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EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 17, 1995

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[English]

The Chairman: We're now going to review what we have done with Bill C-61. Because we've had such a long lay-over since we last dealt with the bill in this committee, and since there are new members on the committee who were not here before, I would ask our research staff to give a capsulized review of the bill and changes that I believe have come about within the bill.

I'm going to ask Sonya to go ahead with that, if you wouldn't mind. We'd very much appreciate it.

Ms Sonya Dakers (Committee Researcher): Bill C-61 adds to the enforcement options that are available to Agriculture Canada officials when individuals are not in compliance with regulations in eight of their acts. At the moment, they have to rely on a rather lengthy criminal process, whereby they can cancel licenses, prosecute, or confiscate products. This bill allows them to issue monetary penalties when someone is in violation of one of their acts.

I believe you received an information package that gives you some more details about the bill. I also handed out a chronology today. I'm going to speak to that and just elaborate a little on it.

The bill received first reading on December 5, 1994. It received second reading on February 10, 1995, and this continued on February 13, 1995, when it was referred to our committee for consideration.

The committee held four meetings on the bill. At the first meeting department officials explained the objectives of the bill. They took the members through the new procedures where a regional manager decides to issue a monetary penalty, explained how the level of penalty is assessed, the options available to the individual, and how the tribunal operates. At that meeting members raised a number of concerns over what was covered in the bill and what the regulations would include.

A lot of these questions related to the differences between the Agriculture Canada approach and the Transport Canada approach. Transport Canada introduced this system in 1986 and has a Civil Aviation Tribunal that has been operating since that time.

As a result of these concerns, the next two meetings of the committee were devoted to hearing about the Transport Canada process and how it worked.

On March 23, 1995, a Transport Canada official came before the committee to explain its system. He basically stuck to the Transport Canada system, but in the discussions that followed the differences between the two systems came out. In fact, most of the meetings seemed to concentrate on particular issues.

In this first meeting, the 50% reduction of the fine if a person decides to pay instead of contest was talked about. The burden of proof was talked about, as well as discretion in imposing penalties and how the tribunal system works. The Transport Canada system is a two-tier system, which is not the case with the Agriculture Canada system.

The difference between absolute and strict liability was discussed, and at the end of that meeting Agriculture Canada officials sat at the table and explained why they felt it was important to keep the concept of absolute liability.

Strict liability is the system on which the Transport Canada Act relies. It is a criminal law approach that allows people to plead due diligence; that they did everything in their power to be in compliance but for reasons beyond their control they were not able to be. The Agriculture Canada system does not allow that, and I'm sure the officials will go into this in more detail.

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On March 30 the committee invited the former chairperson of the Civil Aviation Tribunal to explain how the Transport Canada system works on a practical basis. She explained the importance of having an informal system. Particularly, she used the example that if Transport Canada criminally prosecuted an airline and put it out of business it might mean that a community would lose its airline. So a monetary penalty system seems to work better because officials are able to achieve what they want without such a Draconian measure.

The issue of the 50% reduction was raised again during that meeting because in the Transport Canada case, while negotiation is allowed, there is no automatic reduction of the penalty if the person agrees that he or she has indeed committed a violation and is willing to pay.

The burden of proof is on the minister in the Transport Canada system to prove a violation on a balance of probabilities. That's the standard of proof and it relies on strict liability. This was the other issue that was raised again.

On April 4 department officials from Agriculture Canada and the parliamentary secretary came back before the committee and explained that they intended to introduce several amendments that would deal with some of the issues raised. They explained that they would be dealing with this 50% reduction and the burden of proof. You have before you now a set of amendments that officials will be going through and explaining to you.

They also took us through two scenarios to show us how the penalty matrix works when somebody is in violation, and how they assign values on the gravity of the situation. They used two scenarios to assist members in understanding how their system worked.

There are 12 amendments before you that deal with the matters of not making new matters punishable; the criteria for fixing the penalty; standard of proof; disincentives to contest charges; the burden of proof; and some other smaller matters. I am sure the officials will outline in detail how these work.

The Chairman: Thank you very much, Sonya. Because this bill had been on the table so long waiting to be brought back to the committee, Sonya's role here was to bring us up to date and give a quick synopsis of the history of the bill, not to interpret or give different meanings to what happened. I very much appreciate your efforts. You have done a very good job in clearly explaining what has happened over time.

I think the next step at this time would be to go to the government officials and have them give us an interpretation of the changes and explanations they have put forth. Then we can open it up to committee questions with regard to the changes they have introduced or any other implications to the bill.

I will then turn it over to Lyle and government officials. Possibly Lyle can introduce the officials because we have several new committee members who may not be familiar with the officials who are here.

Mr. Lyle Vanclief (Parliamentary Secretary to the Minister of Agriculture and Agri-Food): Thank you very much, Mr. Chairman, and good morning to committee members.

First I want to thank Sonya and the staff for bringing us up to date on where we have been on the table with this bill up to today.

I welcome Mr. Reg Gatenby, chief of legislation, Food Production and Inspection Branch, Agriculture and Agrifood Canada; Mr. Henry Molot, Q.C., from the Department of Justice; and Phil Amundsen, director general of the midwest region, Food Production and Inspection Branch.

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Also present in the room is M. Pankowski, from the Legal Branch of Agriculture and Agri-Food Canada.

I welcome those members of the team here this morning to help us proceed, Mr. Chairman, with this bill.

As we know from the discussion before, Mr. Chairman, this bill amends a number of acts: the Canada Agricultural Products Act, the Feeds Act, the Health of Animals Act, the Meat Inspection Act, the Pest Control Products Act, the Plant Protection Act, and the Seeds Act.

Mr. Chairman, I think we have addressed the concerns that members of the committee had when we discussed this bill earlier.

Bill C-61 creates a system that allows officials of Agriculture and Agri-Food Canada to issue monetary penalties for serious or repeated violations of the regulations in the food safety, pesticides, and animal and plant health program areas. These monetary penalties can be up to $15,000 for companies and up to $2,000 for individuals not engaged in agribusiness. The legislation also establishes an independent tribunal to hear appeals of the monetary penalties.

I want to define the term ``administrative monetary penalty''. The administrative monetary penalty is used to differentiate monetary penalties, which are non-punitive in nature and not administered by the criminal courts, from fines, which are meant to be punitive and are imposed by the criminal courts for convictions of regulatory offences.

The purpose of the administrative monetary penalty system, or AMPS, is to provide Agriculture and Agri-Food Canada with appropriate and more flexible responses when dealing with violations of regulations such as the marketing of inedible food products or the inhumane transportation of animals.

I think it's an example of good government, and that's what we're all striving for. It will provide a framework in which Canada's high standards for food safety and high quality can be effectively enforced. It will also allow Agriculture and Agri-Food Canada to regulate in a more efficient and more cost-effective way, requiring less time and money than would be required pursuing offences through the provincial court system.

In addition, Bill C-61 supports the competitiveness of the agriculture sectors by responding to requests for more equitable enforcement of regulations for imported and domestic products. Our domestic industry has complained for several years that standards of safety and quality are more strictly applied to it than to their foreign competitors.

Mr. Chairman, over the past number of years there has been a regulatory review taking place in all departments and in Agriculture and Agri-Food Canada. This is one of the responses to the concerns that the industry people had.

Industry associations support this system, because it allows Agriculture and Agri-Food Canada to respond more quickly and effectively when importers or domestic industries market products that do not conform to Canada's food safety or quality standards.

I've prepared a list for members of the committee of letters of support that we have received from industries for this bill. Copies of these letters will be provided if you request them.

I believe, Mr. Chairman, the clerk has probably circulated the list. If you wish to see the actual letters, they are certainly available, but there is a list of those who have made comments.

