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Proceedings of the Standing Joint Committee for the 
Scrutiny of Regulations

Issue 15 - Evidence - February 16, 2017

OTTAWA, Thursday, February 16, 2017

The Standing Joint Committee for the Scrutiny of Regulations met this day at 8:34 a.m. for the review of statutory instruments.

Mr. Harold Albrecht (Joint Chair) in the chair.


The Joint Chair (Mr. Albrecht): We are privileged today to have the appearance of witnesses from the Agriculture and Agri-Food Canada, Andrea Lyon and Susie Miller. We will allow you to make an opening statement. I believe you have already circulated your written remarks, so it's a 10-minute opening statement and then we'll look to our committee members for questions. Welcome.


(For text of documents, see Appendix A, p. 15A:1.)

Andrea Lyon, Deputy Minister, Agriculture and Agri-Food Canada: Good morning and thank you for the invitation to address you today with respect to the administration of the Agricultural Products Marketing Act. I'm joined today by Susie Miller who is providing technical expertise on this file.

I'd like to assure the committee that we recognize the importance of your role in reviewing and scrutinizing statutory instruments. We also appreciate your patience as we have undertaken the work required to respond to the important issues before us.


On January 25, I wrote to the committee to outline the steps the Farm Products Council of Canada (FPCC) and Agriculture and Agri-Food Canada (AAFC) have taken to respond to the committee's concerns about the exercise of federal powers that have been delegated to provincial commodity boards, pursuant to the Agricultural Products Marketing Act, the APMA.


In my remarks this morning, I will first explain what we have done in the short term to ensure that levies collected on interprovincial and export trade are consistent with provincial commodity boards' APMA authorities. Second, I'll provide an update on the long-term regulatory modernization plan. And, third, I will outline plans for enhanced monitoring of the use of APMA authorities.

The key issue before us involves levies set under the authorities of the Agricultural Products Marketing Act. The APMA was enacted in 1949 to harmonize federal and provincial authority in regulating the marketing of farm products.


As you are aware, the federal government is responsible for regulating the marketing of farm products in interprovincial and export trade. For their part, provincial governments are responsible for regulating the marketing of farm products within their provinces.


All provincial governments have legislation that provides authorities to commodity boards to regulate marketing of farm products within the province. The APMA gives the federal government the ability to delegate authority to provincial commodity boards to regulate marketing outside the province.

The APMA power most often used is the authority to set and collect levies from producers for the marketing of products in interprovincial and international trade. The majority of the provincial commodity boards are required to set these powers through APMA orders, which are published in the Canada Gazette Part II. The process for establishing or updating these levy orders requires close collaboration between many bodies. The Farm Products Council of Canada, the Department of Justice, the Privy Council Office and provincial commodity boards all work together to establish or amend levy orders.

Let me speak about the short-term results. With regard to the activities that we have undertaken in the short term, the minister has made it a priority to ensure that all provincial commodity boards are acting in compliance with APMA requirements, specifically that there is a valid APMA levy order and that the amounts collected by the provincial commodity boards are no higher than the amount set out in their APMA levy orders.

Since December 7, 2016, officials from Agriculture Canada and FPCC have been examining each of the 90 delegation orders that provide authorities to provincial commodity boards under the APMA. In my January 25 letter to the committee, I provided an update on the status of our work. Let me give you a further update of where things stand today.

We have concluded that 76 of the 90 commodity boards are using their APMA levy-setting authorities appropriately. We have also determined that 11 of the remaining 14 provincial commodity boards either need to update their APMA levy order or they require a new APMA levy order. For the remaining three commodity boards, we are working very closely with provincial governments to confirm their APMA situation. We expect to be able to confirm this information before the end of this month.

FPCC officials are working with the provincial commodity boards to update their levy orders. Amended levy orders for 5 of the 11 provincial commodity boards are ready to be submitted to the Department of Justice for drafting.

We are making every effort to have all updated or new levy orders submitted to the Department of Justice for official drafting by March 31 of this year.

Once drafted by the Department of Justice, the levy orders will need to be approved by the provincial commodity board and then submitted for publication in Canada Gazette Part II. This process takes about 12 weeks. If the required material is submitted to the Department of Justice by the end of March, this would take us to the end of June 2017 for all updated or new levy orders to be published in Canada Gazette Part II.


We recognize that this is an ambitious target and that we do not control all stages of the regulatory process. However, we have underscored to all parties involved the importance of moving quickly and resolving these outstanding issues.

AAFC and FPCC will continue to closely monitor progress until all amended or new levy orders are published.


With respect to regulatory modernization, since 2012, FPCC and AAFC have been developing a comprehensive long-term plan to modernize APMA regulations. As I mentioned earlier, the Agricultural Products Marketing Act was enacted in 1949, and in the intervening years drafting styles have changed significantly. The different drafting styles have also resulted in different levels of administrative burden. Some commodity boards are required to set their APMA levies using the federal regulatory process through an order published in Canada Gazette Part II. Other commodity boards are able to set their APMA levies using prescribed provincial processes.

The differences in language and requirements among the individual APMA regulations make it difficult to understand the system and for all of the provincial commodity boards to be treated in a similar manner. In addition, some of the provincial commodity boards that were provided APMA authorities no longer exist or they do not currently use the authorities. So the objectives of the regulatory modernization of the APMA are to ensure consistency with legislative changes that have been made at the provincial level, to reflect modern drafting language, to repeal invalid or unused delegation orders, and to ensure that the APMA requirements are consistent across commodity boards.

As in all regulatory modernization initiatives, we will be guided by the core principles for regulations, which include openness and transparency, predictability, flexibility, sensitivity to administrative burden, the need to minimize duplication, and policy coherence across the federal government and across jurisdictions.

Our current work in reviewing the 90 delegation orders may reveal other areas we wish to pursue as part of regulatory modernization. We intend to provide advice to the minister on this package later this spring.

Finally, I'd like to update the committee on what we are doing to strengthen ongoing monitoring of the use of APMA authorities. The Government of Canada has the authority to monitor the use of APMA-delegated authorities, notwithstanding the fact that a specific provision for monitoring does not appear in the legislation. For example, we can request information from commodity boards for monitoring purposes. We can inform commodity boards if they are not in compliance with their APMA authorities, and we can request that they submit an amended order.

