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Proceedings of the Standing Joint Committee on
Scrutiny of Regulations

Issue 7 - Evidence

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OTTAWA, Thursday, May 15, 2003

The Standing Joint Committee of the Senate and the House of Commons for the Scrutiny of Regulations met this day at 8:35 a.m. for the review of Statutory Instruments.

Senator Céline Hervieux-Payette and Mr. Gurmant Grewal (Joint Chairmen) in the Chair.

[English]

The Joint Chairman (Mr. Grewal): I call the meeting to order. Good morning.

Mr. Cummins: Mr. Chairman, you will recall that, at our March 20 meeting, Mr. Farrah, Secretary of the Minister of Fisheries and Oceans, made a number of promises to the committee concerning the Aboriginal fishing regulations. When Mr. White asked Mr. Farrah when he intended to initiate that process, Mr. Farrah said that he would bring the matter to the committee early on. In fact, Mr. Lee asked him as well. Mr. Lee said the following:

I would like to ask if Mr. Farrah, the Parliamentary Secretary to the Minister of Fisheries and Oceans, could clarify the intentions of the department vis-à-vis consultation with this committee before the amendments are crystallized and presented to the House this spring.

Mr. Farrah replied that before any amendments are formally introduced to the House of Commons, the department is committed to meeting with this committee to discuss the various options. He went on to clarify that by ``session'' he meant the spring session. Theoretically, the spring session ends in June. Mr. Chairman, you asked Mr. Farrah if it would be possible for him to attend the following week, and he replied that he would have to check but that it will be as soon as possible. Mr. Farrah said the following: ``We want to ensure to meet the members of the committee before the minister presents the amendments in the House of Commons. Our objective is to ensure that we will have amendments introduced by the House of Commons before June.'' Mr. Lee said: ``Let us signal to the department and the minister that we are ready to receive some form of consultation on the proposed options at an early date and as soon as they are ready.''

The Joint Chairman, Senator Hervieux-Payette, told Mr. Farrah that the committee anticipates that Mr. Farrah will update the committee at the April 3 meeting as to the possible options that could be put forward, to which Mr. Farrah replied that, given the amount of time the committee had devoted to this matter, it is the least they could do.

Mr. Chairman, Mr. Farrah has not been back to the committee since that meeting. To my knowledge, the government has not presented any of these proposed amendments to the committee. I wish to know just what the status of that matter is, Mr. Chairman.

The Joint Chairman (Mr. Grewal): Thank you, Mr. Cummins. It is right that Mr. Farrah made those statements. Does our counsel have any views on that?

Mr. Francois-R. Bernier, General Counsel to the Committee: No, I do not.

The Joint Chairman (Mr. Grewal): We will follow up on this and the members will be updated on the progress at the next meeting.

Mr. Cummins: Mr. Chairman, given that today's date is May 15 and that the next meeting will be at the end of May, there is hardly time to bring amendments before the House and get them through. It would seem to me quite clear that Mr. Farrah has not lived up to his commitment to the committee. The committee at that time agreed to withdraw or withhold a disallowance motion to the House based on the commitment of Mr. Farrah and the minister. I should like to know, Mr. Chairman, the committee's intentions with regard to that obligation and those commitments.

The Joint Chairman (Mr. Grewal): Thank you, Mr. Cummins. Our next meeting is on May 29. If the members want Mr. Farrah to appear before us at the next meeting, we will communicate to the department our desire to have the parliamentary secretary appear before the committee.

Mr. Cummins: Mr. Chairman, we withheld the motion on the disallowance based on the commitment that we would be presented with these amendments before they went to the House so that the committee could comment on them. The rumours are rampant that the House will rise in early June. Even if it does not rise then, there is not enough time for us to review those amendments and for them to pass the House before the summer break. In other words, we will be into another fishing season where DFO will attempt to operate exclusive native commercial fisheries illegally.

It is a function of this committee to rule on those matters and, when it finds that the government is in contravention of the law, to move a disallowance motion. This matter has been before the committee for seven years. I should like to know, Mr. Chairman, the intentions of the committee in this respect.

The Joint Chairman (Mr. Grewal): We will follow up on this matter, Mr. Cummins. I agree that we had a commitment from DFO and that the parliamentary secretary promised that some form of legislation would be presented to the House. To date, the chair has not had any formal communications from the minister or the department. Committee members should discuss this issue at the next meeting and determine the possibility of having the parliamentary secretary, the minister or any official, as the case may be, appear before the committee, to follow-up their commitment on this issue. I think that is the best I can do at this moment.

Mr. Cummins: Mr. Chairman, the next meeting will be too late to initiate anything. It will be too late to initiate a disallowance, and it will be too late to get the matter before the House of Commons. In fact, if the committee instructed counsel now to prepare a disallowance motion for the next meeting, it may be that it would be too late to present that disallowance to the House because there may not be enough sitting days.

Is the committee prepared to take action on this matter today, Mr. Chairman?

The Joint Chairman (Mr. Grewal): Mr. Cummins, I will conclude this matter by saying that in the last meeting members had given the department an opportunity to present the legislation in the House to correct those regulations that this committee thinks are not valid. The minister made a commitment that the legislation will be introduced in the fall.

Mr. Cummins: Not the fall, Mr. Chairman, for this fishing season.

The Joint Chairman (Mr. Grewal): It was to be during this particular session, before the break. I meant before the break. We have not heard anything from the minister yet, so it is about time. I will have counsel follow through with the department to see where we are.

Perhaps legislation is on its way. We do not know yet, because we have not heard from the minister or department officials. That is the way I would leave it at the moment.

Mr. Cummins: Mr. Chairman, it was clear from the information I read into the record that Mr. Farrah, the secretary to the minister, made a commitment to provide this committee with the changes in the proposed legislation before they were presented to the House, presumably, for the committee's scrutiny to ensure that the regulations would be appropriate. That has not happened. In fact, Mr. Farrah has not returned to this committee since that time. We have had no correspondence.

It is May 15. In fact, the fishing season has already started as far as food, social and ceremonial fisheries go. Very shortly, the regular fishery will be opening. I would like to know what action the committee plans to take on this particular matter.

The Joint Chairman (Mr. Grewal): You are right.

Mr. Cummins: Waiting is not an option, Mr. Chairman.

The Joint Chairman (Mr. Grewal): I agree. Your point is well taken. Is there any other comment at the table on this issue? My best conclusion at this moment would be that we should follow through with the department and, if possible, have a witness appear before the committee to give us any briefing on progress made up to now.

Mr. Cummins: Mr. Chairman, could I make the motion that counsel be instructed to have available at the next meeting of this committee a disallowance motion that will be presented to the House if the appropriate action has not been taken by the minister at that point? The committee, for its own dignity, has to move on this matter. The very least that could be done is that at the next sitting of the committee a disallowance motion is ready for presentation in the House. That is the very least we could do.

