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Proceedings of the Standing Joint Committee for the
Scrutiny of Regulations

Issue 4 - Evidence,  May 13, 2010

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OTTAWA, Thursday, May 13, 2010

The Standing Joint Committee for the Scrutiny of Regulations met this day at 8:42 a.m. for the review of statutory instruments.

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

[English]

The Joint Chair (Mr. Kania): Good morning. We will begin with a comment from Mr. Bernhardt on an item from a previous meeting.

Peter Bernhardt, General Counsel to the Committee: In connection with SOR/98-166, Regulations Amending the Patented Medicines (Notice of compliance) Regulations, members of the committee received a memo a couple of days ago with a copy of a letter from Industry Canada. On April 15, the committee decided that departmental officials should appear before the committee on May 27 in connection with this file to confirm that the promised amendments will be made and to provide either a firm date for their making or an explanation as to why it is not possible to do so. As was explained to the department in counsel's April 15 letter, members were concerned not only with the delay in making the amendments, which are relatively minor, but also with the department not providing any indication as to when it expects to proceed, and with merely referring to potential amendments.

In her latest letter, which was received on May 11, Colette Downie confirms the commitment to proceed with the amendments as soon as possible. The delays to date are characterized as being due to ``an unfortunate oversight.'' The letter stated that six months should be sufficient and that a more precise indication of the time frame is forthcoming. Finally, Ms. Downie explains that the reference to potential amendments was intended simply to reflect that the regulations are made by the Governor-in-Council and not by departmental officials, and Ms. Downie did not want to be seen to be presumptuous.

The question is whether members are satisfied with the response or whether the committee still wishes the appearance of witnesses at the next meeting. It seems that everything the committee asked for by way of information and commitments has been provided.

Mr. Szabo: I take their word in good faith and suggest that we indicate the committee is looking forward to confirmation of the department fulfilling its promises.

Senator Moore: I have a comment about the last sentence in the first paragraph on the second page of the letter, which states:

My officials are seeking to confirm this and will provide the Committee with a more specific timetable as soon as this is done, likely in advance of the Committee's meeting on May 27, 2010.

We should insist on having in advance whatever they will give to us so that we can consider it at that meeting. This statement is sliding around again, and I do not like it. It has been three years.

The Joint Chair (Mr. Kania): I understand that we do not require them to appear but we will endeavour to tie them down before the May 27 meeting. Is that agreeable?

Senator Harb: A lot of goodwill is evident. Let us see what comes down. Our officials should keep their eye on it. These results are great.

The Joint Chair (Mr. Kania): Are there other comments? Are members agreed with the approach?

Hon. Members: Agreed.

SOR/2001-184 — REGULATIONS AMENDING AND REPEALING CERTAIN REGULATIONS ADMINISTERED AND ENFORCED BY THE CANADIAN FOOD INSPECTION AGENCY, 2000-1 (MISCELLANEOUS PROGRAM)

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

Mr. Bernhardt: The issue relates to labelling requirements. It has always been the position of the committee that, in particular where labelling requirements are imposed in the interests of health and safety, the required information should appear in both official languages. However, each of the Feeds, Seeds and Fertilizers Regulations provides that information required to be shown on the label must be in English or French or both official languages. In 2000, the Canadian Food Inspection Agency, which is responsible for the three regulations, indicated that it would take the committee's views into consideration but that it could not impose a requirement that information appear on labels in both English and French without first consulting all regulated parties. In 2007, the CFIA reported that it had not completed its review and that a satisfactory conclusion might not be reached for some time. In 2008, the committee was advised that the CFIA had not finished its review due to other priorities and that it was actively studying all aspects of the issue.

In December 2009, in a letter to the president of the agency, the joint chairs noted that the agency had been examining the issue for nearly 10 years, which seemed to be more than sufficient time. An indication was sought as to whether amendments would be made to require that the information on these labels appear in both languages and, if so, when the amendments would be made. The letter concluded by seeking the cooperation of the president in assuring that the agency's review was concluded without further delay, and an appropriate course of action was proposed.

The reply from the president explains that the time taken to date is due to the substantial impact on industry practices and the agency's operations. However, a commitment is expressed to ensuring that users of feeds, seeds and fertilizers receive information on labels in both official languages. It also stated that the agency is in the process of developing criteria to determine which labelling information relates to health and safety and where it is reasonable to require bilingual labelling. I presume criteria refers to criteria analogous to those that govern when federal government services have to be provided in both languages under the Official Languages Act, given that regulations set out the criteria for making that determination. I presume they are looking at something along the same lines here.

That reply was received back in December. I suppose a follow-up letter, asking the agency where things are at and what sorts of criteria it will propose, is in order.

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

Senator Moore: We should also ask when? It is always a time thing with these people. It is when as well, please.

The Joint Chair (Mr. Kania): Agreed?

Hon. Members: Agreed.

SOR/96-143 — VETERINARY DRUG EVALUATION FEES REGULATIONS

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

Mr. Bernhardt: As members know, the distinction between a fee and a tax has occupied both this committee and the courts in recent years. Again, that is the issue here. It is important because of the legal principle that the power to make regulations imposing fees cannot be used in a manner such that the resulting charge is more in the nature of a tax.

These regulations were made pursuant to subsection 19(1) of the Financial Administration Act, which permits the Governor-in-Council to prescribe the fees or charges to be paid for a service provided by Her Majesty. The fees in question here are paid for services in connection with submissions for new veterinary drugs.