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Bill C-61, Mr. Chairman, is an alternative to prosecution. The concept is to use an administrative process and apply monetary penalties to encourage compliance with agricultural acts rather than over-rely on the criminal system to punish offenders. I think that certainly makes a lot of sense. This is a non-punitive administrative system that has compliance as its goal. However, we will still have the option of prosecuting serious offences.

This makes the system very fair and expedient. It allows for negotiated solutions to non-compliance. Administrative monetary penalties can be reduced to zero dollars if a violator will take immediate action, such as purchasing new equipment, to come into compliance. Immediate corrective action results in a better product, improved health and safety, and more effective enforcement. That is certainly the goal of all of us.

The system, I feel, is very fair and impartial. This bill establishes a review tribunal to allow for administrative review of monetary penalties. The review tribunal is an independent, quasi-judicial body that is appointed by the Governor in Council. In addition, if an alleged violator is not satisfied with the administrative review conducted by the review tribunal, he or she can also ask for a judicial review by the Federal Court of Canada.

Before discussing in a little more detail the amendments to the bill that we are now suggesting as a result of previous discussions, I'd like to say a few words about the use of absolute liability.

Bill C-61 allows for the issuance of monetary penalties based on absolute liability. This means that the department needs to prove only that the alleged violator committed an act that is in violation of the regulations. There would be no defence of due diligence, by which a defendant can avoid liability by establishing that he or she was not negligent. Under Bill C-61 there is no possibility of imprisonment, there is no record of conviction of an offence, and the penalties are modest rather than punitive in nature. Because of these factors, there is no constitutional or other legal impediment to proceeding on the basis of absolute liability.

From a policy perspective the use of absolute liability is essential to encourage the food industry to exhibit a high standard of care. This is important for matters involving the food chain and consistent with the approach the courts take in civil cases. The concept of absolute liability is important to the effectiveness of this system as a preventative measure.

I will give you an example of the standards necessary in the food chain. Even a minute amount of peanut dust is enough to send someone with peanut allergies into anaphylactic shock. To such a person the issue is not whether a company exercised due diligence. As a preventive measure, a finding that a product is mislabelled or that the presence of peanuts is not indicated in itself warrants a finding of liability. The focus is on prevention and remedial action with Bill C-61, not in the finding of a fault.

The use of absolute liability will also provide for an effective and efficient enforcement system. The resource base for enforcing regulations is shrinking. Bill C-61 deliberately designs a simple, efficient system to deal with those importers or domestic companies that do not follow our health, safety, and quality regulations.

Mr. Chairman, we've made several amendments. I believe they have been circulated. We may want to have some questions regarding them today. When we go to clause-by-clause discussion on another day, Mr. Chairman, we'll certainly be able to discuss them further if you wish. I'll just touch on some of them, but I won't specifically go into the amendments today.

These are as a result of the committee review we had in the spring. You have copies of them. Some are housekeeping amendments and some are more specific. They include a clause that clarifies that only matters that are offences under the agrifood acts are subject to this act.

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There was a long discussion about the 50% reduction, so as a result of these amendments, the proposed 50% reduction for paying the monetary penalty without contesting is removed from the act. The new provision will allow the matter of reduction in penalty to be governed by a broader criterion to be contained in regulations.

There are amendments for clarity, in which we have specified those aggravating and mitigating criteria that must be considered for determining monetary penalty amounts.

A clause is added that states the notice of violation must clearly outline the rights and obligations of the alleged violator and the alleged violator's right to have the facts reviewed by the minister or by the tribunal.

Clause 19, for example, is amended to show that for all violations the minister must establish, on the balance of probabilities, that the person named in the notice of violation committed the violation.

A clarification is added that the common law defences subject to the act apply to Bill C-61. Examples of common law defences include necessity, duress, official-induced error, coercion, and infancy. All of these are allowable defences. The specific wording it takes to do these, as I say, Mr. Chairman, the committee members have in front of them today.

Mr. Chairman, the officials and I are here to answer any questions the committee members may have. Thank you very much.

The Chairman: Thank you very much, Mr. Vanclief.

To the committee members, possibly we'll be a little less formal in setting times and so on. I would rather leave it open to questions and allow questions if we're dealing with a particular area; other people may have comments on that area. We'll try to answer all the questions the committee has and wrap up any concerns it has this morning.

I'll open it to questions from any member of the committee who would like to come forward.

Mr. Calder (Wellington - Grey - Dufferin - Simcoe): Thank you very much, Mr. Chairman.

Lyle, I have a little bit of a concern here and maybe you can clear this up for me. I'm going to talk a wee bit about checks and balances for the department itself.

The way AMPS is set up now, I'm wondering what the checks and balances are for the government itself. If the government were to come up with someone they deem an offender, that individual would be going against the government and the taxpayer. I'm wondering what the cost would be for somebody who has been found in violation and has to go through this procedure. What is the cost, for that individual, of a review by a government official or a tribunal? What is basically the responsibility to the government itself?

Mr. Vanclief: I'll make a comment first and maybe one of the officials can speak afterwards.

If I'm correct, the cost of the tribunal, etc., is not a cost for the violator unless the violator wants to continue to take the case through to the courts. If that were to be the case, there could be a cost.

Mr. Reg Gatenby (Chief, Legislation, Food Protection and Inspection Branch, Agriculture and Agri-Food Canada): The experience with the administrative monetary penalties is that it's much less costly because it is a much more informal system for the violator. Violators are allowed a ministerial review, in which they make representation themselves. There is an independent tribunal, which is appointed by the Governor in Council. It's a much more informal system than a court system is. People can represent themselves; they don't have to be represented by legal counsel. As well, we'll be holding the hearings in the regions, so there won't be a huge travel cost for the person.

It's much more informal than the court process. In terms of alleged violators defending themselves, it will be generally less costly to do so than going through a provincial court system, where you have legal representation.

Mr. Calder: My concern, and this is what I would like to lay to rest, is that the government wouldn't be able to act arbitrarily on issues such as this. If there were a case, we would want to make sure we had a darn good case before we went.

Mr. Gatenby: Yes. The hearing officers will be independent from the department. They will be Governor in Council appointed. The department will have to make a case that the person alleged to be in violation violated an act or regulation of Agriculture Canada. They'll have to present the facts of that case.

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The person will have, as we've mentioned, the opportunity to present their case, to challenge those facts, in front of an independent hearing officer. The hearing officers will be agricultural experts. They'll be hired from universities, will be retired business people, that sort of thing. They'll be familiar with agriculture legislation and will be totally independent from the department.

If the person is still not satisfied at that level, they can ask for a judicial review from the Federal Court.

Mr. Calder: Thank you.

The Chairman: Mr. Benoit.

Mr. Benoit (Vegreville): Thank you, Mr. Chairman.

When the committee talked about this last spring, I think there was concern from everyone on the committee that this bill gave too much power to the department and to the minister. The committee had legal counsel draw up about seven amendments. I drew up a couple more myself. This bill was then dropped from the committee agenda and wasn't dealt with again.

I would like to ask some questions about the amendments the committee itself made last spring and about how those concerns were or weren't dealt with by the amendments being proposed by the department.

I find it interesting that the committee put these amendments forth with a lot of common concern amongst committee members from all parties, and yet on the agenda we're dealing with now are the amendments brought by the department. I find that quite surprising. I don't think it's acceptable at all. Why didn't we deal with the amendments as brought forth and prepared by the committee itself?

I'm not arguing with the need for change and the need for administrative monetary penalties. I think everyone on the committee recognizes that we need something that will allow more reasonable enforcement of regulation. That's not the issue here at all. The main concern brought forth by this committee last spring was that there were unreasonable powers given to the minister and to the department.

