so well, the 42nd report of the Standing Committee on Procedure and House Affairs was submitted and adopted yesterday, and we are informed that one of the joint chairmanship positions is vacant. We must thus elect a new joint chairman, pursuant to Senate rule 106. This will be the first point on today's agenda. I am ready to receive motions to that effect.


Mr. Hanger: I nominate Mr. Rob Anders.


Mr. Lafleur: Are there any other nominations? If there are no other nominations, I declare Mr. Anders duly elected joint chairman of the committee. I invite Mr. Anders to take the chair.


Mr. Rob Anders (Joint Chairman) in the chair.

The Joint Chairman (Senator Bryden): Before proceeding to the agenda, we should speak to what has happened since the report of the committee was sent to the Senate in respect of the disallowance of the regulation under the Fisheries Act. The report was tabled in the Senate on the day that it was passed by the committee. Was the report to the House of Commons tabled the same day or one day later?

The Joint Clerk (Mr. Lafleur): I would have to verify that.

The Joint Chairman (Senator Bryden): In any event, an attempt was made to resolve the issue.

Mr. Lee: On a point of order, Mr. Chairman, the joint clerk did not know some information about our disallowance report. Could he clarify why he does not know? A disallowance report is significant, and this is an opportunity to put on the record the particulars about what happened to it in the House. The joint clerk has said that he does not know.

The Joint Chairman (Senator Bryden): In fairness, I do not believe the joint clerks realized that I intended to raise this matter this morning. It is simply a matter of checking when the report was tabled in the House of Commons. It would not have been tabled by a joint clerk but rather by a committee member.

Mr. Lee: That would be done with the assistance of the joint clerk.

The Joint Clerk (Mr. Lafleur): Yes. As all members know, the debate was on Wednesday, June 8, and the motion of the minister was adopted that day. Perhaps that answers your question, Mr. Lee.

Mr. Lee: That is good, thank you.

The Joint Chairman (Senator Bryden): The attempt was to have all-party agreement in the House of Commons to expedite the passage of a bill that would solve the problem. However, as sometimes happens, there was not unanimous consent. The motion in the House of Commons was debated. It was decided, by majority vote, not to accept the report but rather to refer it back to this committee.

In the meantime, the report was tabled in the Senate. Under the operation of the provisions of the Scrutiny of Regulations Act, unless interrupted by a minister moving a motion, the report would be adopted 15 days after being tabled. Yesterday was day 15 and the report of this committee was adopted in the Senate. The end result is that the regulation would be disallowed only if the report of the committee had been adopted in both Houses. Having been rejected and referred back to this committee by one House, the section will not be disallowed and we will receive it back. Are there questions?

I would ask Mr. Anders to proceed with today's agenda.

Mr. Lee: Mr. Chairman, if I may, I would comment on the disallowance, but not to debate it, as this is the only public record of looking back through the rearview mirror at what happened. Since this is the first time that a disallowance debate has taken place with a vote in the House, I thought our record should at least take note of it. I want to acknowledge members' participation in that debate and, depending on the stance taken by the various members on the issue, to acknowledge the minister's motion that was adopted to deny the disallowance procedure. All members of the committee can acknowledge for the record that the main reason that occurred was the attempt by the government to remediate the difficulties of that regulation by passing a one- or two-clause bill in the House. That was the major factor leading to the decision of the members of the House, given that we do not usually act on partisan lines when dealing with matters involving this committee. I wanted to acknowledge the participation of all members in the debate and the disposition in the vote. I believe the result puts us in a position whereby we can still work with the issue, and I thank members for that.

The Joint Chairman (Senator Bryden): I have one piece of information for members. We could have moved rapidly enough in the Senate to do the same and refer it back to committee. My position and that of the chamber was that nothing had changed from the time we had actually tabled the report.

To be frank, I wanted to leave it there, to make it clear that if the department does not proceed expeditiously with this legislation and does not act to correct the situation, it would be the intention of our committee to revisit the matter. I will be proposing to the committee in the fall that we make another report to both Houses.

The Joint Chairman (Mr. Anders): On that note, Mr. Lee, I do remember your interventions, as well as Mr. Kamp's. I cannot remember whether I heard members from the other parties, but I know I heard those two.

We will now turn to the first item on our agenda.


Mr. François-R. Bernier, General Counsel to the Committee: In this case, Mr. Chairman, an erratum was published to give the correct number of the Order-in-Council. This is for information.

The Joint Chairman (Mr. Anders): Are there any further comments?

Hon. Members: Agreed.


Mr. Bernier: Mr. Chairman, I should have said at the outset that this agenda is made up of odds and ends. This is really a cleaning up of all of the files ready to go to committee, as this was the expected last meeting of the committee. The balance of the agenda may be somewhat different than it normally would be.

As for SOR/2003-180, the correspondence deals with the failure to transmit this order for registration within the time prescribed by the Statutory Instruments Act. The matter has been drawn to the attention of the regulation- making authority and no further action need be taken.