On this point, both FPCC and AAFC are in agreement. FPCC officials communicate with provincial commodity boards regarding federal delegated authorities, and they continue to offer technical expertise and support to provincial commodity boards in the development of new or amended levy orders.


We will implement mechanisms to update and strengthen the procedures required to support effective ongoing monitoring.


In some cases we can use existing mechanisms, such as federal-provincial-territorial ADM committees, or regular meetings with the National Association of Agri-food Supervisory Agencies. These fora will provide mechanisms to exchange information and communicate the requirements associated with federal delegated authorities under the APMA. We will also explore opportunities to leverage the information collected by provincial governments from commodity boards on the use of levies, including annual reporting, provision of audited financial statements and other oversight requirements.

We will ensure through regular communication with commodity boards that they are aware of their obligations under the APMA and that they are appropriately using their delegated authorities. We believe that these improvements will help strengthen and support effective monitoring of delegated authorities under the APMA.

I can assure you that we are committed to resolving all outstanding issues and to improving the overall operation of the APMA.


Ms. Miller and I would be pleased to answer questions that you may have.


The Joint Chair (Mr. Albrecht): Thank you very much, Ms. Lyon. I think you can see from the long list of different appearances and communications between your department and our committee that this has been outstanding for some time, and I think you understand the frustration of the committee in trying to get to the bottom of it.

In your comments today, you mentioned at the bottom of page 11 that the Government of Canada has the authority to monitor the use of APMA and so on, and then at the top of the next page you say that you can request. But it appears that your requests have not always been honoured, so here we are today trying to find out how we can facilitate and make the process more efficient.

I'm going to open it up to questions. Committee members, I think you'll remember this file from many, many occasions, so who wants to be first in terms of asking a question?

Mr. Genuis: Thank you, Mr. Chair, and thank you to the witnesses for being here.

You have talked about timelines for moving forward on addressing some of these things, and we appreciate that. I don't want to be guilty of crying over spilled milk, but there is a lot of spilled milk here in the sense that it's been 10 years where there has been risk of legal exposure on some of this. It seems very much out of keeping with natural justice, in some sense, that there is the unlawful collection of levies happening for that period of time. How did this happen? We talked about where we're going in the future, but how did this happen in the past and why has it gone on so long?

Ms. Lyon: Thank you for the question. It's certainly a very fair question as to why it's taken this amount of time. I think that was the first question I asked when presented with this file.

As I mentioned in my remarks, the work of FPCC and AAFC since 2012 really has been focused on a broad regulatory modernization package. This would have done a number of things, including addressing the issues before us today in terms of levy orders that aren't consistent with delegated authorities. It would also have dealt with a whole suite of housekeeping issues, cleaning up invalid orders and proceeding in that manner.

A good deal of work was done. There was a lot of progress made, a lot of hard work done by both organizations and a lot of good collaboration with the provincial commodity boards. We surveyed them; we gathered information. As you well know, these large regulatory packages take time.

We had also approached the Treasury Board and PCO on what would be the most expeditious way of proceeding on this large regulatory package. Their advice was to proceed in batches so that it would move as quickly as possible, and that was the process that we launched. As I mentioned, a good deal of work was done in that respect.

Then in December, in the appearance by Mr. Pellerin and Mr. Meredith, it became evident that the committee and others were not satisfied with the process because we weren't able to get that large regulatory package through, despite all the hard work and all those best intentions. What we did at that point was develop the short-term plan I referred to so that we could clean up those issues that were long outstanding and had a very active, engaged and focused plan for achieving that.

That's not to say that we will not return to the large regulatory modernization package. That is our intention, as I mentioned in my remarks, and we do intend to go to the minister with advice in that respect later this spring after we have resolved this immediate issue.

Mr. Genuis: I would like to follow up on the three years spent doing broader work on regulatory modernization. Am I right in understanding you to have said that that is now totally paused while you work on this short-term plan, or are you able to proceed with both at the same time?

Ms. Lyon: Yes, we're able to proceed with both at the same time, certainly. As well, I think the work that we're doing on this short-term plan will yield information that will be valuable and useful as we develop our broader regulatory package. So it has certainly brought greater attention and greater exposure on the issues, and I think that will help us come forward with a very strong regulatory package ultimately.

Mr. Genuis: In terms of these timelines, I've been a political staffer but have never worked inside the public service. However, three years to be working on an as-yet incomplete broader regulatory package — I don't know how many people were working on it — and with that being a reason for what, according to my information, is a 10-year delay in resolving some of these more short-term questions, it seems like we're dealing with very long time horizons, especially when we're talking about ongoing potentially unlawful collection of levies. Is this something that the public just has to accept in terms of how long it takes, or do you think the public should be expecting that these things could move along more quickly?

Ms. Lyon: I think the short-term plan we have developed will bring the issue to a fairly prompt resolution. I certainly don't dispute the fact that this has been outstanding for an amount of time, and I have outlined a few reasons as to why that's taken place. There were best intentions of all parties involved to try to move it through as quickly as possible and to sensitize those players, because there are a lot of people that have a role and responsibility in this process.

We've learned a lot through the process over the preceding number of years, and I think that will help us achieve the timelines that I've set out in terms of resolving the issues definitively.

Mr. Genuis: I have a final question for this group. You expect to go to the minister this spring with the broader package, and then it will be up to the minister in terms of timeline for proceeding from there.

Ms. Lyon: That's right.

Mr. Genuis: Okay, thank you.

The Joint Chair (Mr. Albrecht): And you hope to have it all gazetted by June 2017, correct?

Ms. Lyon: That's for those orders that require either an amended or revised order. The broader long-term regulatory plan would be on a separate track.

The Joint Chair (Mr. Albrecht): Thank you.

Ms. Zahid: Thank you to the witnesses.

I'm really shocked that this file has been open for nearly a decade with so little progress. My constituents expect that when they pay money, either in taxes directly to the federal government or in fees built into the price of a bushel of apples collected under federal authority, that money is collected and utilized in a way that is fair, transparent and in line with laws and regulations. We have that responsibility to all Canadians, and it is one that I take seriously.

In this case, we have delegated that authority to these marketing boards, and it seems they don't take that responsibility with the same seriousness. Do they need to risk losing their authority before they do? The lack of progress here is really unacceptable.