The way the regulations operate is that initially a fixed fee is prescribed; that fee is then subject to a reduction, based on the sales volume of the drug after it has been approved. In the end, the fee paid is 10 per cent of sales for the first three years, up to the maximum of the full fee that was paid initially. As a result, two different applicants can pay two different fees for the same service — that is, processing their application — depending on their respective revenues.

In recent years, the principles in respect of fees for rights and privileges have become more complex due to subsequent court decisions, such as those dealing with the broadcasting licence fees. Those fees were also the subject of reports by the committee.

As far as fees for service are concerned, however, which is what we have here, the applicable principles remain those set out by the Supreme Court of Canada in the Eurig Estate case. According to the Supreme Court, the fact that the amount charged is based on a factor such as the revenue of the person receiving the service is an indication that the charge is more in the nature of a tax, so long as that person's revenue is unrelated to the cost of the service. This criterion is different from the one relating to whether the amount of the total fees paid by all applicants using the service exceeds the cost to the government of providing that service.

In Eurig, the two issues were the subject of two separate analyses by the court. In its reply, the department focuses solely on the second one, which is whether the total fees paid exceed the total cost to the government. That is not the issue here.

If there is no relationship between the revenue of the person receiving the service and the cost of providing the service to that person, it can be concluded that the amount required under the regulations amounts to a tax. The department should be asked again whether it can justify the fees on this basis, which is not the issue it discussed in its initial reply. I suggest a further letter on that point.

A subsidiary issue here relates to the fact that the amount to be paid also turns on decisions of the minister or director. The department's reply seems to indicate that there are specific objective criteria that govern that decision. If there are, perhaps those criteria should be in the regulations.

The department indicates it is considering the possibility of changing the regulations, in its words ``to demonstrate that the process is objective.'' Either way, some clarification should be sought. However, I emphasize that this secondary issue becomes academic if we conclude, on the first issue, that the fees are illegal because they amount to a tax. That issue still needs to be resolved with the department.

The Joint Chair (Mr. Kania): Is the recommendation to send a letter?

Mr. Bernhardt: The first reply from the department did not deal with the issue as it was raised by counsel. It is a question of writing back and asking the department to address the argument we made, rather than some other argument they think we made.

The Joint Chair (Mr. Kania): My concern, in particular, is that this appears to be a tax and not a fee.

Mr. Bernhardt: That is the question.

Mr. Albrecht: I am not opposed to writing a letter. However, it strikes me that on many of these issues, we spend a lot of time drafting letters, sending them, waiting for replies and dealing with it. Are there any mechanisms in place where it is possible, or according to protocol, for our counsel to sit down with the person he has written this letter to and explain, as he has so clearly today, so we do not have these ships passing in the night?

I think we are wasting a lot of time. Maybe we are already having the discussion; I do not want to imply we are not. I think it would be valuable, Mr. Bernhardt, if you talked to them. I do not know whether that is proper.

Mr. Bernhardt: From time to time, there are informal contacts back and forth along those lines. The problem is, we are dealing with legal arguments going back and forth; at some point, there is a need to reduce those to writing. However, in the process of doing that —

Mr. Albrecht: In addition to, in the process, if it is feasible and helpful. It is only a suggestion from a person who has never done it.

The Joint Chair (Mr. Kania): The other suggestion that has worked, as we know, is to ask someone to come in and explain it to us as a committee.

Ms. Chow: I wonder whether there can be specific questions, then a deadline and if the response is still not satisfactory, bring the department here.

However, if the department signed off and explained it is a fee, not a tax, and it is transparent — there is a list and criteria, and this is what they used to determine what fees, whether it is the director or the minister — if they give us all that information, then they do not have to come. It seemed to work in the first instance; why not do it again?

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

Mr. Szabo: After looking at the letters, and even going back to 2008, the issue was already on the table. It seems odd to be in a position where we have to say they are not addressing what we asked them about.

This is not a little error. This is like they want to stonewall. When it takes a year after you raised the issue — more than a year, a year and a half — I tend to agree with Mr. Albrecht. It is indicative of disrespect for the committee.

We see that a lot. We have been through a major item on when does a fee become a tax with Canada Post; we ended up having witnesses, hearings and Supreme Court decisions, I believe.

These issues are serious, which I think every agency understands when they are involved with a fee prescription. We raised this issue; I think it came up at the time of the last go around, so I am skeptical that they did not get it. I think they got it very well. I anticipate that if we do not take a firmer stand, we will see this item a year from now.

I think we have to indicate our concern that they did not carefully consider and read all the relevant aspects of the past communications. We should advance this issue and say, we would like you to look at this part. It is not as if we did not communicate the issue properly; we did. It was clear back in 2008.

I recommend that we see something a little stronger to indicate that the committee is concerned that this matter has not been properly addressed already. Perhaps we can set a timeline for a response on this one as well.

Senator Moore: I want to see a timeline. Maybe in the letter we can say we expect to hear from them by such and such a date; if not, they can expect to be asked to appear before the committee. I want to see something done here before summer recess. There is no reason why they cannot respond properly.

[Translation]

Senator Hervieux-Payette: I would like to point out that we are addressing a specific department in this case. We should keep in mind that this is part of the rules of the game in terms of departmental budgets, that the order perhaps comes from the Treasury Board and not from the department, and that it is one way to acquire funds. These are issues of concern to all the departments.

