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Proceedings of the Standing Joint Committee for the 
Scrutiny of Regulations

Issue 37 - Evidence - May 24, 2018

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OTTAWA, Thursday, May 24, 2018

The Standing Joint Committee for the Scrutiny of Regulations met this day at 8:30 a.m. to review of Statutory Instruments.

Senator Joseph A. Day (Joint Chair) and Mr. Harold Albrecht (Joint Chair) in the chair.

[English]

C.R.C. C. 1551 — TEXTILE LABELLING AND ADVERTISING REGULATIONS

SOR/96-423 — PATENT RULES

SOR/2003-208 — RULES AMENDING THE PATENT RULES

(For text of documents, see Appendix A, p. 37A:1.)

The Joint Chair (Mr. Albrecht): Good morning, committee members. This morning, as you are aware, we have the appearance of witnesses from the Department of Innovation, Science and Economic Development Canada. With us today we have Ms. Leila Wright, Mr. Mark Schaan, Ms. Agnès Lajoie and Rachel Mainville-Dale. We want to welcome them. We will start with opening statements followed by questions from committee members as appropriate.

Leila Wright, Associate Deputy Commissioner, Competition Bureau Canada, Innovation, Science and Economic Development Canada: Thank you, Mr. Joint Chair. My name is Leila Wright and I am the new Associate Deputy Commissioner of Policy Planning and Advocacy at the Competition Bureau. I have been in this position for seven months and my responsibilities include being accountable to this committee.

The Joint Chair (Mr. Albrecht): If I could interrupt, I want to draw to the attention of committee members that you should all have the written material before you to make it easier to follow along in your preferred language. It’s dated May 24, entitled “Appearance Before the Standing Joint Committee on the Scrutiny of Regulations.” The first line is, “My name is Leila Wright . . . .” Does everybody have that? We just received it this morning. Has it not been distributed to all the members? I think it’s very helpful if the members have it. We need copies of the first opening statement for a number of members here.

Sorry, my apologies. It’s very helpful to have these in front of us.

Ms. Wright: I’m joined here today by Mark Schaan, Director General of the Marketplace Framework Policy Branch at ISED, who will be speaking on behalf of the department.

[Translation]

The Competition Bureau, as you may know, is an independent law enforcement agency. Our role is to ensure that Canadian consumers and businesses prosper in a competitive and innovative marketplace, which leads to lower prices and more product choice for Canadians.

[English]

I’m here today to address concerns that you have raised about the bureau’s Textile Labelling and Advertising Regulations. I will speak about the amendments identified in the committee’s notice of disallowance and my colleague Mark Schaan will address the other issues raised by the committee that are not part of the notice of disallowance.

Today, I’m here to do two things. The first is to apologize for the unacceptable delay in addressing the concerns of the committee. The second is to bring the committee up to speed on the concrete action plan that is in place and being moved forward to address the committee’s concerns. I speak for both the bureau and the department when I say we are committed to addressing your concerns.

We recognize that the committee has been in contact with the bureau and department regarding necessary amendments to the TLARs for some time, and despite that, these remain unaddressed. I want to underscore for the committee that we have allowed this to go on for an unacceptable amount of time, and for that we apologize. We recognize that this is a problem and we are taking concrete and immediate steps to correct it.

Let me begin by speaking about the work we are doing to move forward the TLAR amendments in an expedited manner with the aim of having the issues identified in the notice of disallowance addressed within a year. I will then speak about how we are addressing the committee’s concerns regarding communications with the bureau and how we will prevent these issues from happening again.

As you know, prior to receiving your most recent correspondence of April 30, the bureau and ISED intended to address the committee’s concerns through a labelling modernization initiative that is considerably broader in scope than the TLARs.

[Translation]

We thank you for the feedback that the committee provided on this proposal in your April 30 correspondence. We recognize the concerns expressed by the committee about rolling the TLAR amendments into a larger initiative, and have taken immediate action to find another solution.

[English]

The concerns of the committee are the anchor for the plan we are putting forward today. Over the past weeks, we have worked actively with the Department of Justice and Treasury Board Secretariat on this matter and have confirmation that amendments to address all the issues identified in the notice of disallowance can follow the Miscellaneous Amendments Regulations, or MAR, process.

The MAR process is led by TBS in partnership with the department. It is faster than other regulatory approval mechanisms and will allow us to resolve the committee’s concerns in an expedited manner. The MARs process has set timelines, and TBS expects the current process to be completed within a year. Based on this timeline, amendments to address all the issues identified in the notice of disallowance, if approved by Treasury Board, will be completed and published in the Canada Gazette within a year.

As an appendix to my opening remarks, I have included a detailed timetable of this process for the committee, outlining the work that we have already completed as well as the timelines for future work. I have assigned a senior officer who reports directly to me to lead this work on the bureau’s side and have impressed upon her the importance and significance of this initiative.

ISED will also be working with us on this and together we are committed to getting this done. Furthermore, given the extraordinary circumstances of the issue before you, we undertake to update the committee, through counsel and subject to cabinet conferences, as we achieve key milestones outlined in the timetable.

We also recognize that our responsiveness to the committee’s concerns has been an issue. I have put in place a new protocol that will be used for all future correspondence with the committee. We can never lose sight of the fact that Parliament is the keystone of our democracy, and responding to our MPs and senators is of utmost importance.

Moving forward, when the bureau receives a letter from the committee, as a first step the bureau will provide, within a week, acknowledgment of receipt to the clerk. Within four weeks, the bureau will provide a substantive response that outlines a plan for addressing the concerns raised and provides a clear timeline for the work involved. Should the timing of the bureau’s response be substantially different from its previous correspondence with the committee, the bureau will provide an explanation of the reasons for this change in timelines.

We are committed to ensuring our responsiveness to the committee to prevent the current situation from happening again.

[Translation]

In closing, I would like to say that, in my career as a lawyer, I advised clients on how to comply with regulations, and now as a public servant, I help enforce legislation. I know firsthand the importance of having properly drafted regulations.

[English]

We value the work of the committee to ensure that regulatory and statutory requirements fall within the legislative requirements of the law.

This file is a priority for me as well as my colleagues at the bureau and ISED. We are committed to having the amendments done in a timely fashion. I want to reassure the committee that the wheels have been set in motion, and I will work to ensure that they keep moving until we have addressed all of your concerns to your satisfaction. Of course, I would be happy to return to the committee in the future to provide an update on our work.

I will now turn it over to my colleague Mark Schaan. Thank you for your time, and I am prepared to answer any questions the committee may have for me.

The Joint Chair (Mr. Albrecht): Thank you, Ms. Wright. We’ll move on to Mr. Schaan’s statements, and we’ll reserve questions until both statements have been completed.

Mark Schaan, Director General, Strategy and Innovation Policy Sector, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada: My name is Mark Schaan, and I serve as the Director General of Marketplace Framework Policy Branch, in the Strategy and Innovation Policy Sector of Innovation, Science and Economic Development Canada. Our branch specifically analyzes the role of marketplace frameworks in meeting the department’s objectives. This includes analyses of corporate governance, competition and intellectual property and their role in facilitating an efficient marketplace in the innovation economy.

[Translation]

I would like to thank Leila Wright of the Competition Bureau for her contribution, as well as the committee members for giving us the opportunity to appear before you today, not only to address your concerns, but also to explain clearly and concisely the concrete steps that we propose to take to ultimately address this file.

[English]

My colleague from the Competition Bureau has illustrated for you our immediate plan to address the amendments to the Textile Labelling and Advertising Regulations that this committee has identified as the most pressing. It is most useful to be able to avail ourselves of the Miscellaneous Amendments Regulations process, also known as the MAR process, to ensure that those regulations are amended as quickly as possible. As you have pointed out, these changes are long overdue.

[Translation]

I also want to make very clear that we understand that the expedited amendments only form some of the changes that this committee has requested be made; while some of your requests concern form, others touch upon questions of policy.

I would like to assure the committee that in spite of the long delay that has occurred to date, a great deal of preparation has, in fact, been undertaken in recent years by the Competition Bureau to prepare all of the necessary updates for publication in the Canada Gazette, up to and including the drafting of blue-stamped regulations.

[English]

With the fruits of this previous labour in hand, our department and the Competition Bureau are committed to proceeding with these updates to the Textile Labelling and Advertising Regulations in the immediate future. We are currently finalizing the updated consultation materials, which will then be used to build upon the work originally done in 2007. We plan to engage stakeholders this summer on the remaining proposed regulatory changes, that is, those that will not be part of the MAR process. I am optimistic that prepublication for these amendments will take place later this year, with enactment of the new regulations in 2019. I appreciate that this work is similarly long overdue.

[Translation]

It is not, of course, merely the regulations that need to be considered, but the empowering legislation as well. The Textile Labelling Act is one of a number of criminal statutes administered and enforced by the Commissioner of Competition that our department has identified as poorly suited for the modern economy.

The Textile Labelling Act, along with the Consumer Packaging and Labelling Act, as well as the Precious Metals Marking Act, are all laws that concern what are essentially commercial regulatory matters. For various historical reasons, however, they have been drafted as criminal laws and have not been significantly updated in well over three decades.