Ms. Lyon: Thank you for the question and the comment.

Certainly we share the desire to ensure that the delegated authorities are being discharged appropriately and consistent with the law. That's a very important principle.

With respect to the provincial commodity boards, I do believe they are operating with the best of intent. They have been working with us and with FPCC very collaboratively. I think you see the numbers before you in terms of the number of issues that are outstanding. My preference is to have the number at zero, and we are slowly but surely getting there with a very concerted effort and resources dedicated to getting this resolved in a very prompt timeline; hence, the short-term plan that we developed commencing in December to really attack the issue, to review all of the information we had with respect to the levy orders, to determine which were consistent, which were not, relying on a number of documents that we had, survey information, web searches and direct discussions with the provincial commodity boards to validate the information.

They are committed. They understand the importance of adhering to their responsibilities under the APMA, and likewise we are very committed to ensuring that this gets resolved as quickly as possible.

Ms. Zahid: But we have to keep this factor in mind: This file has been open since 2008 and we are in 2017 now.

Ms. Lyon: I fully agree with you. It became quite evident to us that we needed to enhance monitoring and oversight with respect to the processes that we have. Some of the initiatives I referred to in my remarks will set up mechanisms such that the process becomes more routine and standardized so we're not continually facing this issue. I have been quite pleased with the level of cooperation that we have seen and received from the provincial commodity boards in this respect, and likewise with our provincial counterparts who have been very cooperative and collaborative.

So I am confident that the processes we have set up will help prevent these kinds of issues from arising in the future.

Ms. Zahid: Thank you.


Mr. El-Khoury: Thank you, madam, for having agreed to join us this morning, and thank you for your presentation.

You specified that among the 90 boards, 76 are using their levy-setting authorities appropriately; however, 11 do not. Have any judicial or disciplinary measures been taken to have these 11 boards update procedures and exercise their levy orders correctly?

Ms. Lyon: With your permission, I will answer you in English, because this is a very technical topic.


As you know from having looked at the APMA, the authority that the government has with respect to ensuring compliance is, as I pointed out in my remarks, the power and the capability to request information to inform the provincial commodity boards when they are not in compliance with the act and also to recommend that they bring themselves into compliance with the act. In extreme cases, there is the power of revocation of the delegated authorities, a power that would be exercised under quite exceptional circumstances. And to my knowledge, that power has not been exercised in any cases.

As I indicated, I believe on the number of 11 that we do have the orders in place or we have the documentation for 5 of them. We're ascertaining the status of the remaining 3 organizations, and I believe that in a very short period of time they will all be in compliance with the law and with their obligations.

Mr. Badawey: This is not so much a question but a statement. I do want to express my appreciation to the witnesses for coming out today, in particular as it relates to your due diligence with respect to addressing this problem. I know it's probably something that you inherited, and of course today you're coming with a strong message to deal with the concerns that this committee has brought to your attention. As well, you're communicating to us that you're going to look at ensuring that this doesn't happen well into the future with other files. I want to express my personal appreciation for that, as well as the time in which you're going to rectify this problem. You mention that you're going to have this gazetted by June 17, presented to the minister, and then we can move forward and have these rectified. I wanted to express that appreciation to both of you. Thank you.

Mr. Spengemann: How important is the timely completion of your work as it's outlined in this document that you have submitted in the context of the probable, very likely negotiations across the border on NAFTA or, in other words, the need to get our domestic ducks in a row before we're effective at the negotiating table?

Ms. Lyon: That's an interesting question. As public servants and leaders in the organization, we are responsible for discharging all of our responsibilities across the range of files. That is ensuring that we have the appropriate policies in place, the appropriate programs in place, that we are dealing with all administrative and corporate matters and we do that all at the same time.

We have a range of high-priority files at Agriculture and Agri-Food Canada that we are dealing with. One of the key issues is developing the next agricultural policy framework that will set the foundation for agriculture policy in this country for the next five years. That's an extremely important body of work that we are engaging in.

Of course, our relationship with the United States and trade with the United States is paramount. As you know, the Prime Minister has had very good discussions with the U.S. administration in this respect to underscore the importance and the mutual benefits of the Canada-U.S. trade relationship that supports jobs and economic growth in both of our countries.

We attach tremendous priority to those issues, but I would also say, and I can speak for the minister in this respect, that he attaches a lot of priority likewise to the issues that we're discussing this morning and ensuring we are acting promptly and swiftly in resolving both the short-term and the longer-term issues in terms of regulatory modernization, and also ensuring that we have robust and rigorous oversight mechanisms in place to make sure that people are abiding by those delegated authorities.


Mr. Dusseault: I thank our witnesses for their testimony. Since you do not deny the fact that certain levies were exercised without authority, did you evaluate the amounts of money involved, which technically could be challenged by those who paid them?


Ms. Lyon: To my knowledge, we have not assessed the amount of money that is in play in terms of those provincial commodity boards that need to amend or revise their levy orders. Perhaps I can ask Ms. Miller if she has information in that respect.

Susie Miller, Special Advisor, Agriculture and Agri-Food Canada: Thank you.

I don't have information in terms of the amount. It varies across the country and depends on when they became out of compliance. With approximately half of the 14, there have been recent levy changes in the past year or 18 months, anywhere from a 2 to 5 per cent increase above the amount identified. It varies considerably according to the commodity board and when.

We could research that if that was something that the committee wished, but we have not at this point in time.


Mr. Dusseault: I could put the question differently in order to obtain more information. Do you deny the fact that enterprises in this field have paid levies they could challenge? Also, are you in agreement with the fact that someone who paid an unauthorized levy could challenge it and demand a refund?


Ms. Miller: I can provide some explanation about how the levy process is set. Ninety different commodity boards have APMA delegation. Each of them is subject to a governance system specified by the provincial government.

In terms of setting levies, it is done generally through an annual meeting with the vote of the producers. The producers paying the levies, notwithstanding that the legal infrastructure may not be in place to validate an increase, certainly expect to pay them. So they're going in with the expectation that this is a levy that they must pay. They leave the legalities to their board and staff.

That does not mean that some of them may not challenge it. Yes, we do know that there have been levies collected and that the individual commodity boards could be faced with a challenge from some or any of their members. That's why we want to move quickly to remove that possibility and that risk to them.