We often come back to this issue, but to all intents and purposes, I do not think that, at this level, the decision is made by officials; they are caught between a rock and a hard place. This matter has not been resolved by the committee.

I have been sitting on this committee for 14 years, and I can tell you that I have never come across this issue of fee structure and this idea of collecting money only for current operations. Let us be honest about this; we can send letters, but if we really want to target the right people, we should invite Treasury Board representatives here instead. That is where the problem originated. The funds have already been budgeted; they are already in the department. They have no choice where revenue is concerned. The objectives are set; planning is done every year. It should be noted that the process is not an isolated one.

I have no problem with sending the letter, but if we do that, we will make no headway on the issue for another 10 years. Even during the Liberal government's rule, I did not agree with collecting money, indirectly, that had nothing to do with the services provided by the government. This issue is present in dozens of government departments. We should be more realistic and recognize the fact that it is just a hidden tax. If we see it for what it is, we should certainly not expect it to reflect services provided to Canadians.

[English]

The Joint Chair (Mr. Kania): Senator, do you suggest that we ask for a member of the Treasury Board to appear before the committee at this stage?

[Translation]

Senator Hervieux-Payette: Perhaps not at this stage, but eventually. It would be pointless to submit a specific case for review. If we want Treasury Board representatives to appear before us, we should be familiar with the budgetary process and with how each department earmarks revenues to use for their operations. The same goes for Food and Drugs, the CRTC, and all services provided by the government; there is a fee structure in place, but it has nothing to do with operating costs. It so happens that, most of the time, we err on the side of the government. I have never come across services that run a deficit, but rather ones that yield profits.

I prefer clarity. There needs to be some room to manoeuvre because it is difficult, in the case of piecemeal service, to determine the amount accurately. It is the same in any company, but there are still significant discrepancies in certain cases, and the whole thing turns into a money-making machine for the government.

We can address this issue subsequently. I do not want to single out one department in particular. I would like the Sub-Committee on Agenda and Procedure to look into the matter and, once we come back in the fall to complete our agenda, we can do a more in-depth review, under more specific regulatory guidelines.

[English]

The Joint Chair (Mr. Kania): Mr. Bernhardt's suggestion is that we can perhaps plan to hear from witnesses on a macro scale more generally in the fall on this issue. What do members think?

Ms. Chow: I thought a policy guideline said departments cannot charge more than the cost of service, whether it is for a passport or for any other thing. I see someone nodding; that was my understanding.

Mr. Bernhardt: That is one aspect. If they generate excess revenue, then that runs the risk of crossing the line into a tax, which then is illegal under the power to charge a regulatory fee. That is the argument the government addressed in its replay. It said the total amount we collect is less than it costs us to process all these applications and administer the drug approval program, which is one aspect of the test.

However, when dealing with a fee for service, there is a second aspect according to the Supreme Court: When they deal with each individual, there must be a relationship individually as well such that, if two people receive the same service and it costs the government the same amount to provide that service in each case, those two people should pay the same fee.

They need to be able to say here that it costs more to process this person's application because it will generate more revenue after the application is approved and, therefore, they can charge a higher fee. That is the argument they have to make to justify the mechanism here and that is an argument we raise: Can they explain; does it truly cost them more, based on how much revenue this particular drug will produce after it has been approved, or is there no relationship there at all?

They chose not to address that argument either because they misunderstood or, as has been suggested, due to wilful blindness. They addressed only the first argument, which, in fact, was never questioned.

Ms. Chow: Chair, it seems me that it is clear. It is not rocket science for them to say specifically, here is the formula; here is how we charge; and this is the direction. Be clear about it; make it transparent. It probably takes one or two pages. It should not take two or three years to tell us.

Mr. Bernhardt: How do they justify making that distinction?

Ms. Chow: Therefore, yes, there should be a deadline. Ask them to show us how they calculate and justify it, and what the bottom line is. If they do not, they should be here justifying it to members.

[Translation]

Senator Boisvenu: Mr. Chair, I have been working for the government for some 30 years, so I know that fee structures are more complicated than people think. A department is never completely independent when it comes to raising or lowering fees. The procedures that are conducted within the Treasury Board or the Department of Finance are relatively complex and lengthy. I agree with Senator Hervieux-Payette that we should speak to the Department of Finance representatives to find out whether they are the ones we must convince, or whether departments set the fee structures themselves. The issue is more complex than we think, and we are perhaps targeting the wrong government body.

[English]

Mr. Boughen: Taxes are a variable that depends on a lot of things. Let me share with you the thought of municipal tax. House A is worth $1 million and House B is worth $500,000. If there is a fire at either home, the fire department does not stop and ask the value of the property. The fire department supplies a service to fight fires; firefighters respond to the call. The people who own the houses do not pay the same amount of money.

We almost need to have a definition of what we are talking about here; what the tax relates to. Once we define it, we can say, there it is — that is the tax.

People can challenge the right of the regulatory agency to set the tax or to say that this charge is this tax. Nonetheless, I think the definition is important. We need to say what kind of tax we are talking about, because goods and services are the same thing. If we have a tax and we buy a jacket, that tax in Ontario is 8 per cent or 10 per cent now — or it is harmonized, so it is now another number. However, if we buy that jacket in Alberta, there is no tax.