Otherwise, I must wonder why the government members on this committee are refusing to move with that disallowance and refusing to call the government to account when it is acting illegally.

I make the motion that counsel prepare a disallowance motion for presentation in the House to be dealt with by the committee at its next meeting, as the first order of business, Mr. Chairman.

The Joint Chairman (Mr. Grewal): Is the motion seconded?

Mr. Lee: Mr. Chairman, we have an agenda today. We have witnesses here.

I do not mind members proposing motions. However, I am not comfortable getting into a debate on a motion, if there is to be debate, that pre-empts other business when there has not been any prior notice. We work pretty collegially here. I will not turn away a members' motion, but I would ask that if there were to be a motion that we have notice. I am not prepared to agree to it as it stands now. I suggest that we proceed with our agenda as planned.

Mr. Cummins' concerns, on the interim, can probably be taken care of either by a letter or by a phone call in the normal course.

Mr. Cummins: Mr. Chairman, on that, I want to remind you of the briefing note, the memorandum for the minister, that I read into the record last time that indicated that talking points had been prepared for a member of this committee.

The Joint Chairman (Mr. Grewal): There is a motion on the table. Is there a seconder to the motion?

Senator Nolin: Yes.

The Joint Chairman (Mr. Grewal): Any comment? We do not want to prolong it. We can call the question. Everyone knows all the issues. All the members are familiar with the issue. We will entertain brief comments.

[Translation]

Senator Nolin: In the last 10 years, the Department of Fisheries and Oceans has shown us, especially with regard to these regulations in particular, that there is lack of good faith towards our committee. The department only responds under pressure. I think it would be appropriate to ask our legal adviser to draft the motion. It does not commit us to anything, but the fact that the department knows what our position is will increase the pressure.

[English]

Senator Moore: Could I have the motion read, please?

Mr. Till Heyde, Joint Clerk of the Committee: The motion is as follows: That counsel be instructed to have available at the next meeting a disallowance report on the Aboriginal communal fishing licences regulations for consideration by the committee.

Mr. Cummins: As the first order of business.

The Joint Chairman (Mr. Grewal): We already have that report prepared, as you know.

Can we call the question? All those in favour of the motion please raise hands. All those opposed? We have a tie?

I support the motion.

Carried. The motion passes, and it will be the first item on the agenda next meeting.

Mr. Cummins: Thank you Mr. Chairman and my apology to the witnesses for the delay.

The Joint Chairman (Mr. Grewal): Today, we have a special agenda item. We have a presentation by officials of the Treasury Board. As the members know, representation was made by members with regard to fees levied under Part II of the Broadcasting Licence Fee Regulations, 1997, and certain marine services fees charged for icebreaking services. Therefore, this special presentation was organized.

The purpose of the presentation is to provide an overview of the general principles and policies applicable to the prescription of fees based on cost recovery and to clarify the distinction between fees and taxes and the limits, if any, on the imposition of fee by various governmental authorities. We will not be very specific. Our conversation will be regarding the overall policy of the government in this regard.

This will be followed up by an examination of the actual broadcasting licensing fees and marine services fees and appearances by officials of the responsible departments.

We have here Treasury Board officials. Mr. John Morgan will open the presentation. Ms. Suzanne Shirreff will follow Mr. Morgan.

Mr. Morgan, you may begin.

Mr. John Morgan, Executive Director, Financial Management and Accounting Policy Directorate, Comptrollership Branch, Treasury Board of Canada, Secretariat: I should like to thank honourable members for the opportunity to appear before you to discuss the cost recovery and charging policy and the process by which user fees and charges are implemented by departments and agencies that are subject to that policy. I wish to make a few general observations.

Charging for government services is not new. User charging dates back to Confederation. It is not unique to Canada. Virtually all countries, including our major trading partners, have established charges for similar services and programs. We believe that user charges that are implemented in accordance with legal authority and in an open, transparent and participatory manner, as required under the policy, are legitimate, fair and reasonable. Ms. Shirreff will elaborate on this position in her presentation.

Some industry associations have voiced concerns about the way departments and agencies have implemented certain elements of the policy. While we acknowledge that some departments and agencies are experiencing difficulties, it is our conclusion, based on information available to us, that overall the policy is working reasonably well.

We believe that the problems cited by these industry associations, such as the failure to meet service standards, are largely associated with a few regulatory programs and, in our view, have less to do with the cost recovery and charging policy and more to do with general program management.

It is also evident that not all regulatory programs are experiencing the same levels of difficulties, and I can assure you that the difficulties that have been cited are not shared by the majority of programs and activities for which there are charges.

[Translation]

Ms. Suzanne Shirreff, Senior Director, Cost Recovery Policy Division, Comptrollership Branch: The cost-recovery and charging policy is a very complex issue and is often misunderstood, not only outside of government, but sometimes within government.

[English]

To thoroughly address all of the many elements and issues associated with the policy would take considerably more time than is available to us today. With this in mind, I have prepared a short presentation that briefly touches on an overview of charging, responsibilities, the legal basis for charging and the fee-setting process, the principles and requirements of the current 1997 cost recovery and charging policy, and the revisions we are proposing, which are based on the results of our review of its implementation by departments and agencies.

I will also address two questions that I understand are of particular interest to this committee — that is, user charges and taxes, and limits on user charges.

Let me begin with the first question. We often hear this question: Are user charges not just another form of taxation? Let me assure you that user charges, as implemented and amended under the cost-recovery and charging policy, are not taxes. User charges and taxes differ in their nature, function and in the way they are approved.

Taxes are mandatory levies, the approval of which rests exclusively with Parliament. Taxes need not bear any direct relationship between the use of public services or programs, or benefits derived from them. Typically, taxes are used to fund services and programs for which all Canadians derive benefits, such as National Defence.

User charges, under the 1997 cost-recovery and charging policy, are payments made by firms or individuals in exchange for a special good or service or activity provided to them, or a special right or privilege enjoyed by them — a right or privilege granting permission to exploit a publicly owned or controlled resource, such as mineral rights on Crown property or access to the radio frequency spectrum.

I will now turn briefly to an overview of charging. Revenues from user charging have typically amounted to about $4 billion annually over the past several years. That is roughly 2 per cent of total government revenues. While this is not large in absolute terms, for some departments and agencies these revenues can represent a significant percentage of their operating costs.

Departments and agencies, covering some 400 programs or activities, generate these revenues. Of the $4 billion, approximately 44 per cent is derived from rights and privileges, 26 per cent from services provided to other governments, for example, RCMP policing, 13 per cent from the sale of goods or optional use of services, for example, scientific and technical services, and the balance, 17 per cent, from regulatory or mandatory services, for example, drug approvals or icebreaking.

As you can see, when the revenues from services provided to other governments are removed, where charges are typically set by negotiation, revenues from charging amount to slightly less than $3 billion a year.

