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Proceedings of the Standing Joint Committee on
Scrutiny of Regulations

Issue 4 - Evidence, May 6, 2004

OTTAWA, Thursday, May 6, 2004

The Standing Joint Committee of the Senate and the House of Commons for the Scrutiny of Regulations met this day at 8:36 a.m. for the review of Statutory Instruments.

Senator Céline Hervieux-Payette (Joint Chairman) in the Chair.


The Joint Chairman (Senator Hervieux-Payette): Welcome. We have an interesting agenda today. Let us proceed with the first item.


Mr. François-R. Bernier, General Counsel to the Committee: The committee's Report No. 39 goes back to March 1987. In that report, the committee identified certain inadequacies in the law-making process by band councils under the Indian Act. While the report recommended that Indian band bylaws be declared exempt from the application of the Statutory Instruments Act, it also included recommendations that legislation be adopted to provide guarantees in respect of notice of and access to Indian band bylaws. The committee also recommended that the same legislation afford protection against conviction for violation of a bylaw, unless it was proven that reasonable steps had been taken to bring the bylaw to the attention of the persons likely to be affected by it.

In July 1987, the government accepted all those recommendations. In 1999, the joint committee reported to the Houses that more than a decade later these recommendations had yet to be acted upon. The only action taken by the government has been to make a regulation under the Statutory Instruments Act exempting Indian band bylaws and membership rules from the examination, registration and publication requirements of the act.

As a result, the committee stated that ``since June 25, 1987, there has been no appropriate legal framework to ensure that bylaws made by Indian band councils in the exercise of powers granted by the Indian Act are made known to those to whom they apply. This absence of any procedural guarantees is disturbing.'' The committee added: ``In a free and democratic society, and irrespective of racial, ethnic or national origin, every citizen has the right to be notified of the making of laws that apply to that citizen.''

In closing, the committee, in the 1999 report, urged the government to act upon the 1987 recommendations as soon as possible. In June 2002, some 15 years after the first report of the committee, Bill C-61 was given first reading in the House. The proposed legislation was later reintroduced as Bill C-7, and, as amended in committee in 2003, the bill could be said to address the main recommendations of the standing joint committee. However, Bill C-7 died on the Order Paper; and judging by press reports, there appears to be little prospect of it being revived.

The result is that some 17 years after the government accepted the recommendations of the joint committee, the committee appears to be back at square one. The current situation, I believe, is fully unsatisfactory. People who live on reserves have a right to basic procedural guarantees in terms of the making of laws. They were deprived of those guarantees when the government exempted Indian band bylaws from the application of the SIA but failed to enact substitute legislation. At the same time, it would have provided for equivalent guarantees to those provided in the SIA.

I was thinking yesterday that perhaps there will come a time when the inaction of the government will force the joint committee to propose, or to look into proposing, the revocation of the Statutory Instruments Act exemptions for Indian band laws so as to restore the procedural guarantees that were in place under that act.

At this stage, however, I suppose the new minister should be given an opportunity to indicate to the committee how and when he intends to deal with the 1987 recommendations. If the committee is agreed, counsel would suggest that the chairmen send a letter to the new minister.

Mr. Lee: I think the committee should be as firm as we can be in our correspondence. We should say that the committee would be unlikely to accept a continuation of the status quo, that it would be unlikely to accept new legislation that did not provide for the procedural guarantees or accommodations that have been described by counsel and that we strongly recommend that appropriate amendments be included in new legislation, which we hope will be forthcoming.

That is the best we can do. If the government wants to proceed on the same footing as before then, if I am still on the joint committee, I would be happy to look at a disallowance opportunity based on the paradigms described by counsel.

The Joint Chairman (Senator Hervieux-Payette): Are there any other comments? We can assure you, Mr. Lee, that senators will ensure that it happens.

Mr. Lee: That is good.

Mr. Macklin: I am reflecting on those comments and looking at the way in which we are dealing with the various bands in respect of self-governance. It would seem that we should encourage remedial legislation as opposed to waiting for general legislation to come forward. It should be encouraged that the department do something. I do not know whether it would be usual to propose and pass an omnibus bill of sorts, collecting up so-called technical aspects in terms of housecleaning. Clearly, this needs to be dealt with. The way in which public policy is evolving legislatively, I do not see it happening in one broad-based approach. However, it should be worded to emphasize that we would like to see this done as remedial legislation rather than as a major policy change to be effected.

Mr. Epp: I should like to ask whether there is a relevant area in the Constitution for consideration. Is that the issue? When legal counsel says that people have the right to know what kind of legislation will affect them, what is his source? I am not sure that is true in many other areas of Canadian life.