The Joint Chairman (Mr. Anders): Are there any other comments?

Mr. Hanger: With respect to the time being exceeded from that required, was it just a human error?

Mr. Bernier: The prescribed deadline or time for registration of an instrument is seven days. This instrument, as noted by counsel, was registered 52 days after it was made.

Counsel had suggested the committee would like to know why the deadline was not respected. The response did not provide a reply to that question, but assured us the error was all the more unfortunate since the person responsible for sending the document is fully aware of the act's requirements. Human error, I suppose, is the only logical conclusion.

The Joint Chairman (Mr. Anders): Mr. Hanger, are you satisfied with that reply from counsel?

Mr. Hanger: Yes.

The Joint Chairman (Mr. Anders): Any other commentary?

Hon. Members: Agreed.


Mr. Bernier: Mr. Chairman, the correspondence deals with the failure to respect the tabling requirements set out in subsection 7(1) of the Hazardous Products Act. The order was eventually tabled in both Houses on March 22, 2005.

The Joint Chairman (Mr. Anders): I take it that yo-yos are now safer than they were before.

Ms. Wasylycia-Leis: Could I comment?

The Joint Chairman (Mr. Anders): Of course.

Ms. Wasylycia-Leis: I know that yo-yo balls sound like a funny matter, but these toys have actually caused deaths in a few instances. Prohibition was subsequently made — suitably so.

I think the failure of Health Canada to follow all necessary steps around that prohibition is quite appalling. I know they finally did it, but if one reviews the correspondence, look what it took. In the end, there was no excuse, no explanation in the April 14 letter for this failure.

Perhaps this final step is not critical in terms of life and death; I am not sure. However, I would assume that every stage of this process is significant. When this matter is delayed, I find it quite appalling that it took two letters just to accomplish something that basic.

The Joint Chairman (Mr. Anders): Is everybody agreed?

Hon. Members: Agreed.


Mr. Bernier: Mr. Chairman, the executive portion of this order was defective. The order both added and removed a substance from the domestic list and should have cited section 66(4) of the act as enabling authority.

Environment Canada has agreed to develop a new format for the executive portion of similar orders, which will be used in the future.

Hon. Members: Agreed.


Mr. Bernier: Mr. Chairman, this amendment corrects the drafting of the English version of section 4 of the regulations. A question was raised as to the correct date the order was tabled in the Senate. The department insists this was done on June 13, 2003, even though the Journals of the Senate gives the date as June 16, 2003. Inasmuch as the discrepancy is without consequence, we would suggest there is really no reason to pursue this point.

Hon. Members: Agreed.


(For text of documents, see Appendix A, p. 12A:1)

Mr. Peter Bernhardt, Counsel to the Committee: Mr. Chairman, an amendment has been promised that would resolve the drafting point raised in point one of the correspondence. Less satisfactory is the reply as it relates to point two.

At issue in point two is section 4(7) of the regulations. It requires copies of manifests to be kept by carriers for a period of two years. As authority for this requirement, the department is seeking to rely on the opening words of section 191(1) of the Canadian Environmental Protection Act, which is a general power to make regulations for carrying out the purposes and provisions of the act.

Requirements to keep and retain records impose a substantive legal duty. As such, they must be authorized either expressly or by necessary implication. For this reason, the committee has always taken the position that a general power to regulate for carrying out the purposes and provisions of the statute is not sufficient to support these types of requirements.

In addition, the department notes that most of Division 8 of the act, which is the part of the act to which this regulation relates, is intended to implement an international convention that requires the keeping of certain documents.

First, the existence of a requirement in an international agreement does not mean that domestic legislation automatically has to be read to be in conformity with that.

Second, elsewhere in the act, Parliament has already addressed the question of implementing international agreements. Section 186(1) authorizes the minister to prohibit “completely or partially and under any conditions that may be prescribed, the import, export or transit of waste or material” for the purpose of implementing international agreements respecting the environment. Since Parliament has been that specific in that context, I think it is to be presumed that if it wished to confer other powers for the purpose of implementing international agreements, it would have been equally specific. For those reasons, I would suggest that this question should be pursued in a further letter to the department.

The Joint Chairman (Mr. Anders): I understood from your earlier speech that section 2 was unsatisfactory in response.

Mr. Bernhardt: Yes, that is correct.

The Joint Chairman (Mr. Anders): Are there any other comments?

Mr. Lee: Is the issue whether there is authority to require a party to keep a record, or how long the record should be kept? Is it both?

Mr. Bernhardt: It is both. If you cannot require a record to be kept, then it follows that you cannot require that the record be retained for a certain period of time.

Mr. Bernier: If you had authority to prescribe the requirement to keep records, I think that absolute authority to stipulate for how long it should be kept should be in there.

Mr. Bernhardt: Then two years is fine.

Mr. Bernier: Yes.

Mr. Lee: There is no authority under the act that requires anyone to keep any record at any time.

Ms. Wasylycia-Leis: It is only in one section.

Mr. Lee: I should not ask so generally.

