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37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Wednesday, June 4, 2003

1535

The Chair (Mrs. Sue Barnes (London West, Lib.))

Right Hon. Herb Gray (As Individual)

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1545

1550

The Chair

Mr. Jayson Myers (Senior Vice-President and Chief Economist, Canadian Manufacturers & Exporters Canada, and Co-Chair, Business Coalition on Cost Recovery)

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The Chair

Ms. Shannon Coombs (Vice-President, Canadian Consumer Specialty Products Association; Business Coalition on Cost Recovery)

The Chair

Mr. Charles Milne (Vice-President Government Affairs, Crop Life Canada, Business Coalition on Cost Recovery)

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The Chair

Mr. Kevin Murray (Vice-President, Regulatory Affairs, MEDEC; Business Coalition on Cost Recovery)

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The Chair

Mr. Robert White (Director of Scientific and Regulatory Affairs, Nonprescription Drug Manufacturers Association of Canada, Business Coalition on Cost Recovery)

The Chair

Mr. Jim Campbell (Vice-President, Chamber of Maritime Commerce)

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The Chair

Mr. Rahim Jaffer (Edmonton—Strathcona, Canadian Alliance)

Mr. Jayson Myers

Mr. Kevin Murray

Mr. Rahim Jaffer

Mr. Jayson Myers

1630

The Chair

Mr. Robert White

Mr. Rahim Jaffer

The Chair

Mr. Rahim Jaffer

Ms. Shannon Coombs

The Chair

Mr. Rahim Jaffer

Mr. Jim Campbell

Mr. Rahim Jaffer

Mr. Jim Campbell

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Mr. Rahim Jaffer

Mr. Jim Campbell

The Chair

Mr. Bryon Wilfert (Oak Ridges, Lib.)

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The Chair

Mr. Jayson Myers

The Chair

Right Hon. Herb Gray

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The Chair

Mr. Roy Cullen (Etobicoke North, Lib.)

Right Hon. Herb Gray

Mr. Roy Cullen

Right Hon. Herb Gray

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Mr. Roy Cullen

Right Hon. Herb Gray

Mr. Roy Cullen

Mr. Jayson Myers

Mr. Roy Cullen

The Chair

Mr. Shawn Murphy (Hillsborough, Lib.)

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Mr. Jayson Myers

Mr. Shawn Murphy

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Mr. Jayson Myers

Mr. Shawn Murphy

Mr. Jayson Myers

Mr. Shawn Murphy

Mr. Jayson Myers

The Chair

Ms. Maria Minna (Beaches—East York, Lib.)

Mr. Jayson Myers

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Ms. Maria Minna

The Chair

Mr. Jim Campbell

Ms. Maria Minna

Mr. Jim Campbell

Mr. Jayson Myers

The Chair

Ms. Maria Minna

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The Chair

Mr. Robert White

Ms. Maria Minna

The Chair

Mr. Jayson Myers

The Chair

Mr. Pierre Paquette (Joliette, BQ)

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The Chair

Mr. Robert White

Mr. Pierre Paquette

The Chair

Mr. Tony Valeri (Stoney Creek, Lib.)

1720

The Chair

Mr. Jayson Myers

Mr. Tony Valeri

Mr. Jayson Myers

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The Chair

Mr. Jim Campbell

Mr. Tony Valeri

Mr. Jim Campbell

Mr. Tony Valeri

The Chair

CANADA

Standing Committee on Finance

NUMBER 062

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, June 4, 2003

[Recorded by Electronic Apparatus]

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[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Welcome to everyone. The order of the day is Bill C-212, An Act respecting user fees and proposed policy of the Treasury Board on external charging policy.

As witnesses, as an individual, we'd like to welcome back the Right Honourable Herb Gray. Thank you.

From the Business Coalition on Cost Recovery, part of the coalition is present with us today, and I would like to welcome: Mr. Jayson Myers, the co-chair and senior vice-president and chief economist of Canadian Manufacturers & Exporters Canada; Shannon Coombs, the vice-president of the Canadian Consumer Specialty Products Association; Robert White, the director of scientific and regulatory affairs at the Nonprescription Drug Manufacturers Association; Kevin Murray, the vice-president of regulatory affairs, Canada's Medical Device Technology Companies; and Charles Milne, the vice-president of government affairs, CropLife Canada. Welcome to all of you.

And from the Chamber of Maritime Commerce, we have with us Jim Campbell, the vice-president. We are glad you could make your attendance today.

We'll just begin in order today on the agenda. Each group will have 10 to 15 minutes, and we'll commence with the Right Honourable Herb Gray.

Please go ahead, sir.

Right Hon. Herb Gray (As Individual): Madam Chair, members of the committee, thank you for inviting me to come here and offer comments on Bill C-212, proposed by my former colleague, Roy Cullen.

I want to stress that I've been invited by the committee to come. I presume it's because of my experience as opposition House leader, government House leader, and as chair of a special committee of cabinet that deals with the subject matter of this bill. In fact its name is the Special Committee of Council.

I will begin my comments first by expressing words of commendation and praise to Roy Cullen for tabling his bill, which brings before the House, and as a result before this committee, the important issue of user fees and how they're dealt with by government. He has his experience to offer, not only as an MP and a former parliamentary secretary to the Minister of Finance, but also as a public servant himself at the provincial level and as a senior business executive in the forest products industry. Not only do his colleagues owe him thanks for his initiative, but the private sector does as well.

As I've said, my comments will be based on my experience as House leader, both in opposition and in government, and as chair of the Special Committee of Council. First, with respect to the matter of my observations based on my work as House leader, I know this has come up in testimony before and there's been some exchange in the committee with witnesses about how many issues involving user fees would have to come before committee in each year and what the impact would be.

In that respect, if you haven't done so already, you may well want to invite the government House leader or his parliamentary secretary to offer their observations. It would seem to me--and I'm not carrying any brief for either side in the debate here, just offering comments based on my own experience and some reflection on the bill and a quick review of some of the testimony--that even if the number of instances where the user fee issue would come before a committee, and the number of instances would be few in number...one couldn't assume that this would mean very little time would be used up by the relevant committee.

One wouldn't know to what extent the committee would want to hear witnesses, or for that matter if the interested groups that are affected by the user fee in question would want to come before the committee. One couldn't estimate the time involved in the debate, and--let me choose my words carefully--sometimes members do things to delay decisions on matters before a committee as part of an overall strategy in terms of the role of their party in the House and so on. One couldn't exclude some of these things happening.

I have to give you my view that even if the number of instances involving user fees coming before a committee is few in number, one shouldn't assume that the time involved would be very brief or quick. I note that I spent hours and hours in this very room. My first official role in the House was as chairman of this committee, and I appeared before this committee as a minister defending my estimates and testifying on bills. One would have to note that if a committee like this had to deal with issues of user fees, what would the impact be on its other work--on policy, on legislation?

Right now committees find it very difficult to even look at estimates at all, never mind look at them in a cursory way, in a regular manner each and every year. That's something that has to be taken into consideration. The sponsor of the bill, Mr. Cullen, says, “Well, I have a deadline built into my proposal. If the committee doesn't deal with the user fee issue by a certain date, it goes to the House.” But in the House it would have to be dealt with by a motion, which I presume would be debatable and amendable. The amendments would be voted on.

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That's why I ask you to invite the comments of the House leader or his parliamentary secretary as to how much time might be involved, even if there is a limited number of these matters coming before the House to be voted on because they haven't been cleared by the parliamentary committee.

I'm not saying this is an insuperable problem, but it's something to be taken into account. We know how limited the time is now in the House for measures, whether they involve the government's program or private members' business. I suppose there are solutions, like sitting longer hours or resuming night sittings, but I think this has to be taken into account. As I say, there are certainly ways of dealing with this.

The next thing I want to mention is that I was surprised to note that Treasury Board representatives in their presentation didn't seem to recognize--in fact, I don't think it's been generally recognized around the committee table--that there is a process now that is handled by a committee of cabinet called, as I've already said, the Special Committee of Council. The members, as a committee, are authorized on behalf of cabinet as a whole to make decisions with regard to matters that have to be implemented by regulation.

I think some of the material you have before you says that most of the user fees are implemented by regulation. There are other ways of prescribing user fees. They may be a matter of authorization of a department in legislation. There is some type of common-law authority that's mentioned. But I think the overwhelming number of user fees is implemented by regulation.

That means that a proposal for a user fee to be implemented by regulation has to come before the Special Committee of Council. That committee follows roughly the following process. I want to mention that what I'm saying can be looked at in more detail in the public document, “Guide to the Regulatory Process: Developing a Regulatory Proposal and Seeking its Approval”.

The first step when the regulation is prepared and is signed off by the minister is that it goes to this committee, which makes a decision on whether the proposal for a regulation will be pre-published in the Canada Gazette. The committee has the full authority to authorize pre-publication. It is sent back to the department, who send it to cabinet as a whole, who send it to another cabinet committee. Most of the time, at the first stage, they will look to see whether the period proposed for public comment in the regulatory impact statement and so on to be published in the Canada Gazette is adequate in terms of the seriousness and the complexity of the user fee proposal. It may also, at that point, deal with sensitivities in the concept, even though the decision to pre-publish does not presume that the regulation will be ultimately adopted exactly as initially proposed.

Assuming the committee agrees that there will be pre-publication, then in the Canada Gazette appears the regulation, plus a regulatory impact statement, plus the information that a period for comment is being allowed and where to submit the comment. While the Canada Gazette does not have a large circulation--I think there are about 2,000 copies circulated--organizations like those present here today, I'm sure, have staff who review the Canada Gazette for these matters very carefully. They also will disseminate information to their members. It often happens that a department, through its own network of stakeholders, will disseminate the information.

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If there is a period considered adequate for comment, the minimum is usually two weeks, and for more serious matters it may be 75 days. For comments of a more formal nature, others may require much longer comment periods.