Mr. Bernier: Mr. Epp, it derives from the basic principle of fairness of our penal system. You cannot convict someone for breach of a law of which they have no knowledge. That is not part of our society and so would not be considered acceptable. That protection is afforded in section 9, a general provision, of the Statutory Instruments Act, which states that no person can be convicted of a breach of such a bylaw unless the prosecution shows that reasonable steps have been taken to bring the bylaw to their attention.

Mr. Epp: I always thought that ignorance of the law was no excuse. What you are talking about is one step prior to that. In other words, they must take steps to distribute the information?

Mr. Bernier: Ignorance of the law is no excuse; that is correct. For example, your personal knowledge of the existence of the law is irrelevant but the justification for this, that ignorance of the law is no excuse, is precisely because, in our society, we have publicity measures in place to inform of the existence of the law.

An act of Parliament is passed by the House of Commons in public forum. Therefore, we can justify that ignorance of the law is no excuse because any citizen may be ignorant of the law but had the opportunity to know the law because it was enacted publicly.

Mr. Epp: He could have read the Canada Gazette.

Mr. Bernier: He could have read the Hansard; and the same goes for regulations.

The Joint Chairman (Senator Hervieux-Payette): Are there any questions or comments? We are agreed to send a letter to the minister. We could strongly recommend that we would like to have a response within 30 days.

Mr. Lee: In the current political context, Madam Chair, in due course would probably be soon enough. As I see my political future, 30 days would be pretty much meaningless. If we were to have a good response by the fall, the committee could take it up when Parliament resumes.

The Joint Chairman (Senator Hervieux-Payette): I will simply say that the committee strongly recommends. Thank you.


(For text of document, see Appendix A, p. 4A:1)

Mr. Bernier: Madam Chair, in light of the agreement of the minister with the reasons set out in the chairmen's letter of September 8, 2003, this file could now be closed.

Mr. Lee: I agree.


Mr. Bernier: Madam Chair, before anything else I should mention to the committee that there has been an unfortunate mistake in the printing of the material distributed to members of the committee on this item. The original letter of February 6, 2003, was two-sided. This was not noticed when the letter was printed. The result is that the reverse pages are missing from the distributed materials.

Complete copies of the original letters are in the hands of the clerk of the joint committee and could be distributed now. The question is whether members wish to defer this file to the next meeting to have time to review the full letter of February 6 or whether they are ready to deal with it today. If this is of any help to members, I would say that the issue to be decided can easily be explained verbally, even in the absence of the full text of the letter.

The Joint Chairman (Senator Hervieux-Payette): Let us proceed.

Mr. Bernier: In the fall of 2001, the new Canada Shipping Act, 2001 was adopted by Parliament. When it comes into force, this legislation will replace the current Canada Shipping Act. In his letter of February 6, the DIO for the Department of Transport explains that, in anticipation of the coming into force of the new act, the department has established regulatory reform project teams that will review all current regulations to prepare for that coming into force and will see to the development of any new regulations required prior to the coming into force of the new act.

Annex A to Mr. McCullough's letter sets out regulations that will be developed or reviewed as a priority, because they are necessary for the bringing into force of the act. Those are the Phase 1 Regulations. The Phase 2 Regulations are consistent with the new act but will have to be reviewed.

The department is seeking the concurrence of the joint committee to allow marine safety officials to incorporate any future amendments required as a result of the committee's work into the regulatory review that is underway rather than proceed with any required amendments on a case-by-case basis.

The new regulatory regime is expected to be in place by 2006. Insofar as this has the potential to affect a large number of committee files, counsel does need the direction of the committee as to whether to accept the plan outlined by Mr. McCullough. If the committee does accept this proposal, should there be caveats on that acceptance? In that regard, members may want to make a distinction between substantive and non-substantive amendments.

For example, if amendments promised to the committee concern issues of drafting, the committee may well be prepared to allow those amendments to be made within the framework of the regulatory review. On the other hand, if the issue raised by the committee concerns a question of legality, it would be legitimate for the committee to be a little wary of accepting a proposal that would see the required amendment incorporated in a regulatory review that may well take years to complete.

If the past is any guide, these sorts of major undertakings do have a way to carry on beyond the usual projected completion date. That has certainly been the past experience.

The Joint Chairman (Senator Hervieux-Payette): Before I go to Mr. Lee, I should like to underline to everyone that in Annex B we have the different subject matters that are being dealt with by each piece of regulation. Some of them are environmental; some are safety. There are of various natures. They are not part of the same subject matter.

If we decide to wait until 2006, I want you ensure that you know the subject matters dealt with by these regulations —

Mr. Bernier: I am sorry, Madam Chairman. I should have mentioned that Annex B really concerns current files, amendments requested by the committee, and those would be proceeded with now. They will not be wrapped up in the regulatory review.

The Joint Chairman (Senator Hervieux-Payette): Okay. I did not know. Thank you. The question?