I'd just like to ask some questions about the amendments that were put forth by the committee, and by myself - the two amendments that, again, were never talked about, because the committee dropped this from the agenda - to see if those concerns were dealt with. One of the main concerns was that under the proposals in Bill C-61 there was no appeal to the courts on questions of fact. The only appeal to the courts was to ensure that proper procedure virtually had been followed by the tribunal.

My first question, then, I'll relate to an amendment I was going to put to the committee last spring under subclause 14(1). The amendment I would put forth would allow an appeal on questions of fact to the courts so that the minister and the department don't have complete power. There is actually an appeal to the courts on question of fact, not just to see if proper procedure was followed throughout.

The amendment I was proposing there - and I'm not going to put it forth as an amendment - was, at line 8, page 9, of Bill C-61, to substitute the following:

Has this been dealt with by these amendments? I've just seen for the first time the amendments the department is bringing forth. Has this issue been dealt with by the department in their proposed amendments?

Mr. Vanclief: Mr. Chairman, the amendments and the concerns that came forward to the committee last spring were considered by the legal counsel and his officials. To the best of our ability, I think they have been dealt with.

As to some of the specific amendments the member is addressing right now, if he wishes - and this is my understanding, but it's your committee - he can bring those forward specifically in clause-by-clause. It's his right, and his opportunity, to do so.

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But I'll ask Mr. Gatenby to address how the others have been dealt with. As well, Mr. Molot may have a comment.

Mr. Benoit: I would just ask a very direct question. If the amendments or the changes the department has brought forth here were put in place, would a person who is fined under this system of administrative monetary penalties - and it is a fine, no matter what you call it - have an appeal, on the question of facts, to the courts?

Mr. Gatenby: My understanding - and I'll ask Henry to provide a legal interpretation - is that a person is entitled to a judicial review at the Federal Court. To have a judicial review at the Federal Court they'll show that there was an error in law made at the tribunal hearing or that there are now new facts that couldn't reasonably be considered at the time of the tribunal hearing -

Mr. Benoit: So the answer is no, then.

Mr. Gatenby: Henry, do you want to add to that?

Mr. Henry Molot (Senior General Counsel, Administrative Law Section, Department of Justice Canada): It's not a full appeal on the facts, no.

Mr. Benoit: Okay. That's my first question. So that hasn't been dealt with. I think that certainly would have helped at least give a final rebalancing of the scales. Right now the scales are tipped heavily in favour of the minister and the department.

I'd like it if you could, then, go through the amendments that were brought forth by the committee one by one and just explain how the issues brought up in these proposed amendments were dealt with by the changes proposed by the department. Really, I think that's what we're here for today. The committee had concerns. They were serious concerns. Amendments were drafted, by request of this committee, by legal counsel. Have those concerns that were brought up in those proposed amendments been dealt with in the department's proposed amendments, which we have in front of us today?

Mr. Chairman, I think we could deal with probably a lot of questions if they went through these one by one today to see if they have been dealt with.

Mr. Vanclief: Mr. Chairman, I think I made the statement in my opening comments to cover that type of thing. It's up to you, as chair, when you wish to go to clause-by-clause, at which time, as I understand it, the clauses that are here today will be explained on how they address the concerns that before came forward to the committee.

The Chairman: Perhaps I can go back and just give a capsule of the way I recall things.

When the bill came forward there were many concerns raised by individual members at some discussions of the committee. In the process we did go through several different witnesses and heard comments from different witnesses. Transport, I think, was very significant in the fact that they said through the process they had followed had been a very successful means by which to carry out a penalty system that to their mind was very workable.

As things proceeded, I know many members tried to put forth concerns, and I believe the department was extremely responsive to those concerns. I personally met with several of the officials away from the committee. They explained to me everything that was of my concern. I think the amendments that had been brought forward were those that dealt with my concerns as well as the concerns of most of the members of the committee.

I believe in the initial discussions here there clearly was outlined by Mr. Vanclief the impetus of those changes.

Mr. Benoit, is it your concern that you're not clear on what these amendments coming forward are proposing to do? If you need a clarification of what those amendments are doing, that's fine, no problem. I believe the department officials can handle that without any difficulty at all.

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I'm not sure precisely what you're asking on it. That's my difficulty.

Mr. Benoit: What I'm asking precisely is that the amendments that were put forth by this same committee, with all the changes, be dealt with one by one to ensure committee members that the concerns that were brought up last spring have been dealt with.

The Chairman: In my mind, the concerns I raised have been dealt with by the department. In my recollection, this committee did not recommend any specific amendments to the department. This committee had a discussion that generated from the department the clause changes they're proposing.

What you're suggesting is that you gave two specific amendments that you wanted the department to deal with. I'm not aware of those, quite frankly. No one on the staff of the committee is aware of those specifics, nor are the committee members themselves. That creates a bit of a problem.

But I believe concerns raised by most of the committee members have been dealt with through the department's amendments.

They were not formally put to the department as amendments, either. I must point that out.

Mr. Benoit: No, that's right.

My main concern is that they've been dealt with. I don't care who put them forth. I just want some of the concerns dealt with. If we're not going to go through these amendments one by one, then I want to ask a question.

The Chairman: I have no problem going through the amendments one by one if that's what you wish. Why don't we look at the amendments and just have a quick explanation of them?

Mr. Benoit: I'm talking about the amendments that were proposed by the committee, not the ones brought forth by the department.

The Chairman: The committee did not propose amendments. That's what I'm -

Mr. Benoit: No, but they had legal counsel draft amendments. This was taken off the committee agenda.

Mr. Vanclief: Maybe I can help there. Thinking back, I believe the legal counsel for the committee, in response to concerns that were raised around the table, suggested some amendments and ways in which those concerns might be addressed. Those concerns were taken by the officials and addressed, and they have now come back to the committee. The suggested amendments that we can explain today will come forward in clause-by-clause, along with any amendments that any member of the committee may very well have, and be dealt with then.

If, between now and clause-by-clause, the committee members would like to have those amendments before us today explained, we can certainly do so. Between the officials and me, we can certainly do that now.

These are the responses to the areas that were addressed. I don't know how much clearer I can say it than that.

The Chairman: Mr. Vanclief, that's fine.

We'll go to clause 4 on page 2. Let's just have an explanation. We'll go through those quickly.

Mr. Vanclief: So we're going to explain that the amendments were not in clause-by-clause as such but were in explaining amendments that will come forward at that time.

The Chairman: We're dealing with what is here.

Mr. Vanclief: Okay.

Mr. Benoit: Could I ask a question that deals with a lot of the concerns that were brought forth by the committee? This is a question for Mr. Vanclief or whoever is giving the explanation here to keep in mind.

One of the major concerns was about due diligence. When Ms Ghislaine Richard was our witness at committee, I asked a question about due diligence. I used the example of a farmer who sprays a field and has spray drift to a neighbour's field. There's a procedure in place already do deal with that. The neighbour can first of all talk to the neighbour who has had the unfortunate experience of the spray drifting and then it can go to the courts.

On top of that now there is this possibility of up to a $15,000 administrative monetary penalty, even if the farmer can show they took reasonable precautions when they were spraying. She said that in this legislation in fact whether there was due diligence or not really didn't matter. She didn't understand the clause I was questioning her about specifically. She didn't understand why it was in the legislation. She thought it really didn't serve the purpose of assuring compliances. Whoever is giving the explanations along the way can refer regularly back to this issue of due diligence.

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Mr. Vanclief: Mr. Chairman, I'll ask the officials to comment on that specific type of concern right now. That will hopefully explain it.

The Chairman: We are not trying to enter a debate here; we are trying to explain what is coming forth. I think that is important.