The department is required to receive the comments, take them into account in terms of making amendments to the initial proposal, or working out reasons why the comments are not to be taken into account, and the regulation then comes back to the committee. At that time, the committee looks at the regulation in more depth. From my own experience, it looks at things like the rationale for the fee in terms of the service to be provided and whether the fee would be out of line in terms of the service, and matters of that nature, as well as whether there are service standards and how they intend to be monitored.

As I say, the committee at this stage also has the full right to send the regulation back to the department for further work, to improve it with modifications, or to send it to a cabinet committee or to full cabinet. The latter two steps rarely happen. As I said, the committee is given full authority. If it agrees to the regulation as amended or not amended, in the light of the briefing material provided to it by the secretariat, then it authorizes it for publication again in the Canada Gazette. That publication will stipulate when the regulation comes into force.

I have to say--and I think the sponsor of the bill, Mr. Cullen, made this point--the committee does not play a role in following up to see whether the service standards that may have been promised are fully carried out. I think this is something that needs to be addressed. How could it be addressed? I sketch out a couple of possibilities. One is for the committee to be asked to do this--although at the very least it spends three very full hours every Wednesday afternoon dealing with these proposals when the House is in session.

Because it's an ex post facto activity, another idea would be to expand the jurisdiction of the special committee on statutory instruments. It does an ex post facto review now of regulations in the form of statutory instruments to see whether they conform with the original authorizing legislation, and so on. So those are two of my ideas on how this might be handled.

I know my time is limited to 10 to 15 minutes, and I certainly want to hear the other presenters. I won't be able to stay for the full period, so I think I'd like to stop at this point.

I would again commend Mr. Cullen for his initiative. I'm not here on behalf of either side of the debate, but at the request of the committee, to offer some observations and reflections based on my own experience in these matters.

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The Chair: Thank you very much.

We'll now go to Mr. Myers.

Mr. Jayson Myers (Senior Vice-President and Chief Economist, Canadian Manufacturers & Exporters Canada, and Co-Chair, Business Coalition on Cost Recovery): Thank you very much, Madam Chair.

My name is Jay Myers. I'm the senior vice-president of the Canadian Manufacturers & Exporters and the co-chair of the Business Coalition on Cost Recovery. I have several other members of the coalition with me today who will spend a few minutes talking to you, especially about some of their particular issues.

We provided you with a copy of my statement here today as well as a piece of analysis that has been provided to us by REAS Inc., our expert group looking at cost-recovery issues. That analysis looks at some of the problems we've been encountering with cost-recovery programs, as well as some best performance in other jurisdictions where fees and performance standards are linked together. It also provides a critique of Treasury Board's proposed new policy on cost recovery. We've also distributed a copy of a piece that was prepared for us by Jean Szkotnicki, our co-chair and head of the Canadian Animal Health Institute. It chronicles in detail the eroding performance of the Veterinary Drugs Directorate, the agency she deals with, and the efforts she has made on behalf of her members to resolve the problems that arise.

First of all, I'd like to thank the committee for inviting us here today. Thank you for your long-standing commitment to the cost-recovery issue. This is the fourth time we've appeared before the committee on this issue, and we really appreciate your commitment to finding an effective solution to some of these problems.

As you know, our coalition was formed in 1998. It's a group of business and consumer associations accounting for about two million Canadians employed directly by our businesses. But I also want to say that these cost-recovery issues affect just about every Canadian, because they are all about getting good service from government, and they also very much have to do with tax policy.

From the start, we've always understood and support the need to pay reasonable fees linked to provision of service--especially the improvement of service. But in return we expect those fees to be fair, accountable, transparent, and linked to service and performance.

Regrettably, federal cost recovery is not delivered on the very principles set out in its existing cost-recovery policy. Our main concern is that nobody is enforcing the policy. What we're looking for today is an effective enforcement mechanism, or something that will implement cost-recovery policy in a cost-effective way.

The most obvious examples of failure are those agencies and departments that have consistently failed to meet the performance standards agreed when cost-recovery programs were put in place. For instance, it now takes Health Canada an average of 717 days to approve a new prescription drug for humans. That's nearly double the promised standard of 365 days and seven months longer than the average approval times in the United States. Moreover, a new active biological substance is flagged for priority review, meaning that it might be used to treat serious, debilitating, or life-threatening disease. For that, the average approval time in 2000 was 825 days, compared to the U.S. average of 212 days for the same class of products.

It's even worse for new veterinary drugs, where the average is 818 days, far above the performance standard of 180 days committed to when cost recovery was introduced. Yet the fees are still being collected. I suppose the regulators are busier collecting fees than doing the regulation.

Another area where the policy is not enforced is the current requirement to charge only for private benefit. Environment Canada recently introduced cost recovery for its new substance notification program. Under that program, companies are charged a fee to register new substances on the domestic substances list. Once a substance is registered, anybody can import or distribute it in Canada without paying a fee. In that case, there's no private benefit linked to the fee, and in fact it means that the fee payer must subsidize potential competitors. Despite that, Environment Canada went ahead with that cost-recovery initiative with Treasury Board's blessing.

The final unenforced policy is the requirement to provide effective dispute resolution. I strongly disagree with the assessment that Treasury Board provided you last week, that business doesn't understand dispute resolution. We understand the process. The problem is that we have to file complaints about fees and performance to the department who is levying the fee and whose performance standards are slipping. There isn't any independent dispute resolution system, and that's where the problems begin.

Looking ahead, things could get worse. For instance, the Canadian Nuclear Safety Commission recently published a proposal providing for fees to be automatically escalated every year, without consultation or scrutiny by Treasury Board, special committee, council, or Parliament. But we also have some hope, and that's in the form of Bill C-212, proposed by Roy Cullen.

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Bill C-212 addresses a lot of our biggest concerns, including the need for an independent dispute resolution process, identification of private benefit before a fee can be charged, comparison of fees to similar charges levied in our major trading partners, and enhanced reporting to stakeholders and MPs, all Canadians.

Most importantly, Bill C-212 gives Parliament the authority to ensure minimum standards, including performance standards, are actually being met. We think it's a major improvement over the cost-recovery policy revisions proposed by Treasury Board, which we think would actually make the situation worse. We think it would be an effective mechanism for enforcing Treasury Board policy.

So what are the basic things we are asking for? To begin with, we want fees linked to performance. The primary benefit companies get for their fees is the performance of the service they paying for. If departments don't deliver these services in the way or within the timeframe they have promised, then we think fees should be reduced. They are in other jurisdictions.

The U.S. Prescription Drug User Fee Act, PDUFA, is one example. PDUFA sets performance goals negotiated by industry, the FDA, and Congress, which get stronger every year. FDA has met or exceeded those performance standards nearly every year for the past 10 years. A major reason for this, FDA officials say, is PDUFA's five-year sunset clause and the ongoing oversight by Congress. In fact, PDUFA has been so successful that this approach is now being implemented in the United States for both medical devices and veterinary drugs.

In Australia, the Therapeutic Goods Act, 1989, also provides legislated penalties for missing performance targets in the review of human drug products. Fees for evaluations that are not completed within the specified timeframe are reduced to 75% of the level that would have been charged.

Legislated performance standards have also been provided to the Australian Pesticides and Veterinary Medicines Authority, which has a 97% to 98% success rate in delivering on time. When performance is not met, companies can actually apply to a special tribunal for a fee reduction.

If it has been happening in other jurisdictions, is there any reason fees can't be tied to performance standards here in Canada?

Secondly, we want the government to reinstate its commitment for private benefit to be demonstrated before service fees are levied. Treasury Board officials have indicated that the private benefit provision was dropped in its new policy because the issue was too complicated and the government didn't want to have to deal with it. We think this is pretty unacceptable.

If there isn't any private benefit demonstrated, then user fees are a tax, and I would submit that makes this matter a fundamental issue for the House and something where parliamentary oversight is necessary. I think these are fundamental matters of policy where there should be parliamentary scrutiny and where there should be debate in the House.

Worse, by dropping this requirement of private benefit, we feel that the government is effectively allowing agencies to charge new fees without any corresponding expectation to deliver a service or any expectation of service standards.

Thirdly, we are looking for an independent dispute resolution system. The current system of making the agency or department fully responsible for resolving disputes simply doesn't work.

Fourthly, and most important, we are looking for some assurance that someone is actually enforcing cost-recovery policy. In the past, when cost-recovery problems have been found, Treasury Board has told us to go back to the department charging them. This process hasn't worked, and the new policy Treasury Board is proposing won't change that. Similarly, the special committee of cabinet process is not new and really doesn't address the need for dispute resolution.

Special Committee of Council approval is a pretty effective upfront mechanism for authorization, and we certainly don't want to see that weakened. It has worked very effectively with very strong legislators like Mr. Gray at the table. But it has been in place and problems are still arising, and there is no mechanism in that process for a transparent review of the problems as they arise. That's what we would like to see addressed.

I want to conclude by restating something I said earlier--that is, for Canadian business this is not an issue about not paying user fees; it's paying fees for service and for service improvement.

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We don't understand and we can't accept Treasury Board's reluctance to do anything about making sure its cost-recovery policies are met. This is simply a matter of enforcing, in many cases, what we have right now, as well as improving upon cost recovery.

With that, I'd like to pass the discussion to my other colleagues here.

We see Bill C-212 as a tremendous opportunity to put in place an effective mechanism for ensuring compliance with government's own policy. I would really recommend to this committee the leadership you've shown here to put in place a process that will actually work.

The Chair: We're at about 11 minutes now, but I'm going to allow each one to make a brief statement.

Ms. Coombs, we'll start with you.

Ms. Shannon Coombs (Vice-President, Canadian Consumer Specialty Products Association; Business Coalition on Cost Recovery): Madam Chair, thank you very much. I would like to thank the committee today for the opportunity to speak on Bill C-212.

As I was introduced, my name is Shannon Coombs. I'm the vice-president of the Canadian Consumer Specialty Products Association. We represent 40 member companies, collectively a $13.7 billion industry.