Some contend that their enforcement is impractical, and their punitive sanctions are potentially inappropriate for businesses that are found to be in violation of them. We are continuing to evaluate these considerations.

[English]

Efforts have been under way at various points in time, including the present, to consider modernization of our federal labelling laws. There are, of course, many perspectives on how these laws could be improved, as well as a great many interested stakeholders and a fair bit of international experience to consider. That is what our minister referred to in his letter of March 7, 2018. The original intention was to address this committee’s concerns as part of these greater modernization efforts. I certainly understand the hesitation that the committee has expressed with this broader approach. However, it is a valid observation that an open-ended legislative process, such as this one, could prolong even further the shortcomings that you have identified with respect to the regulations.

[Translation]

That is why we will first take the approaches that each of us has just outlined for you, respectively — that is, employing first the MARs process for the most pressing concerns, and then addressing the remainder of the regulatory updates through the standard process — as we also embark on the larger project.

[English]

I’m happy to field any questions that you may have.

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

Mr. Diotte: Mr. Schaan, could you explain the law as it is stated now? You talk about criminal law with labelling. Could you give us some examples of that? I’m curious.

Mr. Schaan: The Textile Labelling Act, as well as the Precious Metals Marking Act, for a number of historical reasons, as I say, are criminal in penalty. So, when there is enforcement action taken for failure to live up to the act, it’s actually a criminal sanction rather than a civil sanction. It is an interesting piece of history as to why that was the case. So, as we look to modernizing it, many people have suggested that we look at civil offences in addition to potential criminal offences for a failure to correspond with the act.

Mr. Diotte: Could you give me an example of a law, like if you rip off the label on a mattress, you could go to jail?

Mr. Schaan: It’s more about falsely identifying the product, so labelling it with a product that it’s not. If it says 60 per cent cotton and 40 per cent polyester and it is actually 70 per cent cotton and 30 per cent polyester, right now the sanctions, as laid out in the Textile Labelling Act, are criminal in nature. One of the opportunities we’ll have as we look to modernize the overall statute as opposed to just the regulation is to look at civil offences, which would bring it into line with international best practices.

Mr. Diotte: As far as you’re aware, nobody has gone to jail for some of these offences?

Mr. Schaan: That would be more a question for the bureau as they’re the enforcer of the statute, but, to my knowledge, no, I don’t believe so.

Ms. Wright: As far as I’m aware, nobody has gone to jail.

Mr. Di Iorio: Mr. Schaan, one clarification: Is it criminal or penal in nature? I’m quite surprised to hear it would be criminal.

Mr. Schaan: It’s criminal in nature.

Ms. Wright: Yes, that’s right; it’s criminal in nature.

Mr. Di Iorio: Not penal.

Ms. Wright: There are fines up to $10,000 for contravention, as well as jail time.

Mr. Di Iorio: I find myself in an interesting position. Ms. Wright, I have your document in front of me, and it seems that you took the textbook I had in mind and put it in writing. I actually want to commend you for the work you’ve done. I understand you’ve been in the position for seven months. So, obviously, as to what happened in the past, you were not in the department before.

Ms. Wright: I’ve been with the Competition Bureau for the past five years, but I’ve been in my current position for the past seven months. So I was not involved in this before then.

Mr. Di Iorio: Have you witnessed the reasons that led to this, well, let’s call it a “situation” that we’re confronted with?

Ms. Wright: Thank you very much for your question. It’s certainly a fair question, the reasons for the delay that we see in this case. It’s one of the first questions I asked when I was briefed on this file.

I’m not here today to try to provide an explanation or a justification for 18 years of delay. I can say that, looking back on the file, it’s clear that there was a lot of hard work done on this file. There was always an intention to make the amendments to the Textile Labelling and Advertising Regulations. There were a number of challenges, including Parliament proroguing at sensitive times in the course of the file. Also, there were difficulties with staff turnover and management turnover.

The bottom line is we didn’t get it done, and I’m here today to try to provide a solution to that and to provide a concrete action plan for moving forward.

Mr. Di Iorio: Going back to my earlier comment when I said I commend you that it’s a textbook example, I do see, clearly, with the apology for the delay and no excuses provided, simply that it’s something unacceptable and should reoccur. You’re referring to concrete steps, and I do see the concrete steps. For example, I see the timelines, the detailed timetable — something that we often insist on. Also, in addition to the detailed timetable, you said that updates will be provided. It’s one thing to say, “I’ll give you a detailed timetable, but then I’ll see you 10 years from now,” and we don’t know what’s happened in the interval. And with the new protocol you’re putting forward, there is also a remedy to ensure that it doesn’t happen again . Thank you for all that. It’s greatly appreciated.

I want to add one element, and this is obviously not in the document. I did sense sincerity in the way you expressed it, and I will be relying on that. I don’t do that to put pressure on you but to be very clear as to why I accept what you’re giving me. I trust that you will carry on the responsibility you undertook.

Could you please enlighten us as to how we can rest assured that the detailed timetable will be a day or two?

Ms. Wright: Thank you very much for your comments.

One of the first things we wanted to do in addressing the committee’s concerns was to put together a very detailed timeline with clear dates associated with that timeline. I can say that we are working extremely hard. We have this timeline, and we are very committed to ensuring that we meet those deadlines and hopefully surpass them.

Mr. Di Iorio: I certainly appreciate what you did, that there’s an officer who is responsible for this aspect, and that officer has to report directly to you.

Ms. Wright: Yes.

Mr. Di Iorio: For example, if that officer, for some reason, is promoted elsewhere, falls ill or whatever, do you have a plan in place to make sure you don’t come back a year from now and say, “Well, the officer wasn’t there and couldn’t carry on”?

Ms. Wright: Absolutely. We have a plan to ensure that if there are changes within the directorate, we will ensure this work continues to move forward.

Mr. Oliver: Thank you very much for coming this morning. Personally, I’m looking at how we get things fixed, not at what happened in the past. There is some renewed vigour around the table here, so thank you for coming and addressing it.

As was been said by my colleague, it’s great to see a detailed timeline and that will see resolution fairly quickly of the outstanding issues.

Because I did hear there are deeper policy-related items that need to go through a more robust process than MAR, I want to confirm that in our disallowance letter, the articles that are going to be revoked are paragraph 5(2) (d), subsections 12(5) to (9), subsection 11(3) — the wording — the English and French versions — and section 31.1 — removing them from the English version. Are all of those planned to be addressed in the MAR update? The other two or three that are outstanding will go through the MAR; is that correct?

Ms. Wright: That’s correct.

Mr. Oliver: So the main four we were most concerned about and which we thought we could revoke without significantly impairing the regulations are going to be addressed through MAR.

Ms. Wright: Yes, that’s right. We ensure they would be addressed through this expedited process.

Mr. Oliver: I think that was four out of nine, right? So there are five that remain that we’ve been raising with you. Those are going through a more detailed process. Can you describe that process again and when you think that might come to fruition?

Mr. Schaan: That process builds on consultation efforts that were done by the bureau in 2007, so it allows us to simply update the consultation process, which we will do now, to be allowed to proceed through to Treasury Board in the fall, and then allow for gazetting in the new year. In some ways, it’s as expedited as the MAR process, but because they are more substantive in nature, we will use the traditional Canada Gazette method.

Mr. Oliver: So you see the other five, then, being addressed in the Canada Gazette in the fall of 2019?

Mr. Schaan: Correct — well, in 2019.

Mr. Oliver: Then we can put dates to all nine of our items from you, then, is that correct?

Mr. Schaan: The only item that will not be in either of those processes is 11(4), which is the recommendation for removing the bilingual exemption, which is, as we indicated to the committee, a question of policy that requires greater consultation. That will not be in the Canada Gazette process.

Mr. Oliver: So 11(4) is the only other issue.

Thank you again for the forthrightness of both your presentations. It’s very much appreciated.

Mr. Shipley: I also want to say thank you for the forthright presentation.

I have a few questions. Ms. Wright, page 2 of your presentation talks about the MAR and says, “Over the past weeks, we worked actively with the Department of Justice and Treasury Board Secretariat” to address the issues identified in the notice of discontinuance, which for this committee is actually our punch to get something done. You said that it can now follow the MAR process, which is led by Treasury Board and “aims to quickly correct errors, omissions and inconsistencies.” Is this new? Why wouldn’t it have been used? Any idea why it’s just coming into effect now, or why somebody thought about using it after all the years?

Ms. Wright: I’m not sure why decisions were made in the past. I can say I’m happy we’re able to use the MAR process going forward and that we will be able to address the committee’s concerns in an expedited manner.

Mr. Shipley: I think all of us are glad to hear that. The concern, obviously, is that this committee has gone through — and I haven’t been on it long — a lot of years. All of a sudden, someone in the department, to your credit, is recognizing there is a process in which we can expedite it.

Mr. Schaan, in the last paragraph of your presentation, you talked about employing, first, the MAR process for most of it, and Mr. Oliver went through which those will be, and then addressing the remainder of the regulatory updates through the standard process.

I’ve got to tell you, that raises a red flag right now, because the standard process we’ve been going through has brought to this table today with you at the end of it. We’ve always heard about the hard work and good intentions of departments, but how are you going to change that reassurance to us under the standard process? The MAR is new. That’s very good, but it is a concern.