Mr. Bernier: The question is still there for other files.

The Joint Chairman (Senator Hervieux-Payette): Have they all the same subject matter, or are they varied like this?

Mr. Bernier: That runs the gamut under the Canada Shipping Act. It runs from safety of navigation to pollution, and so on.

Mr. Lee: Madam Chair, this is perhaps a very useful opportunity to hitch our wagon to a regulatory reform initiative. I think we should say, ``Yes, we will fold all of our requests and concerns into your project, and look forward to a good outcome.''

Although we are being collaborative, which may cause our staff to approach some of these matters in a manner different than they would otherwise have approached it procedurally, we should tell the department that we would have to reserve, due to our responsibilities to our respective Houses, any specific items that come to our attention or need to be dealt with in another track. They should be aware that while we will work with them we would want to reserve anything that we regard as higher profile or more urgent.

If counsel has a list now of something that might fall under that category, we could alert them. Otherwise, we could take reserve out and notify them later of anything that is more urgent.

Mr. Bernier: If I may, and this is along the lines that Mr. Lee just suggested, if the committee is disposed generally to accept this proposal — I mentioned caveats — I would suggest three principles under which the committee would accept the proposal.

The first one would be that full substantive replies would still be expected to be provided to any objections formulated by the committee.

Mr. Lee: Okay.

Mr. Bernier: The second one would be that the committee's acceptance is premised on the projected completion date of 2006.

Mr. Lee: Okay.

Mr. Bernier: The acceptance may not apply if suddenly we are talking about 2010 or 2015.

The third one would be on your point, Mr. Lee. The committee reserves the right to press for immediate amendment where the issue, in the view of the committee, is a substantive issue or one of legality that has an impact on Canadians.

Mr. Lee: I agree to all of that.

The Joint Chairman (Senator Hervieux-Payette): Any comments? Is everyone satisfied with that?

Hon. Members: Agreed.


Mr. Peter Bernhardt, Counsel to the Committee: Madam Chair, the committee's third report concerns the fees known as the Part II broadcasting licence fees prescribed under section 11 of the Broadcasting Act. The committee's report reflected the concern that the imposition of these fees results in the collection of an amount over and above the costs incurred for the management of the radio frequency spectrum, and this could give rise to an argument that the Part II licence fees constitute a tax.

A government response was requested to the report, and members have that response before them this morning. The minister reiterates the policy underlying the fees but also advises that a review of these fees is currently underway chiefly as a result of the June 2003 report of the House of Commons Standing Committee on Canadian Heritage. She also advises that the fees are now being challenged in court, as well.

In making this report, the committee's purpose primarily was to draw the issue to the attention of the Houses. I suppose, having done so, members may conclude that their role has been fulfilled. If that is the case, the file would simply be closed.

Mr. Lee: It would not be a surprise if I said I do not think it is time to close the file. I have read the minister's letter, and it is very courteous and reasonably prompt. However, I wanted to put on record, and I do not know whether colleagues see it the same way as I do, that not only has the Part II fees regime been challenged in court, but also it has essentially been challenged here.

The minister thinks that it might be premature to deal with it because it is in the courts, but it is my view that it could never be premature to respond to the committee and to the concerns it raises on behalf of the House. The track of the challenge that is currently before the courts may take one, two, three, four years.

The Joint Chairman (Senator Hervieux-Payette): Maybe more.

Mr. Lee: However, the track of the challenge before this committee should be pointed out to the minister. We could deal with the issue in about 45 days. We could deal with the litigation and the lack of clarity.

I am not suggesting at all that the committee is in a mood to look at disallowance here, but I am, as one member, fairly aggressive on this. We need to get back to the minister. If the House dissolves soon, it may be a few months before we get back to this.

As I said on a previous file, if I am back here, I would want to be fairly aggressive on this. I have not changed my view that the way they are operating with this fee is inappropriate to the paradigm of fees, and they must restructure. They have to fix this.

The Heritage Committee has suggested this to them; we have suggested it to them; and the court case has suggested it to them. Unless they are totally sure they are absolutely right — and I am not sure they really think that — they should fix this soon or face the music later.

I am not pre-judging what this committee will do, but I have staked out my ground. I believe that the Part II fees are not well founded from a parliamentary perspective. They better fix it, or I will be pursuing this in this committee as soon as I can.

I should like a letter sent that reflects the existence of a parliamentary procedure that could be much more efficient in dealing with the issue than the court case.

The Joint Chairman (Senator Hervieux-Payette): When we answer the letter, you want to more than strongly recommend they take action. You want to say that we are not prepared to go with the answer that it is before the court. You want to tell them that this place will decide, not the court?