I am not sure I want to proceed in two different directions. My first request was to go through the clause-by-clause. Then we can deal with the due diligence question second so we don't get bogged down with six or seven different directions. Let's go clause by clause, please.

Mr. Vanclief: We'll go ahead with that. Mr. Chairman, if everyone has the packet in front of them, the first one is clause 4, which is on page 2. I'll make some brief comments on some of these, then I'll ask the officials for others.

This one is a clarification that says we will only use this act if there is presently a penalty.

Mr. Gatenby, do you wish to make more comments?

Mr. Gatenby: This was the clarification to ensure that only contraventions that are currently offences in our acts and regulations will now be made violations. There was a concern that we could have new violations added to this legislation. Our intention is only to treat current offences as violations under Bill C-61. So this amendment clarifies that only those contraventions that are now offences will be made violations and subject to this particular act.

Mr. Vanclief: The next one is clause 4, which is on page 2, after line 33. This was in response to the 50% reduction, which has now been taken out of the act. This allows the reduction to go in the regulations. The regulations could, but not necessarily, would state how a reduction in the penalty could take place. For example, that could be because of the purchase of equipment or whatever.

It takes out the concern that a lot of us had about the fact that, in simple terms, if you pay up the next day, it's automatically reduced by a certain amount. It takes it out of the act itself. So it's not there.

The Chairman: Clause 4, page 3, line 16.

Mr. Vanclief: Reg, do you want to comment on that?

Mr. Gatenby: As for clause 4 on page 3, when we went through the penalty matrixes, we talked about those factors by which a penalty could be aggravated upward or mitigated downward. This is the compliance history of the violator, the degree of intention or negligence with which they committed the violation, and the amount of harm done by the violation. It is our intention to use those criteria for aggravating and mitigating circumstances.

The committee asked us to put those criteria in the act so it was quite clear as to what the aggravating and mitigating criteria would be. That's what this amendment does.

The Chairman: That'll take us to clause 6 on page 3. In the English version it says ``lines 30 and 31''; it should read ``lines 30 to 33'' on page 3. That's the English version only, I believe.

Explanation, please?

Mr. Gatenby: This is a housekeeping amendment. It was just to make the wording in the bill clearer in terms of intent. It takes out the word ``form''. I don't have the bill in front of me, so I can't.... It used to say:

Now it says:

That just clarifies that in each notice of violation that goes out to an alleged violator we would use a short-form description for that section of the act and regulation that's been allegedly violated.

The Chairman: Clause 7, line 8, page 4.

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Mr. Gatenby: That was just to show that the minister must have reasonable grounds to believe that someone was in violation. That was our intention. Once again, it's a clarifying amendment.

As for clause 7, on page 4, once again that has to do with removal of the -

Mr. Hermanson (Kindersley - Lloydminster): Could I just ask about the legal impact of that change, which is ``has reasonable grounds to believe''? I'm not a lawyer. What is the legal -

The Chairman: Mr. Hermanson, would you mind just making a note of that. I'll come back to you after. If we can go through all these and make notes, that will save us from stop-gapping the whole thing. We'll just try to get explanations. Then we'll go back to deal with them.

Mr. Gatenby: Clause 7, on page 4, has to do with the removal of the 50% reduction from the act. Once again, it allows use broader criteria to be used in regulation.

In clause 7, on page 4, the second amendment, once again, is for clarifying our intent in the legislation. That's just to ensure that a notice of violation must summarize in plain language the rights and obligations under this act of a person to whom it has been served. This is their right to a review by the minister or the tribunal.

In clause 9, on pages 4 and 5, there are three amendments. Once again, the first one and the second one both relate to the removal of the 50% reduction from the act. Once again, it's another consequential amendment.

Clause 18, on page 10, clarifies that the common law defences do apply to Bill C-61. Mr. Vanclief, in his speaking points this morning, mentioned what those common law defences were.

Clause 19, on page 10 -

Mr. Lee (Scarborough - Rouge River): I have sympathy with Mr. Hermanson's earlier question on clause 7, on page 4. It might be useful, before we move off the page, to make sure we all understand what's been put forward. I didn't quite catch the complete drift.

The Chairman: Would you give a fuller explanation of those again? I realize Mr. Vanclief covered them earlier.

Mr. Lee, are you asking for a clarification again?

Mr. Lee: Yes, I would like the witness to go back to clause 18 on page 10, which he just left, to clarify what he meant when he talked about the common law defences in Bill C-61. It didn't hit the nail on the head for me. Could you repeat that?

The Chairman: I don't care who does it, but I think a clarification of what those common law defences are is being asked for. I believe Mr. Vanclief gave three earlier this morning earlier. Would you cover them?

Mr. Vanclief: I'll ask the officials to expand on that, if you wish.

Mr. Lee: It would be a great help to me for the witness to simply state again the purpose of the amendment. If it's clear, then we can move on.

The Chairman: Okay. I'm trying not to get into a debate until we get to that point, but that's fine. I think we're talking about the purpose and what those common law defences are.

Mr. Molot: The added clause is intended to make clear that all the common law defences do apply, except to the extent that they would be inconsistent with the act. Because the bill excludes due diligence in paragraphs 18(a) and 18(b), those otherwise common law defences are not be applicable to this particular statute. But all the other common law defences would be applicable.

Mr. Lee: In talking about the application of these defences under this act, you're referring to only the administrative penalty provisions, not the criminal penalty provisions. Or are you referring to both?

Mr. Molot: It only refers, as you will see, to a person named in a notice of violation, so it's only dealing with violations, not offences.

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Mr. Lee: It only deals with the end.

Mr. Molot: Yes.

The Chairman: Let us continue. Do you want those common law defences spelled out, Mr. Lee?

Mr. Lee: No, that was it.

The Chairman: Thank you. Then we can go on to clause 19.

Mr. Gatenby: I believe clause 19, page 10, states that in his review the minister must establish in the balance of probabilities that the person named in the notice of violation committed the violation. There was some concern as to whether or not the minister was bound by the same thing as the tribunal to use the balance of probabilities, and this clarifies that.

Mr. Vanclief: Clause 20, page 10.

Mr. Gatenby: It just clarifies that it only applies to the agrifood acts. Those are the acts that Mr. Vanclief mentioned at the beginning of his presentation this morning.

The Chairman: Clause 24, page 12.

Mr. Gatenby: That's clarification on the serving.

Mr. Vanclief: Either personally or in such....

Mr. Gatenby: It says:

Mr. Molot: It has dropped out ``sent'', basically.

Mr. Gatenby: Yes, it has dropped out ``sent'' in accordance with the regulations.

The Chairman: Mr. Hermanson, I appreciate your allowing us to go through that and get it all out of the way so we can get back into the specifics. I will turn the floor over to you now.

Mr. Hermanson: Thank you, Mr. Chairman. I must comment that the way we've approached this concerns me. It almost seems like we're trying to fly over some very serious matters here in the hope that some incomplete explanations will satisfy our concerns. In my case it has piqued a greater concern.

I'm not criticizing the department officials who are doing this, but I don't think it serves this committee well to rip through without adequately explaining the impact.

I want to go back to page -

The Chairman: Maybe because it has been a long time since -

Mr. Hermanson: We're doing this because it has been a long time, but this isn't really helping at all because it has been such a long time. This is more confusing than helpful.

The Chairman: I must explain, though, that discussions on these particular items were very intense at the committee several months ago. I must say that all of those amendments were sent to everyone's office yesterday. Everyone had a chance to go through them. It may be a possibility that everybody didn't review them, but that's irrelevant.

It is not trying to move things forward. At the request of Mr. Benoit for a quick explanation, I asked the officials to do that. Initially Mr. Vanclief pointed out the reasoning behind the amendments. In no way do I see any restriction, or pushing or moving things in a extraordinary way.