I gave the clerk our one-pager, on which the picture clearly illustrates the products my member companies make. They make the lives of Canadians healthier and their homes safer.

Due to the diversity of our membership and the products we make, companies are legislated and regulated by numerous acts and regulations, mostly within Health Canada and Environment Canada. My member companies pay new substance notification review fees as well as maintenance and submission fees to both the PMRA, the Pest Management Regulatory Agency, and TPP, the Therapeutic Products Program.

I'm here today to express our strong support for parliamentary oversight for user fees and cost-recovery programs. In June 2000, this committee stated in its report, Challenge for Change, that “A Parliamentary Committee should scrutinize all user fees”. We fully endorsed that recommendation in 2000 and we do so again today. Political intervention is crucial for an accountable cost-recovery policy and implementation at the departmental level. Our industry is asking you to pass this bill to reflect this basic principle.

Why is the scrutiny required? In 1996, PMRA introduced timelines in a management of submissions policy. CCSPA has been an active participant in all the processes and forums to create a functional agency that meets its commitments to all Canadians. However, it is evident that our efforts have not been fruitful. In 1998 the Minister of Health commissioned a third-party report, which found that PMRA's timelines are 40% longer on average than in other countries. In 2002, CCSPA tabled a report to the Standing Committee on Health regarding PMRA's timelines, gathered from access to information data. The key finding in that report was that they exceeded their timelines by 171%.

PMRA has consistently fallen short of their timelines over the past eight years. With the requirement of parliamentary oversight in Bill C-212, CCSPA hopes to see parliamentarians use their skill set to ensure regulations meet the objectives of the government's innovation strategy and smart regulation initiative.

Parliamentary oversight will also ensure improved program delivery by agencies such as the PMRA by holding them accountable for their actions. The example of cost recovery gone awry, in our submission, at the PMRA can be addressed and corrected, but it's the members of Parliament who need to set the tone and direction and keep Canada competitive.

Thank you.

The Chair: Thank you.

We'll go to Mr. Milne, please, briefly.

Mr. Charles Milne (Vice-President Government Affairs, Crop Life Canada, Business Coalition on Cost Recovery): Thank you very much. I appreciate the opportunity to address the committee today.

Crop Life Canada is a non-profit trade association representing the manufacturers, developers, and distributors of plant life science solutions--pest control products and biotechnology--for use in agricultural, urban, and public health settings in Canada. Crop Life Canada's member companies are regulated under the Pest Management Regulatory Agency of Health Canada and are subject to cost recovery.

Since 1995, when cost recovery was first proposed to our industry, Crop Life Canada has continually participated in numerous forums, including many appearances at this committee and the agriculture committee, expressing concerns about shortcomings of cost recovery in areas of accountability, dispute resolution, promised performance improvements, transparency, and global competitiveness. Examples of the impact of poorly implemented cost recovery on Crop Life Canada's members and corresponding proposed improvements have been documented many times and are on record with both this committee and other committees for future and further reference.

Our participation in the coalition on cost recovery revealed that these issues of concern were common regardless of industry sector or regulating agency. We find Mr. Cullen's Bill C-212 to be the most promising initiative for effectively dealing with the long-stated cost-recovery concerns we've been dealing with.

The Treasury Board guidelines for cost recovery are perfectly acceptable. The downfall has been the lack of enforcement, leaving various cost-recovering agencies and departments open to making their own interpretations of Treasury Board guidelines. The result has been inconsistent treatment, with no objective third-party forum for recourse.

In an industry like ours, time to market is the priority for technology-based industries. Regulatory impediments to early market access are disadvantageous to both growing Canada's knowledge-based economy and to those industries that have the capacity to drive the knowledge-based technologies of the new economy.

Crop Life Canada encourages the finance committee to recommend to the House of Commons to pass Bill C-212 expeditiously.

Thank you.

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The Chair: Kevin Murray, please.

Mr. Kevin Murray (Vice-President, Regulatory Affairs, MEDEC; Business Coalition on Cost Recovery): Thank you, Madam Chair.

I'm Kevin Murray, vice-president with MEDEC, representing Canada's medical device technology companies.

New regulations for medical devices were introduced in 1998, with concurrent cost-recovery fees. Five years of experience with cost recovery has resulted in varying degrees of satisfaction for our industry, and in particular serious concerns with the review of cardiovascular devices.

Cardiovascular devices account for approximately 12% of the total market in Canada. These high-risk devices are subject to the most stringent review by Health Canada and consequently generate cost-recovery activities that are reflected in the highest fees for our industry. Cardiovascular devices are highly significant to the Canadian public in that they contribute to life-saving procedures to treat cardiovascular disease, one of Canada's leading killers.

Canadians expect timely access to new technologies for the treatment of these serious diseases. However, since 1998, cardiovascular companies have witnessed a steady increase in turnaround times for the review of cardiovascular devices and consequently a decline in service and efficiency by Health Canada.

The standard for review of cardiovascular devices is 90 days. At the end of 2002, cardiovascular devices' average review time was 200 days. Individual applications can take over a year to review. Several of these applications are not necessarily for new devices but instead represent modifications to existing licensed products. Simple modifications, where one would expect an unimpeded review, are not handled in an efficient manner.

Many companies are experiencing a complete lack of regard for the principles of the client service-oriented manner cost recovery was meant to bring about. Simple modifications such as name changes to existing licensed products are bogged down in bureaucratic red tape. Many of these products are already approved in other major jurisdictions, including the United States and the European Union.

While we recognize Canada's stringent review process, Health Canada's insistence on requesting additional data that does not add significantly to the safety profile for the device is questionable. More likely, the questions simply serve to fill information gaps where lack of knowledge on the part of the reviewer is the symptom. This increases the time for review and costs compared with those of our trading partners and prompts companies not to seek Canada as a first launch for new technologies. Consequently, Canadians will be the last to benefit from such new technologies.

MEDEC has for the past five years worked with the bureaucrats at the Therapeutic Products Directorate to resolve the concerns and assist in finding ways to improve the efficiency of review. Other stakeholder groups have expressed their concern and have made a concerted effort with MEDEC to assist TPD.

We believe that despite our attempts we have seen no improvement in efficiency of review. We are doubly concerned with the probability that the current cost-recovery review within the TPD will lead to increased fees for our industry. The prospect of facing higher fees for poor service will preclude our industry from readily accepting a new fee structure. The problem needs to be rectified now before we can move forward.

Therefore, we believe the provisions of Bill C-212 are important in ensuring that Parliament scrutinize new fee structures proposed by TPD and also provide an opportunity for stakeholders' concerns to be heard. We believe this is important in ensuring Canadians have timely access to the latest technologies from which they will benefit.

Thank you very much.

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The Chair: Mr. White, please.

Mr. Robert White (Director of Scientific and Regulatory Affairs, Nonprescription Drug Manufacturers Association of Canada, Business Coalition on Cost Recovery): Thank you, Madam Chair and members of the committee, for giving us the opportunity to make some comments today on Bill C-212.

The Nonprescription Drug Manufacturers Association of Canada is a national association representing manufacturers, marketers, and distributors of self-care products, which include non-prescription medications, herbal remedies, natural health products, personal care products, and nutritional supplements.

NDMAC fully supports Bill C-212, including provisions that would see improved linkages between user fees and federal department performance standards. Our members have had experience with several different types of fees--these are fees that are introduced and regulated by Health Canada's health product and food branch for mandatory regulatory activities.

The drug evaluation fees were introduced September 1, 1995, and after introduction the review times for our products in fact declined about 37%. Although these times were still above the target performance standards, we were pleased--and it was encouraging--that we were moving in the right direction. However, this improvement proved to be very short-lived. As we entered 1997, performance deteriorated, and when we reached 1999 we were back up to 528 days for the review of a product containing ingredients with a well-established safety and efficacy profile, compared with a performance standard of 225 days.

Review times in 2002 have improved slightly, but we are still taking an average of 443 days, or almost double the target performance standards, to review the product. Australia approves these types of products in 157 days, and in the United States there is no pre-market approval of non-prescription days, so their performance standard is zero.

Our members have been very frustrated with the lack of government action on review times since the improvements we saw in the mid-1990s. We meet with Health Canada's therapeutic products directorate three times per year, and at every meeting review times are high on the agenda. However, irrespective of NDMAC's suggestions and of commitments by the government to increase the efficiencies and improve review times, nothing happens.

It appears that in the absence of accountability there is little impetus to change. The Treasury Board is not enforcing their cost-recovery and charging policy and demanding that departments meet performance standards in return for charging a mandatory service. We see no indication that the latest draft external charging policy will require departments to meet their performance targets.

For these reasons we support Bill C-212 and the ability of Parliament to review performance standards and establish accountability for that performance.

Thank you.

The Chair: Thank you.

Mr. Campbell.

Mr. Jim Campbell (Vice-President, Chamber of Maritime Commerce): Thank you very much, Madam Chair. On behalf of the board members of the Chamber of Maritime Commerce, I wish to thank you and the committee for the opportunity to speak on a piece of proposed legislation that many of us in the marine industry in Canada believe is long overdue.

The Chamber of Maritime Commerce is comprised of more than 125 organizations, including some of North America's largest shippers, domestic and international shipping companies, ports, grain elevators, terminal operators, as well as many providers of marine services and equipment. Our members are extended practically to every region in the country.

The marine community in Canada is charged approximately $500 million a year in fees, tolls, and tariffs that are the result of federal regulations, through crown agencies or through services. Although many of these fees would not be considered user fees as outlined in either Bill C-212 or in the Treasury Board's draft external charging policy that is currently making the rounds, it does show how far federal revenue generation has moved from its historic tax base to a user fee foundation, at least for the marine industry in Canada.

Today I would like to raise three long-time concerns surrounding the federal government's user fee system and how our organization believes Bill C-212 can go far in resolving those concerns.