Mr. Lee: We are quite capable of and would likely decide well before the courts would finally dispose of it. She should be referred to the appropriate sections of the Statutory Instruments Act so that she and her officials know that we are much more efficient in dealing with constitutionality, illegality and ultra vires issues than the courts.

Mr. Epp: I will not comment on Mr. Lee's frequent reference this morning to ``if I am back here.'' That is another problem.

On this particular issue, I note with interest that the letter of October 23 asked for a response within 30 days. Mr. Lee was exceptionally generous when he said that responding on March 23, 2004, was a reasonably fast response. I guess that is just observing the facts.

However, on the issue itself, we ought to take very strong measures here because the regulators in this particular instance in the CRTC have taken it upon themselves to generate a profit. I see the number $81.7 million turned into the Consolidated Revenue Fund. In my opinion, that is something that we must deal with swiftly; it is not permitted.

The Joint Chairman (Senator Hervieux-Payette): Having been in that industry before, in 1994, I remind you that even the CRTC does not control its budget. It is more or less done at the government level than at the CRTC level. Even today, they have a shortage of resources.

They have a workload that is quite unbelievable, and they would certainly dispose of some of that money for the management of their important mandate. They do not have all the latitude of disposing of the funds available to them.

It is hard to say that the government has nothing to say on one hand but that on the other the CRTC budget is being authorized by the government.

Mr. Epp: Madam Chair, are you suggesting that the money that they turned back, the $81.7 million, is in excess of any extra money that they needed?

The Joint Chairman (Senator Hervieux-Payette): No. I am saying that if they could keep a few more dollars to run their shop, they would be very happy. They get what is approved in their budget by the Department of Finance.

Mr. Epp: I need some clarification here. It is my understanding that the CRTC has decided to charge a user fee. You would think that that user fee would be somehow related to their actual costs.

The Joint Chairman (Senator Hervieux-Payette): Yes, but they do not fix the fee. The government fixes the fee. The generation of the extra money is a way of collecting taxes.

Mr. Epp: Okay.

The Joint Chairman (Senator Hervieux-Payette): If they were allowed to collect the fee that would be for their needs, there could be a 5 or 10 per cent difference at the end, for a little margin for their operation. However, when the margin is of the nature that it is, it is not a margin.

Mr. Epp: The CRTC is a line expense in the Estimates.

The Joint Chairman (Senator Hervieux-Payette): Yes. My counsel is saying that the regulation is made by the CRTC but that the entire approval process is done within the government.

Mr. Epp: In other words, I need to get —

The Joint Chairman (Senator Hervieux-Payette): They could decide to bring down their fee if they were authorized to do so.

Mr. Epp: The CRTC decides the fee, but it is approved by Order in Council?

The Joint Chairman (Senator Hervieux-Payette): It is approved by Treasury Board.

Mr. Epp: So we are fighting with both the CRTC and —

The Joint Chairman (Senator Hervieux-Payette): That is why we asked ministers to appear.

Mr. Lee: Technically, no, but practically, yes.

The Joint Chairman (Senator Hervieux-Payette): If we are going ask for reform, my preference — I do not know about my colleagues' preferences — would be for them to have the money they need for their operation, for their mandate, with a reasonable margin. However, they should not be a collection agency for indirect taxes even though the money might go to production, broadcasting, and the Department of Heritage.

The pretension is that some of this extra money goes to the groups regulated by CRTC, but it should not be done like that. It should be done by the proper authority.

Mr. Epp: There was a private member's bill mentioned in the letter you wrote about Bill C-212, and it is before the Senate. Would it be helpful if the Senate would get on the road with this particular bill and get it enacted? That is a comment.

The Joint Chairman (Senator Hervieux-Payette): I would certainly support that, Mr. Epp.

Should we go with the recommendation that we discussed, that we will tell them that, when we come back, we want this to be dealt with properly?

Mr. Lee: I am happy if the tone of my remarks are included in the letter in some way, but I am not prepared to dance on this one for another year. I am close to having made up my mind. I will look for a venue at this committee as soon as we can to push this thing, subject to the views of the rest of the committee and counsel.

Mr. Bernier: Essentially, a letter will be sent to the responsible minister stating that the committee looks forward to her report on the results of the examination that is underway in the fall. The letter will mention in passing that at such time the committee would examine all options available to it, including the possible use of section 19(1) of the Statutory Instruments Act.

Mr. Lee: I do not think that is too oblique. I think that would work. That is fine.

The Joint Chairman (Senator Hervieux-Payette): Moreover, we should mention in the same letter that we think that Parliament should act before the court makes a decision.

Mr. Lee: Yes, we could do that. That is great.