I don’t think you want to be back here other than to give us positive updates, and we just want to have some confidence that this standard process has a little more punch to it than it has had.

Mr. Schaan: The way the bureau and department have worked together on the Textile Labelling and Advertising Regulations project is really that the timelines will apply to the project as a whole. The scrutiny that Leila’s shop and my shop are working together on is to address all of your concerns in a project management approach to all of them. We’re using MAR where MAR is possible, we’re using standard regulatory processes through the Canada Gazette for the portions that aren’t and, at the same time, we’re looking at the broader law.

My commitment on that would be to say that the standard process is being put through the same vigour and rigour we are putting through the MAR process; we’re just using different vehicles because of the nature of the changes being requested.

Mr. Shipley: Again, I want to thank both of you for your presentation and the optimism. I really do.

Mr. El-Khoury: Thank you, Ms. Wright, for your good presentation. You said that you recognized the problem and that concrete steps would be taken in order for this not to happen again. If we go further, you said a new protocol would be used in order to have this amendment made. In order to increase the level of assurance, can you enlighten us as to what kind of concrete steps and approach are you going to use?

At the end, you said this would be corrected in a timely fashion. What do you mean by “timely fashion”?

Ms. Wright: Thank you for your questions.

Some of the frustrations the committee has had with us is a lack of communication as to the steps we’re taking, the steps that need to be taken, as well as the timelines involved in each of those steps. That’s why we are putting in place a new protocol where our correspondence with the committee will include clear timelines for the steps we need to take. If those timelines are different than previous correspondence with the committee, we will explain why the timelines have changed.

With regard to the concrete steps we are taking, I would turn your attention to the appendix to my remarks in which we have set out a timetable. It includes seven steps. We have completed three of those steps. So we are working through, and the target completion date is May 2019.

Mr. El-Khoury: Thank you.

Mr. Badawey: I too want to commend all of you for the work you’ve done and for being forthright to the committee.

I heard key words and phrases from you, Ms. Wright. These include: committed, updating the committee, future protocols, immediate plans, expediting, and, of course, timelines and a plan to meet those timelines. I was so impressed that I think we should copy your letter and commitments to all of the departments that we work with on a regular basis, because it is something that this committee has been striving for, and trying to do so in a fair manner since my time here. And you make it easier for us to go down this road and hopefully meet the expectations the committee has with respect to regulations that have been outstanding for decades in some cases. I want to thank you for that.

That said, we have a plan here now — future protocols, updating the committee on key milestones, timelines — with respect to the micro issue. The macro issue is on the timelines on the larger projects. Mr. Schaan mentioned the larger projects. Can you give us some idea, utilizing that future protocol, on the timelines on those projects, and is it going to be using the same protocol you are utilizing now with these micro issues?

Mr. Schaan: With respect to the second set of concerns of the committee on the specific regulations, we will be using the same process in terms of timeliness.

On the broader project of updating the Textile Labelling Act, which was not necessarily a recommendation of this committee but obviously it is part of the rationale for why this is a challenge and why we’re going back to a statute that potentially has some need for updating, the project timeline is somewhat subject to the political will of the government of the day. We, as officials, will continue the policy work necessary, but the legislative openings are not always as clear as to when time is available to be able to introduce new legislation, house time and other things.

However, I think the commitment on the part of the department is that with respect to any concerns of the Standing Joint Committee for the Scrutiny of Regulations, we will continue to respond to them in an expedited manner.

Within my own shop, I can say, and given the number of statutes that I steward, we have regular communications with your committee. One of the things I’ve asked my group to do, in the same way Leila has, is a better job in tracking all of our correspondence back and forth, making sure we keep on top of it and we are reporting back to you in a timely and expedited manner.

Mr. Badawey: Mr. Schaan, we appreciate that. I want to emphasize that when the committee goes to disallowance, it’s for the reason to encourage the minister and the team to move forward on some of the items that we have concerns about, and this has been accomplished.

I have to say, if you don’t mind, we would like to use some of the direction that you’re going to take for perhaps a future letter from the chairmen to all the departments to hopefully follow the same sort of template to therefore get resolution to a lot of these issues. Like I said, these issues sometimes go back decades.

I appreciate your efforts here, and we look forward to working with you in the future.

Senator Woo: Like you, Ms. Wright, I’ve only been on this file and committee for seven months, so I don’t know as much of the background as my colleagues, which is why my question is an inversion of what has been asked previously.

What I want to hear from you is an understanding of what changed between March 7, the most recent correspondence from the department, still asserting that the best approach for all nine items was the more thorough process and the more recent reversal for the four that will be put through MARs. I don’t want to rehash what has already been asked and the answers you have given.

The specific question I want to put to you is whether there was some thinking in the department, based on the March 7 assessment, that had the nine items go through the more thorough process, which would now be lost because four of those items are going through an expedited process; or if, in fact, there was nothing at all that would have stopped the four from going through MARs in the first place and that the March 7 letter was really, I suppose, an act of convenience or a broad-brush approach to addressing our concerns.

Do you understand my question? I’m trying to see if we might be losing anything by putting the four items through MARs rather than the more thorough process, given that you had said the more thorough process was the way to go just two months ago.

Ms. Wright: I will begin by saying that we are not losing anything by going through the more expedited process. As my colleague Mark mentioned, there was this view that the legislation needed to be updated through a labelling modernization initiative and that we would be able to use that initiative to make all of the changes necessary in order to address the committee’s concerns.

When we received the committee’s letter of April 30, it became clear that the committee had concerns regarding using this larger initiative to address the issues that are before us today. So after receiving that letter from the committee, we took time to see what our alternatives were and tried to come up with a new solution that would address the committee’s concerns in a quicker way.

Senator Stewart Olsen: Thank you for being here. I would just like to complete the process. I think one of the difficulties for our own people here is that we have the promises and we have the dates, but we never know exactly unless we call the departments.

If you could expedite — and you have a person assigned to this now. When the December 2018 is complete, could you send a note to our committee? I’m new as well, so I may be overstepping my bounds, but this would let our people know that this timeline was met. I think that would improve communication greatly and save a lot of work in our department as well.

Mr. Chair, I’m sorry if I overstepped there, but I think it would be very helpful.

The Joint Chair (Mr. Albrecht): Do you want to respond to that, Ms. Wright?

Ms. Wright: Absolutely. We will be happy to work with our legal counsel just to make sure we are respecting cabinet confidences, but we would be happy to provide updates as we meet milestones in our timelines.

The Joint Chair (Mr. Albrecht): I think we have exhausted questions. Thank you for appearing today.

We will move to Ms. Agnès Lajoie and the opening statement she has prepared for us. Following the presentation, we will dismiss our witnesses and the committee will deal with decision 1, decision 2 as appropriate.

Agnès Lajoie, Director General and Assistant Commissioner of Patents, Canadian Intellectual Property Office, Innovation, Science and Economic Development Canada: Good morning, My name is Agnès Lajoie, and I am the Director General and Assistant Commissioner of Patents, Canadian Intellectual Property Office, Innovation, Science and Economic Development Canada. You may hear us using the acronym CIPO, which is for the Canadian Intellectual Property Office. I am joined by Rachel Mainville-Dale, Manager of Patent Policy, and we will share the opening remarks for you today.

I want to thank you for the invitation to speak about the Canadian patent system and more precisely about the reinstatement provisions and the effects of a possible disallowance of the provisions. Before we get into the specifics of the effects of disallowance for the reinstatement provisions for patent applications, I would first like to apologize for the long delays to address all of the committee’s issues. I also think it’s important to take a moment to situate where the provisions on reinstatement fit into the patent legislative regime and where patents fit into the broader government priorities on encouraging innovation.

A patent is a time-limited monopoly granted by the government that provides exclusive rights to produce, use and sell an invention. Those exclusive rights introduce new knowledge and technology that benefits our broader society. Applicants establish boundaries to the use of their inventions by filing patent applications, and the rights are confirmed when the patent is granted. The value of patents for patentees is the certainty of the exclusive rights that are conferred by the patent to exploit their invention.

Timeliness and quality of patent rights is a shared responsibility between applicants and CIPO in terms of timely action from both parties from the moment an application is filed to the timely response during the examination up until the patent is granted.

The main element of the legislative regime used to move applications along that path to a grant or a rejection is the abandonment and reinstatement provisions. Their purpose is to force applicants to pursue their interests and maintain their rights in a timely fashion as well as clearing “deadwood” applications from the Canadian landscape. Eliminating deadwood patent applications allows entrepreneurs and companies greater freedom and certainty to operate their commercial interests. It provides certainty to the marketplace.

[Translation]

Applications can be deemed abandoned in respect of one or multiple failures at the same time, such as failing to request examination within five years of the filing date, failing to respond to an examiner’s report within six months and failing to pay annual maintenance fees. The requirements to reinstate abandoned applications are to request the reinstatement within 12 months of the abandonment, correct that which caused the failure and pay the $200 fee. Generally, between 1,000 and 3,000 patent applications go abandoned every month. Approximately 84 per cent of applicants do not reinstate their applications once they are abandoned.

[English]

Abandonment of patent applications can be inadvertent or it can be used deliberately by applicants who no longer wish to pursue a granted patent or as a strategy to extend the time to make decisions as to whether they wish to pursue a granted patent.