The Joint Chair (Mr. Kania): I want to bring this discussion back to the main concern here. In scrutinizing regulations, it is not for us to determine what should or should not be; it is about what is allowed. They are not allowed to charge a tax, period. They can charge a fee and there are legal criteria to determine whether that charge is a fee or tax. However, this looks like a tax.

They are arguing around the issue and not addressing whether the charge is a tax or fee. That is where we ask ourselves what we do about the fact that it looks and smells like a tax, but they are calling it a fee. What do we do about that situation? Sending another letter to ask them to agree with us that it is a tax will not accomplish much.

Mr. Boughen: Sometimes we pay for the service and tax at the same time. If we go to the dentist to have a filling replaced, the dentist charges a fee and there will be a tax on top of the fee.

The Joint Chair (Mr. Kania): To be clear, that comment was not a direct response to you; that was a macro analysis.

I do not think that sending a simple letter back to say we do not agree will accomplish much. We had the suggestion of possibly having hearings on this issue in the fall. Maybe we should start by bringing someone in to explain why they say what they say in the letter.

I hear both senators saying the issue is more complicated. I agree with that, but I want everyone to think about where we start. We must start somewhere.

Senator Moore: It may be more complicated, but I do not want us to create an escape hatch for these people who are not answering the question. We may say something and they will respond, oh, yes, you are right, and the item drifts again. I would rather have them appear to deal with this issue. We can address the larger picture and how it works. However, I do not want to make that kind of suggestion or indication, have them seize on that and start to waltz around again.

The Joint Chair (Mr. Kania): We can ask specifically who they report to and what they will do to change it.

Mr. Bernhardt: The committee is not in a position at this point to make a determination because it simply does not have the explanation yet.

Senator Moore is correct. There are two tracks. First is the specific issue on this particular fee. We want to hear the department's justification for the criterion under which it has been questioned so the committee can decide whether to accept that justification. There may be a good justification. The committee does not have it yet.

Second, Senator Hervieux-Payette has identified a broader issue. It includes the thorny question of fees, taxes and government charges; how they are imposed; who decides what mechanisms are appropriate; and who governs deciding when that line is crossed, which involves the Department of Finance, Treasury Board and legal opinions from the Department of Justice Canada. The committee can look into this broad issue also and hear from witnesses and Treasury Board on how those decisions are made, what policies there are, et cetera.

The Joint Chair (Senator Martin): Looking at the number of files we go through on a regular basis and the broader issue that the senator has raised, is there another committee that we can perhaps ask or suggest that they review it. That is not to say we should not do the study ourselves. Focus needs to be given to this particular issue to obtain clarification.

I like Mr. Albrecht's suggestion of a direct meeting with Mr. Bernhardt to ensure that the recipients of this letter — those officials — are clear about what our issue is. All of us around the table agree that Mr. Bernhardt has articulated the issue clearly in writing, but sometimes having a face-to-face meeting can reinforce that explanation.

Mr. Bernhardt: We can do it both ways: Write the letter and conclude by making the offer to sit down to meet for a discussion.

Mr. Albrecht: Failing satisfactory resolution at that level, we will ask them to appear before the committee. I am confident we can resolve the issue without spending another hour with witnesses before this committee. Maybe I am naive.

Senator Hervieux-Payette: I am conscious of the workload, but I want to stress that for the last 15 years, we have gone through this item over and over again. If we want to save time, maybe we need to get at the root of the question to save time in the future. That is the purpose of my request.

Counsel knows what we have gone through on this issue. These kinds of questions happen repeatedly in many departments. If we deal with the proper authority, we will probably be able to do our job in a more efficient manner. Meeting with them does not add to our workload, it may save time in the future so we will not be faced with those kinds of questions again. Is it a tax? How did they calculate it? How is it processed within the government? How did they arrive at these figures?

The Joint Chair (Senator Martin): I absolutely understand the importance of getting to the root of the problem and addressing it. My question was simply whether it is the role of this committee to do that. Senator Boisvenu also explained how complex the issue is. Does it require further in-depth study to be done elsewhere? I was not questioning the issue's importance, but where best to address it.

Mr. Szabo: I agree with the joint chair. Our mandate is clear; it was articulated that we want to ensure regulations are properly enabled and do not go where they should not go.

In this case, the principle established by the courts has not been met. Treasury Board issues go to the House of Commons Standing Committee on Government Operations and Estimates. This committee should not think of trying to conduct a study. It is beyond our mandate, although advising that committee and the president of Treasury Board of our concern, certainly, is part of our mandate.

I think probably two letters are involved in this issue. We probably should proceed to express our concern with this particular incident and that they specifically address the tax versus fee issue. If they come back to us in a communication to say that someone else's directive told them what to do and they have no latitude, then we can deal with it. However, on the broader issue, we possibly can send a letter to the president of the Treasury Board and copy the chair House Government Operations Committee and maybe an equivalent Senate committee.

The Joint Chair (Mr. Kania): I will go back to Mr. Bernhardt's comment, which is that we are still awaiting their answer. I suggest that we write a letter, ask for a formal response and offer a meeting. Once we receive their response, we take it to our steering committee for a fuller, longer discussion before coming back to the main committee with a recommendation.

We want to have a recommendation and a plan before the summer recess, do we not?