Mr. Bernhardt: We have a series of files that give rise to an identical issue concerning section 40.1(1) of the Public Service Superannuation Act. This provision states that, where a portion of the federal public service is divested, the act continues to apply to any former public service employee who becomes employed by the person or body to whom the divestiture is made. In turn, the Governor in Council is authorized to make regulations respecting the manner in which and extent to which the provisions of the act or the regulations apply to these new employers.

These various regulations, however, purport to extend the application of the act and the regulations not only to the person or body to whom the service was transferred, but also to persons acting for or on behalf of such a person or body, in effect, subcontractors.

When questioned as to the authority for this broadening of the act, Treasury Board argued that the approach taken was consistent with government policy. Of course, this says nothing about the legality of the approach. While never conceding that the provisions in question were unlawful, in the end Treasury Board did agree to seek amendments to the act to clarify matters and to remove any potential ambiguity.

Last December, counsel wrote to ask whether the Miscellaneous Statute Law Amendment Program had been considered as a vehicle to make the amendment to the act to clarify things. This program is designed to correct inconsistencies and errors and to deal with other minor matters of non-substantive nature. Treasury Board replied that the drafters at the Department of Justice were of the view that this program would not be the appropriate vehicle. When pressed as to reasons for this, the answer returned to us is that the amendment might have financial repercussions involving the spending of public money that was not provided for in the act at present and would broaden the scope of the regulations that could be made.

Given the previous insistence that the amendment we are talking about would change nothing but would only clarify, this latest reply is a bit astonishing. Perhaps at this point the joint chairmen could ask the President of Treasury Board whether the Treasury Board accepts the view of its legal advisors, which is apparently consistent with the position taken by the joint committee. If amending the act to clearly permit the making of these provisions would broaden the scope of the act, then it obviously must follow that the current provisions are not authorized.

The Joint Chairman (Senator Hervieux-Payette): May I have clarification? If I understand correctly, for the people who were transferred, the regulation does not conform and their pensions are affected. What is the downside for the transferred employees?

Mr. Bernhardt: The affected employees at this time were former public service employees that are now working for subcontractors of persons to whom portions of the public service have been divested. The act at present does not contemplate that they can be brought under this regime. The amendment to the act would authorize the kind of regulations that have been made. In effect, it would ensure that what the regulations have tried to give them now, unlawfully, could be given to them lawfully.

Treasury Board has always said that it can be done now but that it will keep us happy and clarify that. The Department of Justice has said that it cannot be done under the Miscellaneous Statute Law Amendment Program because it would not be clarifying things but that rather it would be broadening the act, which is what the committee has said all along. It would seem that the Department of Justice agrees with the committee. The issue is whether Treasury Board agrees with the Department of Justice and with the joint committee.

As Mr. Bernier pointed out, a remake of the regulations would be required after the act is amended so that a valid regulation would be in place.

Mr. Bernier: The act should retroactively validate the regulation made to protect the situation —

Mr. Bernhardt: — of anyone who has been receiving benefits.

Mr. Bernier: These people who are hired by subcontractors now are receiving the benefit of a regime that Parliament did not give them; so Parliament will have to validate that.

Mr. Bernhardt: I recommend that the joint chair write to the President of the Treasury Board noting that apparently his legal advisors are of the same view as the joint committee and that they might wish to reconsider in light of that fact.

Mr. Bernier: If they do not accept the committee's view, then they may wish to accept the view of the Department of Justice, which is the same as the committee's view.

Mr. Epp: I do not think that I would word it in such a way. Rather, I would say that the Department of Justice and the joint committee agree, so get on with it. That is how I would word it.

The Joint Chairman (Senator Hervieux-Payette): I like that wording.

Hon. Members: Agreed.

The Joint Chairman (Senator Hervieux-Payette): I know there would be complaints should the benefit be removed, but I do not think it is right to provide benefit without a legal framework.

Mr. Macklin: How far in terms of public policy do we wish to extend this protection? It is understandable to extend the protection to those who have a vested interest in the superannuation program. However, the question becomes, how far do you let this go? As you divest, it could spread such that you are dealing with sub, sub, subcontractors — way beyond the original perspective that was conceived. I agree with the protection. The question is how far it should go. That important public policy determination needs to be made.

Mr. Bernhardt: I would suggest that that is another reason for bringing this to Parliament, so that the matter can be dealt with through amendments to the act for all to debate.

Mr. Macklin: That is right. That is the place where this should be debated as a public policy argument.

The Joint Chairman (Senator Hervieux-Payette): Are all agreed?

Hon. Members: Agreed.


Mr. Bernier: There is nothing for the committee to do in respect of the correspondence on this order. Close the file.