There are many factors that could play into an applicant’s decision not to reinstate their application and essentially forego their rights to the invention, such as: they no longer believe the resulting patent will have value; realization that the invention is not patentable; or not aligned with their core business and IP strategy.

Once a patent is granted, the rights holder can sue violators of those rights for infringement. This includes the period before the patent was granted from the time the application was available to the public and includes any period where the application was abandoned.

Users of the patent system need a clearly defined end to the reinstatement period in order to provide legal certainty of when their rights are in the public domain. This permits third parties to know whether they are free to use the invention without fear of infringement.

[Translation]

Rachel Mainville-Dale, Manager - Patent Policy, Innovation, Science and Economic Development Canada: I would like to take a moment to briefly outline the work the office has done to address the issues identified by the committee with sections 98 and 152 of the Patent Rules. CIPO believes that the committee plays an important role and it takes the issues it raises seriously. The provisions which are at issue today were identified amongst 12 others in a letter by the committee in 2006. Except for the present issue, all other issues were resolved to the committee’s satisfaction within a short time.

[English]

After several exchanges between CIPO and the committee, we agreed to an amendment in 2009. That year, we started the preparations to include this particular amendment in a set of 25 planned amendments to the Patent Rules. Due to the complexity of modifications needed to our IT systems to implement some of the amendments in that package and a lengthy drafting period with our partners from Justice, the proposed regulations received blue-stamp in 2014.

At the same time, significant effort was being made to make amendments to the Patent Act necessary for Canada to ratify the Patent Law Treaty, otherwise known as PLT. These amendments to the act received Royal Assent in December 2014 but would not come into force until significant coordinating amendments were made to the Patent Rules.

Due to the complexity of the Patent Rules and not wanting to overwhelm stakeholders with piecemeal changes to our regulatory framework, the decision was made to incorporate the blue-stamped proposed regulations from 2014 into the larger PLT amendments to the Patent Rules.

The drafting of the new rules to bring into force PLT includes the previous amendments from 2014 and is nearing completion. Subject to approval, the plan is to prepublish them in the Canada Gazette, Part I by the end of this year. CIPO has always worked to complete the process in the most efficient manner possible with its partners from Justice and the Treasury Board Secretariat. However, many factors can come into play when amending one of the most complicated federal regulations, such as CIPO’s concurrent ratification of five international IP treaties and a modernization of its patents, trademarks and industrial design legislative regimes.

Ms. Lajoie: I would now like to speak to the effect of the potential disallowance of sections 98 and 152 of the Patent Rules. Taking into account the overall purposes and objectives of the patent regime, it is important that there be a clearly defined end to the reinstatement period to provide certainty as to when the invention becomes part of the public domain.

CIPO also respectfully disagreed that the reinstatement regime outlined in section 73 of the Patent Act could function without a prescribed end to the reinstatement period. If these provisions are disallowed, does that mean an applicant could reinstate an application and obtain a patent for an invention that was irrevocably abandoned three years ago? Does that mean there is no end to the reinstatement period for a patent application deemed abandoned today? And what about the third party who has been commercializing that invention believing it was in the public domain? What protection against infringement would be accorded to them when the patent application is revived and granted a patent? Certainty is needed as to when inventions become public domain so that third parties and innovators can use them freely.

In conclusion, the patent system cannot function without a clearly established end of the reinstatement period. It would create considerable uncertainty for applicants as to when they could reinstate their application and more importantly for third parties as to when inventions are in the public domain so that they can commercialize them without fear of infringement.

[Translation]

Given the importance of the issue raised by the committee, we are working with our partners in the Department of Justice and the Treasury Board Secretariat to complete these amendments to the rules in an expedited manner ahead of the other regulatory amendments. Work to complete these amendments is well advanced and we hope to be able to share good news in the very near future.

CIPO wishes to thank the committee for its work in ensuring the robustness of the patent legislative regime, and once again, we apologize for the delays. We of course look forward to the committee’s next review of CIPO’s regulations.

We are now ready to answer your questions. Thank you.

[English]

The Joint Chair (Mr. Albrecht): Thank you very much for your input today. We will now look to our committee members for questions relating to the presentation and the information on agenda Item No. 2.

Mr. Oliver: Thank you very much. I just want to be clear that sections 98 and 152 are part of the amendments you’re planning to prepublish in the Canada Gazette by the end of the year.

Ms. Lajoie: Yes, it is. However, considering the importance of this modification to the committee, we have taken certain measures to accelerate the process that we cannot elaborate on right now because it’s cabinet confidence.

Mr. Oliver: Excellent. Thanks.

If you weren’t able to accelerate it — and I’m glad to hear that that’s a potential — the prepublishing in the Canada Gazette, how long after that? Then you go through consultation that affects an undefined period after that, right?

Ms. Mainville-Dale: The schedule is to go to Canada Gazette Part I by the end of the year, then a 30-day comment period, after which the plan is to go to Canada Gazette Part II by next spring and then come into force in late 2019.

Mr. Oliver: Thanks very much. There is no way the MAR process can be used for these amendments?

Ms. Mainville-Dale: We did consult with Treasury Board and with Justice, and this one was not eligible for the MAR process.

Mr. Oliver: I just want to say: There’s a plan of action. It sounds like there’s a secondary plan of action you can’t talk about that might even expedite things further. I can guess where that’s at since you can’t talk about it. So that’s great to hear. Thank you.

Mr. Shipley: I have a quick question. This has been going on for quite some time. What do other countries do to resolve this? It would appear that it’s working around the complexities of definition.

Ms. Mainville-Dale: Is your question regarding what other countries do regarding abandonment and reinstatement?

Mr. Shipley: Yes. I’m trying to figure out why it’s such a big issue here. Is it the same issue in other countries?

Ms. Mainville-Dale: For abandonments and reinstatements, all countries have some system to encourage you to go through the patent process as quickly as possible so that rights are uncertain. If you don’t respond and do your actions in a timely fashion, you are going to effectively abandon your rights.

A lot of countries have a defined period at which you have to respond, otherwise you lose your rights. There are systems where you have rights for third parties when those rights are uncertain. So, in other words, if you were to start using or commercializing that invention, you would be eventually protected from infringement. So some of them do not have clear ends to their periods of uncertainty. However, in those cases, you have due care, unintentionality and rights for third parties.

Mr. Shipley: What we’re trying to get at is the clarity around infringement.

In the last paragraph, you say, “We hope to share good news with you in the very near future.” What does that mean? Is that following up with Mr. Oliver’s comments about the process to get this to 2019?

Ms. Mainville-Dale: We had a very small window of opportunity to include this in another regulatory package. That work is well advanced, and we hope to be able to come back to the committee in the very near future.

Mr. Shipley: Thank you.

Mr. Di Iorio: Thank you for your presentation. If I go to page 5 of 5, the third bullet, where you say, “In conclusion, the patent system cannot function without a clearly established end for the reinstatement period,” you made the demonstration of that in your previous paragraphs. This will occur if there is disallowance. Do you agree? And disallowance is disallowance of the regulation.

Ms. Mainville-Dale: Yes.

Mr. Di Iorio: If it is so crucial, why is it not in the statute instead of having it in the regulation?

Ms. Lajoie: Actually, this is a very complex question. When we work with our colleagues from Justice in making an optimal determination of what should be in the regulations in order to have all the authority to manage and to coordinate the operation of the patent system, this is the balance that we need to have, and, again, this process is not fully under our control.

It is also important to understand that we also consult our clients and stakeholders when we amend the legislation and when we amend the regulations as well. Amending the regulations provides additional opportunities to interact with our stakeholders and use a more flexible mechanism in order to make sure that our system is modern, functional and in line with international best practices.

Mr. Di Iorio: Actually, that’s not my question. My question is that if it’s so crucial, Parliament would have provided for it in the statute. It would not have left it to the regulations or whether it’s valid or not valid. You know what’s at stake here — whether the statute enables us to adopt this regulation or not, and that’s where we have this debate. The debate is not about the conclusion that you state. Nobody is debating that. We understand the concept. Are we saying that if the legislation doesn’t provide for it, we’re just going to close our eyes and let the regulation go by anyway because it makes sense to have the regulation say that, even if the statute doesn’t allow for it?

So the basic question is: Does the statute allow for this? Because if it doesn’t allow for this, even though it makes the most sense in the universe, we still can’t accept the regulation. That’s my question.

Ms. Mainville-Dale: The skeleton for the reinstatement provisions is laid out in section 73 of the act, where it says that you must do these three things — request the reinstatement, correct the omission and pay the prescribed fee — and it’s the word “prescribed.” It’s saying make the request within the prescribed time. That’s where the regulation, in terms of prescribing the time to make that request —

Mr. Di Iorio: It’s prescribed manner.

Ms. Mainville-Dale: Yes, in the prescribed manner, but within the prescribed period as well. So it says make the request within the prescribed time and pay the prescribed fee. And the regulations prescribe the time and the fee.

The Joint Chair (Mr. Albrecht): Further questions?

I want to thank our witnesses very much for your appearance today, for your input, and the committee will deliberate and make a decision on agenda Items 1 and 2 in terms of action going forward.