Mr. Dusseault: The risk is there, but you think it is not likely that someone might challenge the levies. I think that the evaluation of potential risks is an interesting idea, given the fact that that risk exists, even if it is low, and this would give you an opportunity to assess the amounts in question. Since our meeting is public, the people who listen to us could, with the advice of good lawyers, decide to try to recover a few dollars. It would be a good idea to evaluate the situation and be well prepared for such a scenario.


The Joint Chair (Mr. Albrecht): To follow up on Mr. Dusseault's line of thinking in terms of your response, Ms. Miller, I can understand how that applies to the local, provincial commodity board, but what about levies that are levied outside of that jurisdiction? The people who are levied have not assented to the increase. Is that a correct statement or am I misunderstanding?

Ms. Miller: Basically, the people who are paying the levies for the most part are the ones who are voting on it.

The Joint Chair (Mr. Albrecht): Correct.

Ms. Miller: I'll give you an example. Saskatchewan is a place where most of their pork is actually marketed outside the province, because the big slaughtering plants are in Alberta and Manitoba. It is the same producer who markets outside the province as markets inside the province, and votes.

Generally speaking, the ones who pay the levies are the actual producers, because the levies are collected at the first point of sale off the farm.

The Joint Chair (Mr. Albrecht): Okay. Thank you.

Mr. Kang: In light of the fact that levies have been collected by boards and agencies for some time — close to 20 years — without proper oversight by the council, can you explain your department's involvement in the operations of the council? And what will be done to avoid the reoccurrence of similar problems in the future? What remedial action will be taken to remedy the unlawful collection of levies? Have Canadians been affected in any way, shape or form by not having oversight on the levies?

Ms. Lyon: Thank you for the question.

With respect to the relationship between FPCC and Agriculture and Agri-Food Canada regarding the Agricultural Products Marketing Act, the responsibilities are broken down as follows. The FPCC is responsible for the day-to-day management of the APMA. For example, they undertake the various communications with the provincial commodity boards. They are the ones who are in touch with them. They are your primary contact as a committee.

The responsibility of Agriculture and Agri-Food Canada is more on the policy side and to provide policy advice and guidance, such as to the minister on the broad regulatory package I had referred to earlier.

In terms of how we deal with one another on a day-to-day basis, we have a governance structure within the department that is responsible for liaising and dealing and managing with all of our portfolio partners, including FPCC. We have mechanisms in place at the working level and up to the deputy head level to ensure that there are regular communications with all portfolio partners, including FPCC. We have regular retreats, for example, to share information in terms of our priority initiatives, some of the challenges we're facing, and how we're aligned as portfolio partners to ensure that we are supporting the minister in a coherent and consistent way in terms of his execution of his mandate letter responsibilities.

I hope that gives you a broad picture in terms of how we work with one another. The regulatory modernization initiative that was begun in 2012 is a good example of that close collaboration that we carry out with FPCC. We were very much involved in that process. Likewise, we have been very much involved in this short-term action plan to resolve the issues that are facing us and as we develop the options and considerations for the minister in the broader package.

What are we doing to prevent this from recurring? We're strengthening the monitoring and oversight mechanisms that we have. I believe the relationship between FPCC and Agriculture and Agri-Food Canada is strong, mature and very well developed. We need to ensure that we, likewise, have the same sort of robust mechanisms in terms of how we deal with those organizations that have been delegated responsibilities under the APMA. The initiatives I had pointed out in my remarks are an example of how we believe these sorts of systemic changes will enhance oversight and surveillance.

It may well be that in further discussions we will come up with better ideas. You can always do better in terms of oversight and surveillance, so we're seeking the best possible mechanism.

The Joint Chair (Mr. Albrecht): The last part of his question you may not have caught. What remedial steps do you envision taking in terms of validating the unlawful collection of the levies that have already been collected?

Ms. Lyon: We need to assess the pros and cons of that. We need to look at precedents to see whether this has been done in the past. With every policy initiative, we need to determine what the benefits of this would be, what it would yield and which mechanisms to pursue to give effect to this. My understanding is that a legislative change would be required. Is that necessary? What are all the considerations?

The Joint Chair (Mr. Albrecht): Could it be retroactive? That's a big question.

Ms. Lyon: It would require legislation. We have not arrived at a decision on that, but important considerations would have to be weighed in coming to a recommendation to the minister in that respect.

Mr. Kang: From what I understood from your answer, there was literally no oversight, then? Why are we talking about oversight? You said you had the meetings with all the boards. There was no oversight?

Ms. Lyon: There was indeed oversight. I can refer to a couple of initiatives that had been taken by the FPCC. For example, they have annual meetings with the supervisory agencies. They had undertaken a survey in 2014 with all the provincial commodity boards to obtain information about their governance structure and their levy setting. All of this information and these routine and regular exchanges with the provincial commodity boards enabled the FPCC and us to amass information in this regulatory package that we had been developing and had made good progress on. The progress that we achieved in developing that package was due to those sorts of connections, oversight and discussions that we had with provincial commodity boards.

Where we fell short on that was bringing it over the finish line and getting it completed in a timely fashion. That's what gave rise to our decision in 2012 to focus our attention on the immediate issues facing us.

Mr. Kang: If oversight was such a serious issue, my concern is why it took so long to remedy the situation — since 2012 and we are in 2017. That's a matter of utmost concern to everybody or should be. It shouldn't have taken that long. That's my question.

Ms. Lyon: As I mentioned in a response to an earlier question, I think the primary reason for the delay was the fact that we were focused on a broader initiative that was large in scope and scale. We had tried to resolve that issue by an agreement to proceed in batches so that we wouldn't come forward with a single regulatory package. We had been advancing in that respect, but unfortunately the package did not get through the required decision-making process.

That brought us to this shorter-term plan to take out that element of the regulatory package, the one dealing with the orders, focus on that, get it fixed, get the mechanisms in place to prevent this from recurring, then turn to the regulatory modernization initiative and deal with the remaining issues and any others that may have come to our attention in the conduct of this previous work.

The Joint Chair (Mr. Albrecht): I just want to focus on a couple other questions that have emerged here. Within the current wording, the words "by order'' are included in several of the delegation orders. Is it your intent to bypass those in publication requirements under the Statutory Instruments Act? If so, what safeguards will be put in place to ensure the accessibility of the orders being made and the proper oversight of federal regulatory powers delegated to provincial boards?