Mr. Bernier: Mr. Rousseau raised three issues in respect of these regulations. In January 2002, the responsible DIO wrote that a reply to those comments would be made as soon as the department had had an opportunity to study them. Some eight months later, in September 2002, a letter was received stating that this file is the responsibility of someone other than the DIO within the department. No reply having been received, Mr. Rousseau wrote again to the DIO on January 29, 2003, pointing out that he still did not have a reply to his November 19, 2001, letter, sent some 14 months earlier. Finally, after another two follow-up letters from Mr. Rousseau, Mr. Alain Latourelle replied March 8, 2004, that the issues raised would be discussed with legal advisors.

I would suggest to the committee that to receive this kind of response nearly two and one half years after possible objections to the regulations have been conveyed to the responsible department is not acceptable. One cannot help but wonder if that is the way correspondence sent on behalf of a parliamentary committee is handled in a department. One shudders to think how an ordinary taxpayer's correspondence would be handled. If the committee shares this view, I would suggest that the joint chair write to the responsible minister to request that he instruct his officials to provide a full and detailed response without further delay.

Hon. Members: Agreed.

The Joint Chairman (Senator Hervieux-Payette): Looking at this signature leads me to think that they will not go far with this.


Mr. Bernhardt: This is a somewhat similar situation, Madam Chair. Eight points were raised with the Department of Canadian Heritage in November 2001. Undertakings to make amendments were given in connection with six of those points. On the other two, the department advised that it had referred the matters in question to its legal advisors. Of particular interest in this file is point 5 of the correspondence, which concerns aircraft access permits. Under the Canada National Parks Act, it is an offence to contravene the conditions of a permit. These permits fall within the definition of a statutory instrument under the Statutory Instruments Act. As their contravention is punishable by a fine, they are also subject to the registration and publication requirements set out in the act.

Mr. Rousseau asked whether any of these permits had been issued and whether they had been registered and published. Several follow-up letters were sent asking about the outcome of the consultations that had been mentioned. When no reply was received last September, the joint chairmen wrote to the minister directly asking for her cooperation in ensuring the response was provided. We have now a March 8 reply from Parks Canada Agency. It states that after more than two years the discussions are still ongoing. Moreover, the committee is advised that apparently only three of the six promised amendments are to be made. No mention is made of what became of the other three.

Given all of this, I would suggest a letter to the Minister of the Environment from the joint chairmen asking for an assurance that all of the promised amendments will be made in the forthcoming package and also suggesting that there has been ample time for discussions and that a reply on the other two point would be appreciated without further delay.

Mr. Macklin: You are being very charitable.

The Joint Chairman (Senator Hervieux-Payette): I thought that when we made Parks Canada as a separate entity it would be more efficient, so I feel that we should underline that we expect some movement on this.


(For text of document, see Appendix B, p. 4B:1)

Mr. Bernier: Madam Chairman, it looks as though the chairmen's intervention with the President of the Treasury Board had beneficial effects and is what was required to move this matter forward. The proposal has been to amend sections 5 and 6 of the regulations so they conform to the statutory provisions. Progress will be monitored in the usual way.

The Joint Chairman (Senator Hervieux-Payette): No question? Thank you.


Mr. Bernhardt: A number of amendments to these regulations were first promised in 1989. Obviously, there have been frequent delays since that time. Most recently, the anticipated time for pre-publication was pushed back from last fall to this spring. On a brighter note, I can advise, however, that the proposed amendments were indeed pre-published in Part 1 of the Canada Gazette on May 1. Things do finally seem to be moving ahead. We will continue to monitor the situation.

The Joint Chairman (Senator Hervieux-Payette): Is it done or not?

Mr. Bernhardt: According to their latest forecast, they did pre-publish on May 1, so that deadline has been met. It will now be a matter of final publication.

The Joint Chairman (Senator Hervieux-Payette): After that, it comes back to you.

Mr. Bernhardt: At least we have got to this point finally.


Mr. Bernhardt: At issue here are several discrepancies between the English and French versions of the schedule to the regulations. The department had initially indicated that these would be dealt with in a miscellaneous amendments package that was expected to be done in 2003. On December 19, 2003, Mr. Sinclair reiterated the department's agreement with the amendments but advised that, because no other amendments had been identified to put a miscellaneous package together, it was impossible to say when action would be taken.

Perhaps the committee would at this time wish to indicate that, given the nature of the amendments, it is prepared to be somewhat patient. However, if there is no opportunity to proceed with this package this year, perhaps the committee's amendments could be done as a separate initiative.

The Joint Chairman (Senator Hervieux-Payette): Do we have to be patient on the French version? Senator Biron will have to be patient?

Mr. Bernhardt: It may be the English version in this case.

The Joint Chairman (Senator Hervieux-Payette): I am asking.

Mr. Bernhardt: I would have to review it to see exactly what the nature of the discrepancies was. My recollection is that they were fairly minor, more of an editorial nature.

Senator Moore: What are we doing with this?