We look to our general counsel for comments relating to Item 1 first.

Evelyne Borkowski-Parent, General Counsel to the Committee: It applies to both items, and I appreciated the appearance of witnesses as well.

I want to mention the fact that it is because the committee cracked down on those two files that we actually got the information we got this morning because, even after a notice of disallowance, which is the penultimate step in the process, we got some very generic letters from the department. Now we have some certainty or sense as to what the plan is, but, even after a notice of disallowance, that information was not forthcoming. It is because members pursued the issue that we actually got the information.

The Joint Chair (Mr. Albrecht): For clarification, is counsel recommending we proceed in the direction that we were given this morning, that it is acceptable to proceed in that fashion? Any input?

Mr. Badawey: I do want to reiterate my earlier comments. This committee has been put in place to deal with regulations that sometimes go on for decades. With that, we have mechanisms that allow us to proceed in an expedited fashion. Those are reports, disallowance, et cetera.

Legal counsel is correct, and we did put forward the disallowance. It lit a fire under a few. Quite frankly, not only did it do that and word is getting out through different departments, but also I was very much appreciative about the fact there’s a template now in place within this department that allows them to have a future protocol, which includes something that we constantly ask for: a disciplined timeline with respect to them meeting those objectives.

With those objectives, there are pathways to resolution. That’s the comment that comes to mind. I would go so far as even saying we might want to use this in future correspondence that we send to different departments.

Mr. Chairman, being encouraged and seeing that the yardsticks are in fact moving down the field, I would be prepared to put a motion forward for both Items 1 and 2, if you would allow me, versus splitting them up into two different motions, because they are the same. That motion is to put both disallowances in abeyance, subject to the outlined timelines being met.

With that, again I want to reiterate my comments that I see commitment, key milestones being met, pathways to resolution, an expedited process, and protocols.

To digress for a second, I would encourage counsel to use a lot of what those protocols are going to be, with expectations outlined in future correspondence to other departments so that we can have a disciplined approach versus everyone being different. A disciplined approach as per what was outlined today would be very healthy to pass on to all departments so we get the same treatment from all departments based on the issues we’re dealing with.

The Joint Chair (Mr. Albrecht): I’m just wondering, Mr. Badawey, would you consider, just for clarity and for our purposes, to deal with the exact same motion, but separately?

Mr. Badawey: Separately is fine.

The Joint Chair (Mr. Albrecht): I will certainly accept yours first as Item No. 2 comes up.

Mr. Oliver: I fully support the motion and will support it when it comes to that time.

Just to come back to our counsel’s comments, there is a lesson learned for us. I have been looking at how we systematize or routinize our committee interventions. Although the topics are enormously variable, our committee tools are limited. We have escalation steps.

A good lesson learned is that between the notice of disallowance — whatever we get back — and a final disallowance, there is merit in a last conversation. This one didn’t move that much. Unless this expedited process comes true, then they pushed harder. With the textile issue, there was a very significant shift because of this moment.

Let’s just make sure we remember that, because committees change. We’re all here for short periods of time. It would be great to begin to have a routine process here that other future committee members can follow so that we’re not reinventing stuff every time it comes up.

Senator Woo: Whether I support the motion for Item 1 or Item 2 depends on the answer to this question. I would like some clarification from legal counsel on the second item.

The Joint Chair (Mr. Albrecht): We’re going to deal with them one at a time. Let’s deal with motion number one on Item No. 1 right now.

Senator Woo: Then I’m happy to reserve my comments.

The Joint Chair (Mr. Albrecht): Any further comments on the motion? All in favour of the motion of Mr. Badawey raise your hand. That’s carried.

Mr. Badawey’s motion for Item No. 2 is on the floor.

Senator Woo: Could I get some clarification from counsel on the legal disagreement concerning the effect of the disallowance of those two items and whether they would in fact cause disruption in the patenting process, particularly whether a patent is no longer in effect? There clearly seems to be a difference of views as to whether that would happen. Our own legal advice is that very simple fixes can be put in place — simple fixes that apparently have already been drafted and are ready to go.

I regret not having asked them that question. If we could hear from our legal counsel as to whether you think that course of action, having heard from them today, is still available to us. That will shape our thinking on how we move forward on this file.

Ms. Borkowski-Parent: There is no disagreement as to the effect of the repeal of sections 98 and 152. That information was provided for this meeting.

The committee issued a notice of disallowance on sections 98 and 152. The minister wrote back saying, “Well, we’re not doing that, and if you do that, the patent system is going to fall apart.” Without providing any further explanation as to what that meant, the committee decided to call upon witnesses. They had to provide reasons for the statement that the repeal of sections 98 and 152 would cause great disruption.

As presented in the note prepared for you today at the bottom of pages 3 and 4, it is a valid point. All this could have been provided much earlier in the conversation with the department.

The other thing is that if sections 98 and 152 are so crucial — and after the committee reiterated their apparent lack of validity — they could have been fixed earlier. If they’re so important to their scheme, just fix them before the committee gets to its last resort of disallowance.

However, given the reasons they have given on the effect of the repeal of sections 98 and 152, I would suggest that repealing them at this moment might not be the best course of action. Waiting for them to actually fix the problem would be better.

Senator Woo: Just to clarify, you’re referring to the testimony today, particularly on page 4, mostly.

Ms. Borkowski-Parent: Yes, that’s correct.

The Joint Chair (Mr. Albrecht): Are you looking at the testimony or the prepared notes?

Ms. Borkowski-Parent: That’s in the notes in the material we provided for you.

The Joint Chair (Mr. Albrecht): Senator Woo, did you want to proceed?

Senator Woo: I just wanted to clarify, then, that legal counsel is satisfied that the further explanation they provided does in fact clarify that the revocation would cause disruption to the patent system and, therefore, we should proceed with great caution.

The Joint Chair (Mr. Albrecht): I think the underlining factor for the committee — and Mr. Badawey was at this earlier — is that the time we waste on this is — on page 4 the very last paragraph above the headline — “It bears noting the possibility of adverse consequences only arises because the Department has failed to make . . .” et cetera.

Any further comments?

Senator Stewart Olsen: I’m happy with our decision on number 1.

With number 2, I did not feel we got the reassurance I was looking for. Just from hearing from legal on how difficult it was, I’m not really happy when people tell us this is so complex that we’re not going to understand. That was basically the underlying theme. That’s something we should be careful about and watch. We got much better information from the manager of the department.

I’m okay with all of this, but I’m not happy with the near future.

I agree with Mr. Badawey on the first one, the template with dates and commitments. I do understand that they’re working with two departments and that that’s always difficult, but that can’t be an excuse for the delays in fixing the regulations. They simply can’t say it’s complicated, it’s difficult. We have to push on that.

If we want to put the disallowance in abeyance, that’s fine, but I think we should ask for a date to come back so that we can look at it and make sure, because we leave our people having to sift through all this information and try to keep up with all of these people who don’t respond. I don’t think that’s fair.

The Joint Chair (Mr. Albrecht): So you’re in support of the motion with possibly including, to the department, an expectation of definitive timelines to expedite the process.

Senator Stewart Olsen: Yes. I think that more sense with this one.

The Joint Chair (Mr. Albrecht): Do you want me to make that part of the motion or simply part of the agreement? I think we all sense that frustration.

Senator Stewart Olsen: I’m fine with that.

Mr. Diotte: I agree with the senator on that. The first group had a time frame laid out. I underlined that as well. It’s in the very near future. They’re working in an expedited manner. But I think we have to add a time frame or get some expectation. As I say, you can see that the first group had that time frame and what has been accomplished. The second group is somewhat argumentative and I didn’t appreciate that, but I think we still hold the hammer and we should get a time frame.

Mr. Badawey: I believe I did hear a time frame. I believe I heard Canada Gazette Part I by year end and Part II by spring of 2019. Correct me if I am wrong, but I did hear a time frame and I was satisfied with that.

Having said that, we also have the disallowance and abeyance. If those time frames aren’t met, we can pull the pin, if you don’t mind the expression.

The Joint Chair (Mr. Albrecht): The timelines are there, I believe. However, I think I’m interpreting Senator Stewart Olsen’s comments as asking for updates whether they’re actually achieving them.

Senator Stewart Olsen: That’s right.

The Joint Chair (Mr. Albrecht): “You planned to be there; you’re here now.”

Mr. Badawey: I would add that to the motion if it would satisfy the senator and others that have that concern. We can send a letter off in the late fall, as they outlined with Canada Gazette I, to ask for an update. Following that, if it doesn’t include the update for Part II, we send a second letter out in the spring of 2019 to ask for a second update with respect to Canada Gazette Part II.

The Joint Chair (Mr. Albrecht): Any further input?

Mr. Di Iorio: At page 5, third bullet.

The Joint Chair (Mr. Albrecht): Of their presentation?

Mr. Di Iorio: Yes. It states:

. . . the patent system cannot function without a clearly established end for the reinstatement period.

I hope we all agree on this. But having agreed on this doesn’t advance us very much because that is not the purpose of what we’re doing. What we’re doing is talking about whether this should be in a statute or in a regulation. They basically say that because it’s not in the statute, the only way we have to make it happen is to put it in the regulation, and therefore you can’t disallow the regulation.