Mr. Bernhardt: Certainly, that is the case in Division 8 of the act.

Mr. Lee: Thank you.

The Joint Chairman (Mr. Anders): Are members agreed?

Mr. Lee: We should continue to discuss this matter with the officials.

Hon. Members: Agreed.


Mr. Bernhardt: Mr. Chairman, the Canadian Border Services Agency agreed to remove section 7(4) of these regulations. In March 2004, the agency reported that the amendment had been prepared. Subsequently, the committee was advised that the agency was seeking a legal opinion from the Department of Justice Canada in respect of that amendment. Last month the agency reported that Justice Canada has agreed that this provision is ultra vires. Having already agreed to revoke it, I am not sure why they then decided they needed to obtain an opinion on it. Nevertheless, it would seem that the promised amendment will go ahead and progress will be monitored as per usual.

Mr. Lee: Agreed.

The Joint Chairman (Mr. Anders): I noticed something on page two for a point of clarification. When something is referred to as “blue stamped,” what does that mean?

Mr. Bernhardt: That is the seal of approval from the regulations section of the Department of Justice. It signifies that the item has been reviewed by the regulation section of the Department of Justice. Years ago, they signified that review by stamping the item with a blue-ink stamp. I believe that process no longer exists but the reference has been retained.

The Joint Chairman (Mr. Anders): Is the term used only by the Department of Justice?

Mr. Bernhardt: When we see that term in connection with a regulation, it simply refers to the fact that the Department of Justice has completed its review of the regulation.


(For text of documents, see Appendix B, p. 12B:1)

Mr. Bernhardt: Mr. Chairman, under the Canadian Food Inspection Act, fees established administratively pursuant to that act stand referred to this committee as if they were regulations. Therefore, after review by counsel, 33 points were raised with the CFIA. Amendments have been promised in connection with a number of these, specifically, points 1, 6, 7, 10, 14, 16, 17, 25 to 27, and 29.

As concerns points 2, 3, 5, 13, 24 and 30, it is suggested the reply received from the agency can be accepted as being satisfactory and requiring no further action.

The agency's reply omits entirely to deal with the final three points raised, numbers 31, 32 and 33. It would seem as though they lost the last page. Clearly, these will have to be pursued and followed up.

As well, the reply on points 4, 8, and 9 is unclear as to whether remedial action has actually been promised. Further clarification will be necessary.

That leaves ten points on which the substance of the reply is considered unsatisfactory. Again, for the record, if members will bear with me, these are points 11, 12, 15, 18, 19, 20, 21, 22, 23 and 28. On points 18, 20, 21, 22 and 23, the problem is that the agency's explanation as to how the particular provision is intended to function simply serves to illustrate the need for clarification of the provision in question. On point 28, the agency has simply misunderstood the question asked.

That reduces matters down to points 11, 12, 15 and 19 on more substantive matters.

Point 11 deals with certain fees that require payment of a fixed amount plus related costs. The term “related costs” is in turn defined to mean the costs in the amount determined in accordance with the Treasury Board travel directive, as amended from time to time. The act authorizes the minister to fix fees to be paid for a service or use of a facility provided by the agency and to fix fees in respect of products, rights and privileges provided by the agency. We would suggest that this requires the specifying of an actual amount. While this is the case with respect to some of the costs covered by the travel directory, in other cases the directive fixes no fee. For example, in respect of travel accommodation, it says only that, wherever possible, accommodation should be selected from the white pages of the government hotel directory. In providing that a fee is to include costs of accommodation in an amount determined in accordance with the directive, in this case the minister cannot be said to have fixed the fee as the act requires.

As well, there is an open incorporation by reference. The directive incorporated in the phrase “as amended from time to time” to provide for automatic amendment of this document is to allow someone other than the minister, that is, Parliament's delegate, to establish the fees payable.

The agency has attempted to argue that this incorporation by reference cannot constitute an unlawful delegation because the “delegatee,” in this case the Treasury Board, is not a legislative body. In other words, it would seem that they are trying to argue that sub-delegation to administrative officials is somehow an impossibility. I can only characterize that as bizarre.

The agency also describes this item as constituting the setting of a fee by the minister. Be that as it may, the minister's authority is to fix a fee not to set a fee. Fixing a fee requires the establishment of a fixed amount. The agency does concede that the reference to related costs “could be problematic” and consents, however, only to consider options at the next opportunity. I suggest that this is not a satisfactory undertaking and that this point needs to be pursued.

The Joint Chairman (Mr. Anders): Does counsel feel that this matter can be pursued through more letters?

Mr. Bernhardt: At this time, further correspondence with the agency would be required.

Mr. Hanger: Is the agency complaining that it does not have the authority to fix the fees?

Mr. Bernhardt: No. Counsel suggested to the agency that it has the authority to fix a fee, but when it is said that the fee is whatever the related costs might be to the service, that is not fixing a fee. When you are required to fix a fee, you are required to establish the amount to be charged and not a fee in accordance with the principles set out in a travel directive as it may be amended in the future. That is not fixing a fee. It may provide for the charging of a fee, but it does not fix that fee.