Individual ministers and departments are responsible for establishing or amending charges. Charges may be established or amended under four forms of legal authority. Individual ministers and departments may establish or amend charges pursuant to enabling legislation, for example, the Royal Canadian Mounted Police Act or the National Research Council Act, or under program legislation, like the Aeronautics Act or the Grain Act. In the absence of specific departmental legislation, ministers may also establish charges for services, the use of facilities or for rights and privileges under section 19 of the Financial Administration Act.

Ministers and departments may also establish charges through the ministerial-contracting authority. This is a non- legislative authority, based on common law. Typically, this authority is used for optional services — for example, scientific and technical services. Again, the contracts are negotiated.

The majority of charges are established either through Governor-in-Council regulations or ministerial orders. They are subject to the government's regulatory policy, which is administered by the Privy Council Office. The regulatory policy requires consultations, assessment of the effects of the charges, as well as legal review, pursuant to the Statutory Instruments Act and review by this committee.

The decision to implement or amend a charge and the level of the charge also rests with ministers or departments, subject to the appropriate direct or subordinate legislation, the cost-recovery and charging policy, and the government's regulatory policy when applicable.

The Treasury Board Secretariat reviews proposals to establish or amend charges and makes recommendations to the Treasury Board when Treasury Board approval is required by legislation, or a previous cabinet or Treasury Board decision. Our review of the proposal focuses on authorities and adherence to the requirements of the cost-recovery and charging policy, namely, that departments and agencies demonstrate that they have made reasonable efforts to notify users of new or modified fees before they are implemented; that they have undertaken meaningful and effective consultations with users throughout the fee-setting process; that they have given affected parties the opportunity to provide input and provide feedback to users on comments; that they have assessed the effects, both positive and negative, of the fees and factored them into the fee-setting process; that they have identified and explained to users why services are delivered in the manner by which they are, and that they have established service standards, where it is practical and reasonable to do so, and how they are costed and how the charges are determined; and that they have established a dispute management to address user complaints that reach an impasse stage.

All federal organizations considered to be departments under section 2 of the Financial Administration Act are subject to the 1997 cost-recovery and charging policy. The policy is based on sound economic and public finance principles, principles that are typically shared by other jurisdictions — the efficient allocation of resources. By subjecting government services or programs to a market test of demand and supply, charging promotes the efficient allocation of resources and reduces excess demand for services and programs perceived to be free.

As an equitable approach to the financing of government programs where users receive a special service above and beyond the service provided to the general taxpayer, charging is a fair and reasonable way to fund all or part of the cost of providing that service. Charging users for the right to use or access government-controlled or government-owned resources for commercial purposes permits the government to earn a fair rate of return on behalf of all Canadians for the access to or use of these resources.

The policy identifies and provides guidance on several requirements. Our policy typically asks departments and agencies to consider more requirements. We generally provide more guidance on them than do other jurisdictions in their charging policies. In fact, none of the several national and provincial jurisdictions studied addresses dispute management.

The key requirements of the policy are that departments must make reasonable efforts to notify users on any new or modified fees before they are implemented; that they undertake meaningful and effective consultations with users; that they give affected parties the opportunity to provide input and feedback; that they have assessed the effects, both positive and negative, of fees and factored them into their fee-setting decisions; that they have identified and explained to users why services are delivered in the manner that they are; that they develop service standards where it is practical and reasonable to do so; and that they establish dispute processes to address user complaints that reach an impasse stage.

Based on the results of the review of the implementation of this policy by departments and agencies, we are proposing a number of revisions to the 1997 cost-recovery and charging policy. These are intended to enhance the accountability of the fee-setting process by strengthening policy requirements that are within the direct control of departments and agencies, by making the process more open and transparent and by improving reporting to Parliament and the public.

These revisions include more stringent requirements with respect to consultations with stakeholders, mandatory development of service standards and performance results, including explanations of variances and options for corrective action when standards are not met, and improved monitoring of the implementation of the policy by departments and the Treasury Board Secretariat.

Improved reporting to Parliament is recommended in departmental reports on plans and priorities and departmental performance reports, on a broad range of charging parameters including revenues, charges, authorities, costs, service standards, performance measurement, consultations and special studies.

I turn now to the question of limits on fees. Departments and agencies are required to determine the full cost of providing goods, services and programs. This ensures that both the department and the users are aware of the full cost. Charges for goods, for optional services and for regulatory or mandatory services, for information products and for the use of public facilities and rights and privileges of a personal nature must be cost based. That is, they are not to exceed the full cost of providing them. Typically, charges for services, be they optional, regulatory or mandatory, are set below the full cost of providing the service. In fact, the majority are priced well below the full cost, although in some instances some charges approach 85 per cent of the full costs.

Charges for the sale, lease or licence of public property, or for rights and privileges which are de facto inputs to commercial activities, are set based on market rates.

Mr. Lee: Thank you. That was probably a good start to our exercise here.

I have a reasonable understanding of the complex area that you have outlined for us. Not only is it complex, but apparently it is always under revision. We are always revising things in Parliament here, too. That is why we are in business.

However, you did not mention — and I realize you have tried to structure the whole area of fees — but you implied, I suppose, that the one area where you cannot go and do not go is the area of taxation. You can work with fees but, without express authority from Parliament, nobody taxes, nobody collects, nobody pays. Is that a fair statement?

Mr. Morgan: Mr. Chairman, that is correct. Taxation is a parliamentary authority directly approved by Parliament. To the extent that Parliament has approved tax, then the policy would not apply.

Mr. Lee: There is a kind of no-go area for government. As you are aware, what caught this particular member's attention recently is the issue of the Part II fees under the CRTC regulations. My impression was that those fees were a form of — let us call it tollgating. As Ms. Shirreff was going through her analysis, I was trying to fit the CRTC Part II fees into that template. I was having difficulty.

I want to ask you a question about what I simply call tollgating: Something moves out in civil society and the government whacks it with a fee. In the case of the CRTC Part II fees, someone cobbled together a formula like a percentage. As far as I can see, the percentage does not bear any relationship to market. It does not bear any relationship to anything. Someone just put it together. The revenues collected are not used by the agency; they are turned over to the Consolidated Revenue Fund, thrown into the big black hole.

As far as I can see, there are no service standards because the fee is just applied on a formula. It is just like a tax. You pay your percentage. People collecting the tax do not even get to use the money for a service. There is no service held out. To get a licence, you pay a percentage and the money goes to the Crown. See you later. To me, that looks like a tax.

I know you have not come as a witness specifically on CRTC things. You are presenting the broader government policy. How do I find my way in the administrative template that you have presented to us? I quickly got lost thinking of the CRTC Part II fees. Can you help me out with that?

Mr. Morgan: Mr. Chair, I should like to direct that question to Ms. Shirreff, who is more familiar with the details of those fees.