Ms. Lyon: I know that's been an issue that the committee has discussed. There have been discussions between FPCC, ourselves, provincial commodity boards and others on the advisability of keeping or removing the "by order'' requirement.

I can tell you today that we haven't come to a definitive policy decision on that. We will weigh and assess the pros and cons of keeping the "by order'' requirement. There are some very good advantages for retaining it, such as some of the oversight and the transparency mechanisms, including through the work of this committee and the scrutiny that you would provide. Transparency more broadly is another — in terms of Canadians — for regulators, et cetera.

On the other hand, there's an issue of speed and efficiency, and the fact that the provincial regimes do have very robust governance and transparency mechanisms. So is it necessary or is it duplicative? There are good arguments on both sides.

The other argument in terms of removing the "by order'' requirement is that process, in and of itself, takes a lot of time. So is it worth the energy or can you achieve your objectives, which are transparency, avoiding duplication and minimizing administrative burden, through other mechanisms?

If the committee has views or advice in this respect, we would be happy to hear them as we develop recommendations for the minister.

Mr. Genuis: Ms. Lyon, I will just follow up on some things that I heard throughout the testimony. You mentioned speaking on behalf of the minister and that the minister sees the importance of this. When was the minister first briefed on this file?

Ms. Lyon: In response to the question about the roles and responsibilities between Agriculture and Agri-Food Canada and FPCC, I should have mentioned that there is a bit of a trigger in terms of when Agriculture becomes actively involved in the work that you do.

I am copied on all of the correspondence that goes from the committee to Mr. Pellerin. Our involvement tends to be triggered when there is an issue identified by the committee as unsatisfactory — a "reply unsatisfactory.'' That sends off a signal that the system is not pleased with progress and, hence, we become more actively involved.

We are involved on a daily basis, and we do have this unit within the department that follows things very closely. But once there's evidence that the committee views the progress to be unsatisfactory, that's when more senior levels of the department get involved.

Consequently, that is when we alerted the minister to this issue. That would have been in early December 2016. We advised the minister and the minister's office, and he gave us direction in terms of how to respond to this. The direction consisted of ensuring that we move with dispatch in resolving these short-term issues and that we come back to him subsequently with recommendations for a long-term regulatory plan.

Mr. Genuis: We're talking about an issue that has been outstanding for close to a decade, and the minister responsible would have first been notified about it in December 2016. Am I understanding that correctly?

Ms. Lyon: What I indicated is that the trigger for more senior level involvement in a file where this committee is not pleased with the progress is just that indication. If there is an indication that the committee finds a response to be unsatisfactory, that sends a signal to us that things are not proceeding.

Up to that point, my understanding was that the file was regarded as — I don't know all of the categorizations — progress had been identified. So at that point it would have been reasonable to assume that the degree of comfort with the plan in place was such that the minister did not need to get engaged personally in the file.

Mr. Genuis: Maybe that speaks to the procedures for the committee, but given the system of ministerial accountability that we have, I think we should, going forward, look to make sure that ministers are looped in on these kinds of issues much earlier in the process because we're a parliamentary committee. Any correspondence that we send on an issue that's outstanding — 10 years is a long time, and for almost all of that time the minister was not aware, which is baffling to me and something that I think we should revisit as a committee in terms of how that can happen.

In response to an earlier question, you made a comment about the larger regulatory modernization. You said that the packages did not get through the desired decision-making process, which is a little bit different from what you had said earlier, which is that you decided to focus on fixing the individual gaps in the existing process because you're just realizing the urgency of that. Maybe I could just ask you to clarify: Was there some blockage in the process of the larger modernization package?

Ms. Lyon: I would like to clarify the issue in terms of ministers being alerted. When I said the minister was alerted, that would have been the current minister. I wasn't speaking about previous ministers' involvement in the file.

Mr. Genuis: Can you clarify when other ministers would have been alerted? Maybe you don't have that information.

Ms. Lyon: I don't have the information at hand, but the regulatory package that had been proceeding had — I'll have to confirm at what point it proceeded up through the chain within the department and whether it went to the minister.

Mr. Genuis: We've had the same Minister of Agriculture since the election, so you're saying this minister would not have been briefed any time between early November 2015, when he was appointed, and December 2016, or given information at all about this particular file during that period?

Ms. Lyon: Because the issue was regarded as satisfactory in terms of how it was proceeding. The moment it was determined that the committee found the responses and the activities and the plans to be unsatisfactory, we responded immediately with the plan that I outlined.

To respond to the question about the status of the previous regulatory plan, my understanding is that there was not a substantive issue at play that prevented it from proceeding. It was more administrative in nature in terms of priority- setting among those people that have roles and responsibilities, and the speed of agenda-setting — does it get on the agenda and how quickly it moves.

We had developed, with some assistance from Treasury Board, this notion of a batched approach, where it could proceed in stages. We thought that would have been a good plan, but it did not advance to the point that we would have liked, again, not because of a substantive objection but more administrative and scheduling-related issues.

The Joint Chair (Mr. Albrecht): I just wanted to remind the committee that we would like to wrap this up by 9:30, at the latest, if we can. Obviously we're not going to cut off committee members. You are the master of our destiny here.

Mr. Badawey, and then I'd like to make a couple of concluding remarks.

Mr. Badawey: I want to dig a bit deeper on the questions that were just asked. I note that on the agenda it states, under "Orders Made by Boards and Agencies under the Agricultural Products Marketing Act,'' that you folks were before the committee on February 1, 2007, as well as in 2008, 2010, 2012 and 2015. I'm assuming that that was to hear the concerns of this committee on this issue.

Based on that and hearing those concerns, I'm assuming that the former minister or ministers would have been informed to then react accordingly. Can I assume that?

Ms. Lyon: I think we would need to check. I know that one of my predecessors had appeared before this committee in 2002. I don't know if the minister of the day had been alerted at the time, so we would need to confirm that information as some of it is going back a fair bit.

Mr. Badawey: Thank you. I would appreciate that information. That would be great.

Secondly, I want to commend you, as well as the minister, for reacting when you were alerted to the concern this time; job well done. Thank you.