Mr. Hanger: Ultimately, they do not want any other department or organization determine the outcome of that fee. Is that the basis of the complaint?

Mr. Bernhardt: The agency does not have a complaint because the agency submitted the fee in this form. If members are agreed, the committee would object to the way in which the fee has been set up such that it is not in accordance with the requirements of the act that the fee be fixed.

Mr. Lee: It would be helpful if we could reduce the list of 30-some items in this file down to three or four. I agree with counsel that we need more clarity on a legal basis for the setting, fixing or collecting of fees. Citizens are being required to pay a fee that may not have been generated strictly in accordance with the law as we see it. We should keep working on the file but get the list down to the short list that counsel has described.

Mr. Kamp: I agree. My question would be, though, is the system that they are using a reasonable one? Is there a better system? Is the problem with the act or is the problem with their system?

Mr. Bernhardt: From the committee's point of view, the problem would be that the act is fairly specific in what it requires.

Mr. Kamp: I understand that.

Mr. Bernhardt: The agency is seeking to put in place something other than what the act requires. It is up to the agency to decide if it absolutely needs the structure it has in place. If it does, the agency would need to go to Parliament and ask for broader authority to set the fees, to do so in a more general fashion.

Mr. Bernier: Mr. Kamp asked if this is reasonable? Of course, it is reasonable. The way they want to do it is reasonable. The way we are saying the law requires them to do it is reasonable as well.

How does one define reasonable? To us, as legal advisers, what Parliament has asked you to do is by definition the only reasonable thing you can do. If Parliament has said that it wants you to fix this fee, not simply provide for it, then that is the only reasonable thing an agency can do.

There may be other ways of doing it. That body or entity may well wish to go back to Parliament and seek a legislative amendment to the statute. Then that will become reasonable. Until that is done, we do not work by reference to our sense of what is reasonable. We work on the basis of the law and the enabling legislation that Parliament has put in place. That, to us, defines reason.

As legislators, I am sure you will agree that the law is always an expression of your eminent reason and good judgment.

The Joint Chairman (Mr. Anders): They are skinning the cat in a way that we have not prescribed.

Mr. Bernier: In a nutshell, yes.

Mr. Hanger: How will you achieve this now?

Mr. Bernhardt: That point will be the subject of further correspondence with the agency. We will pursue the argument, as it were.

Mr. Hanger: Will that be stated in the letter, that you will cease and desist doing it one way?

Mr. Bernhardt: In this type of situation, it is not uncommon for us to end by suggesting that if this is considered essential, you always have a solution. That solution is always to go back to Parliament. I think most government departments are well aware of that fact. It never hurts to remind them that they do always have a card in their hand that they can play.

Mr. Hanger: The letter, then, will reflect clearly that the agency will no longer operate outside the parameters already set out.

Mr. Bernhardt: As Mr. Bernier notes, we are not a court of law. As long as the department maintains that what it is doing is legal, then you are still at the level of trying to convince the agency or the department of the error of their views.

Mr. Bernier: The response to the department would identify what are seen as weaknesses in the rationale provided in the support of the provision and re-explain, if need be, the basis on which the charge was questioned. That would give the department, the agency, an opportunity to reassess its original response. That would then comes back to the committee. Quite often, after one or two exchanges like this, at some point an agency or regulation-making authority may see the light. It may decide that, yes, it does agree with the committee and will make a particular amendment.

If an issue is considered substantive enough and there is no sharing of a common view, the chairmen would then write to the minister. That would be the next level. Eventually the committee can report, if it is an issue that warrants a report.

Mr. Hanger: Thank you for that clarification, Mr. Bernier. I asked that question for one reason. I know this is not the first time issues like this have come before the committee, where agencies have operated outside their proposed restrictions or law and the matter had to be carried further.

Mr. Bernier: We have to be careful when we say that an agency is operating outside the law. That is a view of the committee. It is an opinion. This is a parliamentary review committee. That is why my colleague said that this committee is not a court of law.

In this country, there is a presumption of validity that attaches to both legislation and regulations. A regulation or an instrument is presumed to have been validly made. If someone, whether a citizen or this committee tasked with reviewing legislation, thinks otherwise, the burden of proof is on them to establish that.

Mr. Goodyear: I was going to suggest exactly what Mr. Hanger has suggested, that the next set of correspondence should be more firm in stating that they should comply with the committee's interpretation of the regulations just to avoid having this come back. I would support anything that would decrease this list.

The Joint Chairman (Senator Bryden): Over the period of time that I have been involved with this committee, it is the case that we really do try to negotiate, within reason, a solution that is satisfactory to this committee. This file is positively infantile in the sense that it dates back only to 2004. We sometimes deal with files that go back to the 1980s.

It is absolutely worthwhile to have our counsel continue to narrow the issues. If we get stuck, we go to that person's director or boss and then to the minister. Ultimately, if we do not receive a satisfactory response, we do what we did with the fisheries regulation, and that is make a report to disallow it.