That is kind of a veiled threat to us saying, “You’re going to put the system in disrepute if you go ahead with this.” Well, it’s strange to say we put the system in disrepute when they created the problem.

I want us to be clear that we’re not going to be proceeding in this way all the time. I agree with my colleague Mr. Diotte. We hope to be able to share good news in the very near future. I don’t find this acceptable as a way to come before the committee. If it’s because of cabinet confidence that they can’t disclose things, there is a way to say that, but this is not the formula. There are ways to say that. Their way is to say, “We are currently working on matters we cannot disclose, and therefore we cannot address it publicly or in camera.” There is a way to say that, but not to come here and say they’ll fix it and that’s why it took so long.

[Translation]

Ms. Sansoucy: The last time I took part in the work of this committee, we had a very interesting discussion on the respect of the mandate and responsibilities of the committee. In the presentation of the Canadian Intellectual Property Office, I did not feel that people had understood our mandate and responsibilities and the respect that is due to them.

I agree with my colleagues’ comments. When we must deal with matters that are too complex or secret — It is not sufficient to say, as indicated on page 5, that CIPO “respectfully disagrees” and then move on to the next point. What about our responsibilities as a committee? In our next letter to the Canadian Intellectual Property Office, I would like us to ask it how it perceives our mandate and our responsibilities, and how it intends to respond to them. I really don’t know what its duties are with regard to our mandate and responsibilities.

[English]

Mr. Shipley: I want to go back to the comment in their presentation of the “very near future.” In the motion, we’re talking about the timelines.

I want to go back to what we had in the first presentation. In Canada, we have seasons that are about three months long, so if they say in the spring of 2019 or in the fall, it gives us about three months of variation.

What I was impressed with here is that in February 2019 or in April 2018, they would meet those objectives and if they can’t, they will be staying in touch with us on why they can’t and how they’re going to meet the challenge.

I would look to our legal counsel in terms of an expectation of time. When they said we’ll have it in spring of 2019, can we say April 1, 2019, or we’re going to move forward? Can we be a little more specific?

What we have found in past presentations is that they become very generic, so you’re out a season. It’s not too bad, I guess.

I think what the motion is asking is good. We cleared a big hurdle this morning in terms of getting a little more punch into what we’re asking for.

I think we need to be specific on a month at a time and let them say why they can or cannot meet that.

The Joint Chair (Mr. Albrecht): Are we prepared to move on the motion? Instead of simply requesting spring or fall, we would put in a month. On this particular one, we don’t have spring or fall in there.

Mr. Shipley: They talked about the very near future, the spring of 2019.

Mr. Badawey: I’m satisfied of the outline of the timelines presented to us and therefore satisfied with the amendment that I put forward, with the addition of Senator Stewart Olsen’s concerns, and we will leave at it that.

The Joint Chair (Mr. Albrecht): Perhaps in the future we can be more precise in drafting those motions.

Mr. Badawey: That said, Mr. Chairman, that question could have been posed to the witnesses themselves and we could have received from them some credible timelines.

The Joint Chair (Mr. Albrecht): All those in favour of the motion raise your hands? Opposed? That is carried.

Mr. Badawey: Mr. Chairman, if I may, I have a question and a comment. I have a question to our legal counsel to give explanation to the committee of what would happen, when disallowance then goes forward, to the regulations that we’re disallowing.

I want to make sure that the committee understands that we can go against what our intentions are if, in fact, disallowance moves forward. I want to ensure that the committee understands the implications of moving forward with disallowance.

I would like legal counsel to come back with a template that is, as John said, more systematic in moving forward with our correspondence to departments and that, in fact, we’re consistent with our expectations when these issues are expected to be expedited.

I was very impressed with the first presentation today and how disciplined they were with respect to the direction that they were going to take. Not just with this issue, but also a protocol for ensuring that future timelines will be met, and then, of course, articulated to the committee on a regular, consistent basis. I was happy with that.

So if we can have something drafted up, it doesn’t have to be too elaborate. Just a one-pager with respect to having a template we can forward when we are moving forward with our concerns and discussions with the different departments.

The Joint Chair (Mr. Albrecht): We have talked about disallowance previously. Do you want to quickly do a summary?

Ms. Borkowski-Parent: The first step is the notice of disallowance, so firing a shot across the bow. The notice of disallowance will spell out the provisions that are objected to. It’s not a repeal of the whole regulation, just of the provisions and one of this committee’s criteria that it infringes upon.

That goes back to Mr. Di Iorio’s comment. What generally is not part of the consideration, because it’s a matter of policy which falls outside of the mandate of the committee, is the effect on the overall regulatory system that the department manages in the end. The committee was given that power because fixing those legal problems should prevail on other issues that the department might find are competing with that. That’s why there is the exceptional power that the committee has.

In this instance, it is not that the committee’s conclusions are erroneous. It is the unintended effects that the repeal would have, which were spelled out in the correspondence to the committee as of this month. That is also a point that could have been made way earlier in the correspondence from the department rather than after a notice of disallowance is issued.

In the end, it shouldn’t sway the decision of the committee. But given that they seem to be approaching the final steps, it’s probably the more prudent approach.

Mr. Badawey: The point I’m trying to make is that although disallowance is a lever or a mechanism for the committee to encourage the minister and the department to move forward in the direction we expect, our intent is to fix the regulation. The ultimate result can be that the regulation can, in fact, be repealed, which then goes against what we’re trying to do in the first place, which is fixing versus repealing.

Ms. Borkowski-Parent: Certain provisions of the regulations would be repealed, not the whole. So there would still be the Patent Rules, just not sections 98 and 152.

Mr. Badawey: I just wanted to make that point, Mr. Chairman.

Mr. Di Iorio: I want to refer to something crucial that we all should be mindful of: the concept of routinization. I have been here for a limited period of time, and I will be here for a limited period of time. I think we have to be cautious in attempting to customize the approach of the committee. That might explain why we often get into these lengthy processes. People understand the way we work and they say, “We just have to go through the motions with them.”

If routinization refers to having something structured, enlightening, informative and transparent, I accept it and I believe that’s what was put forward. That’s why I agree with that meaning of “routinization.”

If routinization is understood by others as being, “Well, you just put in those buzzwords whenever you make a presentation to them,” and they’ll see the buzzwords and say, “Fine, let’s move on,” that, I think, we have to be very careful in doing.

So in the way we choose to go about becoming transparent, informative and structured, we have to be always cautious in retaining an important discretion to intervene when we see people swaying away from their responsibilities.

MARGINAL NOTES (SF-2016-3)

(For text of documents, see Appendix B, p. 37B:1.)

The Joint Chair (Mr. Albrecht): Let’s move on to Item No. 3 on our agenda. Committee members, we’ll look to our general counsel.

[Translation]

Ms. Borkowski-Parent: At its meeting of October 19, 2017, the committee studied the government’s response to report 91 on marginal notes. That report was tabled in March 2017 in response to the change in the format of the consolidated statutes and regulations of the Department of Justice. You will remember that the marginal notes had been moved into the body of the text so that it was impossible to distinguish them from the headings. In law, the two have a different probative value.

Following the meeting of October 19, 2017, the joint chairs wrote to the minister to ask what solution was being considered by the department to solve the issue of marginal notes. A three-month deadline was in fact been imposed by the committee for the department to find a solution. The reply from the senior director of the department dated April 12, 2018, is in the documents that were prepared for you.

In summary, the department still has not taken any corrective measures and cannot provide a timeline. It also mentions the fact that consultations with stakeholders could lead to further delays. The committee might like to know if consultations had already taken place before the adoption of the new format, and with whom, whether the issue of legal validity was raised, and who may be consulted in future.

[English]

The Joint Chair (Mr. Albrecht): Clearly, it appears the response from the department on April 12 is pushing us away or ignoring us. How do we want to proceed? What are our next avenues for action?

Mr. Shipley: When we go back to the earlier ones, it’s the wording that I think drives us crazy: fulsome consideration; study options; still ongoing; additional time. So there is no commitment to do anything, quite honestly. I don’t know whether the next step is disallowance.

Ms. Borkowski-Parent: This is an issue that applies to all statutes and regulations. There was a legal effect to the change of format. Disallowance would not work in this case. That’s why the committee went straight to a report because it’s a systemic issue that applies to all regulations. If the committee is unsatisfied with that response, it might want to consider witnesses to put additional pressure on the department.

The Joint Chair (Mr. Albrecht): My memory says there was the possibility of tabling a rejoinder or something that emphasizes this again to the house. Is that an option, or are we beyond that as well?

Ms. Borkowski-Parent: It is always an option. It would be a very short report stating the committee has concerns that the department is taking its time to address, but it might want to hear witnesses.

Mr. Shipley: So they have not been in as witnesses?

Ms. Borkowski-Parent: Not on that issue. We had the Department of Justice appear a couple of weeks ago on incorporation by reference, but not on marginal notes.

The Joint Chair (Mr. Albrecht): Are you suggesting we invite the department to appear as witnesses to explain their lack of action on our concern about marginal notes? Is someone prepared to make that motion?

Mr. Shipley: I will make that motion.