The Joint Chair (Mr. Albrecht): Committee members, I think the witnesses have indicated that by June of 2017 they are committed to dealing with the short-term issues and having them gazetted and then report on the regulation modernization. My hope is that, at that same point, we could expect from them an update as to how we're progressing.

Before we release our witnesses so that we can have further discussion, I would like our counsel to ask any questions for clarification that would be helpful for the committee members in taking action from this point forward.

Evelyne Borkowski-Parent, General Counsel to the Committee: Most of the questions were asked already.

One comment I take issue with came from Ms. Miller's testimony, when you mentioned that the legal infrastructure was not there to validate the fees decided by the provincial boards. I would just mention that the legal infrastructure is the very basis of collecting money in Canada. That's how the rule of law works, so it's not there to validate what is done by boards or other organizations. It's the very basis of it.

The Joint Chair (Mr. Albrecht): I want to thank our witnesses for being here.

My suggestion is that because our witnesses have committed to having many of these short-term issues dealt with by June of 2017 — and we thank them for that — we expect a progress report, on the modernization regime that they have indicated they are putting into place, by June as well. That will come to our general counsel, and she will determine whether the response is satisfactory and bring it back to us as needed.

Are there other ideas as to how we should proceed with this file?

Mr. Genuis: I agree with your suggestions with respect to this file.

Can I suggest, as a matter of course from now on, that we copy ministers' offices on all correspondence that we send to their departments? In some sense, the minister is accountable for this, but it's really not fair to him or us if the person accountable has just found out in December.

Ms. Borkowski-Parent: Right now we have a system of DIO, which was requested by the committee in the fall. It's now at the DM or ADM level. That's been done across the board. In the recent past, the level of the DIOs had decreased significantly, so in order to ensure accountability and expediency, the committee asked for that. DIO, I should have mentioned, is a designated instruments officer. It's the person we correspond with within the department. In the past, whether to communicate with a minister was usually done through the joint chairs, and it's a decision of committee members.

Those files have now been regrouped under Orders Made by Boards and Agencies under the Agricultural Products Marketing Act. There were numerous files — B.C. vegetables, P.E.I. potatoes. There are 90 of them.

I cannot tell you, at this point, whether the previous ministers had been sent a letter on these files. I can look that up, but ultimately it's always a decision of the committee.

Furthermore, the committee adopted this new procedure in the fall as well where, if there's no satisfactory response provided within four months, a letter is sent automatically to the minister through the joint chairs. So that has changed already.

The Joint Chair (Mr. Albrecht): I personally would be concerned if we copied the minister on all of the correspondence. You and I get 100 emails a day, and it's too easy to ignore them because we get so many. I would prefer to maintain the system where, after an unsatisfactory response from the ADM, at another point it kicks in automatically that he or she gets a letter from the joint chairs.


Mr. Dusseault: We reserve communicating with the minister for cases where we conclude that he must absolutely be informed. We run the risk of losing some of our impact if we write to him every week.


The Joint Chair (Mr. Albrecht): I think that process is already in place given what we adopted in the fall. With all due respect to Mr. Genuis, that is just another counterpoint. Certainly, the committee has to decide.

Mr. Genuis: Fair enough. That makes sense.

The Joint Chair (Mr. Albrecht): Do we all agree, then, that the issue will be resolved by gazetting in June and then a progress report on the long-term modernization issues that will accompany that to our counsel? Is there any opposition? Carried.


(For text of documents, see Appendix B, p. 15B:1.)

Ms. Borkowski-Parent: There are numerous points on this file, so I thank you in advance for your patience.

First, the CRTC has agreed to address 6 of the 17 points initially raised. Those points dealt with drafting matters. Point No. 9 has been resolved by amendments made in 2015.

On several of the other 10 points, the CRTC's response of July 20 largely eschews the questions, so I will take them in turn.

On point 2, there was a French-English discrepancy noted in the definition of "demarcation point.'' The English version deals with single or multiple-unit buildings, which encompass commercial buildings, whereas the French deals with single or multiple dwellings, which encompass only residential units.

So the CRTC relies on its interpretation of other definitions to affirm that there is no discrepancy. The fact of the matter is, in its ordinary and common sense, "logement'' means a place for lodging and not used for commercial purposes. This point seems to be lost on the CRTC.

On point 3, counsel asked whether for the purposes of the regulations a television station could be both local and extra-regional. As this appears to be the case and that qualification does not engender any conflict in the application of the regulations, this response could be taken as satisfactory.

On point 4, there's an element of circularity in certain definitions of the regulation, more specifically in the definition of high-definition service, which is as follows:

. . . high definition service means a programming service that provides any amount of its programming in high definition and includes a high definition version of a programming service.

"Programming service'' is in turn defined as "a program that is provided by a programming undertaking.''

Bear with me here.

The Joint Chair (Mr. Albrecht): I think you're being kind in using the term "circularity.''

Ms. Borkowski-Parent: Since a programming service is really only a program, it was asked how a program could actually be providing programming. As members will notice, it's a bit nonsensical.

Once again, that point seems to be lost on the CRTC, and a further attempt to clarify that issue could be made. The same can be said about point 5, on the definition of "high definition version.''

As for point 6, on the issue of standard versus high definition, the committee could take the department's response to be satisfactory in light of the definition of "high definition.''

On point 8, I thought it would be helpful to describe the operation of section 17. Subsection 17(1) provides for the programming services to be distributed by a licensee as part of its basic service. Subsection (1) also specifies an order of priority. Now, subsection 17(4) deals with a case of two or more television stations ranking equally on the order of priority of subsection (1). Paragraph (a) establishes the proximity of the main studios as the differentiating factor in the case where all stations have studios in the same province as the licensed area.

In the case where one or more, but not all, stations having studios located in the same province as the licensed area, paragraph (b) only mentions that priority is given to the station that has a studio located in the same province as the licensed area.

The point of the matter is that you might have more than one station that qualifies, and paragraph (b) fails to establish which station has priority over the other. The CRTC's response states that paragraphs (a) and (b) should be applied together. This is difficult to accept when the premise for the application of each paragraph is mutually exclusive.

Point 10 deals with the absence of a definition of "adult programming services.'' The CRTC would like to rely on the ordinary meaning of that term, yet it also relies on two different definitions of the same term in its administrative documents. This goes to show the necessity of the definition in the first place.