Counsel is suggesting the next best step. They are saying that we have narrowed the issues quite a bit, but let us narrow them even further. I would agree with that course of action.

The Joint Chairman (Mr. Anders): It all comes down to perspective — one year versus 21 years. It is all relative.

Mr. Bernier: It depends on your age.

The Joint Chairman (Mr. Anders): That is right.

Is the committee agreed that counsel should pursue sending firmer letters?

Hon. Members: Agreed.

Mr. Bernhardt: If I may, we have three other points. To expedite matters, I would suggest that points 15 and 19 in the correspondence are substantive issues that need to be pursued as well. If members have questions, I would be pleased to speak to those points.

Counsel is seeking guidance from the committee this morning on point 12. It deals with an additional fee for the consideration of an application for an import permit, where the conditions agreed to between Canada and the country of origin of the animal or thing require modification or have been modified less than two years before the date of the application.

In other words, where someone makes an import application and that application reveals some unforeseen circumstance or problem that will require Canada to go back to the country of origin and renegotiate its arrangements, or where someone applies for an import permit and will receive the benefit of a renegotiation that took place in the last two years, an additional fee would be charged to that applicant.

While there may well be extra costs incurred by the agency in such situations, the question for the committee is whether this is an appropriate basis on which to structure the fee. In effect, it would seem that the agency wants applicants to fund international negotiations. This gives rise to the question of whether that would be so unusual as to constitute an unusual and unexpected use of the power in contravention of the committee's scrutiny criteria. Counsel would ask for the view of the committee on this matter.

The Joint Chairman (Mr. Anders): How often do these events actually result in a renegotiation?

Mr. Bernhardt: In the reply, the agency cites four examples where this has happened.

The Joint Chairman (Mr. Anders): Do you have a sense of the period of time?

Mr. Bernhardt: These fees began in 2000. I assume these examples are from the last four years.

On page 3 of the agency's letter of April 20, the agency speaks to a disease outbreak of classical swine fever in Denmark, the spread of an existing disease, bluetongue, in Australia, et cetera. Presumably this arises from time to time and requires the agency reworking the protocol and arrangements with the country of origin.

The Joint Chairman (Mr. Anders): Do we know the amount of the fee in question?

Mr. Bernhardt: We have it in Part II, section 2, table item 2(1)(a). It is $65-$115 per animal.

Mr. Lee: I do not think I could conjure up clear instructions to counsel at this time because I am unclear on the scenarios that would warrant the second or subsequent fee requirement. It is my opinion that counsel should pursue this for better clarification of why the agency thinks that the user-pay concept would require a Canadian or an importer to pay additional fees.

Someone might decide to import orange rabbits from Argentina because they think there might be a market for them. However, in order to complete all the necessary health inspections on the potential disease carrying capability of the orange rabbit, it might cost half a million plus travel. The department's message is that someone wanting to import such an animal for a commercial purpose will have to pay the freight to ensure that the public protection infrastructure is in place. Would it be fair for that importer to foist the extra cost on the taxpayer so that the importer can market orange rabbits? Perhaps counsel could seek out the scenarios that implicate this user fee position. That would help the committee in a future meeting.

The Joint Chairman (Mr. Anders): I agree. We know the fee per animal but what would be the aggregate fee for to import 100,000 animals, for example? The fee would seem to be prohibitive to conducting business. Knowing the aggregate cost to the business versus the cost to the department for investigating the matter would be of interest to the committee. That information should be pursued in a letter.

Are members agreed that counsel pursue those questions in a letter to the agency?

Hon. Members: Agreed.


(For text of documents, see Appendix C, p. 12C:1)

Mr. Bernhardt: Mr. Chairman, action was promised with the exception of points 4 and 23 in the correspondence. On point 4, the department has missed the point of the question asked: Whether it is intended that section 4(3) cease to apply where the concentration of the fumigant does not exceed that set out in one of columns two or three of Schedule II or both columns. The concentration in one of them is in parts per million and in the other, in milligrams per cubic metre. The department's reply deals with the point in time when the provision ceases to apply. It is simply a matter of reformulating the question and posing it again.

The issue in point 23 is the application of Part IV of the regulations to mobile units, the contents of which have been fumigated but not aerated before the units are loaded on board a ship. The Canada Shipping Act authorizes regulations respecting the safe use of pesticides in the fumigation of ships only, not the fumigation of items prior to loading them on board a ship. The department argues that the wording in question simply describes certain cargo on ships — mobile units whose contents were fumigated before they were put on board. Nevertheless, to regulate how these containers are handled before they are on the ship clearly goes beyond making regulations respecting the safe use of pesticides in the fumigation of ships since the fumigation takes place prior to the units being on the ship. I would suggest that this second matter be pursued in another letter to the Department of Transport.

The Joint Chairman (Mr. Anders): Does this matter apply to any ship that flies a Canadian flag or to any ship that docks in Canada under a foreign flag?