Ms. Shirreff: The Part II fees were not introduced to recover the CRTC costs of regulating. A small portion of the fee is linked to Industry Canada's costs associated with the management of the radio spectrum. More important, one of the key economic principles of the 1997 cost-recovery charging policy permits departments and agencies to set charges based on market rates for access to or use of federal resource. In this case, the resource is the radio frequency spectrum. A fair rate of return can then be returned to Canadian taxpayers under commercial exploitation. The main principle of the 1997 policy falls in that domain.

The imposition of this fee is consistent with the CRTC authority and the aforementioned principles of the policy. Heritage Canada is responsible for the broadcasting and telecommunications policy. We believe it is more appropriate for officials from that department to respond to your questions on the appropriateness of the fee formula and whether those fees should be re-examined.

Mr. Lee: Does Treasury Board check to make sure that a fee complies with some of the criteria you have mentioned? Has anyone ever checked those fees? Do you ever actually go out and make sure there is a service standard involved, that the thing is not a tax, that the revenue bears some relationship to a service standard?

Whose job is it to check to make sure that departments, in this case the CRTC or any other department, is not running off tollgating and taxing and going way out beyond what we think of as fees and not wading into the field of taxation? Who checks?

Ms. Shirreff: You raised several points. You raised the issue of service standards. The 1997 policy calls for the establishment of service standards where it is reasonable. Like I mentioned, in doing our review of this 1997 policy, we are proposing to make it mandatory for service standards for all areas. A number of fees that are in place may not have service standards at this stage.

Your second point is, who checks? Again, Treasury Board has a role, depending on the process by which the fee is put into place — for example, through the regulatory policy. Then you have all those requirements being abided by. That is basically managed by the Privy Council Office. From a Treasury Board perspective, there are two scenarios. Depending on the authority, the department will put the fee in place, either through its own departmental legislation or program legislation or, if it uses the Financial Administration Act, those come through the Treasury Board, via Treasury Board submission. As well, if you are putting this into place through the process of regulations, then there will be typically regulations, and the regulatory process follows along, whether there is examination by the SCC, the Governor in Council, and then ultimately it comes to this committee.

This is where it gets complex in terms of the various authorities. Maybe I can specify in the case of a Treasury Board submission, for example. As I mentioned in my opening remarks, typically we look first at the issue of authorities, under what authorities these fees are being put into place. Then we look at the adherence of the cost recovery and charging policy.

As I mentioned, we have requirements that call for open and transparent consultations, knowing the full cost, looking at service standards, whether they are applicable, whether they have done those types of things or not, although the 1997 policy did not make it mandatory. We look as well to see that they have explained to clients what they are getting in terms of service, and why the service was delivered in the manner in which it was done.

These are generally some of the processes that are used to check on those things.

I talked as well about what we are doing in our revisions, which I think is probably very good in terms of openness, transparency and accountability. We are making tremendous advancement in terms of enhancing our reporting to Parliament, where a great deal of information will be available not only on revenues but as well on costs, service, consultation processes, authorities, et cetera.

Mr. Abbott: I appreciate your input this morning. It is helpful. I sit on the Heritage Committee. As you may know, we have just completed a study on the state of broadcasting in Canada. A number of concerns came out of that study. I do not suppose that I fully understand where all the committee members are coming from, but I would think that there was a concern about the fact that the broadcast industry is seen by some copyright holders, some rights holders and by the government as being something of a cash cow. It is in that context.

I am looking to you for counsel; I am not looking to berate you or anything else. I am simply looking to you for counsel. I want to make that clear.

However, I also want to make clear that the broadcast industry is subjected to all sorts of copyright. There was the new inclusion under the copyright provisions in 1996, Neighbouring Rights, the Radio Starmaker Fund, contributions to the Canadian Television Fund. There comes a point where the industry, I am sure, sees itself just a little bit under siege.

I understand the Part I portion, which is cost recovery. In other words, it is my understanding, and please correct me if I am wrong, that Part I fundamentally funds the functions of the CRTC. Part II really does not have anything to do with cost recovery. It does have to do with, I believe you said, market rates for access to the resource and commercial exploitation of a resource.

The difficulty we are presently faced with in the world is the fact that spectrum is becoming increasingly irrelevant. The expansion of programming by all sorts of digital means fundamentally puts spectrum at a lower and lower and lower value.

I guess the question would be, and perhaps it follows along the lines of what Mr. Lee was just asking, is this: What means, what vehicle, what procedure could the broadcast industry follow to make the case that indeed the so-called market rates for the spectrum is diminishing, virtually disappearing in value? How can they make that case? We are talking about a $90 million charge to the broadcast industry for Part II fees, on top of the Starmaker Fund, the copyright, the Neighbouring Rights, CTF and all the other fees. What vehicle would the Treasury Board suggest that the broadcast industry use to make its case with respect to the $90 million, particularly because it disappears into consolidated revenue? What vehicle could it use to make that case?

Mr. Morgan: In terms of the spectrum, worldwide, it is considered a public resource. If I recall correctly, several years ago Industry Canada actually auctioned off access to the spectrum in Canada, generating over $1.4 billion for the Consolidated Revenue Fund. The process they followed for that, and this was 10-year access rights for cell phones, digital access to the spectrum, was very similar to the practice followed in the United States, where they had an auction, and the U.K., where they had an auction, as well as other areas of Europe and, I believe, New Zealand.

In terms of the value of the spectrum, there was a real acknowledgment of the market value, and through this auction process they are able to generate a considerable amount of revenue for the federal government.

In terms of the specifics of the CRTC and the Part II fees and how the industry could perhaps make more visible their concerns regarding that and its relationship to market, I will turn that over to Ms. Shirreff.

Ms. Shirreff: I will speak from a policy perspective. I think I explained the difference as to when it applies to cost recovery and when it is a right and privilege and/or access. The CRTC Part II fees were done under the latter scenario. In terms of what the broadcasting stakeholders should do and how they should do this, this is the entire process of what we talk about under the cost-recovery policy where we encourage open and transparent consultations. Those types of discussions take place at the departmental level, and they ultimately decide at the end as to the appropriateness of the fee or what the price should be.

Typically, there are a number of issues. Certainly, the policy allows for various public policy objectives, and those are varied. Those are taken into account, as well as the ability to pay, for example. Out of that, departments and ministers make the business case and decide on whether it is a fee formula, the methods, and how they conclude with those issues.

I hope that provides clarification for you.

The Joint Chairman (Mr. Grewal): Before you go on to your next question, Senator Hervieux-Payette would like to ask a question.

The Joint Chairman (Senator Hervieux-Payette): It may be just for our own understanding and to put it on the record, since I followed the auction of the spectrum when I was with the industry. Just to remind you, the American experience was almost a failure. They agreed to pay billions of dollars to the government. These billions of dollars were never paid, and, of course, had to be renegotiated downward. This was during the time there was a bonanza. This was the sector where money was flowing almost from heaven.