The Joint Chair (Mr. Albrecht): Moved by Mr. Shipley. All those in agreement with that motion raise your hand. Opposed, same sign. That is carried. We will ask them to appear as witnesses.

Next is Item 4 on our agenda.

SOR/92-620 — CORRECTIONS AND CONDITIONAL RELEASE REGULATIONS.

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

(For text of documents, see Appendix C, p. 37C:1. )

Cynthia Kirkby, Counsel to the Committee: The 41 outstanding issues on this file were first raised in 2001. The committee was told in 2003 that regulatory amendments would not be made until after the enabling act had been amended, and that took until 2012. Since then, it appeared that progress was being made, and the committee was even told that amendments were expected in 2016. But then, the committee was advised that the amendments were being examined in the context of a broader review of the criminal justice and corrections regime.

The joint chairs wrote to the minister last May, expressing concern about further delay if the promised amendments are, once again, not going to be amended until the act is amended. They sought his assistance in ensuring that the promised amendments were made promptly, even if that meant making them independent of the broader review.

The minister’s response does not commit to that approach and advises that options for reform of the act and regulations were to be presented to the government for consideration in fall of 2017. That is where the file currently stands.

The Joint Chair (Mr. Albrecht): Obviously, we’ve passed the fall of 2017. What is your wish, committee members, in dealing with this unacceptable response?

Mr. Oliver: This goes to my comments earlier. Rather than rethinking each one, which is where we get involved in discussing whether to give them more time, I think our staff have written to their staff. We have received some directions back, what wasn’t implemented. We’ve had our chairs write and received responses back that aren’t yet satisfactory. So I think our next escalation is an interview here, or is there another step that we’ve used before? Just going back and forth with the chairs’ letters obviously isn’t effective. Is there anything between this and an interview here at committee to discuss the issues?

Ms. Borkowski-Parent: No.

Mr. Oliver: I would recommend that we —

The Joint Chair (Mr. Albrecht): We have moved that we have the department appear here to explain their lack of action.

Senator Stewart Olsen: I’m not sure about this one. I’m not sure about your motion, Mr. Oliver.

I know that the Department of Justice — and I’m not a Liberal, but I know the Liberals are undertaking a huge review of a lot of issues. I don’t know if we’re going to hear anything different on this because I know they are amending, and I think I have heard them discussing this one.

I’m not so sure we should push on that. Maybe we could look at it in the fall. But right now, we might give the department a bit of leeway on this. We could send them a letter and say that we’re not happy with this. But, to ask them to send officials and then get the same answer, I don’t know.

The Joint Chair (Mr. Albrecht): Except they had promised by 2017, which is a long time ago.

Senator Stewart Olsen: That was a long time ago. I hear you.

Ms. Borkowski-Parent: Here is a possibility. Given that Minister Goodale appeared before the committee after that letter was sent and given his commitment that he did not want to be back in this room, there could be another letter to the minister to see if we get a different result.

I want to also point out that as far as routinization is concerned, we’re getting a lot of letters where things are bundled in larger regulatory initiatives. We usually warn the committee that this means further delays.

I think counsel would appreciate guidance at this point as to what information we present to departments. Do we say, “If you cannot make that large modernization initiative come to fruition in two years, which is what the committee traditionally considers to be an acceptable period of time to make amendments requested by the committee, then make those amendments independently”? That would avoid files where, because of a modernization initiative, they remain open for too long or for a decade. If we could have that guidance from the committee, that way it is put in our correspondence in the future: “The committee considers two years. Whether you do it in a large initiative or separately is up to the department, but it’s two years.”

The Joint Chair (Mr. Albrecht): I’m just wondering, on the original motion by Mr. Oliver, if we could do both. We could write the letter indicating that we’re inviting the witnesses on a certain date. However, if the issue is dealt with prior to the witnesses appearing, we could save them that trouble.

Senator Stewart Olsen: If that’s the will of the committee, sure.

Mr. Oliver: That’s why I asked the question before I put a motion forward. What are our options as a committee before we go to next steps? I like this one more because I do understand that there is a big review going on. I don’t want to waste people’s time coming in and meeting with us. So I think maybe we come back, given that two years is our committee’s expectation, or exactly what you said, and that if they’re not able to address it in that time, then we expect to see shorter-term actions taken on the regulations themselves. That means we’re parking this for two years.

The Joint Chair (Mr. Albrecht): So you will withdraw the motion?

Mr. Oliver: Yes, I will withdraw the motion because I think that’s a preferred alternative.

Mr. Badawey: I’ll support the motion by the senator, but I want to go to the comments that legal counsel made with respect to two years. That’s exactly what I was asking for earlier, notwithstanding Mr. Di Iorio’s comments, to have a one-page report back to the committee with a template that we can send to the departments when we have these concerns.

Your comments would be part of that. I’ll call it a report, but I don’t expect a 10-page report. It doesn’t have to be too elaborate, just something that is based on our discussions, the prior presentations and, of course, the responsibilities the department has taken to stay within that discipline. That’s what I’m looking for.

The Joint Chair (Mr. Albrecht): My understanding is that we’ll ask counsel to come to up with a short presentation, a template as to what the expectations are, including the two-year timeline. All in favour of that? Opposed, same sign? That is carried.

Are we good? Have we left you with adequate direction?

Ms. Borkowski-Parent: On the template, yes.

On this file in particular, we’re going to write another letter to the minister?

The Joint Chair (Mr. Albrecht): Yes. I think we could put an addendum in there: “We would be happy to have you appear again before the committee.”

Next is Item 5 on the agenda.

SOR/97-109 — PCB WASTE EXPORT REGULATIONS, 1996

SOR/2002-301 — INTERPROVINCIAL MOVEMENT OF HAZARDOUS WASTE REGULATIONS.

SOR/2009-162 — CHROMIUM ELECTROPLATING, CHROMIUM ANODIZING AND REVERSE ETCHING REGULATIONS.

SOR/2010-138 — REGULATIONS PRESCRIBING CIRCUMSTANCES FOR GRANTING WAIVERS PURSUANT TO SECTION 147 OF THE ACT.

SOR/2011-261 — REGULATIONS AMENDING THE OFF-ROAD COMPRESSION-IGNITION ENGINE EMISSION REGULATIONS.

(For text of documents, see Appendix D, p. 37D.1. )

Ms. Borkowski-Parent: At the March 29 meeting, members elected to send a stern letter to the Minister of Environment in lieu of tabling a report on Environment and Climate Change Canada’s timeliness issues. The letter requested, for May 1, time frames for each of the files, where time frames had already been pushed back on several occasions. They were provided in the response from the minister.

If the committee agrees, counsel could monitor the adherence to the time frames, barring which the report could be adopted by the committee.

The Joint Chair (Mr. Albrecht): So moved. All in favour? So ordered.

We will move on to Item No. 6.

SOR/91-365 — PARI-MUTUEL BETTING SUPERVISION REGULATIONS.

(For text of documents, see Appendix E, p. 37E:1.)

Ms. Kirkby: When these regulations were reviewed in 2006, a discrepancy was noted between one of the two versions of one of the enabling provisions. Specifically, while the English version of paragraph 204(8)(e) of the Criminal Code would permit subdelegation in the regulations, the French version would not. Given the principle of statutory interpretation that the meaning common to both versions is the correct one, subdelegation is therefore not authorized. However, section 87(1) of the regulations purported to subdelegate to the director of the race track division the authority to set licence conditions. That subsection of the regulations was repealed in 2011, so there is no ongoing issue with respect to the regulations themselves. The Department of Justice has agreed to amend the code to resolve the discrepancy in the enabling provision, but there has this been no indication of when this will occur.

The question is, therefore, whether committee members wish to continue monitoring this file until the statutory amendment is made or whether it should instead be closed since there is no ongoing issue about whether a provision of the regulations is authorized.

Mr. Shipley: The letter that came from the Department of Justice on January of 2017 states at the bottom:

An appropriate legislative vehicle has been identified, however, it’s too early to speculate on its timing.

What does that mean? That was the final comment. They appreciate the committee for its patience.

Ms. Borkowski-Parent: It means they have potentially identified a bill that it could be included in, but for reasons of cabinet confidence, they are not saying what or when that is.

Mr. Shipley: It’s really an English-French translation issue where they’ve taken the more stringent definition. Is it something we can park, or is it something we need to move forward? If we can park it, we park it.

Ms. Borkowski-Parent: I want to make clear that sometimes French-English discrepancies have very significant effects. That said, from a resource management perspective of the secretariat staff, we’ve been tracking those changes to an act that don’t have an impact on the regulations. That has been resolved. Originally, it was a vires issue. The provision has been repealed. There is nothing for the committee to object to in the regulations.

Does the committee keep tracking the amendment to the act? That’s where, from a resource perspective — we’re short-staffed as it is.

The Joint Chair (Mr. Albrecht): Basically, it’s time to move on.

Mr. Shipley: I think it’s time to move on.

The Joint Chair (Mr. Albrecht): Should we close that file? Agreed.

Next is Item 7.

SOR/2006-102 — TRAFFIC ON THE LAND SIDE OF AIRPORTS REGULATIONS

(For text of documents, see Appendix F, p. 37F:1.)

Ms. Borkowski-Parent: This also deals with a problem in the act, but it has impacts in the regulations, so it’s different from the previous file.