We tried to get a quick, brief explanation of things and now we're trying to get down to details. If you have concerns, I think this is the time to raise them in whatever detail you wish, but let's be specific about what the concerns are and deal with them.

I do think we have had a tremendous amount of discussion on the committee, but I'm not saying I want to restrict any discussion this morning. I want that discussion to flow as freely as possible, but let's get to specifics on it.

Mr. Hermanson: On page 4, clause 7, there is a proposed amendment that includes the clause ``has reasonable grounds to believe''. I would like an opinion from legal counsel as to what impact those words have on this legislation. To me it sounds pretty fuzzy, so I would like a legal opinion.

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Mr. Molot: Those additional words add a measure of objectivity to the requirement on the person designated. In other words, the way it reads at the moment without the amendment, it just says ``where a person designated believes'', so it's very subjective.

It was felt it would be advisable to say it's not what you personally believe, or all your prejudice. You have to have some objective standard, and the words ``reasonable grounds'' kind of elevate the standard the designated person must reach before he can reach the conclusion that a person has committed a violation for purposes of issuing a notice. It raises that standard.

Mr. Hermanson: So would reasonable grounds be an investigation by the department, an investigation by appropriate police forces? Could that become a bone of contention in determining whether or not these AMPs are imposed upon some of the...?

Mr. Molot: If there was nothing in the file to indicate that a violation had been committed, there would be no reasonable grounds for the belief the designated officer had, and therefore it would be an invalid notice.

Mr. Hermanson: Who is the designated officer, and what are the reasonable grounds he or she has to bring? Reasonable grounds is not defined.

Mr. Vanclief: If I could interrupt for a minute, in this type of legislation we have inspectors or government officials out there. If they see and feel that a violation has occurred, whether it's a mislabelling or whatever, they will take that report back to be reviewed by their senior in the region and a determination will again be.... There's a check and balance, so you don't have somebody out there going up and down the road or around the plant writing tickets every day.

They see and they feel and they write a report. That is checked between themselves and their superior. Then if it's felt there's reasonable grounds that a violation took place, it's laid out in the legislation how that violation will be delivered to them. I believe we've even cleared up that it can't be mailed to them; it must be presented to them, etc.

So there's a number of checks and balances in here to ensure that people aren't just willy-nilly out there saying they don't like something. They have to have back-up before they can do it.

The Chairman: Just as an explanation, the committee had a concern that there wasn't a statement in here about protection for whomever is being inspected. That's why this was put in. It was raised by the committee. As a matter of fact, I was very concerned about that and pushed it forward. I felt there had to be some kind of reasonable protection.

The explanation was that the officer in the field may from time to time make a questionable decision, therefore he would have to prove to his superiors it was a reasonable position. I think the department added that to try to clarify that concern.

Mr. Hermanson: I'll just clarify this a bit more, because I don't know if I'm being clearly understood.

Suppose there is an allegation of improper compliance with regulations and a fine is administered on an entity. What if that entity then goes to the courts and says its character has been impeached or challenged in some way because reasonable grounds were not presented? It would then become a legal issue.

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How do we define whether or not that officer, official or enforcement person did have reasonable grounds? What are the legal ramifications? When a court receives this challenge, how does the court interpret reasonable grounds to believe?

Mr. Phil Amundsen (Director General, Midwest Region, Food Production and Inspection Branch, Agriculture and Agri-Food Canada): From an appeal perspective, AMPs are looked at as an additional tool. It's like prosecutions are our last resort now. We don't go out to prosecute people. We only use prosecutions when all else has failed or it's a very serious matter.

In this case, if a product were mislabelled or, let's say, animals were damaged in transport or something, there would be lab reports and a detailed inspection report with pictures and stuff. It would be a detailed investigation.

The first time we don't go to court on it. We don't apply administrative monetary penalties for minor infractions, first offences or first violations. It could be a continuing problem or a fairly serious violation, and there would be a complete case put together, which would be objectively put together, not just based on one person's opinion. It does involve lab tests, detailed inspections and reports, all written up.

That would not be presented to the individual who did the inspection or the analysis; it would be evaluated by somebody else in the region.

Mr. Hermanson: In that case, then, why isn't this wording ``has evidence to support that a person has committed''? Why is that not the wording rather than ``has reasonable grounds to believe''? It just sounds so -

Mr. Molot: ``Reasonable grounds'' is a fairly common legal expression. You find it in the Criminal Code and sprinkled throughout federal and provincial statutes. It's just a boiler plate that has a strong message that an official or policeman must reach a certain level of belief based on facts and evidence before he or she can issue a notice, lay a charge, enter premises - a whole range of administrative and enforcement actions that usually are supported only if you have reasonable, probable grounds for your belief.

Mr. Hermanson: Is that the opinion of our legal counsel as well?

[Translation]

Mr. Philippe Ducharme (Legislative Counsel, Legislative Counsel Office, Parliamentary Exchanges and Protocol Directorate, House of Commons): In fact, I can only repeat what the legal counsel has already said. This is a legal expression that is often used in the Criminal Code to eliminate any arbitrary decision by an official or policeman.

[English]

So I agree with legal counsel's opinion.

Mr. Hermanson: Is this then a phrase that fairly balances the rights of the accused as well as those of the department for legal action that might be taken against them for perhaps not having had reasonable grounds to believe?

[Translation]

Mr. Ducharme: It is a somewhat generic expression that is used to make sure that the official will not act in an arbitraty fashion. As for legal repercussions, this is not a judicial process, this only serves to make sure that before a notice of violation is served, there are reasonable grounds to believe that there has been a violation of the Act.

[English]

The Chairman: Did you have any other specifics you wished to raise?

Mr. Hermanson: For page 4, clause 7, there is a proposed amendment for a new subclause 7(3):

Perhaps, for me and other new members of the committee, we might be walked through the process by the officials. If an enforcement officer of some kind who works for the department brings forth a concern - perhaps it's improper labelling or perhaps food is not safe because it's not processed properly or the inspection shows some flaw - I understand a warning is given first. Is that using this act? Is that warning under this act?

If it's a serious offence, do we forget the warning stage and go immediately to a fine? Can this process be bypassed if it's felt that the offence is serious enough? We just say we're not going to use this act at all; we're going to immediately lay criminal charges because we feel the offence is so serious? The person then appeals. They must appeal first to the minister and then to the tribunal. Can they bypass the minister and go directly to the tribunal?

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I would like to know a little bit of the history of the tribunal. How do they traditionally rule? How long does it take when a tribunal reviews a case? Is it something that's done in a matter of days or weeks after the appeal is lodged, or does it take months or years? These are the types of nuts and bolts facts I would like to know.

The Chairman: Possibly we can do a walk-through. There's a bit of difficulty in giving the history of the tribunal because the history is related to the Transport tribunal. I guess I could not give as much detail as you would like, but I know the questions you raise with regard to the tribunal are in the minutes of the meeting. Whether officials can give you those details on how the transport committee operated, I can't tell you, but I can assure you that the witnesses we had from Transport tried to deal with cases as quickly as possible. There were a large number of cases that did come forth and they found they diminished substantially over time. They felt it was a very successful process to stay away from the criminality of things, which is the direction the department is moving in here, and to resolve issues in the fairest way and yet make it serious enough in order for people to follow.

On a five-year basis, there were 3,100 reports that were investigated. Actually, by the time they got to monetary penalties there were only 307, which means that approximately 90% of those cases were resolved up front, before we got to a penalty within the structure.

Following that, there were 75 prosecutions in the court, which means that again numbers diminished substantially in getting resolutions to these occurrences so that we could carry on without a major kerfuffle. That was one of the issues.

However, I'll go back to the department now. They will try to do a walk-through on what is happening, and that may answer some other questions that are coming forward.