In Canada, I cautioned the government that this was, of course, a very good business for those who were in auctioning consultation, but in fact again this was a big burden on the industry. At the end of the day, it would be the Canadian taxpayer who would pay for it. There is nothing free in this world. In Europe, if you look at the track record of the industry today, they are all in danger, for example, Deutsche Telekom and the French. All these people agreed to pay tremendous amounts of money, cannot raise it and have not raised the cash to pay these licences.

When government thinks it has found a cash cow, people like you have to look to see if it is reasonable and if it makes sense. At that time, people wanted to have access, but as you say, it is new technology today, and when it comes, for instance, to cable, they also pay. They do not use the spectrum, because they go on cable, and they pay tremendous amounts of money, and even there, there is a distortion in the whole process because they have to invest billions of dollars to put the fibre from coast to coast.

On one hand, you charge a big fee, and then we are charging the industry at the end of the day. We want to be able to brag that we are the best one in that sector, so, of course, we will discuss that with the people in telecom. However, it is important that when you do the analysis and people come up with these great schemes, in this sector, it was penalizing for Canada because these industries went to CD communication. I have not seen the whole report yet, but I know some of it. We know that they do not have enough cash to move forward and they are asking us to open Canada's policy and to permit foreign investment.

That is where it has got us. The question seems to be just a fee question, but at the end of the day, the whole policy is being touched by that. That is why I wanted to put that on the record — because we have to look at the global picture, not just one fee, one after the other.

The other thing that may be for your reflection is how we put all the industries on the same footing, for example, if some industries, like telecom, are being charged fees, and other companies are paying a licence. Let us talk about transportation and trucking. If they had to pay that, I do not know how much they would charge for transporting goods.

We have to have a level playing field when it comes and a very neutral system. Taxation is your piece of cake. Establishing a fair system is my concern, and we are studying this subject because it is of the utmost importance to all of us.

It is not just being picky about whether we follow regulations. Normally, we do not look at the policy aspect, but in this case the question of the separation of power between the executive being able to raise fees, to impose fees and to do the taxation is very important to parliamentarians. It is a principle that this committee has very much at heart.

I am sorry to be long. I resumed the intention of the whole process because it is a unique process of our committee. We attach a lot of importance to that.

The Joint Chairman (Mr. Grewal): Do you want to comment on what the co-chair has said?

Ms. Shirreff: No.

Mr. Abbott: We do not want to say that having a fee on spectrum management would be the equivalent to having a fee on a buggy whip. We clearly understand that there is still some value there.

I suppose for myself, and, perhaps, for all of my colleagues, while Parliament sits and while the government and government agencies are proceeding with whatever they are proceeding with, the issue is one of accountability to the members of whichever House.

Meaning no disrespect, I am still not totally clear. If I have a constituent of whatever description who comes to me and asks about holding the government accountable relative to Part II fees — I apologize, in that, unfortunately, there was something in what you were telling us, but I am still asking the same question. I need a little more clarity. It is one where we can go in at a political level, big-P political level. The opposition can go in and rail against the Finance Minister and the government for the taxes, and, indeed, there have been times in this Parliament where, as a result of some of the members of the Liberals having concern about a particular program, the program was actually extracted from budget considerations or budget votes.

Hence, the accountability practice does work. However, in this particular instance, because Part II is fees, how do we as parliamentarians get at that? More precisely, how does industry get at that?

Mr. Morgan: Under the current policy, we do have a requirement for consultations with stakeholders and the setting of fees, and we are proposing to strengthen that even further. We have outlined in our opening remarks some of those areas, in the upfront consultations for fee setting, identification of costs, identification of dispute-resolution processes and remediation if performance standards set at the outset of the consultations are not met.

One of the additional things we are doing to try to strengthen the accountability to Parliament — and this applies to a variety of government programs — is to strengthen the reports on plans and priorities, departmental performance reports, and the information provided to Parliament. If there is a proposed fee change being contemplated or consultations being contemplated, that will be evident in these reports that are tabled in Parliament.

That would provide a good opportunity to make this information more visible as to the intentions of ministers, whether they are undertaking consultations, implementing a new fee after consultations, or whether they have had some disputes that are not getting resolved. That information will be visible in these reports, and then parliamentarians, through committees that receive these reports, would have the opportunity to inquire as to the plans, why performance standards were not being achieved and what the issues are relating to disputes.

We are trying to strengthen accountability through more direct reporting of this information and more transparency so that parliamentarians are aware of these issues. I think that will go a long way to address your concerns.

Mr. Abbott: With the greatest of respect, it always strikes me that the word ``consultation,'' which is normally taken to be a verb, in the hands of the bureaucracy is commonly a noun. It is a fait accompli. It is an advising, as opposed to a true consultation, where there is back and forth. This is the frustration I have as a legislator responsible to my constituents, that the word ``consultation'' is not seen as a verb frequently by the bureaucracy.

Mr. Wappel: To be clear, am I correct that we will be considering the broadcast licensing fees and the marine services fees separately from today?

The Joint Chairman (Mr. Grewal): I think so.

Mr. Wappel: Then I will not ask any questions about them.

I will ask general questions. The cost-recovery and charging policy is just that, a policy and not a law, is it not?

Ms. Shirreff: No.

Mr. Wappel: Who developed it?

Mr. Morgan: That is a Treasury Board policy approved by Treasury Board ministers.

Mr. Wappel: Who must follow it?

Mr. Morgan: Ministers who undertake user charges would follow that policy.

Mr. Wappel: All ministers and all ministries?

Ms. Shirreff: Yes. That would be all the departments and agencies as defined under section 2 of the Financial Administration Act.

Mr. Wappel: If a policy is not followed, who reprimands the ministry that did not follow the policy?

Mr. Morgan: Treasury Board Secretariat monitors the application of its policies as part of the active monitoring policy that was implemented several years ago. We do oversee the implementation of policy. We review all submissions coming forward to the Treasury Board and, as a policy centre, our group reviews those to ensure conformity upfront. In fact, going forward to Treasury Board ministers, any proposed changes to fees that come through submissions are reviewed at two levels within the secretariat — at the program sectors, which have a portfolio responsibility, and, uniquely, from a policy perspective we actually get involved in these transactions individually.

The reprimanding of a department that is not achieving its standards falls into the dispute-resolution process within the ministry, and ultimately to Parliament in terms of issues being raised by parliamentarians.

Mr. Wappel: What is the legal authority that Treasury Board has to develop this policy?

Mr. Morgan: This is granted to the Treasury Board under the Financial Administration Act.

Mr. Wappel: I presume you are both aware of the Supreme Court decision in Eurig Estate (Re)?

Ms. Shirreff: Yes.

