[Recorded by Electronic Apparatus]
Tuesday, June 4, 1996
.1530 
[English]
The Chairman: Order, please. We shall commence consideration of Bill C-4, an act to amend the Standards Council of Canada Act. It is ordered that Bill C-4 be now read a second time and referred to the Standing Committee on Industry.
On clause 1
The Chairman: We have here officials from the Standards Council of Canada and the Department of Industry. I invite you to make a statement and to introduce yourselves and then to answer questions from the members.
Mr. Schmidt (Okanagan Centre): Will the questions go clause by clause, or will they come after statements?
The Chairman: They will come after statements.
Mr. David Tobin (Director General, Corporate Governance, Department of Industry): Thank you, Mr. Chairman. With me today is Michael McSweeney, the executive director of the Standards Council of Canada, and Bob Main, who is a director within the corporate governance branch of Industry Canada.
We have a very short statement to go through, Mr. Chairman, with your permission. Essentially, I'd like to provide a bit of background on the SCC.
In October 1994 the president of the SCC was asked to review the mandate and structure of the SCC. As well, in the publication called Building a More Innovative Economy, which was released in November 1994, there was a commitment to reform the SCC. As part of an overall government objective to reduce the size of boards and commissions, the question of the membership and the size of the membership of the council was also to be looked at.
Public consultations took place across the country between January and February 1995, and this bill was introduced in Parliament in March 1996. The consultations were carried out in Vancouver, Edmonton, Toronto, Montreal and Halifax. There were also separate meetings with the provincial representation on the Standards Council as well as the standards development organizations. In addition to that, a survey was conducted across Canada to solicit the views of stakeholders, both those who write standards and use standards, to solicit their views.
The general consensus of the consultations was that there was support for an institution like the Standards Council of Canada. However, steps should be taken to modernize its mandate to reflect the changing circumstances and better support for current policy objectives such as technology diffusion, international trade, regulatory reform, as well as internal trade.
It was also a question of looking at its mandate, the powers to ensure that it had the proper authority to fulfil its mandate, as well as to streamline the council by downsizing it to a maximum of 15 appointed members. The consultation documents that went out had suggested a membership of somewhere around 30; in fact, those consulted suggested that it be reduced to somewhere around 15. That was from the then 57.
The renewed mandate in Bill C-4 is to include all areas where standardization is not already provided by law. Part of the mandate is also an attempt to involve more Canadians in standards activities; to oversee the national standards system, which we had an opportunity of presenting to this committee earlier in its generic sense; to foster quality performance and technological innovation in Canadian goods and services through standardization; and also to establish long-term objectives and strategies.
In terms of the structure of the Standards Council, Bill C-4 does provide for reducing it from57 to 15. This would mean the majority of the members from the private sector, so it would call upon government to reduce its membership. Those from the private sector are to represent a broad spectrum of interests and have appropriate knowledge and experience in standardization.
In order to effectively provide for representation from provincial and territorial governments, a provincial-territorial advisory committee is to be created, and the legislation calls for that. The legislation also states that the chair and vice-chair of this committee are to be members of the Standards Council. In addition, standards development organizations are to be formed. There is to be an advisory committee consisting of them, with one member from that committee being a non-voting member of the council.
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In addition to that, there is a number of housekeeping elements, such as changing the title of president and vice-president to chairperson and vice-chair, which is more in keeping with institutions such as the Standards Council; specifying the duties of the chairperson; confirming that meetings of the council and its committees may be held through electronic means - I think that's just a question of adapting it to modern technology - and just modernizing the act in terms of some of the statutory and language provisions.
The Chairman: Thank you very much, Mr. Tobin.
Getting right to the point, Mr. Leblanc, do you have a question?
[Translation]
Mr. Leblanc (Longueuil): In this document, it says the Industry Minister informed his provincial counterparts in writing of his plans to change the way provinces are represented. Six provinces responded, but Quebec did not. I would like to know why Quebec did not respond.