Mr. Bernhardt: It applies to any ship in Canadian waters if the fumigation commenced in Canadian waters or if cargo on board that will be unloaded in Canada is fumigated in transit.

The Joint Chairman (Mr. Anders): Are members agreed that counsel pursue this matter with correspondence?

Hon. Members: Agreed.


(For text of document, see Appendix D, p. 12D:1)

Mr. Bernhardt: Mr. Chairman, the question that had to be resolved is whether the relevant enabling legislation permitted a regulation prescribing a maximum fine of $500, with the actual amount in each case to be set by the court, or whether the Governor-in-Council was required to fix the actual amount of the fee to be imposed.

As is explained in Mr. Rousseau's letter of February 9, 2004, it is suggested that there can be agreement with the department's position, that what is to be prescribed is the maximum amount of the fine that may be imposed.

Mr. Rousseau's letter also questions another aspect of the regulations. Again, this deals with incorporation by reference. Subparagraph 39(1)(a)(i) provides for a fine for a contravention of Part 1 of the regulations in an amount not exceeding the lesser of $500 and the amount prescribed under the laws of the province in which the contravention took place, “as amended from time to time.” In effect, it will be the provincial lawmakers, not the Governor-in- Council, who determines the actual maximum fine that can be imposed. Again, in the absence of clear authority, this represents an unlawful delegation of the power to prescribe the maximum penalty.

This issue is only addressed in a very cursory manner at the conclusion of the department's reply of June 11, 2004. It refers to a couple of cases. These cases already have been dealt with extensively by the committee when this issue has arisen in other files. The committee has concluded on more than one occasion that these cases are in no way inconsistent with the committee's position. This being so, I would suggest that the matter should be pursued in a further letter to the department.

Hon. Members: Agreed.


Mr. Bernier: Mr. Chairman, as a result of delays in the making of this order and of the amending SOR/2004-56, there was no legal authority to collect levies on eggs marketed in interprovincial and export trade from December 28, 2002 to February 20, 2003, and from December 28, 2003 to March 25, 2004. A letter was sent to ask whether such levies had been collected in those periods of time and the answer is that they were not.

Mr. Lee: Good.

The Joint Chairman (Mr. Anders): I am just digesting that your explanation. You are saying that no fees were collected in the period in question.

Mr. Bernier: That is the answer. As counsel, it is our view that we are not equipped to question the veracity of the response. We asked for an answer and it was given, surprising though the answer may appear.

The Joint Chairman (Mr. Anders): The only way I can make sense of this issue is to ask if it in some way leads to a question of whether fees can be levied in the future. Otherwise, it does not make sense.

Mr. Bernier: My colleague and I discussed this matter yesterday. The one thing I pointed out to him is that Mr. Pearce states:

We can confirm that no levies were collected in respect of inter-provincial or export trade by the Agency during those periods, pursuant to the levy orders SOR/2003-75 or SOR/2004-56.

This is not quite the same as saying, “No levies were collected.” It says, “No levies were collected pursuant to these orders because we recognize that these orders did not provide the authority.” Is that the same as saying that no levies were collected at all?

The Joint Chairman (Mr. Anders): Is counsel's suggestion that we let this item one die and move on?

Are members agreed?

Mr. Goodyear: I do not agree. I think we should ask a basic question and get a basic answer that clarifies and tells the truth, the whole truth and nothing but the truth.

The Joint Chairman (Senator Bryden): I would agree. I had read these letters and I missed that point. They targeted and worded it very carefully, that there were no levies pursuant to the levy and then they set it out. They did not say that they were not continuing to collect levies. We could at least ensure they understand that that point did not just walk past us without being noticed.

Mr. Hanger: Looking at the letter of March 14, 2005, it state that “no levies had been collected on interprovincial and/or export trade” during those periods at all. That is clear, is it not?

The Joint Chairman (Senator Bryden): March 7, 2005?

Mr. Bernier: The March 14 letter is the one from the Chair of the National Farm Products Council who says that the council wrote to the Canadian Egg Marketing Agency asking for the assurance you just mentioned. I have attached a response from the Canadian Egg Marketing Agency, which is the following letter, dated March 7. Do you follow me now?

Mr. Hanger: I do, thank you.

The Joint Chairman (Mr. Anders): What if we were to inquire as to other and/or all levies applied?

Mr. Bernier: There were other levies certainly under their provincial marketing statute. There are levies collected on interprovincial movement of these goods and sales. The issue for this committee is that in order to impose and collect levies on interprovincial and export in these agricultural products, the authority of the federal statute is required. There must be a valid federal instrument in place that allows the provincial marketing agency to collect.

The Joint Chairman (Mr. Anders): Does counsel have a clear sense of how to pose the question?

Mr. Bernier: Yes, it is quite a simple question.

Mr. Lee: I think the letter from the Canadian Egg Marketing Agency answers the question that our counsel asked, which was the following: Were any levies collected in respect of eggs marketed through interprovincial or export trade between those two dates? The answer coming back says that no levies were collected in respect of interprovincial or export trade by the agency during those periods pursuant to the regulation we are dealing with and another regulation. I think that is a fairly clear answer.