Mr. Vanclief: Mr. Chairman, I'll ask Mr. Amundsen to walk through a scenario of all the steps that might take place, if necessary, if there wasn't a resolution at a step, and how it would go on to the next one.

Mr. Amundsen: When we find a violation our normal procedure is to talk to the individual and discuss it with them. At that stage, if it was deemed to be a problem, they'd get a verbal warning. If it was continued they would get a written warning, and then we would proceed to implement AMPS on them.

In a more serious case we could bypass some of those steps, and in some cases we would jump automatically to prosecution. Within our branch we have an enforcement policy to outline how we do follow those things. We do have a standard procedure that we follow, and we will jump steps. In some cases we will go straight to a prosecution for a very serious matter.

Mr. Hermanson: That procedure is already in place?

Mr. Amundsen: Yes. All AMPS is doing is adding an option between the written warnings and going to a criminal prosecution.

Mr. Hermanson: Is it possible for me to have a copy of that procedure manual?

Mr. Amundsen: Yes, we can get you a copy.

Mr. Hermanson: That's something I don't have in the file.

Mr. Amundsen: Within AMPS, if a monetary penalty is imposed on you, you do have the option to negotiate a settlement. You could say your problem is caused by lack of equipment, training of staff and foreign investment. You could basically bring your monetary penalty down to nothing. Our whole goal is to get the product in compliance as quickly as possible, and if investing in equipment will solve the problem, that's what we're after.

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Criminal prosecutions are reserved where other measures fail or for very serious matters that are more criminal in nature, while this is deemed to be a regulatory offence. We're looking at transportation of animals and we're looking at health and safety of food.

Mr. Hermanson: And you can move directly to that without the interim.

Mr. Amundsen: Yes - and we do. That's part of our procedure right now. We do take cases to court. There are cases we don't want to take to court but we do want to deal with, and AMPS is designed to do that. They are not something we would normally want to take to court. They're not criminal. But they are regulatory offences that have to be dealt with, because they do have serious implications.

Mr. Hermanson: Then the tribunal; I guess we're not talking about using the same tribunal as is used in Transport. We're appointing a new tribunal.

Mr. Amundsen: It would be an agricultural tribunal.

Mr. Hermanson: Are they going to be people with a justice background or an agricultural background?

Mr. Amundsen: We would be looking for people with an agricultural background, academics from an agricultural background, retired business people - those who do understand agriculture and the business we're in, who could understand both an individual's case and the department's case.

Mr. Gatenby: The chairperson of the tribunal will have a legal background. The act specifies that the chairperson of the tribunal have a law degree and ten years' experience at the bar as well as a knowledge of agriculture. Officers who will hold hearings will have an agricultural background.

Mr. Hermanson: Okay.

Suppose I'm charged and I'm appealing to this tribunal. Am I allowed to stay in business while this is going on if it should take six months? Am I shut down while this process is taking place? Am I at the mercy of a tribunal that may not make a decision for a year?

Mr. Amundsen: AMPS is not something that would put anybody out of business.

Mr. Gatenby: It's not a licence to continue a health and safety infraction. If you're putting out a product that's a safety concern for the public, we're not going to issue a monetary penalty and sit back and let you do that same thing for six months before your case comes up before the tribunal.

Mr. Hermanson: Obviously, though, if you're appealing -

Mr. Gatenby: It's not a licence to continue that kind of infraction.

Mr. Hermanson: I understand that. But obviously if there is an appeal there is probably a difference of opinion as to how something is being interpreted.

Mr. Gatenby: That's right.

Mr. Hermanson: Let's suppose it's not a health issue but another regulatory issue. Can I still function in my business while I'm appealing this, or if this is critical to my business must I cease business while I'm waiting for a ruling from the tribunal?

Mr. Amundsen: If it's not a health and safety matter, yes, you would continue in business. Take the case of peanuts in the ice cream. There, because certain people have a very severe allergy to that, if you were to continue to produce that product we would have to detain it. It is a serious health risk to certain people, albeit a small part of the population. If it were a difference on the label, that would go through the tribunal. You wouldn't be out of business while that was going on. But if you continued to put out a mislabelled product, and if there was a recall, that would be your responsibility. If you put out more product you would be responsible for the costs of recall.

Mr. Hermanson: Mr. Chairman, I have taken a lot of the committee's time. I have two more issues I want to bring up. I am prepared to defer and let other members of the committee speak, or I can continue on with questioning.

The Chairman: I would just as soon get your issues on the floor and out of the way. I have Mr. Landry and Mr. McKinnon waiting. As I said at the beginning, we're trying to be less formal, answer everybody's questions, and get the concerns out so we can proceed. I think that's important here. Continue; I think everybody's patient.

Mr. Hermanson: Thank you. I just wanted to make it clear that I wasn't trying to impose unfairly on the committee.

In terms of due diligence, I know in the case of the GST there were rulings in interpretation papers that came down from Revenue Canada as to how the GST was to be collected. Companies complied with the regulations, and then Revenue Canada changed their opinion. They sent a further opinion on how GST should be collected. So these businesses in fact hadn't been complying with the new interpretation. They were then asked to pay funds owed that they hadn't collected under the GST plus interest - blah, blah, blah. It became a very messy situation. To this day I don't believe they were dealt with fairly.

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Suppose Agriculture Canada changes their view of some regulations, and someone who had been complying with what they felt were the requirements of Agriculture Canada suddenly are no longer complying. Are they protected or could they then have fines imposed upon them before they were able to comply with the new interpretation?

Mr. Vanclief: The bottom line here, if I could use the peanut example, is that I think we have to be very cautious and very aware here that we cannot.... If, no matter how hard a person says they tried to keep the peanut dust out of the product, there is still peanut dust in the product, the bottom line is that there was peanut dust in the product, and it wasn't labelled as such. The absolute liability is that it's there. We can't say, well, you did your best, so you shouldn't be addressed in some way, shape or form to fix it.

As the officials have said, this doesn't mean to say, bang, here's a big fine, or whatever, but a violation has taken place, intentionally or otherwise. The matter needs to be addressed.

That's why we are very concerned that someone can't simply say they thought they had it fixed up, and they're sorry it wasn't. The absolute fact is that the peanut dust was there, and it must be addressed.

Maybe Mr. Molot would address the legal aspect.

Mr. Molot: I think a lot depends on the circumstances. Health and safety, as Mr. Vanclief mentioned, is one thing. Official-induced error might be a defence in the scenario you painted earlier. I'm not giving an opinion on it, but it may be that it wouldn't be a question of due diligence so much as that particular common law defence, which would, if it were applicable, continue to apply.

Mr. Hermanson: So other than the area of health and safety, you feel there would not be a problem if the person hadn't complied with regulations retroactively.

Mr. Molot: In totally different situations.... You're painting a picture of a change in interpretation of a policy.

Mr. Hermanson: That happens occasionally.

Mr. Molot: Yes, it happens occasionally. I don't know what would happen in that type of situation. I guess it depends on....

Mr. Hermanson: We've used the peanut illustration. Of course, that's very sensitive, because people's lives may be at stake. But let's suppose we're talking about a trailer in which, according to Health Canada, you can haul, say, only 12 animals. Somebody went out and bought a trailer for several thousand dollars to transport livestock. AgCanada suddenly decides that, no, only 10 animals should be allowed to be transported in that wagon.

Are they given a reasonable time to refit their facilities? Are they penalized immediately because AgCanada has changed their regulations? Are they given a grace period? What's the impact when we have those types of changes?

Mr. Molot: That's a fairly -

The Chairman: I believe Mr. Amundsen wanted to put a comment on that.