Mr. Tobin: The letters you are referring to were sent to every province, and it was only after these documents were prepared that Quebec responded. I believe a total of seven provinces responded.
Mr. Leblanc: All the provinces agreed?
Mr. Tobin: They were all more or less in agreement.
[English]
The Chairman: Mr. Schmidt.
Mr. Schmidt: Thank you, Mr. Chairman. I refer to the provincial and territorial advisory committee. The chairman and the vice-chairman are members of the council. Are they part of the 15?
Mr. Tobin: Yes.
Mr. Schmidt: Does each of the provinces have its own advisory committee?
Mr. Tobin: That would be up to the provinces. Under the previous system there were57 members, so the trick was to try to get it down to 15. I suppose what the provinces do internally is really up to them, but there is nothing within the council that would require that. There is one advisory committee, which all the provinces would be members of, and the chair and vice-chair of that committee would be members of the Standards Council.
Mr. Schmidt: So if I understand correctly, there's a council and then there's this advisory committee, of which each province is a member. The chairman and vice-chairman go to the council and are full members of that council.
Mr. Tobin: Exactly.
Mr. Schmidt: Who pays for the advisory council when it has its meetings independent of the council? Who pays the members when they attend those meetings, for both their expenses and their remuneration on a per diem basis?
Mr. Tobin: Can I ask Mr. McSweeney to answer that question?
Mr. Schmidt: Of course.
Mr. Michael McSweeney (Executive Director, Standards Council of Canada): Thank you, Mr. Chairman.
There is no remuneration for any members of the board of directors of the Standards Council of Canada save and accept for the chair, the current president. They all serve without remuneration. Secondly, the Standards Council of Canada will pay the provincial and territorial advisory committee at the outset for its travel expenses, between one and two times a year.
Mr. Schmidt: So that's one and a half times. You said between one and two.
Mr. McSweeney: We're hoping to keep the meetings to once a year.
Mr. Schmidt: But there won't be more than two.
Mr. McSweeney: That's correct.
Mr. Schmidt: How does this provincial and territorial committee report to the council, other than through the representatives on the council itself?
Mr. Tobin: We're breaking new ground, of course, because -
Mr. Schmidt: Yes, I understand that. How do you envision it, then?
Mr. Tobin: We envision that they would come forward to report at the regular meetings of the council. Agendas would be circulated in advance. The provincial advisory committee would probably meet in advance of meetings and come forward with an agreed-upon view or views of the provinces, and express them at the council meeting.
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Mr. Schmidt: Would they meet on a quarterly or as-needed basis between sessions of council and make representations through letters or other forms...?
Mr. Tobin: I suspect they would probably meet between meetings, certainly in advance of a meeting, so they could come forward with the views of the provinces. Of course, they can meet electronically more often if they need to cut down on expenses. But I would envisage them probably meeting at least before the full council meets.
Mr. Schmidt: Would the Standards Council be obligated to pay their expenses for these other informal meetings?
Mr. Tobin: I don't believe so.
Mr. McSweeney: Where possible, we will try to work electronically or by teleconference. We've tried that in the past and it has worked quite successfully. So if we have to bring them together for formal meetings that are scheduled well in advance in order to prepare the representatives for the actual council meeting, then we will do that.
Mr. Schmidt: I was thinking more of meetings that they might want to initiate on their own.
Mr. McSweeney: No.
Mr. Schmidt: Okay, thanks.
The Chairman: Mr. Murray, do you have a question?
Mr. Murray (Lanark - Carleton): I have a couple of quick questions, Mr. Chairman.
Looking at the reduced numbers from 57 to 15 and the the government's interest in having more private sector involvement, can you tell me what the breakdown is now - the current ratio of private sector to government appointees?