Furthermore, if the CRTC relies on administrative definitions, there's really no impediment in elaborating one for the purposes of the regulations. More importantly, the fact that there is a procedure in place to resolve disputes about whether programs fall under adult programming is no substitute for clear regulations.

On point 11, the answer provided by the CRTC regarding the ambiguity in "Canadian third-language service'' and "non-Canadian third-language service,'' albeit a bit convoluted, could be taken as satisfactory by the committee.

As for point 14, the French and English discrepancy involves different requirements whether you read one version or the other. While the CRTC goes to great length to explain why, in practice, it might not have great ramifications, at the very least it constitutes poor drafting and it should be corrected. The same can be said of the discrepancy raised at point 16. So for the sake of internal consistency, both versions of subsection 49(1) should be aligned.

Lastly, on point 17, the problem was the antecedent of "it'' in the English version, whereas "elle'' in the French clearly refers to the contribution. While the CRTC went to great lengths, once again, to use statutory interpretation, it does nothing to resolve what remains, essentially, a syntactic ambiguity that could easily be corrected. That being said, section 54 might be repealed in the course of the review of the licensee contribution scheme, so on this point it might be a matter of monitoring the issue.

The Joint Chair (Mr. Albrecht): Thank you very much to our counsel for a very good synopsis of a complicated issue. For me, it was distressing to see that a commission responsible for communication is having such difficulty communicating. However, that's an editorial comment.

I would suggest, committee members, that we move through them one by one.

On point 2, the English-French discrepancy, is there agreement that we ask them to change it and get it clarified so that they are equal in both languages?

Hon. Members: Agreed.

The Joint Chair (Mr. Albrecht): On point 3, are we okay to leave that one? Counsel suggests that that's probably okay. Is there any disagreement? I see none.

Regarding point 4, our counsel is suggesting action to define this more clearly. Should we ask her to continue to proceed and pursue this issue?

Hon. Members: Agreed.

The Joint Chair (Mr. Albrecht): I would suggest the same for point 5, that we pursue action to have that response clarified.

Point 6 is probably okay. All agreed that we'll leave item 6 as is?

Hon. Senators: Agreed.

The Joint Chair (Mr. Albrecht): I guess we go from point 6 to point 8.

Ms. Borkowski-Parent: Point 7 was clarified.

The Joint Chair (Mr. Albrecht): On point 8, the suggestion is that there should be an amendment to clarify this paragraph, as identified. Agreed?

Hon. Members: Agreed.

The Joint Chair (Mr. Albrecht): The suggestion is that point 10 needs to be more clearly defined, and I think there's good reason to proceed with that. All agreed?

Hon. Members: Agreed.

The Joint Chair (Mr. Albrecht): Item 11 is okay, so we'll leave it as is, unless there's disagreement from committee members.

Item 14 is an English-French issue, and I suggest that they either change it or remove the French. Again, we'll ask our counsel to communicate that. All in agreement?

Hon. Members: Agreed.

The Joint Chair (Mr. Albrecht): Item 16, again, is asking for follow-up in terms of getting that change made. If there is no disagreement, we'll proceed in that fashion.

And on item 17, we agreed that it's okay as it is. We're going to leave it.

Ms. Borkowski-Parent: On point 17, it's a matter of monitoring to see if they remove section 54.

The Joint Chair (Mr. Albrecht): All agreed?

Hon. Members: Agreed.

The Joint Chair (Mr. Albrecht): Thank you. That's very complicated, so thank you again to our counsel. That's got to be hours and hours of painstaking work to pursue that. We appreciate it very much.



(For text of documents, see Appendix C, p. 15C:1.)

Shawn Abel, Counsel to the Committee: With respect to the manner of disposal of goods regulations, a number of concerns were first raised in 2004. These primarily arise from the fact that the regulations seem to bear little relationship to the Preclearance Act under which they are made, and in some cases seem to contradict the act. Moreover, the regulations do not really seem to provide for the manner of disposing of detained, seized or forfeited goods. Some questions were also raised concerning the operation of the act itself.

With respect to the other set of regulations designating persons who may enter a pre-clearance area, provisions requiring that certain workers entering a pre-clearance area be under constant surveillance are not authorized under the act.

Amendments to the manner of disposal of goods regulations or to the act and the regulations have been promised in some fashion since 2006. Amendments to the other regulations were promised in 2010.

When the committee last considered these files in 2014, members accepted, on a provisional basis, that the department was continuing to enforce regulations of some dubious legality, as negotiations were ongoing with the United States concerning a new pre-clearance agreement, after which it was understood that the act would be amended.

A new agreement was reached in March 2015, but it is unclear when the new act will come into force. Currently Bill C-23, which would replace the Preclearance Act entirely, was tabled in the House of Commons in June 2016, but it has not proceeded beyond first reading.

Additionally, the department has still not provided clear confirmation that all concerns raised by the committee will be addressed as part of upcoming regulatory amendments. That's where the situation is right now.

The Joint Chair (Mr. Albrecht): Is it possible that the reason Bill C-23 has not received further action is because of some of these issues?

Mr. Abel: Honestly, I can't say.

The Joint Chair (Mr. Albrecht): That's speculation.

Mr. Abel: It could be, I would imagine, a number of other issues relating to international affairs.

The Joint Chair (Mr. Albrecht): In any event, it looks like we're very close to this being implemented. It was announced on March 16 as simply a matter of having the legislation introduced, debated and passed. It would seem to me that now's the time for action.

Committee members, what's your view in terms of following up on these outstanding issues?


Mr. Dusseault: I know that Bill C-23 is going to be debated very soon in the House of Commons. I presume that we can wait to see if this bill is moving forward well, and decide later if we need to take other measures regarding this bill.


The Joint Chair (Mr. Albrecht): Any further comments? Is there any response from counsel? Would that be satisfactory from your perspective?

Mr. Abel: If I may, in the meantime we can continue to press the department for a clearer confirmation on the regulatory amendments and that they will resolve all of the committee's concerns.

Mr. Genuis: Senator Runciman isn't here. He had suggested that we write to the minister directly and request a timeline in terms of proceeding. I would concur with that. I think that's a good way of ensuring progress.

Mr. Abel: We can prepare a draft for the chairs.

The Joint Chair (Mr. Albrecht): Can we do them concurrently? Can we continue to pursue the issues outstanding and write to the minister and ask for a timeline? Are we in agreement with that?