Mr. Bernhardt: We will write and suggest that if they do not have their miscellaneous package together by the end of this year, they should go ahead with the committee's amendments separately.

Senator Moore: Thank you.


Mr. Bernhardt: We had several drafting amendments that were to be combined into a package of amendments that is now to be completed sometime this year, so for now that would appear to be satisfactory.

The Joint Chairman (Senator Hervieux-Payette): Okay. Questions? Thank you.



(For text of document, see Appendix C, p. 4C:1)

Mr. Bernhardt: Amendments were promised to address the issues raised in points 2, 3 and 4 as well as the second paragraph of point 5 of counsel's letter. The department's advice on the first paragraph of point 5 is quite correct and no amendment is required.

That leaves only point 1. The reply indicated that consultations were to be undertaken. Perhaps at this point we could just follow up on the results of those consultations.

The Joint Chairman (Senator Hervieux-Payette): All the other points have been dealt with?

Mr. Bernhardt: We have promises on those.


(For text of document, see Appendix D, p. 4D:1)

Mr. Bernhardt: The only outstanding issue here is that raised in point 2 of the correspondence concerning section 65(3) of the regulations. This provision purports to confer on the Crown a right of recovery in respect of royalties paid against any person who owned or operated the mine or any related person during the fiscal year in respect of which the royalties were payable.

There is a proposed amendment to this provision. Under the proposed amendment, anyone who owned or operated the mine during a given fiscal year would be jointly and severally liable for all royalties payable in respect of that mine for any part of the fiscal year. It largely comes to the same thing as the provision at present.

If one is to argue that this simply states what would be the case in any event, the provision is pointless to the extent it makes all owners liable for all royalties in a given year, even though they may not have been the owner at the time those royalties were incurred. It has to be seen to confer a substantive right of recovery on the Crown that the Crown would not otherwise possess. For this, you would need express enabling authority in the relevant statutes.

The department has cited section 12 of the Territorial Lands Act and section 19.1 of the Financial Administration Act as providing authority for this extended right of recovery. The Territorial Lands Act provision authorizes regulations for the leasing of mining rights in or on territorial lands and the payment of royalties for those rights. However, if royalties are payable for the leasing of mining rights, presumably only those people who held the lease at a given time can be made to pay the royalties. Again, the regulations purport to go beyond that.

Under section 19.1 of the FAA, regulations could be made prescribing fees or charges for rights or privileges conferred by licences or permits. These fees may be imposed on the persons to whom the right of or privilege is conferred.

There is nothing here that permits the imposition of charges on persons who did not hold the right of privilege, which in this case is a mining lease, at the time the charges were incurred. Given all this, I suggest a further letter on this point should go to the department pursuing this matter further.

Mr. Epp: If we are dealing with a mine or some other mineral resource that is being sold, does it not work the same as when you buy or sell a house and the property taxes are due and payable in June?

If I were to buy a house in March, I would write the contract such that the taxes for the year would be prorated. I would pay nine twelfths of the annual tax bill and the vendor would pay three twelfths of the annual tax bill. Why should we insist that the government collect the taxes from someone who no longer owns it? That is how I understand your explanation, although I may be wrong.

Mr. Bernhardt: The provision is such that if I had the mining lease for six months of the year and sold the mine to you, then you would have the lease for the next six months of the year. We would both be liable for the royalties for the entire year.

Mr. Epp: I understand.

Mr. Bernhardt: The committee would be taking issue with that in this case. Nothing in the act provides clear enough authority to extend this right of recovery beyond what would normally be the case.

Mr. Epp: You saying that the way in which it is written, both the owner in the first half of the year and the owner in the second half of the year would be required to pay the whole thing?

Mr. Bernhardt: The Crown could come after either one for the entire amount, at its choosing, presumably whoever had the deepest pockets at the time.

The Joint Chairman (Senator Hervieux-Payette): You are right. If we want to collect, we have to be specific. If one has been in place for four months and the other one for six months, then the amount payable should be prorated accordingly. That has to be written in the law. Currently, there is a joint onus on the owners because there is nothing in the law but only in the regulation.

Mr. Epp: I will restate my case. One man owns something and mismanages to the point of bankruptcy. He decides to sell to a large company. Why not say to the new owner that included in the purchase is the obligation to pay the royalties for the year. That should be clear. That is the point, is it not?

Mr. Bernier: The owner of a mine when the royalties are payable is the person from whom those royalties are collected. The Crown is trying to use its regulation-making powers to give itself a right that is exorbitant in common law. As my colleague suggested, if at common law both the previous owner and the owner at the time royalties are payable are, in fact, severally liable, then there is no need for any provision because the Crown has that right at common law.