Mr. Tobin: Right now there are 57. There are 10 provincial - 1 per province - 6 federal government representatives, and I think that leaves 42 for the public at large. The 15 would be broken down. Rather than six federal government representatives there would be one, and he or she would be expected to coordinate the views of the federal government prior to the meeting. There would be the two provincial ones - responding to the views of the two members on this side from the committee - one from the standards-writing organizations and the president. So that would be five, and there would be ten at large.
Mr. Murray: How do you see the council interacting with industry if it's going to change from the way it interacts now? If so, is the current practice to be more involved with industry associations, or will more individual businesses talk to the council?
Mr. Tobin: The legislation doesn't require a move one way or the other, but I think it's envisaged that a smaller council would operate more strategically than it does now, and maybe interact a little more effectively with some of the business associations. There is a wide net of volunteers right now that involves the associations and individual companies.
We hope that because this renewed council will be a smaller group, it'll be able to operate a little more strategically in terms of interacting with those associations, as opposed to dealing with the actual writing of a standard. It may examine where standards are becoming an issue and which area it should be looking at in terms of a country for standardization, or whether there's a particular sector or sectors it should be concentrating on. So we hope that sort of discussion will take place at the council level.
Mr. Murray: Thanks. That's all, Mr. Chairman.
The Chairman: Mr. Schmidt, do you have another question?
Mr. Schmidt: No.
The Chairman: Mr. Tobin, I'd like to thank you and your colleagues for helping us consider Bill C-2 in committee. That ends your presentation.
I'd like to call the Canadian Standards Association to the table. Mr. Paladino and Peter Rideout are with us. You can make whatever presentation you like, and then we'll open up for questions.
Mr. Pat Paladino (Vice-President, Standards Development, Canadian Standards Association): Thank you, Mr. Chairman, for allowing us to appear here before you.
We're appearing here today following our letter of March 12, 1996 to Minister Manley in support of the changes to the Standards Council of Canada Act. I'd like to stress that we do support all the changes within the act itself. In that letter we referenced the independent evaluation of the Canadian standards systems commissioned by CSA and authored by Professors Trebilcock and Howse of the University of Toronto. We also identified several areas in the new act that could be revised in order to enhance the council's effectiveness.
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The minister indicated in his letter of May 7 that he intended to ask the Standards Council to begin work on the elimination of the overlap and the duplication of federal regulations and that of the national standards system. We would like to make a few proposals that should assist in this initiative.
In order that you have an understanding of the context of our recommendation, I think it would be appropriate to give some background on CSA and what we see as our role in the national standards system.
We are Canada's largest developer of standards and product certifier and Canada's leading registrar of quality systems through our Quality Management Institute. We work in a broad range of industry sectors, the most well known to consumers being the electrical area and protective equipment such as hockey helmets.
As a not-for-profit association, we have a membership spanning the range from individuals through governments to both large and small industries. Through the efforts of 8,000 volunteer members, CSA publishes over 1,700 standards in 35 different fields. Our role is to help meet societal needs and assist business competitiveness, that is, to make standards work for people and business.
Although our focus is on Canada, we must be very active internationally. We are therefore deeply involved in international standards and through the Standards Council hold a number of key secretariats, including those for quality, ISO 9000, and for environmental management systems, ISO 14000.
We have customers in seventy countries around the world and work in partnership with approximately thirty agencies. Our focus is national but our vision is international.
To begin, I would like to relate our proposals to the context in which we find ourselves not only today but will evolve to in the future.
With the implementation of the GATT under the World Trade Organization, the economic barriers to trade are being removed. The remaining barriers are of a technical nature, relating to the lack of compatibility of products and services.
The implementation of international standards will tend to remove the last barrier. Canada is well placed but at the same time encumbered in taking advantage of the trade opportunities presented by the WTO.
On the plus side, we have a well-developed national standards system that has already embraced international standards to a large extent. As an example, CSA has adopted many of the IEC standards for electrical products. This has provided the opportunity for Canadian manufacturers to build the same product for domestic and international markets. We need to build on this openness to embrace international standards for the benefit of both the Canadian public and industry.