Mr. Bernhardt: My concern is that the first thing they will do when they receive our letter is go to the Department of Justice Canada looking for a legal opinion. That will be turned around and there will be meetings —

The Joint Chair (Mr. Kania): What if we ask for a meeting?

Mr. Bernhardt: At this point, I am leery of asking for a response within 30 days because, as I say, I expect that the first thing they will do is consult with the Department of Justice Canada, who will bring in a specialist. It will take much time to sort out and have the legal opinion transcribed into a letter from the client department.

The Joint Chair (Mr. Kania): They have already written the response.

Mr. Bernhardt: A response on a different issue.

The Joint Chair (Mr. Kania): That is correct. Push for a meeting date so we can deal with this before the summer.

Are members agreed?

Hon. Members: Agreed.

SOR/98-159 — MOTOR VEHICLE RESTRAINT SYSTEMS AND BOOSTER CUSHIONS SAFETY REGULATIONS

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

Mr. Bernhardt: Only one matter remains in this file. It pertains to provisions requiring that the surfaces of certain metallic parts of a seat belt assembly on a restraint system for disabled persons have no corrosion that may be transferred to the occupant or the occupants' clothing. As well, there are requirements relating to colour fastness, colour transferability and staining for the webbing of belts provided with these systems.

The Motor Vehicle Safety Act requires a vehicle, to which the national safety mark is applied, to conform to the applicable standards prescribed by the regulations. ``Standard'' is defined to mean ``a standard that governs the design, construction, functioning or marking of vehicles or equipment for the purpose of reducing the risk of death, injury or property damage from vehicle use.''

The committee questions whether this regulation authorizes standards that in the department's words ``were created on the basis of comfort and convenience for consumers.'' The department's argument is that since the use of belt systems will be encouraged, if the cleanliness and appearance of these systems do not deteriorate, provisions such as those in question are safety-related. The problem is that whether the belt system retains its colour, is colourfast or will not stain clothing has nothing to do with the safety of that system.

A distinction can be drawn between a safety-related standard in Schedule 6 of the regulations dealing with corrosion that is intended to prevent rust that will weaken metal parts of seat belt assemblies and the provision here that deals with corrosion purely for the protection of the clothing of people using the belts. The committee has taken the view that the first one is a safety standard and the second one is not a safety standard. A seat belt will fulfill its function regardless of whether the webbing is colourfast. Rather than set out a safety standard, the provisions are best characterized as intended to influence people's behaviour. The department's concern is that eliminating the requirements can potentially reduce seat belt use, but it does not speak to the safety of the belt. The goal is admirable but goes beyond the scope of the current Motor Vehicle Safety Act. It is suggested that if it is considered essential to impose requirements related to staining and colourfastness, then the Motor Vehicle Safety Act needs to be amended to provide clear authority to do so. If members agree the issue should be pursued, the recommendation is to write to the minister because discussions with departmental officials have reached an impasse.

As of yesterday, these regulations were replaced with new regulations, which do not directly contain these same requirements. However, they are set out in a technical document incorporated by reference into the new regulations, so the same problem still remains.

The Joint Chair (Mr. Kania): Are members agreed that we write to the minister?

Hon. Members: Agreed.

SOR/2003-346 — CANADIAN PAYMENTS ASSOCIATION BY-LAW NO. 3 — PAYMENT ITEMS AND AUTOMATED CLEARING SETTLEMENT SYSTEM

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

Shawn Abel, Counsel to the Committee: Although it took some two years to receive a substantive reply on this file, amendments were promised to resolve five of the six concerns initially raised by the committee. These amendments were made recently by SOR/2010-43. That instrument will come into force on the day that section 422(3) of the statute, SC2007, Chapter 6, comes into force. That day is to be fixed by order of the Governor-in-Council. Other than drafting concerns, one of the promised amendments will revoke and remake an invalid provision under proper statutory authority, and another promised amendment will remove unnecessary and subjective terminology in relation to an administrative decision.

Point 2 of counsel's initial letter remains outstanding and concerns the discretion granted to the Board of Directors of the Canadian Payments Association to approve or revoke the clearing status of an institution, notwithstanding that the criteria set out in the bylaw for those actions may be met. The association suggests that this discretion must be exercised on a case-by-case basis, and that there are no factors or administrative guidelines to be set out in law, with the exception of the association's statutory objects as set out in the Canadian Payments Act.

The December 14, 2009, letter also explains one example given where the board might refuse to approve a new clearer due to ``negative efficiency implications.'' The board gives detailed explanations of what that situation would mean in that context. On the face of the reply, it does not seem possible to clarify the board's discretion any further in the bylaw. The question for members is whether this situation is satisfactory. A letter can be drafted to ask when the promised amendments are expected to come into force.

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

Hon. Members: Agreed.

SOR/2008-197 — STORAGE TANK SYSTEMS FOR PETROLEUM PRODUCTS AND ALLIED PETROLEUM PRODUCTS REGULATIONS

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

Mr. Abel: Eleven points of concern were raised regarding these regulations, which replace an earlier regulation and resolve a drafting concern previously raised by the committee. Amendments are promised to address nine new points dealing with matters of drafting and French/English equivalency. In addition, the department's reply on point 11 appears to be satisfactory. This leaves only point 5, which deals with the requirement under three provisions that certain tests be performed using a validated method. The department explains that the term ``validated method'' means certain ``industry-recognized technical standardized tests.'' It might be that this term can be considered a term of art, which will be understood by persons governed by the regulations. On the other hand, perhaps regulations should name the methods required.