If the Crown does not have that right, and this is why the regulation has been made, to give itself a right as a litigant that it does not have at common law, then it needs Parliament to expressly authorize that. The Crown cannot use general regulation-making power to improve its position before the courts, in terms of remedies. That is the issue.

Mr. Epp: I understand, thank you.

The Joint Chairman (Senator Hervieux-Payette): Is there a final comment?

Mr. Bernhardt: We will pursue it.


(For text of document, see Appendix E, p. 4E:1)

Mr. Bernhardt: We have a promise of an amendment on the first point. Transport Canada's reply on the second point would appear to be satisfactory. If members agree, then it is simply a matter of following-up progress on the promised amendment.

Mr. Epp: Proceed.

The Joint Chairman (Senator Hervieux-Payette): Are all agreed?

Hon. Members: Agreed.


(For text of document, see Appendix F, p. 4F:1)

Mr. Bernier: Amendments were promised in relation to 10 provisions of TP 127, Ship Electrical Standards, in respect of section S1.2.3 of Schedule 1 to the standard and similar sections S1.3.2 and S1.5.3. Counsel queried if there are circumstances in which the board of steamship inspection would refuse to approve a period of less than 36 hours for emergency electrical power, even though all the conditions set out in the section are met. The answer from Transport Canada was that, when those conditions are met, the board would always approve a lesser period. That being the case, the department should be asked to provide a reply to my colleague's suggestion that the words, ``will be considered by the board'' be replaced with the words, ``is permitted,'' which would then grant that permission by operation of the standard. With the agreement of the committee, a letter will be sent to that effect.

Mr. Macklin: That is appropriate.

Hon. Members: Agreed.


(For text of document, see Appendix G, p. 4G:1)

Mr. Bernier: These regulations revoke Stuart-Trembleur Lake Band Timber Regulations to which the committee had made a number of objections. A new issue has been raised with regard to section 8 of the regulations and its conformity to section 57(d) of the Indian Act. The question was whether the enabling power requires the Governor in Council to specify the amount of the fine or of a term of imprisonment to be imposed for contravention of the regulations.

In reply, the Department of Indian Affairs and Northern Development agreed that the enabling power could be read as to require this result but argued that another, in its view better, reading of the enabling section was one under which the Governor in Council can simply specify that there will be a fine or a term of imprisonment not exceeding the stated limit.

After fairly long consideration of the department's response, counsel would suggest that the interpretation put forward by the department has merit and that, in the circumstances, the current regulations should receive the benefit of the doubt. We would recommend that the committee not pursue this matter. Close the file.

The Joint Chairman (Senator Hervieux-Payette): Nobody will be deprived of any rights.

Mr. Bernier: Both interpretations are possible. We are always mindful, when advising the committee, that unless we are convinced beyond a reasonable doubt that our position is the better one, some deference has to be paid to the regulation and some recognition has to be given to the presumption of validity. We do not wish to lead the committee down the garden path.

The Joint Chairman (Senator Hervieux-Payette): That is wise. Thank you.


(For text of document, see Appendix H, p. 4H:1)



(For text of document, see Appendix I, p. 4I:1)


(For text of document, see Appendix J, p. 4J:1)

Mr. Bernier: If I may, I will deal with all of the items under Action Promised as a group. The instruments listed represent 12 amendments that were promised to the committee.


(For text of document, see Appendix K, p. 4K:1)


(For text of document, see Appendix L, p. 4L:1)


(For text of document, see Appendix M, p. 4M:1)


(For text of document, see Appendix N, p. 4N:1)

Mr. Bernier: In respect of the instruments listed under Action Taken, the revocation of the Lauzon Dry Docks Regulations resolves 5 concerns of the committee with its provisions. Another 17 amendments have been made at the request of the joint committee. I note that two ultra vires provisions have been repealed and a third ultra vires provision has been amended so as to bring it in conformity with the enabling act.

A total of 88 statutory instruments have been reviewed by counsel and are submitted without comment.

The Joint Chairman (Senator Hervieux-Payette): Are all agreed?

Hon. Members: Agreed.

Mr. Macklin: Are we now to other business?

The Joint Chairman (Senator Hervieux-Payette): Yes.

Mr. Macklin: I want to advise the committee that Mr. Grewal and I made a referral to the Speaker of the House with respect to potential conflict between the Statutory Instruments Act and the standing orders. I spoke to the Speaker yesterday and he advised that a letter is coming to us shortly, so the matter has been dealt with.

The Joint Chairman (Senator Hervieux-Payette): Will the letter be sent to Mr. Grewal and to me?

Mr. Macklin: Yes, that is correct.

The Joint Chairman (Senator Hervieux-Payette): Will this resolve the matter?

Mr. Macklin: The letter will advise the committee of his direction.

The Joint Chairman (Senator Hervieux-Payette): Thank you. Is there any other business?

The committee adjourned.

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