The first is the ongoing disconnect we have seen between federal departments when it comes to implementing user fee programs--programs that seem to run counter and contrary at times to a number of federal government policy statements, especially those policies regarding the environment, trade, and transportation infrastructure.

Second, at least in the case of marine service fees, of which this committee is well aware from your 2000 study on user fees, we have found both a total lack of institutional memory at times and of government commitment to resolving this fee issue.

Third, as Jay and his colleagues have discussed, is the issue of transparency of process. Today, Madam Chair, I'd like to use real life examples of how some federal user fees continue to be misapplied at times--confusing to some users and unfairly assessed to others--because I feel that examples of what happens with a government policy out there in Canada to Canadians are the bellwether of whether it's a good policy or not.

The CMC contends that only through the introduction of this bill will stakeholders have an open and transparent process in which new fees can be debated, increases in current fees scrutinized, and ongoing fee programs appraised for effectiveness and efficiency.

First, I would like to discuss how the consultation provisions within the bill can resolve a number of concerns the marine community has had over the years with specific user fee programs. There continues to be a policy disconnect, we feel, between federal departments in addressing overreaching government policy.

For my first example, I wish to refer to a border-crossing service that sits not far from the site where the federal government recently pledged a much-needed $300 million to improve efficiency of the border. Since its opening in 1990, the Detroit-Windsor truck ferry, a tug-barge operation that crosses the Detroit River between Windsor and Detroit just down the river from the Ambassador Bridge, has been providing a 20-minute scheduled crossing between the two cities.

Originally intended to serve the needs of trucks moving hazardous material, which the U.S. bridge authority has banned, and the oversized specialized cargoes that move through there, the ferry service is capable of relieving the four- to six-hour delays truckers frequently have to contend with in Windsor. Yet this small father-and-son operation is being charged more than $50,000 a year by Canada Customs for the agency to supply a customs agent for eight hours a day.

The operators are not aware of any other border crossing in Canada that supplies regularly scheduled border service that is charged for the services of a customs agent. This is taking place within sight of the Ambassador Bridge, at times filled with trucks literally parked for hours at a time trying to cross. We believe this is an example of one federal department's user fee program undermining the competitive position of a single, small Canadian operation while another department, Transport Canada, which has just recently released its Straight Ahead policy paper, highlights and encourages operations such as this in order to help relieve congestion on our highways and reduce air emissions.

We just don't understand implementing a user fee that would in large part dissuade truckers from taking a ferry instead of sitting and idling for hours on a bridge, which seems to counter the government's stated commitment to goals such as those found in Kyoto.

I would like to remain on the issue of the importance of this bill in allowing for a process in which parliamentarians are provided with the opportunity to participate in reviewing and discussing not only the details of the proposed fee but its potential wide-reaching consequences.

The provision found within Bill C-212 regarding the need to compare a proposed user fee with those of Canada's major trading partners is vital.

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For marine transportation in Canada the ability to remain competitive is not only based on the challenges it faces from other modes such as rail. Where the overwhelming and ever-present competition comes from for marine carriers, ports, and shippers is with the real world of global trade economics, where markets can source products from anywhere in the world.

Much of the 400 million tonnes of cargo that moves through Canadian ports is bulk material--coal from Alberta and B.C., iron ore from Quebec, salt from Nova Scotia, wheat from the Prairies. In international markets, for commodities such as these, Canadian producers are price takers, not price makers. Quebec iron ore can be sourced out of Brazil, wheat from Australia instead of Saskatchewan, or they can use the port of New Jersey instead of Halifax.

Many of these people use marine services in Canada and they must respond to international markets and competition, not only by keeping their own costs that they can control down, but they must also have the ability to work with a government department to keep their fees down. With this bill, an open dialogue with DOT and parliamentarians regarding the big-picture economic questions arising from specific user fee applications can only be a constructive and productive process for both stakeholders and members of the House.

Another example of a federal fee that we feel is misapplied as a current example of where the implementation of Bill C-212 would be of great help is in the application of marine service fees in the Great Lakes. The Canadian Coast Guard currently imposes charges on the commercial shipping sector of over $35 million a year for navigational aids, dredging, vessel traffic services, and ice breaking.

Vessels transiting the St. Lawrence River and the Great Lakes bound directly to a U.S. port do not have to pay Canadian Coast Guard fees for ice breaking, dredging, and navigation aids. These vessels nevertheless benefit from the marine navigational, dredging, and ice-breaking services supplied by the Canadian Coast Guard.

It's a situation that places Canadian industry at a competitive disadvantage due to incurring higher costs for shipping from a Canadian origin. For example, a ship could sail through hundreds of miles of Canadian waters--through the St. Lawrence River, lakes Ontario, Erie, and Huron--and land in Chicago to drop off steel, then sail up to Duluth, Minnesota, take on U.S. grain, and transit more hundreds of miles through Canadian waters using Canadian Coast Guard services and not pay one cent of marine services or dredging fees.

If the same ship were to bring cargo to Hamilton, sail up to Thunder Bay to take on Canadian wheat, and then move out of the lakes, that ship could be charged as much as $15,000 in fees.

During this committee's study of user fees in 2000, one of the CMC's members, Mr. Wayne Smith, from the seaway marine transport in St. Catherine's, put it this way:

... we have the ridiculous outcome that a Canadian icebreaker can provide service to a U.S. ship carrying U.S. cargo, competing with Canadian ships and Canadian cargoes, free of charge. But, as is often the case, if we're assisted in ice conditions by a U.S. icebreaker and carrying Canadian cargo, trying to compete in the U.S. market, we are charged by the Canadian Coast Guard, whether there are ice conditions in place, or whether it's a U.S. icebreaker or even a private icebreaker.

Once again this is an example of a disconnect between one federal department, Fisheries and Oceans, that is required to generate revenue in any way they can by operating a user fee program, which we feel is a program that arguably can stifle trade and is seen to run counter to other federal departments such as International Trade, a department that has a mandate to encourage and promote Canadian trade....

My second point today touches on how this bill can resolve what we have seen over the last five years, that being the lack of resolve by the government to respond to Canada's marine communities' legitimate concerns regarding coast guard fees. Since the first reference to marine services fees by the federal government, the Canadian Coast Guard, first under Transport, then under Fisheries and Oceans, this file has been the responsibility of no less than six ministers. Since its implementation in 1997 we have dealt with four fisheries ministers and three coast guard commissioners.

Understandably, each time a minister is changed, marine stakeholders must once again take up the task of bringing a whole new decision-making regime up to speed on the issues surrounding the file. We believe that this total lack of what I would call political institutional memory has been frustrating to say the least for the marine community in Canada.

We are supportive of Bill C-212's call on the minister responsible for a user fee to report to Parliament on an annual basis. An example of where this would be most welcome by the marine industry is in the lack of response by the fisheries minister to two proposals we have made regarding user fees in the last two years.

The Canadian Coast Guard's challenge is to provide the right services at the right cost, and industry's challenge is to remain competitive. In August last year the National Marine Industrial Coalition, which is comprised of 800 organizations and companies across Canada, submitted a proposal to the Minister of Fisheries and Oceans calling for a national marine fee agreement with the Canadian Coast Guard that addresses these challenges.

The proposed agreement would have a 10-year term and would establish an ongoing partnership between industry and the coast guard with the goal of ensuring that services and programs are delivered in the most cost-effective manner possible.

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The proposal also calls for the gradual elimination of the marine service fees as soon as possible. It has now been nine months and we have yet to receive an answer from the minister.

On both these points we contend that the parliamentary consultation approach, as suggested by Mr. Cullen, and the requirement calling for an annual report by the responsible minister, as outlined in Bill C-212, would address both of these issues.

Lastly, the issue of transparency. The federal government now charges marine operators more than $4 million per year for dredging selective sections of the St. Lawrence River. At six o'clock in the evening last Friday, the Minister of Fisheries and Oceans announced a permanent fee arrangement that will lead to a regime of progressively higher costs for vessels traversing the St. Lawrence ship channel. The initial increase in this fee for transiting ships is now more than 9%, he has announced, effective June 1, which is a little more than a day after the announcement late Friday afternoon.

The result of this action will be a further erosion of the economic viability of the Great Lakes and the St. Lawrence Seaway trade route and is contrary to Transport Canada's objective to promote the use of the safest, most environmentally responsible mode of transportation: marine.

With the transparency and accountability provisions within Bill C-212, we would hope this kind of action by a minister would be a thing of the past. I say that tongue in cheek.

In conclusion, the Chamber of Maritime Commerce supports this bill and the spirit with which it was written. We would like to thank Mr. Cullen for his efforts and the finance committee for its ongoing concern for the federal government's cost-recovery user fee policy.

If implemented, this legislation will go far in establishing a transparent and open consultation and decision-making process regarding user fees, a process that will demand a much higher degree of stakeholder consultation and ministerial accountability. As well, it is a process Canada's marine community would support and gladly participate in.

Thank you.

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The Chair: Thank you to all of you.

Now we'll have roughly an hour of questioning.

Up to 10 minutes, Mr. Jaffer.

Mr. Rahim Jaffer (Edmonton—Strathcona, Canadian Alliance): Thank you, Madam Chair, and I'd like to thank all the presenters here today. There was a lot of information to be presented, but I think it can be concluded that you're all in favour of this sort of legislation and that it's a step in the right direction, especially in trying to, as was mentioned, create accountability and some transparency in certain areas.

I know in many cases many of your industries may differ. There are some similarities clearly. But one thing that I was hoping to get some comment on--I believe we just heard from the maritime group on some of the current stakeholder discussions--is under the current situation prior to this bill, what sort of consultation takes place when there is a dispute with your particular industries. If you feel a levy of a fee is not in line with what you believe it should be, what sort of consultation exists with the stakeholder groups and the government department particularly? Is there any response currently if you do have a certain grievance with the fee that's been set? I know this particular legislation addresses that. But under the current situation, is there any sort of procedure that has been able to deal with that particular problem at all in your experience?