In any case, a further letter can be drafted to at least seek a progress report on the promised amendments.

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

Hon. Members: Agreed.

SOR/99-467 — CANADA TRAVELLING EXHIBITIONS INDEMNIFICATION REGULATIONS

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

Mr. Bernhardt: The promised amendment to section 10 of these regulations mentioned in the correspondence has been made by SOR/2010-13. The other aspect that had been questioned was section 11(2)(e) referring to conditioned reports, although the regulations apparently contemplate there being only one condition report. The department explained that there are other condition reports that may be created pursuant to the indemnity agreements with each institution. This explanation seems to be satisfactory. As well, certain explanatory material on the department's website was inaccurate. This material was to be corrected but, as of this week, that had not been done. A reminder should be sent to the department. As soon as those corrections have been posted, the file can be closed.

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

Hon. Members: Agreed.

SOR/2006-148 — REGULATIONS AMENDING THE REPORTING OF IMPORTED GOODS REGULATIONS

SOR/2006-155 — REGULATIONS AMENDING THE REPORTING OF IMPORTED GOODS REGULATIONS

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

Mr. Abel: Two points were pursued after this file was last before the committee. On the first point, the agency assures the committee that, in the future, the proper statutory authority for these kinds of amendments will be cited and that an amendment suggested to the act by the committee has been added to the agency's list of future possible amendments to the act. That response seems satisfactory.

In connection with the amendment promised to address the second point, the agency's last letter indicated that it was expected to proceed through the winter months. However, no amendment has been made yet, and an updated progress report can be sought.

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

Hon. Members: Agreed.

SOR/2001-520 — CANADA INDUSTRIAL RELATIONS BOARD REGULATIONS, 2001

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

Mr. Bernhardt: Amendments have been promised to address all the concerns raised. The more minor amendments are expected to be made this year. The more substantive ones are to be included in a broader review of the regulations. In her December 4 letter, the chairperson of the board advised that the objective is to complete this second phase by the end of 2012. The question for the committee is whether it feels this time frame is reasonable in the circumstances.

The Joint Chair (Mr. Kania): Are there comments? Seeing no opposition, we think that is reasonable.

SOR/92 — 620-CORRECTIONS AND CONDITIONAL RELEASE REGULATIONS

SOR/96 — 108-CORRECTIONS AND CONDITIONAL RELEASE REGULATIONS, AMENDMENT

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

Mr. Bernhardt: Again, amendments have been promised to the regulations, as well to the Corrections and Conditional Release Act itself. The amendments to the act were introduced in the last session. They were in Bill C-43 and Bill C-53. Both those bills died on the Order Paper, so perhaps the department can be asked if the provisions addressing the committee's concerns will be reintroduced.

Amendments to the regulations requested by the committee have been prepared. Apparently they were awaiting the passage of the amendments to the act. Again, the department can be asked whether this remains its intent.

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

Hon. Members: Agreed.

SOR/2003-174 — CANADIAN PAYMENTS ASSOCIATION BY-LAW NO. 1 — GENERAL

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

SOR/2003-175 — CANADIAN PAYMENTS ASSOCIATION BY-LAW NO. 2 — FINANCE

SOR/2003-347 — CANADIAN PAYMENTS ASSOCIATION BY-LAW NO. 6 — COMPLIANCE

Mr. Abel: Chair, if it is acceptable, I propose to cover as a group the next three files, concerning bylaws of the Canadian Payments Association.

A total of nine promised amendments to these bylaws were made recently by SOR/2010-43. That instrument will only come into force on the day that section 422(3) of SC2007, Chapter 6, comes into force, which day is to be fixed by order of the Governor-in-Council.

Two other amendments to the Canadian Payments Act itself were promised in connection with SOR/2003-347. These amendments were also made by the statute I mentioned, and those amendments are already in force.

The Joint Chair (Mr. Kania): Is it agreed?

Hon. Members: Agreed.

SOR/2008-151 — REGULATIONS AMENDING THE PACIFC PILOTAGE TARIFF REGULATIONS (ADDITIONAL CHARGES)

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

Mr. Abel: When this file was last before the committee, the department had promised to have a proposed amendment published by the end of 2009 to resolve the discrepancy between the French and English versions of the definition of ``hampered ship.'' Proposed amendments to these regulations published in October did not include the promised amendment, prompting counsel to seek an explanation.

The department's letter of December 3 indicated that prepublication of an instrument addressing the omission was expected in 2010. This prepublication has not yet been done, so perhaps an update as to progress on that instrument can be sought.

The Joint Chair (Mr. Kania): Is it agreed?

Hon. Members: Agreed.

SOR/92-631 — VINYL CHLORIDE RELEASE REGULATIONS, 1992

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

Mr. Bernhardt: In June 2007, the committee was informed that promised amendments were to be made in the upcoming months. By December 2007, the forecast completion time was the first quarter of 2008. Things were then delayed when a previously identified issue apparently arose in the course of the approval process. According to the department, this issue led to further study and review.

Last December, the department advised it expected its review to be complete by the end of January. At this point, perhaps the department can be asked whether this expectation has proven to be the case, as well as for a firm time frame by which it now expects the amendments to be completed.

The Joint Chair (Mr. Kania): Is it agreed?

Hon. Members: Agreed.