On the other hand, the national standards system has a number of deficiencies that need to be addressed, and the proposed changes to the act will do much to correct these. In addition, we have internal barriers to trade caused by provincial and federal incompatibilities in codes, standards and regulations. The use of national standards would address these issues.
As the minister has identified, both provincial and federal regulation in a number of areas is not coordinated with standards or causes conflicts that reduce the effectiveness of both, resulting in reduced industry competitiveness. As an example, though we believe it to be now resolved, the proposed regulation of the potable water systems by Health Canada did not encompass the existing national standards for plumbing or the national plumbing code administered through provincial legislation.
The proposed changes to the act anticipate the development of standards-related strategies. The importance to the economy of the development of a national strategy for standardization should not be underrated.
Canada is one of only a few G-7 countries that does not have such a strategy. Britain, Germany and France, for example, have well-established strategies designed to support their industry both domestically and internationally.
It is not by accident that sales representatives from Canadian steel companies find a potential customer who wishes to purchase steel to German standards or that Britain raised the image of its export products based on industry compliance with international standards for quality, that is, ISO 9000.
Japan is currently providing assistance to a number of countries to develop national standards systems based on their own system, well known to their industry and hence a competitive advantage. The United States, although it does not have a formal national strategy, is aggressively promoting its standards for the advantage of its industry.
Our national standards system can be one of the best in the world. When coupled with a national strategy, it can be of great support to the competitiveness of our industry.
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The act should strongly emphasize the role of the Standards Council in the development and maintenance of such a strategy, developed with full input and support of industry and coordinated with governments.
The current role of the council is related to the maintenance of the national standards system. For the reason outlined above, the council needs to assume more of a leadership role in the promotion of the advantages of the system to both governments and industry. This should be done particularly with respect to the removal of internal barriers to trade and as a substitute for regulations.
A case in point is the development of the ISO 14000 series of standards. Environment Canada, together with the provinces, has shown leadership in embracing these documents in place of regulations. Not only has the regulatory intent been met, if not exceeded, but our industry will be entering the international marketplace with a competitive edge.
SCC needs to be empowered to promote this concept at all levels of government.
In addition, the council should be active in the promotion of the facilities of the national standards system to address both federal and provincial government needs for standardization. At present, many government departments develop their own standards, rather than using the cost-minimizing facilities of the national standards system. Economies of scale introduced by additional work carried out by the standards-writing organizations will help to offset the effects of diminishing financial support of standards.
CSA supports the changes to the Standards Council of Canada Act and the leadership role it should demonstrate in the development and maintenance of a national standards strategy.
In order to meet the objectives outlined above, we propose the following.
First, given the rapidly changing world of standards and standards-related matters, as we move towards a more global economy, it is recommended that a review clause be added to the act so the act will be examined on a regular basis, such as a five-year interval, to ensure that the Standards Council itself and the national standards system remain relevant to the needs of Canadian society as a whole.
Second, we recommend that there should be explicit reference in the proposed mandate to the important role the Standards Council of Canada should play in promoting the standards harmonization objectives of the new internal trade agreement.
Third, we recommend that the government departments be directed to make maximum use of the services of the national standards system in developing their standards. The standards developed by the national standards system are based on consensus and may either be referenced in regulation or serve as an alternative. A greater reliance by the Government of Canada on the national standards system would be particularly appropriate in view of the government's wish to help reduce the regulatory burden on Canadian industry and thus make it more competitive.
The purpose of CSA is to make standards work for people and business. A strong standards system led by the Standards Council of Canada will help fulfil our mandate. We intend to continue to support strongly the national standards system.
Mr. Chairman, we wish to thank the committee for allowing us to appear in front of it. We will be pleased to answer any questions you may have.
The Chairman: Thank you very much, Mr. Paladino.
[Translation]
You have some questions, Mr. Leblanc?