Mr. Jayson Myers: I think part of the problem is that it really differs from department to department. There isn't any systematic way of dealing with disputes as they arise. Maybe other members here, especially the product approval area, can speak best for their own sectors.

Mr. Kevin Murray: I can give a recent example where one of our member companies had an application in to Health Canada for the review of a product where there were four different models of basically the same product and the department asked for four sets of fees to review essentially the same information four times over. The company disputed it on the basis that one review of the information would have covered the four different models. The dispute really did not progress any further than within the particular area--in this case the Medical Devices Bureau. There's a policy within the Medical Devices Bureau on dispute resolution. However, it stays within the Medical Devices Bureau and the Therapeutic Products Directorate, and there's no opportunity to go outside that to get any sort of third-party convenor.

Mr. Rahim Jaffer: Okay. It seems to be one of the big challenges. There isn't a place where you can go to complain or to actually appeal the process to get that transparency.

It's what I was afraid of. It seems to be something, at least in this legislation, that hopefully we'll be able to establish as sort of a standard.

This might be difficult to answer, but to get an idea, if you see this sort of standardization take place, especially in the setting of user fees.... I know it's case by case, depending on what the product is, in some cases, or what the particular issue is. Can you estimate, in standardizing this, how much money it may save in the long run? What sort of efficiency would this introduce to the bottom line of your companies? Whatever it might be, do you see an overall savings? Do you see that potentially because of this efficiency that maybe it's going to cost you more in the long run by adding this legislation? What thoughts do you have on that front?

It would be useful to hear. You've made it clear that you are willing to pay for the services, as long as they are up front and transparent. Do you see an overall savings in your area with this efficiency being introduced? Could you potentially see costs increasing? That's what I'd like to hear from your perspective.

Mr. Jayson Myers: Again, maybe I could start by referring back to our original study Where Does the Buck Stop? It was an attempt to quantify some of the savings. From the latest information provided by Treasury Board, which is already three years out of date, we are looking at somewhere around $4 billion in cost recovery.

I don't think it's an issue of the fee. I think it's an issue of the delays and the inefficiencies of the system that are involved.

We can come out with a drug and do all of the innovation in Canada. Canada is the 35th country in the world to approve the drug and then, on top of that, charge a fee for the approval.

I think trying to shorten the approval time will provide better service, especially in the mandatory regulated services, and speed up the time to market. You are reducing the compliance cost of regulation that the Treasury Board estimated was somewhere between $30 billion and $50 billion a year. I think the estimate came out about four years ago.

There are tremendous cost savings here. It's not necessarily the fee itself, although not tying the fee to the performance standard is where the escalating costs come in. The real savings are in the efficiency of the regulatory process and lower compliance on the part of companies.

From an economist, if you make regulation easier and less expensive to comply with, you'll get more compliance.

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The Chair: Mr. White wanted to comment, Mr. Jaffer, on your former question. I'll give him the chance to do so.

Mr. Robert White: Thank you.

You were asking about dispute resolution systems. Health Canada is in a process right now where they are developing a dispute resolution process that will apply to all their activities.

I think the concern we have is that, once again, this is a departmental policy. If it's not consistent with what another department puts in place, where do we go? Otherwise, we are paying fees to different departments and there is going to be a different process perhaps in each location.

I think we are looking for something that's more consistent. I think Bill C-212 gives us the consistency.

Thank you.

Mr. Rahim Jaffer: Was there anyone else?

The Chair: No, that was the only person who indicated. I'm sorry I let you go ahead with your other question. I don't like to interrupt like that.

Mr. Rahim Jaffer: That's all right.

Did you want to comment?

Ms. Shannon Coombs: If I may, I would speak to the competitive issue.

I was talking earlier about the different fees we pay. Our member companies make disinfectants, Comet, Lysol, and things like that. Five years ago we had a situation where we had two acts, two sets of regulations, and two user fees. The government was double-dipping for the same product.

What has happened now is that we have one act, one regulation, and one fee. If I can explain this properly, we achieved that through political intervention. The reason we had arrived at the situation was because of the misinterpretation of the Treasury Board cost-recovery policy by two different branches within Health Canada.

I would like to thank our colleague, the Right Honourable Herb Gray, for helping us with the issue, but Mr. Gray is no longer there.

That is why we are here today to talk about parliamentary scrutiny on the fees. We feel it is desperately needed in this situation.

The competitiveness aspect of having a single jurisdiction within one department has meant that timelines for changing simple amendments for formulation changes to a product, such as a cleaning product, went from 385 days at the Pest Management Regulatory Agency to 45 days at the therapeutic products program. The savings is incredible in terms of making amendments to products and allowing consumers to keep their homes safe and healthy.

The Chair: You still have a couple of minutes.

Mr. Rahim Jaffer: My last question is to Mr. Campbell. You mentioned the issue of the particular case with the customs issue and the ferry service. It was brought to my attention a while ago, but maybe you can enlighten me further.

I'm curious if there is, in your experience, a case where there are really no set rules for people importing things into the country or transporting things, especially when imports are coming in.

When going through customs, there are warehouses that the government pretty much leases out or gives a contract to someone to be able to store goods before they're inspected by customs. Unfortunately, it was brought to my attention that some of the customs warehouses were then billing the company while the product was in storage. There's no real transparency on how they come up with the final billing for some of the storage costs before the product is returned and then authorized to be shipped out.

Is that a problem that you've come in contact with? I'm only curious. I know I'm not clarifying it very much because it was only something that was brought to my attention recently.

Is it something that this may also help? Could you try to expand on it, if it's something that you've come in contact with in some of your dealings?

Mr. Jim Campbell: No. In fact, I hadn't heard about it before.

Mr. Rahim Jaffer: Okay.

Mr. Jim Campbell: The issue of arbitrariness is definitely what the operators are considering, the $50,000 fee they have. For Customs Canada, what I'm told is that you usually have to pay for a customs agent for special purposes.

If a plane was to fly in once from out of the country into an airport, you'd have to pay for an agent to go over there. But this is a regularly scheduled service that has been going on for ten years. They continue to be, they feel, the only border crossing in Canada--and they have yet to find anyone else--where they have to pay for Canada Customs services.

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Mr. Rahim Jaffer: There are no details as to how they come up with that amount. Is that right?

Mr. Jim Campbell: It's just under $50,000 for the cost of having a customs agent for eight hours a day. They've actually asked customs to give them 24-hour coverage and said that they would pay for it. Customs have said no. They can only have them for eight hours a day.

They can't stay open to help relieve the Ambassador Bridge and the tunnel, even if they wanted to.

The Chair: Thank you very much.

I have six people on my list.

Mr. Wilfert, go ahead.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you very much, Madam Chairman. I thank everyone for attending today.

The four areas I was interested in deal with impact assessment, service standard, service performance, and dispute management.

In terms of impact assessment, I know at the moment the departments look at an environmental scan, competitiveness with other jurisdictions, practices of other government departments, etc. From some of the stories I'm hearing today and have heard before, there doesn't seem to be a lot of attention paid to that, because clearly it's a more streamlined process in certain jurisdictions, and there doesn't seem to be any rationale as to why they're longer here.

There also seems to be a problem about dealing in silos here. Certainly, the gentleman talking about the marine issue is a good example of that. Transport has one policy initiative we're trying to achieve, yet we may have Fisheries and Oceans or Canada Customs doing something else that really thwarts the policy.

I don't think as a committee, Madam Chairman, we've had a breakdown of what they're doing in some sample departments, for example, in the United States, Australia, and other jurisdictions that are competitors. It would be helpful to have that information. I mentioned that before, and Australia was an example. But the United States, Australia, and Great Britain, what are they doing? Why are they able to achieve...? Surely they have to look at impact assessments, and obviously that's reflected in their policies.

When we look at service standards, at the moment Treasury Board Secretariat requires the establishment of service standards for all fees and they require that service standards be one of the subjects of stakeholder consideration. I'm not quite sure why we don't have service standards that are mandatory for all the departments and all the programs, and if you don't meet them.... As I've said many times, you have to pay a fee if you expect service. If you don't get the service, you shouldn't be paying the fee. It should be reduced or it should be dealt with.

On dispute management, this is the only area of Mr. Cullen's bill I have some difficulty with--the role of a committee. I know the stakeholders here talk about an independent dispute body of some kind. Is that to look at fees? Is that to look at complaints? Our job as policy makers is to make sure the policy is established and--as we used the term yesterday--that a hammer comes down. We don't have an effective hammer, it seems, at the present time.

I'm not convinced a committee should be looking at all of the fees or any fees. I don't know if that's really their job. I certainly listened with great interest to Mr. Gray's comments with regard to some of the problems that could happen. I think his suggestion, by the way, Madam Chairman, was a good one with regard to the House leader or the parliamentary secretary to the House leader. I think there could be some operational problems.

Having said that, I think we still need something so that where there is a problem, you'd say this is the policy standard across the board and you're not meeting it, and you'd have somewhere to go. I think the policy makers should know that things are not being dealt with. It's a travesty when we hear some of the examples from around this table.

So I differ at the moment from Mr. Cullen in his bill, although I'm obviously looking to my colleague, the parliamentary secretary to the Treasury Board minister, in terms of responses. Clearly, we all know there's a problem. We've all identified the problems. It's just a question of what's the best solution in dealing with it.

I think one gentleman said it's really a tax, if in fact you're not getting the service. It's become a cash cow. All we're doing is saying, give us the money, and by the way, don't come back until we're ready to talk to you. Some departments--we have to be fair--are better than others, but the principle still applies. It's the principle that you're paying a fee--what is the service?

I just wondered if any of you would comment on the issue of this dispute management mechanism, as to whether or not if a committee was struck to look at ways to improve the process or to make specific recommendations...and they would only be recommendations, because obviously any committee, whatever it was, wouldn't be empowered to say yes or no and that's the end of it.