Mr. Wappel: One of the problems that many members of the public have is how to tell the difference between a fee and a tax. Our briefing note indicates what the Supreme Court holding is, and I want to know whether you agree with it. The Supreme Court apparently has said that a fee may be found to constitute a tax when certain characteristics are met. First, it is enforceable by law.

Did you not tell us that almost all user fees are done through the regulatory process?

Ms. Shirreff: The great majority are done in that way.

Mr. Wappel: So that would be a fee enforceable by law, would it not? That is not a trick question.

Ms. Shirreff: I am not a lawyer. The regulatory policy is also a policy.

Mr. Wappel: Except that regulations have the force of law. People can be punished under regulations.

Another characteristic of a fee possibly being a tax is if its imposition by the authority of the legislature. Obviously, regulations flow from statutes, which are from the legislature, do they not? That is again a fairly easy statement of the obvious, right?

Ms. Shirreff: Yes.

Mr. Wappel: It is levied by a public body. They are all levied by public bodies in this case, are they not?

Mr. Morgan: That is correct.

Mr. Wappel: They are clearly intended for a public purpose, correct?

Finally, the lack of a reasonable connection between the amount charged and the actual cost of the service would be an indicator that the fee is in fact a tax.

Since the other four bullet points, you have already agreed, apply to virtually all fees, the real question has to be whether there is a connection between the amount charged for the fee and the cost of the relevant service. Do you agree that that is the holding, as you read it, of Eurig Estate (Re)?

Ms. Shirreff: I have not looked at the Eurig file for quite a long time, but I understand the essence of it. There is a cost recovery when you link it to the service that is being provided to the benefits, if you wish, for an identifiable group beyond the general taxpayer. The other group about which the policy speaks is this access to a public resource or a right and privilege. I guess this is where the question of whether we call that a user charge or a tax arises.

Mr. Wappel: Precisely. Should we call a charge to use a public resource a user fee or should we call it a tax for using the public resource? That is an interesting question and I guess that is what we will get to.

I want to be clear that, from my perspective, one of the critical questions is the relationship between the amount charged and the relevant service. I wanted to ensure that you are aware of the Eurig case, and you are.

Mr. Abbott: With respect to access to a public resource, the two-part fee system that is on the broadcasters is unique to broadcasting because there are telecommunication operators who are also regulated by the CRTC. The telecommunication operators have access to the same public resource, the spectrum, and yet they are not subjected to Part II fees. This obviously is a CRTC policy, so you cannot comment on it, but would you care to comment on the fairness of that?

I want to restate this very clearly. We have been talking a lot about spectrum access, access to public resource and fact that Part II fees essentially are for the access to the public resource. We have broadcasters who are subjected to Part II fees. We have telecommunication operators who are also subjected to CRTC regulations, as are broadcasters, and yet they are not. How fair is that for the broadcasters?

Ms. Shirreff: From a policy perspective, you are correct. CRTC/Heritage Canada, who is responsible for the broadcasting and telecommunications policy, would need to consider those issues.

In terms of fairness, the policy is very broad. It encourages openness, transparency and consultation. Even in our proposed policy, we encourage an ongoing process where there is consultation, because the world changes quickly. What may have been fair yesterday may not be fair tomorrow, or other issues may come into it that require changes, better understanding or different modes of managing.

I do not know that I can be any more specific than that, but from a policy perspective the fairness of the application of the fee goes to the determination of what the fee should be and the appropriateness of whatever methods, and ministers decide at the end. From a policy perspective, the encouragement of ongoing dialogue and adjusting to new issues as they come up provide the forum that will dictate what changes are required when the fee should be amended or reviewed from a policy perspective.

Mr. Abbott: It seems to me that there have been two years of monologue as opposed to dialogue. The broadcasters have said that they believe the fees to be invalid as an ultra vires tax and/or unconstitutional, a delegation of taxing powers to Parliament, and for two years they have been attempting to have this reviewed and overturned.

I take in good faith the talk about consultation. Dialogue does not seem to have occurred over a full 24-month period. This is a CRTC issue. Although the Treasury Board may have this policy completely in good faith, there is nonetheless a breakdown at the practical level.

Mr. Lee: We now have two measuring sticks. There is the administrative measuring stick, administrative guidelines that govern fee setting and the relationship of the fee to the criteria that you have outlined for us, one set of guidelines or one measuring stick. The other, which Mr. Wappel has brought up, is the measuring stick that Parliament will use or the courts will use in determining whether or not a fee or a charge is really a tax, whether it is valid as a fee or a tax.

Can you tell me, since Treasury Board appears to be the gatekeeper, if you recall an instance, either of you, of the application of either measuring stick by Treasury Board for the purpose of disciplining the voracious appetite of government ministries to charge fees or taxes? If you have used either of those measuring sticks to roll back a fee or block a fee or tell a ministry that what they are doing is taxing and they cannot do it without the authority of Parliament, can you tell me if there has been an instance of the use of either measuring stick by Treasury Board to police this field?

Mr. Morgan: I am not aware of any instance. We do review any fee proposals that come forward to the board for compliance with the policy, so respecting the notion that if it is a fee and a charge and it is for a service, that there is some relationship to costs.

We indicated earlier that the vast majority of the fees are set at well below full cost recovery. Once you get into the accessing of a public good, such as the spectrum, what is the fair value? What is the cost of the spectrum to the federal government? It is a free good. How do you determine that cost measuring? The determination to date has been that these are driven by market forces, so the fee is set with respect to an economic indicator as opposed to cost.

However, I am not aware of anything where we have rolled it back due to considerations about tax versus a charge.

[Translation]

Senator Nolin: Is it your responsibility to examine the cost recovery structure of other quasi-judicial organizations, such as the CRTC?

Ms. Shirreff: Before making a presentation before Treasury Board, we study the aspect of authority and look into whether the policy has been applied correctly. As for the cost recovery structure, this function applies to departments. Since each program is specific, each department must take several elements into account, including costs, distribution and the implementation of the program. At the end of this exercise, we end up with several structures which are adapted to the various programs. The policy requires that comparative studies be carried out in relation to other countries or other departments, for instance. Based on that data, the final price structure is established. In the presentation to Treasury Board, these elements are explained and you will also find within the regulation process a summary of the impact analysis.

Senator Nolin: Do you examine the fees imposed by a tribunal?

Ms. Shirreff: No, we do not do that with regard to either policy or Treasury Board.

Senator Nolin: Is that part of your mandate?

Ms. Shirreff: No.

[English]

The Joint Chairman (Mr. Grewal): I also have questions. Reference has been made many times to the term ``full cost.'' We all know that full cost could be a combination of direct and indirect costs. Is there any established policy referring to full cost? Are there any criteria that limits up to where we can expand the indirect cost? What is the distinction between direct and indirect cost, and what is the criterion that defines the full cost?