The Government Property Traffic Act authorizes the Governor-in-Council to make regulations authorizing officers to enforce the regulations. Those are understood to be public servants. Subsection 21(d) of the regulations purports to authorizes airport operators, its agents, contractors and employees to enforce the regulations. These individuals would not be covered by the meaning of “officers” or “fonctionnaires” in French. So this is very much a vires issue.

It was raised in 2006, the year the regulations were made. In 2008, the committee was informed that the department was looking into an amendment to the act. As of last December, the department was still looking into opportunities to amend the act.

As I mentioned earlier, it’s a vires issue, which means subsection 21(d) is unauthorized and void in law.

Twelve years is far too long for a department to still be looking at options when agents are enforcing the regulations on a daily basis without being authorized to do so. It might be time for the committee to express its concerns to the minister or consider disallowance .

Mr. Diotte: Bring them in.

The Joint Chair (Mr. Albrecht): As witnesses?

Mr. Diotte: I say disallow. Let’s face it. That’s how we got the action that we got today. If they think that they will just come here and answer a few questions, we’re not going to get anywhere. This is a perfect opportunity to do that. Then we’ll get some action.

The Joint Chair (Mr. Albrecht): Mr. Badawey had a motion to bring in witnesses. We have a suggestion of disallowance.

Mr. Scarpaleggia: Could you repeat where we’re at? We have a motion to bring them in?

The Joint Chair (Mr. Albrecht): Mr. Badawey’s motion was to bring witnesses in.

Mr. Scarpaleggia: I think that’s a good idea. I want to know what the implications are of having people who aren’t authorized implementing regulations, especially in an airport context where there are security concerns.

Does this discrepancy mean that someone might not be implementing an important regulation or requirement because they don’t feel authorized? I would like to know the implications. I think the point is well made that when we bring people in, we get action.

Mr. Oliver: I don’t disagree with that, but I don’t see a letter from the chairs to the minister. We haven’t given the minister a chance to hear about this, to prepare, to meet with his staff and ask for a fulsome report.

This is where it feels a bit arbitrary at times. We’ve almost always written to a minister in advance, asked for them to intervene and follow up, and then when that doesn’t come back satisfactorily, we’ve gone to the interview stage. So while I don’t disagree with the issues and the urgency of them, I don’t think we’ve given the minister a chance yet to meet with his staff and address it before being brought in here.

The Joint Chair (Mr. Albrecht): We have a motion on the floor. We have multiple opinions.

Mr. Badawey: I think having witnesses is appropriate. I appreciate Mr. Diotte’s comments because there is a message we’re trying to get out there, which is my first point. The message is getting out to the departments that we want these files to move forward. That goes without saying.

Having said that, if we go to disallowance, the next step would probably be to bring a witness in, like we did this morning, before we actually release the disallowance. Let’s get to that now and make it very clear that we expect this to be dealt with before we go to disallowance.

The other point I want to make is that when we do bring the witnesses in, legal counsel ought to give us the implications outlined earlier with respect to the effects of this not being addressed. That way we can make that very clear to the witnesses when they do arrive here. With that, we would then be forced to take the proper directions if it’s not dealt with.

Senator Stewart Olsen: I support that, but I also agree with Mr. Oliver. I’m wondering if we shouldn’t do both — inform the minister that we’ve asked for witnesses to come before us and that we feel, in fairness, to inform him of this.

This is a very grave issue, in my opinion. It’s extremely serious. We’re asking people who are not covered by anything — any protection at all — to do law enforcement. I think that’s very grave.

I would support Mr. Badawey’s motion, but in fairness to the minister, the minister should be informed as well.

The Joint Chair (Mr. Albrecht): We have a motion on the floor to ask the department to come in and appear as witnesses. We could modify the motion and ask the minister to come in, but that’s Mr. Badawey’s decision, not mine.

You’re recommending that we have the department come in to —

Mr. Badawey: That’s fine.

The Joint Chair (Mr. Albrecht): All those in favour of the motion to have the department appear as witnesses to deal with this particular issue, please raise your hand. Opposed, the same sign. Carried.

Senator Stewart Olsen: Can we get the letter to —

The Joint Chair (Mr. Albrecht): That would have to be a separate action. I can’t make that decision on my own; I can’t just write a letter.

Senator Stewart Olsen: I would like to move that we inform the minister of the actions we’re taking, because I think that was a good point: He hasn’t been informed.

The Joint Chair (Mr. Albrecht): So you’re making a motion that we write a letter to the minister on this same issue.

Mr. Badawey: Is that necessary? I’m assuming we’re going to send a letter to ask for witnesses. We can simply copy the minister.

Senator Stewart Olsen: We can do that, sure.

The Joint Chair (Mr. Albrecht): So ordered: copy the minister.

Next is Item 8 on our agenda.

[Translation]

SOR/2013-49, REGULATIONS AMENDING THE ONSHORE PIPELINE REGULATIONS, 1999

(The text of the documents can be found in Appendix G, p. 37G:1.)

Ms. Kirkby: The National Energy Board had promised the committee that it would make about 10 amendments to the regulations and indicated that most would be completed in 2017, and the others in 2018.

However, the Department of Natural Resources wrote to the committee last February to announce the tabling of Bill C-69 which proposes, among other things, to repeal the National Energy Board Act, which is the enabling statute for the regulations in question, and to replace the board with a new regulatory entity. The letter indicated that the government expects this bill to be passed by spring 2019.

Finally, the government proposes to take the committee’s recommendations into account in the context of regulatory changes that would follow the adoption of Bill C-69.

[English]

The Joint Chair (Mr. Albrecht): It appears this file is being dealt with satisfactorily. Shall we continue to monitor and move forward? All in agreement with that? So ordered.

SI/2017-58 — ORDER FIXING THE DAY ON WHICH THIS ORDER IS REGISTERED AS THE DAY ON WHICH CERTAIN PROVISIONS OF THE ACT COME INTO FORCE

(For text of documents, see Appendix H, p. 37H:1.)

SI/2017-59 — ORDER FIXING THE DAY ON WHICH THIS ORDER IS PUBLISHED AS THE DAY ON WHICH CERTAIN SECTIONS OF THE ACT COME INTO FORCE

(For text of documents, see Appendix I, p. 37I:1.)

SI/2018-9 — ORDER FIXING THE DAY ON WHICH THIS ORDER IS REGISTERED AS THE DAY ON WHICH CERTAIN PROVISIONS OF THE ACT COME INTO FORCE

(For text of documents, see Appendix J, p. 37J:1.)

The Joint Chair (Mr. Albrecht): We’re moving to Item 9 and that items that follow it. In the past we have done all of them together. We’re going to suggest that we do them individually quickly so it’s cleaner for our record-keeping.

Ms. Kirkby: Items 9 to 11 are the same issue, so I was going to deal with them together.

For each of those orders, the regulation-making authority failed to fix a date of coming into force as the committee understands the term “fix.” In each instance, the authority advises that going forward it will fully consider an approach that satisfies the committee, namely referencing the date on which the order is made as the date on which it comes into force.

Counsel will continue to review future orders for compliance in this regard, and these files can be closed.

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

We’ll move to Item 12.

SOR/93-195 — QUEBEC MAPLE SYRUP PRODUCERS’ LEVY (INTERPROVINCIAL AND EXPORT TRADE) ORDER

(For text of documents, see Appendix K, p. 37K:1.)

Ms. Borkowski-Parent: This is the good news portion of the meeting. There is an excellent graph on the nature of the problem of the issue in the note provided for you.

The only thing I want to say on this file is that after counsel met with the Farm Products Council and representatives from the Quebec Maple Syrup Producers this spring, it seems that everyone is finally, after 24 years, in agreement as to the way forward. The amendment is now with the Department of Justice, and we can follow up in the usual manner.

The Joint Chair (Mr. Albrecht): Sweet.

Mr. Shipley: I want to comment on a couple of things. Is there a timeline we should be asking for?

Second, this is rhubarb season, so if you ever have the chance to have somebody make a rhubarb pie, put maple syrup on top of it. It is most amazing.

But to my question of timelines —

Ms. Borkowski-Parent: The drafting instructions were just entered this spring, but we will follow up and ask for the time frame.

Mr. Shipley: Thank you.

The Joint Chair (Mr. Albrecht): All in agreement with that? Okay.

Next is Item 13.

SOR/2015-162 — TARIFF AMENDING THE FEDERAL ELECTIONS FEES TARIFF

(For text of documents, see Appendix L, p. 37L:1.)

Ms. Kirkby: There were two types of issues raised with Elections Canada in December 2017. The first concerns the tabling requirement in the Canada Elections Act, which was not complied with for the amendments to the tariff in June 2015. Elections Canada has explained that this was an oversight resulting from Parliament being adjourned and then dissolved, and advises it will ensure compliance with the tabling requirement in the future.

The other type of issue concerns inconsistent or unclear drafting. For each of these three drafting issues raised, Elections Canada suggests amendments will be made the next time the tariff is reviewed, so we could certainly seek a timeline in that respect.

The Joint Chair (Mr. Albrecht): Seek a timeline. All in favour? Carried.

That concludes our meeting for today.

(The committee adjourned.)