SOR/2003-219 — PASSENGER INFORMATION (CUSTOMS) REGULATIONS

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

Mr. Abel: A concern was raised initially that section 4 of these regulations was ultra vires the enabling act. Although the committee was persuaded this was not the case, the concern remained that section 4 was so poorly drafted as to give rise to that confusion.

A non-substantive amendment was therefore agreed to in the May 15, 2008 letter from the Canada Border Services Agency. As members can see in the letters before them today, this item was nearing completion in 2009 but has now been delayed to include it in a broader package of anticipated amendments to these regulations, which is expected to be made in 2011.

The question for members is whether this delay, under the circumstances, is acceptable.

The Joint Chair (Mr. Kania): Is it agreed? No oppositon?

Senator Moore: What are we doing with it?

Mr. Abel: In this case, we will continue to seek regular updates as to whether they will meet that timeline — that the package goes forward in 2011.

Senator Moore: We will wait another year, is that right?

Mr. Abel: In essence, yes.

Senator Moore: Somehow, that is not acceptable. Is there nothing we can do to advance the file quicker than that?

Mr. Bernhardt: It is always open to the committee to make the suggestion that its amendment proceed independently. In this case, it is one minor amendment for the purpose of clarifying how a provision reads.

That being the case, the suggestion is that the committee may choose to exercise a little more patience here. That does not mean we put the file aside and write again at the end of 2011 if nothing happens. We will bring it forward and ask for a regular progress report. If it looks like that deadline is falling farther back, the file will come back to the committee at that point.

Senator Moore: Reluctantly, okay.

SOR/2003-355 — OFF-ROAD SMALL SPARK-IGNITION ENGINE EMISSION REGULATIONS

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

Mr. Abel: Amendments to resolve all seven issues raised on this file have been promised since March 2006. As the correspondence before members indicates, completion of the amendments has been delayed several times since then.

The department's most recent letter of December 8, 2009, indicated that an omnibus package, including the promised amendments, was in the works and was expected to be completed in the spring of this year. Nothing has been made yet, so perhaps another update on the status of these amendments can be sought.

The Joint Chair (Mr. Kania): Is it agreed?

Hon. Members: Agreed.

SOR/2006-241 — REGULATIONS AMENDING THE FOOD AND DRUG REGULATIONS (DATA PROTECTION)

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

Mr. Abel: Three points on this file were pursued again with the Department of Health, following the committee's last consideration. The first point deals with the statement in the regulations that the specified section ``applies'' to the ``implementation'' of Article 1711 of the North American Free Trade Agreement, NAFTA. This statement, as it is worded, does not make sense.

The department has previously stated that this statement is intended to be a purpose statement. While counsel's April 23, 2008 letter explained how such a statement can be worded properly, the department appears to have taken this explanation as a suggestion that such an amendment should be made.

This overlooks the second paragraph — point one of counsel's same letter — which points out this statement should be removed as it is unnecessary. This point ccan be emphasized again.

With respect to points one and two, amendments were promised, but the department prefers to wait until ongoing litigation concerning this section concludes. It seems unlikely that litigation will be affected by the amendments suggested by the committee. However, these points involve matters of clarification rather than substance, so perhaps this response is acceptable.

As of November 3, 2009, the relevant litigation had entered the appeal process. At the least, this litigation should not be expected to be resolved until late this year — assuming no further litigation is pursued, such as a return to the trial level or further appeal to the Supreme Court.

Finally, it is suggested that a satisfactory reply was received on the third point, acknowledging that the minister's failure to perform a mandatory duty imposed by these regulations constitutes an offence under the enabling act.

If members are agreed, a letter pursuing point one and seeking an update on the state of the litigation can be drafted.

The Joint Chair (Mr. Kania): Is it agreed?

Hon. Members: Agreed.

SOR/2008-80 — REGULATIONS AMENDING THE LAURENTIAN PILOTAGE AUTHORITY REGULATIONS

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

Mr. Bernhardt: This instrument made four corrections that had been previously requested by the committee. However, three new points were raised: two of these concerned discrepancies between the English and French versions; and the third questioned the purpose of section 32 of the regulations.

The reply from the Laurentian Pilotage Authority states that amendments will be made in response to the matters raised. There is no explanation furnished in connection with section 32, however, so it is unclear what the nature of any amendment to this provision might be. When seeking a progress report, perhaps some details can be asked for in this connection.

The Joint Chair (Mr. Kania): Is it agreed?

Hon. Members: Agreed.

SOR/2009-110 — GLASS DOORS AND ENCLOSURES REGULATIONS

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

Mr. Bernhardt: Again, an amendment is promised on this provision to remove a discrepancy between the two versions, and a progress report on that will be sought after the meeting.

The Joint Chair (Mr. Kania): Pursuant to tradition, I will let you go through part 10, ``Action Taken,'' as a group.

SOR/2010-14 — ORDER 2010-87-01-01 AMENDING THE DOMESTIC SUBSTANCES LIST

SOR/2009-39 — ORDER 2008-87-12-01 AMENDING THE DOMESTIC SUBSTANCES LIST

(For text of documents, see Appendix R, p. 4R:1.)