The Joint Chairman (Mr. Anders): I sense there are others on the committee who may have a difference of opinion.

Mr. Lee, would you be opposed to a follow-up letter?

Mr. Lee: To clarify their answer? I am not too sure why there is a question here. I have missed the point. I certainly would not want the record to show that we are publicly questioning the veracity of the answer when the answer they have given seems very clear on the face of it and coincides precisely with the question that was originally asked.

The Joint Chairman (Mr. Anders): I sense that Mr. Hanger and Mr. Goodyear may feel differently.

Mr. Lee: If someone wants to allege that an untruthful answer was given, someone might as well say it because I do not see it on the face of the documents. I just wanted to make that point. If there is some interstitial space that has not been reconnoitred here, I have missed it.

I do have problems getting clarification on something that appears to be clear. If members want counsel to ask more questions, I do not have a big problem; it is a letter back and forth, and that is fine.

Mr. Hanger: I get the sense that there could be other levies imposed besides the levy SOR/2003-75 and SOR/ 2004- 56. Is that the case?

Mr. Bernier: The interprovincial and export marketing levies form part of a set of levies that are imposed. Perhaps partly in answer to both Mr. Lee and Mr. Hanger, we did submit this response as satisfactory. We had the same difficulty that Mr. Lee has expressed. It seems odd that with such a complex marketing regime as that which applies to eggs, for example, you could slice off a part of a levy. From the producer's point of view, they pay so many cents per dozen of eggs marketing. This is broken off between the federal component and the provincial component. It seems somewhat difficult to accept that, for a period of a few months now and a few months later on, one could simply hive off a part of one component, carry on and then that component would be back on. That is not easy to contemplate from a practical point of view, which leads one to suggest that if levies were not collected pursuant to these orders, then a similar levy was collected.

Mr. Hanger: We should check it out.

Mr. Bernier: The question then becomes what the authority was for that collection.

The Joint Chairman (Mr. Anders): I sense that the way to move forward is to have counsel follow up with a letter.

Mr. Lee, are you agreeable?

Mr. Lee: I agree.

The Joint Chairman (Mr. Anders): Are members agreed?

Hon. Members: Agreed.

Senator Moore: Will the letter ask whether fees are being collected in a subsequent period? Counsel said that there were no fees in those two periods. What is the question?

Mr. Bernier: Senator, the letter would ask whether in the same periods one could confirm that the levies collected did not include any component, if you will, for interprovincial or export marketing, that there was a true non- collection.

Senator Moore: I would be careful of the wording of the question because I do not want it to appear that we are challenging the written statement. That is not our role.

The Joint Chairman (Senator Bryden): I would simply muddy the waters. The committee wrote to the National Farm Products Council. The reply was categorical, and we could accept it. However, it is difficult to believe that this is an ongoing process of international and interprovincial marketing. During this period of time, no eggs were being shipped interprovincially. If this is so, what authority were they using? That is the question.

The Joint Chairman (Mr. Anders): Are members agreed to a follow-up letter?

Hon. Members: Agreed.




Mr. Bernier: Mr. Chairman, the turkeys will prove a simpler case than the eggs. In this case, the original documentation was asked by counsel to establish that the amendments were made by the Turkey Marketing Agency. The documentation has been provided and this is satisfactory.

Hon. Members: Agreed.


(For text of document, see Appendix E, p. 12E:1)

Mr. Bernier: The reply in this case, Mr. Chairman, was satisfactory. The comment sheet also notes that the amendment repeals section 8(2) of the regulations, which had been commented on by the joint committee.

The Joint Chairman (Mr. Anders): Are members agreed?

Hon. Members: Agreed.


Mr. Bernier: Mr. Chairman, the committee had expressed the wish that the pilotage charge imposed by section 6 of the regulations be expressed to be equal to the reasonable cost incurred by the authority in providing the service, as opposed to simply the costs incurred by the authority.

The Laurentian Pilotage Authority declines to do that. The authority has provided an additional explanation of the reasons for which it has prescribed the charge as it has and emphasizes the fact that these charges do not contain any profit component. All in all, the authority has made a fairly good case for keeping the current formulation of the charge but would like to have the view of the committee.

Mr. Hanger: What was the reason for this examination? What brought this pilotage charge to the attention of the committee? Was there a complaint?

Mr. Bernier: No. This was part of the regular work of the committee. The instrument came up for review, was reviewed by counsel and submitted to the committee. At the time, counsel noted that for some of the other charges, such as reimbursements to pilots in the tariff regulations, the authority will specify that it will only reimburse reasonable expenses incurred by a pilot. However, when the authority made available the use of pilot boats, the tariff provided for reimbursement of the costs to the authority. The comment was that when the authority reimburses a pilot for his expenses, it is on the basis of reasonable expenses. Why, then, does the authority not formulate its charge in terms of reasonable costs?