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Rather than simply dealing with fee structures, I don't know that members of Parliament should be or would be in a position to be able to evaluate the appropriateness of a fee, but I think they would be in a position to evaluate whether policies are in fact being adhered to, evaluate whether what was being asked for...and there was a case here of Health Canada asking four times. I know we'd like to get it right, but....

The Chair: Thank you.

Mr. Myers.

Mr. Jayson Myers: As some preliminary comments, I think where the importance of some degree of parliamentary oversight comes in is not looking at the details of a cost-recovery program and not being in a position to be the tribunal to hear disputes--because you can start off with the people here today and those hearings could go on for a long time, and they already have gone on for quite a long time in the committee--but I think there is a role to ensure that cost-recovery programs do have an effective dispute settlement process, that there is a tribunal or an effective dispute process put in place, not necessarily part of a parliamentary committee but where the committee then would ask, has that requirement of the policy been met? Have other requirements of the policy been met? That's the degree of oversight.

I don't think anybody is really contemplating anyone on a parliamentary committee getting involved in the business of developing a cost-recovery program. That is the job of the departments, but certainly the check needs to be there. Are these programs in line with the policy that is there? Is the policy being implemented? Are these institutions or the dispute settlement procedures in place?

If setting guidelines at a parliamentary level can lead to the formation of an independent dispute process that perhaps is not part of the parliamentary process, I think there is a degree of oversight that is necessary to ensure that is in place and the policy is actually being implemented.

So I agree. The importance of having a hammer is the benefit of it.

The Chair: Mr. Gray, do you wish to comment?

Right Hon. Herb Gray: This is an issue on which I'm glad I have a chance to comment before I leave. I apologize to the committee and the other witnesses. I can't stay until 5:30.

But the bill itself, unless I missed something, doesn't spell out how this independent dispute settlement mechanism will work, what its authority will be, who is on it, and questions of that nature. Will it merely be a form of mediation, or will it have the authority to make a decision? If it has the authority to make a decision, one shouldn't always assume that the decision will be on the side of the private sector applicant. That's one point.

The second point is, what does this do to the matter of parliamentary sovereignty?

If we make a final decision, then this mechanism will be able to cancel out parliamentary sovereignty and the role of the government, made up of members of Parliament accountable to Parliament as a whole. I think this should be spelled out, because there are issues here that have to be dealt with if one is dealing with this bill in a serious way--and it deserves to be dealt with in a serious way.

So is it a mediation process, or is it a process where this independent body will have the final decision-making authority about a dispute? I repeat, if that's the case, what does it do to the role of a parliamentary committee and Parliament as a whole, which seems to be the focus of the bill before us?

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The Chair: Thank you.

We'll go to Mr. Cullen.

My apologies to the committee members. I didn't realize Mr. Gray had to leave early. Perhaps if there are questions to Mr. Gray, you might pose them first.

Mr. Roy Cullen (Etobicoke North, Lib.): Can you stick around for another few minutes?

Right Hon. Herb Gray: Yes.

Mr. Roy Cullen: Thank you.

I'd like to thank all the presenters--Mr. Gray, the business coalition, and others--for coming here today.

Mr. Gray, I'm flattered with your attention to this bill. Thank you for your input on the bill over the last while.

Just on that last point, of course, a bill doesn't spell out every single detail of every aspect of the legislation, as you well know, but what I have in mind and what I've been speaking about would be a process that would not be binding, but where some independent panel would make a determination of competing ideas as to whether the user fee was fair and reasonable in the circumstances, whether it met those tests, and then someone independent reporting them back to the government and to the House. But I've always said it wouldn't be binding--it couldn't be binding--and it couldn't deal with frivolous claims as well.

I'd like to come back to your point, sir, and I am mindful of this discussion about the work of billing, the volume of transactions, although we have heard different numbers. We're always reminded that a committee decides its own fate, and in fact with estimates, the estimates are referred to the committee, but if the committee doesn't deal with them--these are in the billions of dollars sometimes--they're deemed accepted and they're reported back to the House.

The scenario I would see is that the proposal would be put to the House of Commons. The House of Commons would refer it to a committee. My view would be that if it was a health user fee, it would go to health. If it was a transportation user fee, it would go to transportation.

Mr. Gray, in your judgment, what would stop a committee of the House from saying, for example, we're only interested in reviewing user fees if the increase is more than 7%? That would pick up Mr. Campbell's concern. What would stop a committee from saying, we're not interested in user fee increases; we're only interested in looking at new user fees? What would stop a committee from saying, we're only interested in looking at user fees where the independent dispute resolution process has been triggered, and then we want to see that report? What would stop a committee from deciding that?

This is where I have trouble with this volume concern. We're always told that a committee decides its own fate. What would preclude it from setting out those rules?

Right Hon. Herb Gray: That is a concept that is worthy of consideration, but my reading of the bill before us has a concept that goes further. It says:

4.(4) Every proposal tabled under subsection (2) is deemed referred to the committee.

5. The Committee must review every proposal referred to it pursuant to subsection 4(4) and submit to the House of Commons a report containing its recommendation as to the appropriate user fee.

Then the bill goes on to say:

6.(1) The House of Commons may pass a resolution approving, rejecting or amending the recommendation made by the Committee pursuant to section 5.

(2) If, within forty days of receiving a proposal referred to it pursuant to subsection 4(4), the Committee fails to report its recommendation to the House of Commons, the House may pass a resolution approving, rejecting or amending the proposal.

All I'm saying is, looking at the scheme in the bill, I think there's more there with respect to imposing a burden on a committee with its limited time for considering anything and the responsibility in question here.

When I talk about volume, I will readily concede that you might interpret these words to say there could be internal guidelines as to what matters would be considered by the committee, but if that's the case, I don't think this is what the private sector witnesses here may expect from this bill. They may expect something much more wide-ranging in application and therefore time-consuming.

By the way, when something is, as I said earlier, referred to committee, witnesses like those here from the private sector may expect the opportunity that you're giving them today to come and talk about each particular proposal. You can see how easy it is to use some time.

I'm not saying the time here is not used well. I think it is. The presentations were excellent and informative.

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Mr. Roy Cullen: If I could interject for a moment, sir, there's an amendment that I thought we had sent over to you, such that even though legislative council says it must review, the committee can still decide whether it will review. I have proposed an amendment that says “The Committee may review”.

Right Hon. Herb Gray: I recognize that. I'm saying you might check your amendments against the expectations of the private sector witnesses. I haven't discussed this with them.

Mr. Roy Cullen: This is my bill so that's what I have on the table. I think the reality is, the committee has to decide how they're going to deal with the volume, if there is volume. We've heard there could be as few as 12 per year, but the committee surely could decide if they're only going to look at new fees or....

In any case, I'd like to come back to another point.

Mr. Myers, since 1998, when you first surfaced this issue...what you're saying is that it hasn't become any better; in fact, it's probably become worse. I've heard this comment about micromanagement, and frankly I'm hearing what people are saying.

It takes me back to my days in the private sector. If you set up a business unit, you'd say there are certain expectations in terms of return on assets, profitability, etc., on implementing a strategic plan of the corporation, whatever. If things get worse from 1998 to 2003, in a corporation you have certain options.

There'd be a lot of discussion, but after a few years there'd be a management change, I suspect, if there was no improvement. If things were getting worse, if the option of not changing management wasn't there, then I'm sorry, you'd go in and you'd start micromanaging.

Regrettably, I think that's the situation we find ourselves in today. Notwithstanding all the interventions, all the submissions, all the meetings of this committee, all the reports of this committee, the situation is not getting any better. In fact, it could be getting worse.

I wonder if you're prepared to comment on that.

Mr. Jayson Myers: Unfortunately, I agree with you. The situation is getting worse, and I think you've heard from a number of witnesses and business representatives. There are others who are part of our coalition who could talk about this as well.

There are some areas where we're actually seeing some improvement. There are some best practices being established. On the whole, it is not a good picture. There is a real disconnect between the fee and what was promised when the cost-recovery program was implemented and performance.

I think where the real problem comes in is the issue of the enforcement of existing policy guidelines. If we had an effective quality system in place, you wouldn't have the problems that need that micromanagement.

So, Mr. Cullen, I think you're right. Right now there is, on the part of a number of departments and cost-recovery programs, a need to micromanage to improve the situation. I think much more today, on top of that, there's also a need for some form of enforcement to ensure that policy guidelines are actually being followed and that there isn't a continuing need for micromanagement in the future.

Mr. Roy Cullen: Good. I think that's fine for me for now. Thank you.

The Chair: All right. Then we'll go to Mr. Shawn Murphy.

Thank you, Mr. Gray.

Mr. Shawn Murphy (Hillsborough, Lib.): Madam Chair, my first area was going to be addressed to Mr. Gray, but I'll go to Mr. Myers.

Again, this follows along the same line of questioning of Mr. Wilfert and Mr. Cullen. I think everyone agrees with the submissions here today. I haven't heard anything to suggest that people agree with user fees for specific benefits, but these user fees have to be transparent and accountable and fair.

I'm wrestling with this whole concept of how a committee can determine what is...and if I hear your submission correctly, one of your biggest complaints, if not your biggest complaint, is not the amount of the fee but the service you're getting for the fee.

It's going to be difficult for us to come before a committee. If it's a cardiac device or something very complicated and we have a long hearing and the Department of Health brings in six witnesses, and they're all, I assume, medical doctors, and your own people whom you represent would come in and they would say this is not service, we could have a two-day hearing. At the end of the day, am I going to be any wiser as to what is feasible?

I tend to agree with you that this is a major problem.

I guess my own thinking on the issue is that the fees really should come from the executive government, the cabinet, but they have to be accountable to Parliament, and Parliament to this committee. Right now I don't see that accountability. There are certain departments, mainly the health department, DFO, that seem to have a certain user fee regime that's outside the arm of Parliament. How do we bring them in?

I was going to throw some of these questions to Mr. Gray.

Is there any role for the Auditor General here in this whole area? Something has to happen to bring the departments back in line to provide a fee that's fair and reasonable and transferrable--which isn't going on now. And I'm having difficulty with the committee structure.