SOR/2009-329 — REGULATIONS AMENDING THE PACIFIC PILOTAGE REGULATIONS

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

SOR/2010-26 — REGULATIONS AMENDING THE CANADIAN AVIATION REGULATIONS (PARTS I AND IV)

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

SOR/2010-38 — REGULATIONS AMENDING THE CONTROLLED PRODUCTS REGULATIONS

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

Mr. Bernhardt: There are five instruments listed under ``Action Taken.'' Together, they make 13 amendments that were requested by the committee.

In particular, I refer to SOR/2010-38. Four of the amendments made by this instrument replaced provisions whose legality had been questioned by the committee.

SOR/2009-40 — REGULATIONS AMENDING THE PUBLIC ACCOUNTABILITY STATEMENTS (BANKS, INSURANCE COMPANIES, TRUST AND LOAN COMPANIES) REGULATIONS

SOR/2009-46 — REGULATIONS AMENDING THE DISCLOSURE OF INTEREST (RETAIL ASSOCIATIONS) REGULATIONS

SOR/2009-48 — REGULATIONS AMENDING THE DISCLOSURE OF CHARGES (AUTHORIZED FOREIGN BANKS) REGULATIONS

SOR/2009-49 — REGULATIONS AMENDING THE ACCESS TO BASIC BANKING SERVICES REGULATIONS

SOR/2009-50 — REGULATIONS AMENDING THE DISCLOSURE OF CHARGES (BANKS) REGULATIONS

SOR/2009-52 — REGULATIONS AMENDING THE DISCLOSURE OF CHARGES (TRUST AND LOAN COMPANIES) REGULATIONS

SOR/2009-53 — REGULATIONS AMENDING THE NOTICES OF DEPOSIT RESTRICTIONS (AUTHORIZED FOREIGN BANKS) REGULATIONS

SOR/2009-54 — REGULATIONS AMENDING THE DISCLOSURE ON ACCOUNT OPENING BY TELEPHONE REQUEST (AUTHORIZED FOREIGN BANKS) REGULATIONS

SOR/2009-55 — REGULATIONS AMENDING THE DISCLOSURE ON ACCOUNT OPENING BY TELEPHONE REQUEST (BANKS) REGULATIONS

SOR/2009-56 — REGULATIONS AMENDING THE DISCLOSURE ON ACCOUNT OPENING BY TELEPHONE REQUEST (RETAIL ASSOCIATIONS) REGULATIONS

SOR/2009-57 — REGULATIONS AMENDING THE DISCLOSURE ON ACCOUNT OPENING BY TELEPHONE REQUEST (TRUST AND LOAN COMPANIES) REGULATIONS

SOR/2009-58 — REGULATIONS AMENDING THE COMPLAINT INFORMATION (TRUST AND LOAN COMPANIES) REGULATIONS

SOR/2009-59 — REGULATIONS AMENDING THE COMPLAINT INFORMATION (AUTHORIZED FOREIGN BANKS) REGULATIONS

SOR/2009-60 — REGULATIONS AMENDING THE COMPLAINT INFORMATION (BANKS) REGULATIONS

SOR/2009-61 — REGULATIONS AMENDING THE COMPLAINT INFORMATION (RETAIL ASSOCIATIONS) REGULATIONS

SOR/2009-62 — REGULATIONS AMENDING THE COMPLAINT INFORMATION (FOREIGN INSURANCE COMPANIES) REGULATIONS

SOR/2009-63 — REGULATIONS AMENDING THE COMPLAINT INFORMATION (CANADIAN INSURANCE COMPANIES) REGULATIONS

SOR/2009-214 — CPFTA RULES OF ORIGIN REGULATIONS

SOR/2009-215 — CPFTA RULES OF ORIGIN FOR CASUAL GOODS REGULATIONS

SOR/2009-216 — CPFTA TARIFF PREFERENCE REGULATIONS

SOR/2009-217 — CPFTA SUGAR AGGREGATE QUANTITY LIMIT ORDER

SOR/2009-228 — ORDER AMENDING THE CCRFTA SUGAR AGGREGATE QUANTITY LIMIT ORDER

SOR/2009-299 — ORDER AMENDING THE ALLOCATION METHOD ORDER (BEEF AND VEAL)

SOR/2009-301 — REGULATIONS AMENDING THE CANADIAN HATCHING EGG PRODUCERS QUOTA REGULATIONS

SOR/2009-308 — REGULATIONS AMENDING THE CORRECTIONS AND CONDITIONAL RELEASE REGULATIONS

SOR/2010-25 — REGULATIONS AMENDING THE CANADIAN INTERNATIONAL TRADE TRIBUNAL PROCUREMENT INQUIRY REGULATIONS

SOR/2010-29 — RADIOCOMMUNICATION ACT (SUBSECTION 4(1) AND PARAGRAPH 9(1)(b)) EXEMPTION ORDER (SECURITY, SAFETY AND INTERNATIONAL RELATIONS), NO. 2010-1

SOR/2010-30 — REGULATIONS AMENDING THE CANADIAN TURKEY QUOTA REGULATIONS, 1990

SOR/2010-31 — REGULATIONS AMENDING THE CANADIAN TURKEY MARKETING QUOTA REGULATIONS, 1990

Mr. Bernhardt: Finally, on item 11, I note there are 29 instruments listed under ``Statutory Instruments Without Comment'' that have been reviewed by counsel and found to comply with all the committee's scrutiny criteria.

The Joint Chair (Mr. Kania): Are there any comments or questions? Thank you very much. The next meeting is the first Thursday after the break week.

(The committee adjourned.)

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