I see agreement. We will proceed in that fashion.


(For text of documents, see Appendix D, p. 15D:1.)

Mr. Abel: Two promised amendments to these regulations have been outstanding since 2007 and 2013, respectively, to correct a drafting error and to define the term "national security requirements'' in paragraph 22(1)(b). When the committee considered these matters in May 2016, the department was unable to indicate when the amendments might be made, owing to conflicting priorities. Members asked for an explanation of those priorities.

The department indicates that delays have arisen because the two legislative counsel teams available to it are currently dedicated to military justice matters and the file belonging to the Chief of Military Personnel. As well, the file belonging to the Director General of Compensation and Benefits has priority.

The department was only able to state that work will not be expected to continue until fall 2016. It being 2017, it may be worthwhile to ask the department whether work is now proceeding.

The Joint Chair (Mr. Albrecht): I couldn't agree more. Are there any other perspectives there, asking for a progress report?


Mr. Dusseault: I think that we have been very patient in this case. I am ready to wait for an additional reply from the department, since it made a commitment in the fall of 2016. However, eventually I think our patience will wear thin and that we will have to invite the officials to come before the committee. For the moment, I am willing to wait for their subsequent reply.


The Joint Chair (Mr. Albrecht): Mr. Dusseault, would you care to suggest a deadline in terms of a report back to this committee?


Mr. Dusseault: Let's say before the end of the parliamentary session, so before the month of June.


The Joint Chair (Mr. Albrecht): The end of this session? The end of June?

Mr. Dusseault: Yes.

The Joint Chair (Mr. Albrecht): You're very patient. Unless I hear other comments, we'll proceed in that fashion, expecting a report by the end of June. All agreed?

Hon. Members: Agreed.

The Joint Chair (Mr. Albrecht): So ordered.


(For text of documents, see Appendix E, p. 15E:1.)

Mr. Abel: In 2009, the Canada Border Services Agency agreed to amend the regulations in order to address the committee's concerns regarding the requirement that importers and carriers be of good character in order to qualify for a customs self-assessment authorization. This term was considered vague and subjective by the committee.

Numerous delays have arisen in making amendments to these regulations. In October 2015, the agency indicated that amendments were ready to be made at the earliest opportunity. Thirteen months then passed before the agency's letter of November 25, 2016, arrived, despite repeated requests for an update. The agency's letter again states that amendments will be made at the earliest opportunity.

Perhaps consideration should be given at this point to writing to the minister concerning these continued delays.

Mr. Genuis: I think conducting a study into what constitutes good character would be much more edifying than a lot of what we do normally, but on a more serious note, yes, let's write to the minister.

The Joint Chair (Mr. Albrecht): Are we all in agreement regarding writing to the minister over the signature of the co-chairs?

Hon. Members: Agreed.

The Joint Chair (Mr. Albrecht): So ordered.


(For text of documents, see Appendix F, p. 15F:1.)

Ms. Borkowski-Parent: A discrepancy between the French and English version of subsection 34(5) of the regulations was brought to the attention of the CRTC in July of last year. Subsection 34(5) deals with contributions made by a licensee. The problem lies in the difference between contributions made "for'' a particular broadcast year and contributions made "in'' a particular broadcast year. You'll understand that if contributions for a broadcast year are not made "in'' that same year, the two could mean different things, whereas the French is consistent.

As an aside, this shows that drafting, or French-English discrepancies, can have very practical implications.

Whereas the CRTC did not really answer the crux of the matter, it did indicate that amendments to the Broadcasting Distribution Regulations were being prepared in light of a change in policy on broadcasting distribution contributions and the committee's comments would be taken into consideration at that time. The letter from the CRTC from August 23 states that proposed regulations were expected in early 2017, with a final timeframe of September 1, 2017.

The Joint Chair (Mr. Albrecht): Are we agreed that's satisfactory?

Hearing no further concerns, we will assume that one is satisfactory. We will move ahead.



(For text of documents, see Appendix G, p. 15G:1.)

Ms. Borkowski-Parent: The purpose of the regulations is to set standards for the composition of the one-cent coin. Given that this coin was withdrawn from Canadian circulation in 2012, the instrument no longer serves a purpose and the Department of Finance intends to repeal it at the earliest opportunity. We could do the usual follow-up.


The Joint Chair (Mr. Albrecht): We could follow up or we could insist on a deadline, committee members. What's your wish?

Mr. Genuis: Call witnesses. No, I'm just kidding.

The Joint Chair (Mr. Albrecht): You're overly eager.

Would you simply consent to follow up, or do we want to insist on a deadline? This has been going on for some time and the decision was made many years ago.


Mr. Dusseault: Are there further regulations to be amended by the Department of Finance? It could include them in a series of regulatory changes.

Ms. Borkowski-Parent: That is certainly a question we can put to the department's representatives, that is to say whether they intend to prepare amending regulations in which they could include this regulatory amendment. We can ask them.

Mr. Dusseault: Absolutely. I think that would be a good way for them to proceed.


Senator McIntyre: I have a small point on the Base Metal Coin Regulations. Instead of following through, perhaps a deadline should be set. The reason I say that is because, as I understand it, the department responded that the regulations no longer serve a purpose and will be repealed at the earliest opportunity, but they haven't done it.

Ms. Borkowski-Parent: But since they are of no practical application because a one-cent coin is no longer being made, it sits on the statute book. It should be repealed for clarity.

Senator McIntyre: The intention is there.

Ms. Borkowski-Parent: Yes, but it's not urgent, probably, in that regard.

Senator McIntyre: All right.


We will have to ask Scrooge what he intends to do with the pennies.


Mr. Genuis: As you all know, I tend to be more bullish on these kinds of things, but we're dealing with other files where we have the unlawful collection of levies and imminent problems. For a regulation on the statute books that they have said they are going to repeal but that they haven't repealed yet and that has no effect anyways, I guess we should monitor the file, but obviously, relative to the other things we're dealing with, I'm not going to lose a lot of sleep over it.

The Joint Chair (Mr. Albrecht): Okay, so we're comfortable with that "earliest opportunity'' at this point? I see agreement on that.

There being no further items of business, thank you very much, committee members, for your cooperation.

(The committee adjourned.)

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