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Mr. Jayson Myers: Perhaps I could take a first crack at that, Mr. Murphy.

This reminds me very much of the debate that went on in Australia about six years ago when Australian departments were wrestling with some of the same problems. The way they resolved the issue about how to deal with some of these disputes and about linking between performance and fees was a decision, first of all, to set out the expectations very clearly for what the user fee was being paid for.

I have to say that in here and in Treasury Board we had a big discussion about public-private benefit. Often in cases this is a very complicated issue; the two are tied together.

Many companies pay user fees in order to expedite the regulatory process. How, then, do you get some idea about what is an inefficiency in the regulatory process? And what's a necessary part of the regulatory process that's needed in order to protect health and safety in the environment, for instance?

Well, in business, you have something called activity-based costing. You use it a lot in terms of lead manufacturing. You look at what delivers customer value, at what's extraneous to the operation. In Australia, that's what they adopted. The departments have adopted a system for the actual approval process. They can tell you the time it actually takes to approve a product and they can tell you how much time that application has been in the waiting line, not doing anything.

I think a part of the resolution of this is to, again, open the transparency. Mr. Cullen's bill would require a greater degree of transparency in the costing, in the way these costs are put together and the linkage between fees and performance standards. If you can identify that approval process down into what is of value and what is simply inefficiency in the regulatory process, then a lot of the discrepancies can be overcome through that degree of transparency. I think it's been the lack of that transparency that's led to a lot of the problems and a lot of the disputes that have arisen that have not been effectively dealt with.

Mr. Shawn Murphy: As I read the bill, the bill states that although there's some issue of “may” or “must”, the intent of the bill is that user fees, whether it's an increase, a new fee, or a change in the fee, come before a committee, not perhaps this committee, but a committee of the House. I see this as being very complex, cumbersome, and it may not add a whole lot of value to the.... I'm not disagreeing with what you're saying; I'm agreeing with you, but I'm looking for the right....

Are there any other international comparisons? Obviously you've looked at this issue in Australia, Great Britain. Is there any other regime that may assist us in this problem?

» (1700)

Mr. Jayson Myers: I guess the United States too...and I refer you to a reference in the report from RIAS that was provided to us. In those jurisdictions, performance standards are legislated and the fees are attached to that.

I think what we're struggling with here is putting in place an effective mechanism for review. If it becomes a complicated process, it's not going to work, and I think everybody realizes that.

At the same time, I think whatever the process is that we end up with at the end of the day, what we're really looking for is the provision of some degree of parliamentary oversight and the role of a committee to make a determination that a cost-recovery program falls...that these things have been taken into account, that there's some greater transparency, that within the process there's a dispute resolution system in place. And we're looking to do that in as simple and efficient a way as possible.

Mr. Shawn Murphy: There are a lot of fees out there. Everyone has their own little horror story. I have and you have and we all have in the room here. But there are a lot of smaller fees. The one I deal with, where I come from, is that the national park charges a fee for people to get in. It's perhaps $4 and it might increase to $5. I don't think it's really our job to have a committee on whether or not they get the value. I'm wrestling with it in my own mind.

Mr. Jayson Myers: I agree. I don't think that's the level of detail you would necessarily want to get into. I think you do want to get the committee's discretion about what sort of review and oversight the committee would want to provide.

Don't underestimate the power that a provision for some degree of parliamentary oversight can have in improving the administration of user fee programs. Don't underestimate the power that this discussion is having right now in improving our communication with Treasury Board.

Mr. Shawn Murphy: This is why I went back to the Auditor General. If there is any way of involving her office, I find that very effective. Departments do get offside. That brings them back to reality a bit. If they have to spend two hours in front of the Auditor General, I find that very effective in bringing some accountability to the system.

Mr. Jayson Myers: My concern is that the Auditor General has been reviewing user fees. They did that in the agrifood review two years ago. Nothing has improved in that process.

The Chair: We'll go to Ms. Minna. Mr. Valeri is saying he's returning. Mr. Paquette tells me he would like to have a question if he can.

Ms. Wasylycia-Leis, did you...? Okay.

We'll go to Ms. Minna and then Mr. Paquette and then Mr. Valeri, if he's back.

Ms. Maria Minna (Beaches—East York, Lib.): Madam Chair, thank you.

There's no question there's a problem that needs to be fixed. I think we've discussed it. We've heard it today and in other hearings. Of course, the bill addresses it. I'm trying to see the most effective way one can do this.

For instance, to go to the dispute mechanism, would we have one in every department? It would have its own dispute mechanism and it would not be an arbitrating sort of thing. Every department would have to set up its own internal dispute mechanism on fees and performance. Would that dispute mechanism be there as a passive-reactive entity, say, only when someone complained, or would it be also given possibly the powers of being proactive and looking at performance?

Mr. Jayson Myers: Most departments should have some formal way of overcoming problems before they're elevated to a problem that would have to be referred to a general dispute resolution system. Hopefully, if we have an effective compliance to Treasury Board policy as it exists right now, we wouldn't have a lot of disputes to reconcile. We need some way of dealing with issues within departments.

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Ms. Maria Minna: Is the issue then at Treasury Board? Is that where we ought to be focusing rather than establishing dispute mechanisms within departments everywhere?

The Chair: Mr. Campbell would like to respond.

Mr. Jim Campbell: One of the difficulties we found with dispute resolution is that our marine service fees are quite unlike what these gentlemen and Shannon have talked to this afternoon. When they're charged by the federal government for service...if they don't want that service, they're not charged.

In our particular situation, if a ship that has hundreds of thousands of dollars of satellite navigation equipment on it is still in the waters--Canadian waters--it will be charged for navigational aids and services that in fact they probably really wouldn't need. So how do you dispute that?

Secondly, since program review--and many of these fees have come up since program review in the last six, seven years--we have departments such as Fisheries and Oceans and the Coast Guard that have come under enormous budgetary pressure. What is happening--and what has happened--is that Treasury Board will go in and tell the department, you have to raise $40 million. Then you are going to expect the same officials to be able to put in a dispute resolution mechanism and process that will potentially take some of the $40 million away, which will then force them to find the money somewhere else.

The ability to be able to have an arm's-length process such as what is being suggested in Bill C-212, if not in committee, then in subcommittee.... Right now the marine industry in Canada is working with a subcommittee of the Standing Committee on Transport extremely well. It's made up of six or seven very interested members in our particular issues. We're proceeding quite well on a particular study of interest to us, the subcommittee, and the committee. I think some formal, high-level--as Jay has said--dispute resolution or process can work at a subcommittee level, if not at the committee level.

Ms. Maria Minna: What about doing it as part of the estimates process? If in the plans and priorities departments were to be expected to put in what, if any, new fees they were planning, and at the same time give an evaluation of how they are performing in others, since estimates come to committees, it could be done as part of the estimates process.

Mr. Jim Campbell: That might be an eloquent way of dealing with it. There are times when estimates come up, and this may be still an opportunity. I don't think it takes away from Bill C-212. I think that would just really be the business of the committee, the chair and the members, to decide how they are going to look at that. Maybe during the estimates process that might be the place to do it.

Mr. Jayson Myers: My concern with the estimates process, as Mr. Gray pointed out, is that committees have not spent a great deal of time dealing with estimates. To put this into a package where committees are going to take a cursory glance at this and approve a whole package of estimates is not necessarily going to provide, I think, a sufficient check to enforce what the guidelines are.

The Chair: Go ahead.

Ms. Maria Minna: Presumably, that would have to change; otherwise it wouldn't work. I understand that. Presumably the committees would know they are dealing with looking at the evaluation and the performance of user fees and that this would be an added burden. At that point there could be some witnesses called, especially those that were most affected by areas that were most at fault. As every committee deals with their own estimates differently, every department would be looked at in one way or another--the health department, for instance, with its number of days of approving medicine and what have you.

I understand the dispute mechanism and so on, but what's the hammer. Let's say we find there is a performance problem. What's the penalty? Is it an incentive? Is it a cutback of fees? I would imagine it becomes a bit of a vicious circle to some degree in that the department has less money and then their service becomes less.... I'm just trying to look at the ramification.

» (1710)

The Chair: Mr. White is first and then Mr. Myers.

Mr. Robert White: I want to pick up on something Jay said, and it was your question about the estimates procedure and departments coming in and explaining what their performance has been in the past. That could be very, very difficult, because there are different branches in departments. Each of those branches, I think, has a different experience with how well they have actually implemented fees. The healthy environments and consumer safety branch, for example, is probably going to be coming forward with a number of different fees. They haven't introduced any yet so they could say we have a clean record; we've never had any problems. However, start going over to the Therapeutic Products Directorate, where it's not very good, and look at the test management regulatory agencies, where it's not very good, and I think then you have a very, very difficult time determining whether they actually are efficient or not.

Ms. Maria Minna: They would also have to flag, as part of their plans and priorities, the new estimates they are anticipating to bring in, in the next year, so that the committees then would also be able to have some advance discussion as to the value and the reasonableness of the estimates being contemplated. You would have both.

The Chair: Mr. Myers, another question?

Mr. Jayson Myers: Oh, yes. Could I just respond to the question of what is the hammer?

The very effective hammer that is legislated in Australia and in the United States, at least in the veterinary drug and medical device areas, is that if you don't meet the service standard to which you committed and for which the service fee is paid, then that fee is reduced or it's eliminated. I know there is an argument that asks, wouldn't that reduce the quality of the service? To me, that's a bit like the argument that we go into free trade and we go to the bottom of the pack in environmental hazards. That hasn't happened, and it hasn't happened in Australia or the United States, where as a result of tying the fee to performance we have actually had an improvement in the compliance to performance standard.