Mr. Morgan: The Treasury Board Secretariat did issue a guide to the costing of outputs about 10 years ago. That guide provides the reference point for the costing of indirect costs, full costs and so on.

We also have some guidance available internal to the government when one department wishes to charge another department for an optional service. We have some guidance as to the types of incremental costs that can be charged between departments. However, for the purpose of external charging, there is a guide to costing of outputs that is published on our Web site.

The Joint Chairman (Mr. Grewal): Would we be able to obtain a copy of this policy or criteria?

Mr. Morgan: Yes, most definitely. We could do that.

The Joint Chairman (Mr. Grewal): We would appreciate that.

Also, I am sure that everyone around the table is aware that the broadcasting industry recommends that the broadcasting licensing fee regulations of 1997 be amended to abolish Part II licensing fees.

I know that we are discussing these matters broadly. I thank the witnesses for clarifying the distinction for the benefit of the members on taxes levied and the limits.

Would you have any comment or would you agree with the recommendation of the broadcast industry?

Ms. Shirreff: This is a question that must be addressed between the stakeholders and the CRTC/Heritage Canada.

The Joint Chairman (Mr. Grewal): Looking through the glass lens of policy, any comments on that?

Ms. Shirreff: I can respond from a policy perspective. It fits the principle. My knowledge of that Part II piece is under the access to a public resource. The economic principles of the policy have been followed.

In terms of the appropriateness of the fee formula and the price at the end, certainly I would not want to comment about that.

The Joint Chairman (Mr. Grewal): I thank the witnesses for their insight and overview and for clarifying some of the issues that the committee members had. We thank you for your attendance.

I have a question for committee members now. This presentation has highlighted some of the important issues for the benefit of members. The question for committee members is this: Do we want witnesses to appear before us on this issue from Canadian Heritage, CRTC and the Canadian Coast Guard? Our next meeting is on May 29. What is the consensus? Should we have the other witnesses here?

Mr. Lee: This member says ``yes.''

Mr. Abbott: Yes.

The Joint Chairman (Mr. Grewal): I believe all of us have that feeling. We will ask counsel general to arrange for the possibility on May 29 to hear the witnesses from Canadian Heritage, CRTC and Canadian Coast Guard.

Mr. Bernier: Mr. Chairman, I believe the clerk may have some concerns in relation to the time.

The Joint Chairman (Mr. Grewal): Two weeks should be reasonably good enough. We can try for that. All right.

Let us move on to our other items quickly.

We have letters to and from ministers.

Mr. Bernier: We have the fifth report, No. 39, of the committee to deal with. It is a special agenda item.

The note before the committee this morning includes the summary of previous reports of the committee in relation to the exercise of law-making powers by Indian councils under the Indian Act, and examines to what extent the provisions of Bill C-61, which is now C-7, meet the undertakings that have been given to the joint committee by the government in its responses to those reports.

The text of each committee recommendation appears in bold in the note and, with your permission, I will deal with them in the order in which they appear.

Concerning the first recommendation, proposed section 30(8) of the bill would give effect to that recommendation.

The second recommendation was that the Indian Act be amended to provide guarantees of the rights to notice of delegated legislation and to access to such legislation made by Indian band councils. The right of access aspect of the recommendation would be addressed by proposed section 30. However, for the reasons mentioned in the note, I would suggest that the provisions of the bill are not entirely satisfactory in respect of the right to notice of delegated legislation. It appears that some sort of guarantee is needed that, in the event an Indian band opts or chooses not to enact an administration of government code, the Governor in Council would make regulations that require reasonable public notice of band laws. One approach would be to make it mandatory for the Governor in Council to make regulations that would apply in the absence of a code adopted under section 6. Another approach would be for Parliament to enshrine those guarantees or those procedures in the bill.

The third recommendation of the committee is that the Indian Act be amended to guarantee that no person may be convicted for a violation of any bylaw made under the act unless it is proved that reasonable steps have been taken to bring the bylaw to the notice of those persons likely to be affected by it.

Obviously, there is a connection between this recommendation and the previous one regarding notice of bylaws. This third recommendation is simply not addressed in the bill that was tabled in the House.

Concerning the fourth recommendation of the committee in respect of the disallowance powers of the minister, proposed section 53 of the bill would revoke section 82 of the Indian Act, thereby implementing that recommendation.

The fifth recommendation of the committee was that appropriate measures be taken to ensure the enforceability of certain band membership rules and intoxicant bylaws adopted before June 25, 1987, and that were not registered and published as required by the Statutory Instruments Act. As of August 2001, only one such bylaw remained to be dealt with. The latest information is that the concerned community is not implementing that bylaw and would not intend to adopt a new bylaw on the same subject. In light of this, my suggestion would be that the committee consider this recommendation to have been implemented.

The second and third recommendations are linked and concern the giving of notice of laws made by band council, which is a fundamental guarantee in the Statutory Instruments Act, and the right not to be found guilty for breach of a bylaw unless the prosecution shows that reasonable steps were taken to bring the law to the attention of the person charged. If the committee agrees, I would suggest that the chair write to the Minister of Indian Affairs and Northern Development to point out these omissions in the bill and to remind him that the government had given formal undertaking to address these matters in legislation and that this was not done in Bill C-7.

The Joint Chairman (Mr. Grewal): Are there any comments on this?

Mr. Lee: I have no objection and I do not think there could be an objection. It is simply renewing the focus of this committee on that particular issue with the department. I would have to note that the department obviously has not taken note of the issue. The new legislation has been forward, in that, where Indian bands and organizations do take up the challenge and begin to regulate themselves, the requirement that reasonable notice be there is a requirement of the statute for those administrative codes.

What has been left out of the statute is a requirement that the government, in lieu of the Indian band making its own administrative code, insert the reasonable notice provision.

It does no harm and it is probably good to remind the government that, from the perspective of the citizen who would be affected by these bylaws, where it is involved in the making of the regulations, it take steps to provide reasonable notice. I am in agreement.

The Joint Chairman (Mr. Grewal): Do we have a consensus?

Hon. Members: Agreed.

Mr. Lee: Mr. Chairman, may I just confirm that, under the proposed regime, there is no role for this committee in reviewing any of these statutory instruments that are generated by these administrative codes? In other words, Parliament has delegated to Indian bands the ability to make regulations. I just wish to confirm that this committee would not have a role in scrutinizing any of those statutory instruments.

Mr. Bernier: That is correct, Mr. Lee. Proposed section 30(8) provides that the Statutory Instruments Act, which includes the provision dealing with the mandate of this committee, does not apply with respect to codes and band laws made under this act. That was a recommendation of the joint committee.