Mr. Leblanc: I have one on the Provincial and Territorial Advisory Committee. From what I have read, the Advisory Committee is not represented on the Standards Council of Canada and has no powers. It only has the power to recommend, suggest or advise. Don't you agree that one or two members of the Advisory Committee should sit on the Standards Council of Canada? Wouldn't that be beneficial?
[English]
Mr. Paladino: I believe the standards development organizations would be sitting on the council or have a representative on the council. We would work through that member.
[Translation]
Mr. Leblanc: I have read the document. The Provincial and Territorial Advisory Committee does not sit on the Standards Council of Canada.
[English]
Mr. Paladino: We work very closely with a lot of the authorities across the country. Although we don't have a seat on this new provincial and territorial council, we do meet on a regular basis with a lot of the authorities. But I think the standards development organizations would have a voice in this new Standards Council through the member representing all the standards developers across Canada.
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[Translation]
Mr. Leblanc: You are satisfied with the current structure?
[English]
Mr. Paladino: Yes.
The Chairman: Mr. Schmidt.
Mr. Schmidt: Mr. Chairman, I find myself slightly confused with the national standards system, the Canadian Standards Association and the Standards Council of Canada. Could you differentiate among those three groups?
Mr. Paladino: The national standards system is not a group as such -
Mr. Schmidt: No, it's not a group.
Mr. Paladino: That's the system that the Standards Council of Canada administers.
Mr. Schmidt: What do you do?
Mr. Paladino: The CSA does a number of things. We develop national standards in a number of different fields. The Standards Council has accredited CSA as a standards development organization, as a certification organization and as a systems registrar - quality system and environmental system registrar.
Mr. Schmidt: Once you are accredited by the Standards Council, do you report back to the council?
Mr. Paladino: The Standards Council does follow-up accreditation audits for the certification and the testing side of the business. We do submit our standards to the Standards Council for approval as national standards of Canada.
Mr. Schmidt: Is the national standards system, in practice, really the result of the work you've done as the Canadian Standards Association and then as formalized through the Standards Council of Canada? Is that in effect what happens?
Mr. Paladino: Well, we work very closely. It's a whole system in place. Not anybody can go out and start writing standards. You need the Standards Council to make sure that the systems are in place, that all the processes are in place, that you're qualified to develop standards. Then you tie it in with the certification and testing of products and equipment. You do need somebody like the Standards Council in place to make sure we're all following the same rules and are qualified to perform those functions. The Standards Council gives an increment of credibility to the Canadian standards.
Mr. Schmidt: So you're really saying that the Canadian Standards Association would not be acting in the interests of its members if there weren't a Standards Council of Canada.
Mr. Paladino: We always act in the best interests of our stakeholders and our customers -
Mr. Schmidt: But that's not the counter-side of that position, though. If you need the Standards Council to give you legitimacy, it suggests that if it weren't there you would not be legitimate and would not be acting in their best interests. It seems a sort of oxymoron.
Mr. Peter Rideout (Director, Built Environment Programs, Canadian Standards Association): Perhaps I can augment what has been said.
In the international forum most countries have national standards systems, which in many cases are actual government functions. In Canada we have two levels: the Standards Council of Canada and independent, not-for-profit standards-writing organizations. The existence of the Standards Council of Canada and its infrastructure provided by the national standards system gives international credibility to our standards system. Although CSA was in existence many years before the Standards Council, the creation of the Standards Council of Canada gave greater credibility to the work of CSA than would have existed otherwise.
Mr. Schmidt: That answers my question, Mr. Chairman.
[Translation]
The Chairman: Do you have another question, Mr. Leblanc?
Mr. Leblanc: When you set standards, you give points for the quality of certain products; you rate the quality of certain products.
In the past, I have received complaints saying some members of the Standards Council of Canada were in a conflict of interest when it came to certain products. Do you think this new structure will prevent that type of thing?
I have been a member of Parliament for 12 years now and that problem has arisen a number of times. Some manufacturers have complained that their products were deemed to be not as good as others, whereas they claimed their products were better than... I am not here to say who was right and who was wrong, but there did seem to be some conflict of interest.