Mr. Amundsen: That's an excellent example, because it is a case where there are fairly common provincial codes of practice developed by the industry, which includes farmers and the livestock industry, that say with this size of trailer in this kind of weather...obviously when it's colder you can pack more animals into it, because you want that.

Those are industry-defined limits, and we wouldn't automatically change them. But even in that case, if somebody comes in to an auction market with too many animals on a trailer, what we do is warn them. We actually have their trailer measured so that they understand what they can have. They actually get a plasticized card so that they know what the trailer can carry. They carry that in the truck so that if they get stopped again...in this temperature they can haul this many pigs or this many cattle.

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If they come in with five dead animals, that's not a health and safety matter for humans; it is a very public issue and something that has to be dealt with. Then we probably would skip some of the verbal warnings and steps and go straight to a written warning or impose a financial penalty. It might be that they would turn around and make modifications to their trailer rather than pay a straight penalty, so they can haul the animals.

Mr. Hermanson: What if you're a manufacturer of something pertaining to agriculture? Maybe this is a weird example, but suppose you're the manufacturer of the trailer and there's some design thing you have to change because Agriculture Canada interprets regulations differently from how you interpret them. It may mean refitting your whole factory -

Mr. Amundsen: These again are industry standards. A trailer that's designed to haul pigs or cattle doesn't work for hauling horses. That's a very public issue; if you are going to haul horses, you have to have a trailer that's high enough to haul horses or you end up with stress and abuse of the animals. That's not an Agriculture Canada standard, it's an industry-established standard, but it does come into our transportation regulations, for it constitutes inhumane treatment of the animals.

Mr. Gatenby: I think you have an image of the Department of Agriculture arbitrarily changing standards. When we put a standard out, it's negotiated with industry associations. Certainly, there is a chance for the public to comment on those changes to the standard and those kinds of things. It's an ongoing process that's very public. It's not something we spring on industry and go out and start enforcing the next day. It's a very public process.

Mr. Hermanson: That's why I'm asking how the due diligence factor comes into play in this piece of legislation. There are changes and they will have an impact on manufacturers, producers, processors. What assurance can you give me that there will be reasonable negotiations and that time will be allotted for the necessary changes to be made so that people won't go bankrupt and there won't be unreasonable demands made upon them?

Mr. Gatenby: It's built into the regulatory process itself.

Mr. Hermanson: It's not part of this act, then? You're saying it's already there.

Mr. Amundsen: It is part of our enforcement policy, and Reg will get you a copy. Our goal is to deal with the individuals, talk to them, give them warnings, work with them, give them time. Right now we negotiate timeframes when somebody is not in compliance.

Obviously, in health and safety matters, it's no time to make the changes before you produce more products...if people are allowed to use up old labels, if there are no health and safety concerns, if there's no economic fraud, if it's just a matter of complying with what their competitors have to comply with...it's a reasonable process.

Mr. Hermanson: There's one last concern I have and it's in a bit of a more sensitive area.

I was recently in Atlantic Canada and spoke with people in the fishing industry. They felt that some of the enforcement officers from DFO were sometimes turning a blind eye, sometimes accepting money to not report infractions. Is there a chance that this regime would be opening the door for the Department of Agriculture inspectors, enforcement officers, and so on to say, ``Look, if you give me $100 I won't report this infraction and you won't be fined, because I'm not going to let my superiors know''? If this is an open door, how can we close that door?

Mr. Amundsen: Our system now has built-in audits. The work our inspection staff does is subject to an audit by a senior official, who reviews paperwork, actually visits the work site, and does an audit of the establishment. So it's not something that anybody working independently could do without getting caught.

Mr. Gatenby: The penalty has much less impact than the seizure of a load or the seizure of product. Our inspectors now have powers that could cause an economic impact. To the best of our knowledge it's not abused in that way, and we don't expect it will be abused with this system either.

The Chairman: Mr. Hermanson, to reassure you, and it's the position of the agriculture department as well, in compliance and enforcement - and really what we're trying to do is achieve compliance in this case - Agriculture and Agri-Food Canada believes consultation on regulations developed and amended with parties to the actions.... It's important for Agriculture Canada to develop its regulations through consultation with those people in the industry who are most affected. They also recognize that compliance with regulations is more likely when there have been discussions with those parties that are most affected.

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Therefore, as a matter of policy, they first of all feel that they have to go through consultation with everyone in order to change. Second, they state clearly that it is important for compliance that they have those discussions with people in the industry. Third, proposed regulations are always published in the Canada Gazette.

They not only go through the process of discussion, but they also have to go through a published version of those, before any compliance occurs. There's usually a pretty wide-open discussion. They're not evil monsters who come in with regulations that are down on the industry. Here, we're talking about a procedure they're trying to put in place to bring about compliance.

Compliance is the goal here. It's not punishment, it's not something that goes outside the limits of common sense. If the process in transportation has started with 3,100 cases and actual monetary penalties are put on 300, that means 90% of the cases were in compliance before they got to monetary penalties. That's a really positive initiative, not only for the industry but also for the Canadian public and for the ministry at the same time.

I think it's a win situation when we look at where they're heading with this legislation.

Thank you very much for your questions, and I hope your concerns have been answered. I think the department has done a job in explaining its position.

Mr. McKinnon, you've been very kind and generous in waiting. I really appreciate that.

Mr. Landry, you have been as well.

I'll go to Mr. McKinnon and then to Mr. Landry.

Mr. McKinnon (Brandon - Souris): I appreciate those very kind remarks directed to me, Mr. Chairman.

My question to the witnesses is at the level of applying appropriate penalties. How do you know or how do you sense that a trucking firm that is squeezing in an extra animal, as Mr. Hermanson was pointing out, has an appropriate penalty applied to it versus an unregistered seed company selling some non-licensed goods of some kind? How do you know that is going to be appropriate to bring about a level of compliance we sense needs to be addressed here?

Mr. Gatenby: The bill specifies that the regulations will contain penalty matrixes, and we made an amendment to show what will be in those penalty matrixes.

We have about 2,000 possible violations under our acts and our 50 sets of regulations. We will take each of those violations and allocate them to a minor, serious, or very serious category. That will be subject to negotiation with industry associations. We will assign that within the department and then carry out consultations on those regulatory regulations with the industry association.

Each violation will be minor, serious, or very serious and a monetary penalty will be proposed for industry. For example, minor violations will carry a monetary penalty of $500, serious violations will have a monetary penalty of $2,000, and very serious violations will have a monetary penalty of $4,000.

Mr. McKinnon: Have the industries themselves come forward with those suggested -

Mr. Gatenby: No, the department will make the suggestion and consult with industry on our suggested approach.

Mr. Vanclief: Industry will be involved in that decision.

The Chairman: Mr. Landry.

[Translation]

Mr. Landry (Lotbinière): I recognize that the monetary penalties in Bill C-61 will help unclog the courts.

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I would however like to make a comment. I would like us to have a very close look at this Bill - I noticed that it has several clauses - so as not to leave any loopholes and we end up with more offenders in the future. That's all that I wanted to say.

[English]

Mr. Gatenby: I'm sorry, I missed the last part of the question.

The Chairman: We don't want to create a problem for future offenders. We don't want the problem to carry on. I think he's saying that. Can we stop it with the administrative penalties that are being imposed? Is that reasonably accurate?

Mr. Amundsen: That's why administrative monetary penalties make one step in the process. If the verbal and written warnings are not effective, then we apply monetary penalties. If monetary penalties are not effective, we will go to court and put together a case. But we will have tried each step in the process to make sure it works. Right now, that's an option. This just adds one more step without clogging the courts, as you said.

[Translation]

Mr. Landry: I would like to ask another question regarding the monetary penalties. Can an offender who has been caught committing an offence reinvest the monetary penalty in his processing business, for instance or is this provision abolished?