I don't see that occurring, and frankly, the introduction of new drugs and new therapeutic products and new products onto the Canadian market is in the interest of Canadians. It's something the government should be doing and should be doing well. To levy a fee and say you are going to improve that process if you pay a fee, and then to not meet that standard...with any private sector contract there would be all sorts of recourse that companies or individual Canadians could take. That, of course, isn't possible when you have a mandatory regulatory service or when you have a service, as in the green fees, where it's part of departmental regulation.

[Translation]

The Chair: Mr. Paquette.

Mr. Pierre Paquette (Joliette, BQ): Thank you, Madam Chair.

I just wanted to start by telling the representatives of the Canadian Consumer Specialty Products Association that I recently had to deal with the Pest Management Regulatory Agency. A biotechnology company in my riding had developed a product to keep wood cuts clean. It took an extremely long time to develop the product. The company went past the process deadline, which threatened the very survival of the company, since several million dollars were involved. If you miss a harvesting season, you can only make it up the following year. So I became witness to the fact that officials, even if they are very professional, operate from a position of strength. If they feel they are being pressured, they can become extremely unpleasant. Just as they can be very pleasant.

So, it seems to me that companies which deal with the government are treated arbitrarily and I find that unacceptable.

I think that Mr. Cullen's bill will facilitate things. One bad case and all the others are forgotten.

I only have a brief, specific question, since you have already addressed many issues. In the presentation made by the Non-Prescription Drug Manufacturers Association of Canada, it says:

Drug evaluation fees were introduced September 1, 1995 and after introduction, the review times for our members' products declined by 37 per cent. Although these times were still above the target performance standards, it was encouraging that we were headed in the right direction. However, this improvement was short-lived. As we entered 1997, performance deteriorated, and by 1999, review times were almost back to pre-user fee review times.

In your opinion, how do you explain that after the regulations came into effect, there was a significant improvement, nearly 40%, but that the situation slowly deteriorated to the point where it was the exact same situation as before?

It's understandable that, after making an effort, delays were decreased by 37% and that from then on the situation stagnated. The first reductions are often the easiest to achieve, but as time goes by, it seems that it becomes more difficult to maintain.

How do you explain that, between 1995 and 1999, things turned out as they did?

» (1715)

[English]

The Chair: Mr. White.

Mr. Robert White: Thank you for that question.

When the fees were first introduced, I think there was a strong commitment by the regulators to do it right and meet those performance standards. However, that commitment perhaps slipped a little bit over time, and there wasn't as much concern about whether or not they met performance standards. There was a question about resources being allocated.

Perhaps on the part of some senior managers there was a question about commitment to getting the job done. Part of that may have been because there was no accountability for them to get the job done. Even though industry, for example, could yell and say, “Listen, this slows things down; what you're doing is preventing consumers from getting access to medications in a timely manner”, I don't know exactly what their response would be, but they would probably say, “Well, we're working on it, and we're trying to get efficiencies”.

There's a commitment and there has to be an accountability, which is why I think Bill C-212 actually gives Parliament the opportunity to call these people before them and say, “If you're not meeting performance standards, what's your process, and what efficiencies are you going to put in place to meet those performance standards? You've offered a service, you're charging a fee; therefore, get to it.”

I don't think that happens right now.

[Translation]

Mr. Pierre Paquette: To carry on from there, what I find interesting with regard to Bill C-212, is that since it is extremely difficult for us to intervene in specific cases, since officials may feel they are being pressured, as I mentioned earlier, and that we may inadvertently politicize a case, I think it is better for us to regularly conduct an overall review using a user-fee schedule, rather than having to intervene sporadically on specific cases. In that regard, as I've already told Mr. Cullen, we fully support the spirit of Bill C-212.

[English]

The Chair: Mr. Valeri, please.

Mr. Tony Valeri (Stoney Creek, Lib.): Thank you, Chair.

I have one question, which is really just a point of clarification for me. I personally like the idea of the Business Coalition on Cost Recovery to link fees to performance. I understand the argument some people are making, that the point of this exercise is not the amount of money being collected, but the service people want to have provided.

But I go back to this characterization: what's the hammer here? If you link to performance, I think there will be an objective or a goal that people need to shoot for, and a measure of competency in meeting that standard. If a department is unable to meet that standard on an ongoing basis, then there's something wrong. They're either underresourced or the standard is not realistic or there's something wrong with the way it is being handled. I think this is a way of crystallizing and getting our heads around an aspect of this whole process.

Part of my question reflects what was said here. I don't think anyone around the table is going to disagree with parliamentary approval, scrutiny, oversight, or with this aspect of the argument. There needs to be more oversight and more parliamentary scrutiny, and I think there are aspects of this bill that speak to that and make it work.

The area I'm concerned about, which I want to ensure I understand correctly, that this is what you're asking for, has to do with subsection 6(3) in the bill. It says “A regulating authority may not fix or vary a user fee that is inconsistent with the amount approved or recommended by the House of Commons”.

My sense was that you talked about oversight and recommendation to Parliament in your brief, but I didn't get the sense that you were asking Parliament to approve user fees. That's really what I want to get clear. I see two distinct requests here: one is that Parliament needs to provide greater oversight and the other is that Parliament needs to approve a user fee. The approval of the user fee and the request to approve the user fee would occur prior to the implementation of any user fee.

I just want to make sure that is what you're asking for, because it's different from oversight, accountability, scrutiny, and all of the other words I've heard this afternoon. That's what I want to understand.

» (1720)

The Chair: Mr. Myers, do you want to answer?

Mr. Jayson Myers: Maybe I'll kick off the discussion.

Under existing Treasury Board policy and guidelines, it's specified that performance standards should be met, that there should be consultations, and that there should be dispute resolution. But this isn't working.

Under existing committee business, it's possible to bring up these issues. It's now possible to do it in the estimates process. As Jim has talked about, it's possible to do it in a transport subcommittee. Yet these issues are still out there as systematic problems that businesses have been facing across government departments.

The issue is how to link fees to standards. I guess we have come back to the committee again on this issue, because we've been trying to work with Treasury Board, but we really haven't been getting anywhere with them. We've been trying to make sure there is some form of effective enforcement.

We're very supportive of Mr. Cullen's bill because we see it as more than simply oversight but as asking for parliamentary approval. Frankly, given our experience with Treasury Board, given the experience with what has happened with the Auditor General's reports on this issue, and given our experience with what has happened with the recommendations of this committee, we see the problems as still there--and growing. This is one reason why we're very much in favour of Mr. Cullen's bill right now, because it enforces that linkage of fee and service.

Mr. Tony Valeri: It's not enforcing it, but preventing a fee from coming forward. You're asking for approval; that is what you are suggesting we should do. There's a difference, and I just want to make sure we understand that.

Mr. Jayson Myers: If a cost-recovery program or a fee comes forward, where that cost-recovery program does not have an effective link between fee and service, where it does not have an effective dispute settlement system, where it's not following the guideline effectively or it's not within Treasury Board policy, and where issues are raised that there is not any clearly spelled out private benefit, then I think you could then argue that it is, in effect, a tax. But you could also argue that it affects tax policy and therefore it is a matter where you need some approval.

My take on it is that I would like to see Parliament say, “Yes, this is a user fee that has followed Treasury Board guidelines and it's approved for that reason”--effectively linking fees to performance standards--but “No, we don't approve this because there's been a failure to provide the mechanisms that government policy itself has called for”.

So I think that is the very effective hammer. Unfortunately, it's the type of hammer we are looking for right now, because in our experience in dealing with this issue over the past five or six years, nothing else seems to have been effective.

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The Chair: Mr. Campbell.

Mr. Jim Campbell: Through you, Madam Chair, I would like to respond to Mr. Valeri on those two issues, one being the issue of performance standards.

In our particular situation, I can give you two examples. As far as the Canadian Coast Guard is concerned, we don't really have performance standards tied to our user fee. In fact, a few years back the marine industry in the Great Lakes spent a considerable amount of time and money working with the Coast Guard to look at what fixed and floating navigational aids in the Great Lakes were really necessary, given our new capabilities as far as navigation were concerned. Close to 50% of those aids were removed, saving the Coast Guard millions of dollars--and its impact on our fee was zero. So there was no connection.

We're actually trying to get there, to get a performance standard attached to the current fee level right now. That is the proposal I mentioned earlier in our discussions, which has been sitting on the fisheries minister's desk for the last nine months and which we still have to get a response on. If we help them save money over a ten-year period, we talk about whether that will be reflected on the percentage of fee that can be reduced. So in our particular case, we're still looking for the whole aspect of performance standards.

As far as parliamentary oversight is concerned, I would agree with Jay. As you would well know, any committee can look at any fee or pretty much any issue they wish to right now. There could be all-party support to cut the fee, or to increase the fee, or what have you, but once the report is done, the government can still look at it and say, “Thank you very much, and have a nice day”. But with Bill C-212 there are some teeth. There is an opportunity through the committee process, where most of the work of Parliament is really done, as you all know. This is a legitimate place for that kind of work to be done. Unless you have the teeth of Parliament approving or not approving a committee's recommendation regarding a fee, Bill C-212 would really be moot. We wouldn't even bother working with it, because as I said, committees right now do have the authority to be able to look at a fee. But at the end of the day, where does that report go?

In this process being outlined--or sketched, because if Bill C-212 is approved there's going to have to be a lot of procedural process attached to it in the coming years--we think Parliament is the place to go. Yes, Parliament should have scrutiny over whether they should allow fees or fee increases.

Mr. Tony Valeri: Scrutiny, but you also think Parliament should have approval privilege on whether fees go forward.

Mr. Jim Campbell: Exactly--approval privilege, which I hope they would first scrutinize.

Mr. Tony Valeri: Okay.

The Chair: Thank you,all of you, for coming here today to help us in our deliberations on this private member's bill.

We will be meeting as a committee for our final panel of witnesses next Tuesday afternoon. You will note in your offices that I have put out the final notice for clause-by-clause consideration to occur a week Tuesday--unless I have to amend it for reasons I don't have right now.

On behalf of all of my members around the table, thank you very much. We certainly like to hear from witnesses.

We are adjourned.