Mr. Lee: Ordinarily, I would scrutinize these pilotage authorities for charges of this nature. However, in this case, counsel has done a good job of inquiring into it and we have reasonable assurance that the basis for the charges is good, reasonable and fair. I will back off my intense scrutiny and accept counsel's judgment, but I will keep a watchful eye on all the other pilotage authorities.

The Joint Chairman (Mr. Anders): Are members agreed?

Hon. Members: Agreed.


(For text of documents, see Appendix F, p. 12F:1)


(For text of documents, see Appendix G, p. 12G:1)


(For text of documents, see Appendix H, p. 12H:1)


(For text of documents, see Appendix I, p. 12I:1)


(For text of document, see Appendix J, p. 12J:1)


(For text of documents, see Appendix K, p. 12K:1)


(For text of documents, see Appendix L, p. 12L:1)


(For text of documents, see Appendix M, p. 12M:1)


(For text of documents, see Appendix N, p. 12N:1)


(For text of documents, see Appendix O, p. 12O:1)


(For text of documents, see Appendix P, p. 12P:1)


(For text of documents, see Appendix Q, p. 12Q:1)


(For text of documents, see Appendix R, p. 12R:1)


(For text of documents, see Appendix S, p. 12S:1)


(For text of documents, see Appendix T, p. 12T:1)



(For text of documents, see Appendix U, p. 12U:1)


(For text of documents, see Appendix V, p. 12V:1)


(For text of documents, see Appendix W, p. 12W:1)


(For text of documents, see Appendix X, p. 12X:1)



(For text of documents, see Appendix Y, p. 12Y:1)

Mr. Bernhardt: Mr. Chairman, if members are in accord, I would propose to follow the usual practice of dealing with instruments under Action Promised as a group and Action Taken as a group.

Hon. Members: Agreed.

Mr. Bernhardt: The files under Action Promised reflect 36 amendments promised to the committee, including the revocation of two ultra vires provisions, as well as an undertaking to seek Parliament's validation in respect of certain fees collected without lawful authority. Two instruments in this group each makes an amendment previously promised.

Under Action Taken, 28 amendments requested by the committee have been made. Two of these amendments delete provisions considered by the committee to be ultra vires.

There were 82 instruments reviewed and submitted without comment to the committee. These have been found to be in conformity with all of the committee's criteria.

Mr. Lee: I am agreed.

Mr. Hanger: Is it common practice on the fee collection and setting issue for agencies to step outside their limitations or what they are required to do? This is the third time this morning we have heard that.

Mr. Bernhardt: It reflects one of the areas of heaviest activity in regulations. Many regulations and statutory instruments deal with the charging of money and the setting of fees. In this day and age, they tend to be areas where the bureaucracy is inclined to push the envelope a bit. As a result, issues in that field often come before this committee. Issues related to fees and charges are the bread-and-butter issues of the committee.

Mr. Bernier: Mr. Hanger, we are talking about money, so it is an area of greater temptation.

As my colleague says, if there is a way to push the envelope, it will be pushed; and the committee pushes back.

The Joint Chairman (Senator Bryden): I would like to make a comment, particularly for new members on the committee. The activities of our counsel and of this committee do not relate to complaints from the public. We are required to review all of the regulations that come out of the federal parliamentary system to ensure that they comply.

For example, a regulation can be absolutely ultra vires for 10 years and may not have caused anyone any problem and perhaps has never been used. However, if we find it, we have to deal with it. Our function is not complaint- triggered at all. The intent is to prevent the citizen from having to make a complaint. Hopefully we catch it the problem before they do.

We will look at a regulation if a complaint is made, but the standard practice is that we do our job in advance of any complaints.

The Joint Chairman (Mr. Anders): You can all put out householders begging and asking for regulatory input.

Are there other comments or questions?

The Joint Chairman (Senator Bryden): Before we adjourn the meeting, I would just like to say how much I appreciate working with this committee and the efforts that are made by members to work in a constructive and non-partisan manner for the most part. A person cannot avoid a shot once in a while, but the atmosphere is very good.

On behalf of the committee, I also want to thank our counsel for their thoroughness and their patience with us. They know this stuff inside out. It must sometimes be a little difficult to sit through, once again, an explanation that they have given so many times before.

I also want to thank our respective clerks from the Senate and the House of Commons. They have certainly made my life as joint chairman very easy.

This will be our last meeting before the summer break, if and when it occurs. The next meeting will be in September, the first week we are back, if the parliamentary calendar is followed.

I warn members of the committee from the House of Commons that because the Senate has to clean up after the Commons, we sit an extra week leading up to the summer recess. As a result, our hopper is sometimes pretty empty when we come back in the fall. It may be that the Senate will not sit that first week just to get even, if nothing else.

I thank you again and wish that you all have a good summer break.

Mr. Hanger: Thank you and the same to you.

The Joint Chairman (Mr. Anders): I would like to say that of all the committees I have served on over my eight years, this is probably the most non-partisan, which is a change of pace.

The committee adjourned.

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