[English]

Mr. Gatenby: Because compliance is the goal here, the intention is that if a person or a company is in non-compliance, they could take corrective action. That's what we want them to do: take quick corrective action. So as Mr. Amundsen said earlier, you might, for example, have a canning processor who's not heating his cans to a proper temperature to kill bacteria in the cans. So we find bacteria in his product, and that's obviously a safety concern to us.

If we came forward to administer a monetary penalty and he said he would buy new thermal processes in order to heat the cans to a proper temperature to make sure that in the future the bacteria is killed, then we will offset the proposed monetary penalty by $1 for every $2 he spends to come back into compliance. So if it's a potential monetary penalty of $2,000 and he'll spend $4,000 on new equipment to ensure future compliance, we will allow that kind of offset, because our goal is to get him back into compliance.

[Translation]

Mr. Landry: That's why I say there shouldn't be any loopholes in the law. Businessmen who are in the processing industry shouldn't be able to say: I'm going to break the law because I know that if I do I will only have half the amount to invest in order to ensure compliance. There is a danger there, and that's what I meant when I said that we shouldn't create more offenders.

[English]

Mr. Gatenby: There is no incentive for three reasons.

First, if that person has put out a product that is a health and safety threat, then that product is going to be seized, in addition to having a monetary penalty. So the person loses the value of that product.

Second, they invest capital in capital equipment for their plant. So that's going to cost them money.

Third, if they say they're going to do that, but then turn around and ignore it - they don't do it - then that's another monetary penalty.

We do have other options, such as the seizure of product and prosecution, if they don't comply with it. This is just one option we have.

I don't think someone will abuse the system. That's because, first, we seize the product if it's a health and safety threat, and that's going to cost them money.

Second, there's another monetary penalty over and above this one if they tell us they're going to come into compliance but they don't.

Mr. Lee: I have one question. Mr. Chairman, I think I should indicate to the witnesses that, as one member, I'm relatively pleased with the changes that have been proposed. I think they address a number of potentially very serious problems with the original draft of the bill.

So although I fear we're going into a brave new world here and I'm cautious as a legislator about moving into this world and informing my constituents - although I only have a few farms in my riding - that their relationship to the state in terms of potential sanction will be in the hands of public officials who are not even quasi-judicial and are certainly not judicial, I still accept that there are some efficiencies to be gained, provided we can protect the interests and liberties of the citizen. I think the bill strikes a reasonable balance, but only time will tell.

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The client base pool in agriculture is many thousands of persons and business corporations. In the other areas where administrative monetary penalties have been tried, the client group has been much smaller, a bit more ``clubby''. So we're now moving into a much broader field.

The one issue I want to ask about is more a question of legalities and of the charter. This is a fairly large system we've put in place, albeit on a regional basis. In this system you will have a two-track option in terms of enforcement. On the one hand you have the traditional criminal penalty for individuals who breach the act or the regulations, and on the other hand you have the administrative monetary penalties.

If the citizen is faced with the criminal charges, then the citizen knows what he or she has to deal with. The law will be fairly clear, and all of that is buttressed by the charter. If the citizen is looking at administrative monetary penalties, there will be a fair bit of discretion on the part of the public official in terms of proceeding or not proceeding. I heard reference earlier to a matrix that would determine what the penalty might be.

So there's a lot of uncertainty for the citizen as to what the down-stroke is going to be. At the bottom, in terms of guilt, innocence, liability and non-liability, there's a different set of rules for the administrative monetary penalty. We've closed the gap somewhat here by adding back in the common law defences for the monetary penalties, but I gather we've left a couple out - for example, due diligence.

Are officials confident that when this system goes down the road, we won't have a situation where a citizen is going to argue that he or she is worse off not having the benefit of the full list of common law defences on the criminal side? Will he or she not challenge the administrative monetary penalty system on that basis? Have we done all we can as legislators to make sure the AMP system is going to stand up to any challenges that will come along because of the discrepancy between what the citizen faces on the criminal side and what the citizen faces under AMPS?

Mr. Molot: Well, Mr. Lee, we think that by removing the criminal aspects from the AMPS bill we've removed the charter potential.

In a sense we've seen a somewhat similar phenomenon to what you've described taking place in the licensing field, where professions have, for example, revoked licences of members, whether they're doctors or lawyers or what have you. The charter has been raised by the licensee, or former licensee, who claims that he's probably worse off, or as badly off, as someone convicted of an offence. I mean, he loses his livelihood, which for many people is far worse than a $10,000 fine. The Supreme Court has said you don't have a charter right in such a case.

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So in a sense building on that as well as some other cases in the Supreme Court, we think that by tailoring the legislation in the way we have - limited penalties and amounts so that they're non-punitive - we have avoided the criminal aspects, the punitive aspects, which would obviously give rise to charter concerns. We hope we have - or we think we have.

Mr. Lee: Just as a follow-up, I am skeptical in the extreme about the semantic distinction you make between ``penalty'' and ``punitive''. In common man parlance, a penalty is a penalty is a penalty. A fine is a fine.

I realize around this table we're trying to make the distinction that a fine isn't a penalty, but it's a question of -

Mr. Molot: Well, why don't we just call it a cat as opposed to a penalty, a word that would not in any way connote anything punitive? Maybe penalty conveys that message to some people. Maybe it's a dangerous word to have chosen.

Mr. Lee: The state is going to have its hand in my pocket in one of two ways: it's going to either tax me or penalize me. You're suggesting there's a third way.

Mr. Molot: Oh, no, there are others ways. There are other ways.

Mr. Lee: I don't think the courts will ever buy it. But in any event, I realize that modern governments are moving in this direction, and I just want to reconfirm that I think officials have done a reasonable job in crafting the ark for the next few years.

Thank you.

The Chairman: Mr. Pillitteri.

Mr. Pillitteri (Niagara Falls): Thank you very much, Mr. Chairman.

You've been asked a lot of questions about the law aspect of it, but as a producer, as a farmer, I must commend the department for what it has done. When a producer had an infraction prior to this, it was thought that he had committed a crime. He had to prove himself somewhat innocent, because he had committed a crime. It was not a crime. It was not a vehicle of understanding. This has created a vehicle of understanding.

For someone living within an urban area, when he has a finished product, you don't see the right of the law...not right, but the producer is the one most of the time who is bearing the brunt and paying the cost of it. He's paying the cost of the infraction. This is the perfect vehicle. The producer or processor finds a way without any headache or costliness, because he has an opportunity to communicate that he did not have before.

I would just like to make that statement on the part of a producer, which I have been all my life.

Thank you very much, Mr. Chairman.

The Chairman: Thank you very much.

I want to say thank you to our staff for giving us the background, filling us in on what we had done as a committee up to this point. Sonya, you did a very fine job.

I want to say thank you to the officials for coming in and trying to explain as clearly as possible the motivation for putting forward this legislation, and the implications of that legislation. I also want to say thank you for being as understanding as you have to the concerns that have been brought forth by the committee. I see a tremendous change of direction, as Mr. Lee pointed out. I think you have done a great deal to help us with the concerns we brought forward.

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I also would also like to thank the committee members, including Mr. Hermanson, who looked into the areas of concern. I think many Canadians would view similar areas of concern. From the answers that have been given I think there's a much better understanding by everyone here as to where we're going with the bill.

So I want to thank everyone here for your concentrated effort this morning.

I would remind the committee that on Thursday we start our input study. We will have here Jack Wilkinson, president of the Canadian Federation of Agriculture, at 9 a.m. We will proceed with the basic input for that study to go on.

Next Tuesday, if the committee is in favour, we will go ahead with clause-by-clause consideration of this bill. That will be a week from today. It will give anyone time to look over any further concerns they have, any discussions they have.

The meeting is adjourned.

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