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Do you think the new structure will stop that type of thing?
[English]
Mr. Paladino: I don't think the changes at the Standards Council will affect the issues you're talking about. When standards are developed, they are a minimum set of requirements that all manufacturers or all industry have to meet and comply with. It's like anything else: you can build to the minimum standards or you can build to something higher than that, but at least you create a level playing field in that everybody meets these minimum sets of requirements.
The requirements themselves are developed by consensus, and you have to take the divergent views of all the different parties that are participating in that standards development process, be it government, be it industry, be it certifiers. I don't think the changes at the Standards Council of Canada or in the act will change that. The system is in place, it's consensus, and you have to take those views in place.
Mr. Rideout: The existence of the Standards Council being in a position of auditing the standards development process puts an infrastructure in place that should minimize...
The point you are making has existed for many years: that you can, through influence and so on, on a committee, put forward the interests of your own organization over the interests of the industry as a whole. But the fact that the Standards Council provides an audit of the national standards system, which hopefully addresses those kinds of issues, is what gives the system credibility on an international forum.
The other point is that we're trying to work with industry to elevate the thinking away from that parochial kind of thinking, to looking at standards in the national standards system as a competitive advantage in the international marketplace. That's what we have to rise to and that's what we're trying to address in the paper: looking at the big-picture strategy issues that we have to deal with as a country.
The Chairman: I would like to thank the witnesses, Mr. Paladino and Mr. Rideout, for coming and helping us in the consideration of this bill.
Mr. Schmidt: Would it be possible to get a copy of the brief these gentlemen presented?
The Chairman: It should have been with you. If it was not, then you have my apologies.
Having heard all the witnesses who have asked the committee to appear before it, I'd like now to consider Bill C-4 clause by clause.
Clauses 1 to 14 inclusive agreed to
The Chairman: Shall the title carry?
Some hon. members: Agreed.
The Chairman: Shall the bill carry?
Some hon. members: Agreed.
The Chairman: Shall I report the bill to the House?
Some hon. members: Agreed.
The Chairman: Thank you very much for your contribution, Mr. Bodnar.
Mr. Bodnar (Saskatoon - Dundurn): I was pleased to be so helpful.
The Chairman: I would like to talk with the committee about future business. I would like to suggest to the committee that we begin consideration of Bill C-5, whose long title reads, ``An Act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Income Tax Act''.
We have 20 witnesses. The minister is available next week, and at the call of the chair we'll start with the minister's appearance. He is not available on Tuesday, but he will do it next week.
There are two weeks left after this week and there are a number of witnesses. If we want to get started with witnesses, it may be better to do Wednesday and Thursday so we can start having some of the witnesses come in. If you don't mind, I wouldn't mind getting it started.
Mr. Parliamentary Secretary, can we try for Wednesday afternoon?
Mr. Bodnar: We'll try.
The Chairman: Get back to us.
I apologize to the committee. You may want to talk to me privately about this. Because the round table fell through last week, I'm wondering if we should try with renewed effort in the fall to get the science and technology review going, rather than schedule something in the last week.
Mr. Schmidt: I don't think we should start that, because that's a big subject.
The Chairman: Yes, that's my view now, too.
Mr. Schmidt: Let's deal with the Bankruptcy Act and get it out of the way.
The Chairman: Okay.
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Mr. Schmidt: I really do think, Mr. Chairman, we ought to get with that science and technology stuff. We just have to do... Well, we don't have to do anything, I suppose, but I think we should.
The Chairman: No, I know it is important, and I tell you quite frankly of my own disappointment that the round table didn't get it started. We'll try with renewed effort, because it's as important to me as it is to you and other people, and I don't want to miss another window of opportunity.
Mr. Schmidt: Good.
The Chairman: Thank you very much, everyone. The meeting is adjourned to the call of the chair.