The thinking of the joint committee at the time, about 20 years ago, was that band councils are democratically elected or chosen representatives in their communities. There was something, perhaps, not appropriate in a committee of Parliament overseeing the work of a democratically elected body. For example, we do not review the work of the bylaws of the City of Ottawa. There are accounting mechanisms in place, those people are elected, and they will account for the exercise of their powers. The situation of band councils was felt to be similar and that out of deference, if you will, to democratic principles, the committee should refrain from exercising its jurisdiction.

Mr. Lee: Thank you.

The Joint Chairman (Mr. Grewal): We will inform the minister.

[Translation]

Mr. Rousseau: In this letter, keeping a promise he made when he appeared before the committee, the deputy minister provides an explanation, with figures, as to why the department's response to concerns raised by the committee improved. The committee's legal advisers note that this is indeed the case.

Of course, we will continue to monitor, in the usual way, any progress with regard to all files relating to this department and will keep the committee abreast of any developments.

[English]

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

[Translation]

C.R.C. c. 568 — DENATURED ALCOHOL REGULATIONS

(For text of documents, see Appendix A, p. 7A:1)

Mr. Rousseau: In this file, the committee concluded that the regulations were illegal because they applied to individuals contrary to what is stipulated in the act.

In 1988, the department had promised to amend the regulations. That has not been done. But in 2000, the act was amended in order to authorize the adoption of the regulations. However, this legislative amendment was not retroactive. The regulations continued to be illegal and the committee asked that the regulations be re-adopted under the new regulatory powers in order to ensure their validity.

In their letter dated February 18, 2003, the joint chairs pointed out to the minister that the current regulations have been applied for 15 years despite the fact that the government knows that they are illegal. The co-chairs have also said that the committee wanted to review this file before the summer break and that if the problem had not been solved at that point, the committee would consider taking the appropriate measures to obtain the necessary corrections. The regulations are still in effect today.

In answer to the joint chairs' letter, the minister wrote that following the adoption of the new Excise Act — which is supposed to come into effect on July 1, 2003 — new regulations will replace the old ones. The minister noted that efforts have been made to ensure that this happens as soon as possible. Adopting the new regulations will correct the problem relating to their validity. So now the committee must decide whether the minister's commitment is acceptable.

[English]

The Joint Chairman (Mr. Grewal): Any comments?

Mr. Lee: I have a question. Upon the adoption of the new regulations, are old regulations removed? If that is in fact the case, then does that clear up the problem of the illegal application of the old regulations? Can we close the file?

[Translation]

Mr. Rousseau: Yes, we could also mention the formal repeal of the former regulations, but the old regulations are implicitly repealed when new ones are adopted.

[English]

Mr. Lee: It solves our problem, right?

Mr. Rousseau: Yes.

SOR/87-65 — ASSESSOR'S RULES OF PROCEDURE

Mr. Bernier: With reference to the first paragraph of the note before the committee, I would point out that the new assessors' rules of procedure were pre-published in Part 1 of the Canada Gazette on April 3. We hope that we will have those new rules formally in place shortly.

The committee today is considering the government's response to its fifth report. For the record, paragraph number 2 of the note on that response takes issue with the factual accuracy of the explanation given by the government in its response for the failure to proceed with the 1988 draft amendments.

With regard to the appointment of judges in the superior courts of provinces to act as assessors, the government response states that arrangements are being made to make these appointments. With regard to the issue of the authority of judges in the Federal Court who currently act as assessors or continue to act as assessors, it seems that the government simply found a way in its response to sidestep having to deal with this particular issue.

As unsatisfactory as the response may be on these two aspects, it must be recognized that strictly speaking they both lie beyond the remit of this committee. The concerns of the committee were, and are, the assessors' rules of procedure themselves. As long as the new rules are enacted fairly promptly, I would suggest that those incidental aspects, interesting though they are, have more to do with the proper implementation of the 1990 enactment and really cannot be pursued independently by this committee.

For this reason, I would recommend that the staff simply monitor the enactment of the draft rules at this time.

Mr. Lee: Congratulations on the good work to everyone. This has been a long-standing file. It looks like it is being concluded successfully. I thank the parties, all those judges and civil servants out there for putting it together.

[Translation]

SOR/90-111—DAIRY PRODUCTS REGULATIONS— AMENDMENT

SOR/90-558—DAIRY PRODUCTS REGULATIONS— AMENDMENT

(For text of documents, see Appendix B, p. 7B:1)

Mr. Rousseau: Mr. Chairman, in the correspondence which deals with these two files, the agency informed us that the promised changes will be carried out under the regulatory amendment program. In one case, we were told that the permanent amendment should be carried out by mid-2003. In the other case, the agency said it hopes to incorporate it into a regulatory amendment which is now in the hands of the Justice Department.

In summary, the committee's advisers will monitor this file and keep the committee abreast of any developments.

[English]

Mr. Lee: Agreed.

SOR/2002-354 — REGULATIONS AMENDING CERTAIN REGULATIONS ADMINISTERED AND ENFORCED BY THE CANADIAN FOOD INSPECTION AGENCY, 2002-1 (MISCELLANEOUS PROGRAM)

(For text of documents, see Appendix C, p. 7C:1)

Mr. Bernier: The correspondence in relation to the one instrument listed under ``action promised'' contains one promise of action. The instrument itself makes some 12 corrections to six different statutory instruments. There are 62 instruments submitted to the committee without comment.

I have a question regarding the agenda of the next meeting. Is it the feeling of members that if we deal with the Aboriginal communal fishing regulations and do secure witnesses that would occupy the entire time of the committee?

The Joint Chairman (Mr. Grewal): I would suggest we have the witnesses first, and we discuss the Aboriginal issues afterwards.

Mr. Bernier: Do I put files on that agenda or will those two matters eat up the entire time?

Mr. Lee: I believe that those two matters will eat up the entire time. The fees and taxation issue will consume an hour or more. The second issue, depending on what evolves between now and than, may take five minutes, or it may take half a day.

Counsel is quite right to project the lack of time that would be available for files. If there is anything urgent, however, it could be brought up early in the meeting to be disposed quickly.

The Joint Chairman (Mr. Grewal): We confront the difficulty that the motion specifies that this must be the first item. Aboriginal fishing communal licences must be the first issue.

Mr. Lee: That is a hell of a way to do business here.

Mr. Bernier: It would probably make more sense to start with the witnesses.

Mr. Lee: We have no idea where this thing will go.

Senator Moore: This has been jerked around long enough.

Mr. Lee: We do not know what will be presented to us.

Senator Moore: That is right. It may be a quickie or a protracted debate.

Mr. Lee: When we have witnesses, I would prefer that debate not be protracted. If there is a quick disposition, let us deal with it. Otherwise, there will be some unhappy campers here if we end up dealing with Mr. Cummins' personal file. We have a little time until the next meeting.

The Joint Chairman (Mr. Grewal): We will ask the witnesses to be here at 8:45. In the first 15 minutes, we will have that discussion and come back with a motion.

The committee adjourned.

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