ENSU Committee Meeting

STANDING COMMITTEE ON ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

COMITÉ PERMANENT DE L'ENVIRONNEMENT ET DU DÉVELOPPEMENT DURABLE

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, June 3, 1998

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[Translation]

The Chairman (The Hon. Charles Caccia (Davenport, Lib.)): Welcome to this meeting of the Environment Committee. Pursuant to the House reference, we're continuing our consideration of Bill C- 32. As provided for in the Standing Orders, clause 1 is now under consideration.

[English]

On behalf of the members of the committee in this room, I welcome our witnesses today. Perhaps I should invite them to introduce themselves, in whichever order they wish to adopt, and in welcoming them, inform them that we have a little system in place of timing, so as to give everybody a fair chance, and also a chance for members of the committee to ask one, if not two questions. The timing system is simply a Swiss chronometer that the clerk sets into motion and gives a gentle ring at eight minutes, which then indicates that there are two minutes left for that person to conclude his or her remarks.

I hope you will find that acceptable. It is intended to treat everybody equally. We have started this series of hearings with this system, and it has worked reasonably well, because it lengthens the period of questions and answers.

Who would like to start? Mr. Reid.

[Translation]

Mr. Timothy Reid (President, Canadian Chamber of Commerce): Thank you very much, Mr. Chairman.

[English]

On behalf of members of the Canadian Chamber of Commerce, I'd like to thank you for the opportunity to appear before this committee to provide our views on Bill C-32.

My name is Tim Reid, and I'm the president of the Canadian Chamber of Commerce. With me is Bob Redhead, principal of Robert J. Redhead Limited and former director of corporate and government affairs with Laidlaw Inc. He serves as chairman of the Canadian Chamber's environmental committee.

The Canadian Chamber of Commerce is very fortunate to be able to draw on some of the best and top professional business experts from among its members and to invite them to exchange views with members of Parliament.

[Translation]

The Canadian Chamber of Commerce is the most important and most representative trade association in the country. Thanks to our network of 500 local chambers of commerce and organizations, we have partners in all federal ridings. Our network is made up of over 170,000 members in total and businesses of all sizes active in all sectors and all across the country.

[English]

Mr. Chairman and members of the committee, the Canadian Chamber of Commerce supports the principles and application of sustainable development. Through our environment committee, we are actively involved with other business groups, such as those who share this briefing with us, in developing guidelines and action plans that will help business members of all of us to attain truly sustainable development.

Accordingly, we were very pleased that pollution prevention and sustainable development remain the overarching policy goals of a renewed Canadian Environmental Protection Act. Making these principles cornerstones of the regulations encourages decisions to be made that will respect both the environmental concerns of Canadians and the economic realities and impacts of various courses of action.

Bill C-32 is, in our opinion, a much-improved version over the previous bill, which represented a heavy-handed command-and-control approach to environmental protection that would have hurt Canadian competitiveness without clearly enhancing environmental performance.

Although Bill C-32 continues with a command-and-control approach, we are pleased to see that many of our concerns have been addressed. For example, Bill C-32 recognizes the recently signed harmonization accord, which provides for a consistent framework for environmental protection of Canada.

Although the Canadian Chamber of Commerce continues to have concerns with some clauses of the bill, we believe it's time to move forward. We encourage the committee to complete its work with this legislation in a timely manner. It has been almost four years since review of the existing act began. No one will benefit by further delays.

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I will now ask Bob Redhead to address some of the specific issues we wish to share with the committee. Of course, at the end of all of our presentations, along with the other business representatives here, we would be pleased to answer any questions.

Bob.

Mr. Robert J. Redhead (President, Robert J. Redhead Limited; Chairman, Environmental Committee, Canadian Chamber of Commerce): Thank you, Tim, Mr. Chairman, and members of the committee.

The chamber supports an effective framework environmental law and the enforcement of those laws. As you have heard from Tim, we support Bill C-32, the Canadian Environmental Protection Act 1998. This is based in part on the cooperative approach taken by the Government of Canada in addressing concerns expressed about an earlier version of this present bill.

We have reviewed Bill C-32 and we're generally in support of this more workable piece of legislation with its strong emphasis on the environmental impacts on human health, its preference for pollution prevention, and its use and recognition of tools such as partnership, harmonization, and cost-effective regulation.

Many of our concerns with the earlier bill have been addressed, particularly with respect to the application of virtual elimination plans to non-schedule-1 substances, the definition of the precautionary principle, and the recognition of voluntary initiatives for pollution prevention and environmental emergency plans.

We do, however, still have some concerns that we would like the committee to consider and that are laid out in the detailed brief that we submitted on June 1. I'd like to touch on some of those now.

Pollution prevention. The definition of pollution prevention in Bill C-32 excludes recycling, reuse, and recovery operations. Recycling is an example of a cost-effective measure that results in less pollution. The recognition and encouragement of recycling options will result in the development of new recycling technologies.

Some of the most important pollution prevention advances have and will continue to occur in the quest for maximizing the utility of a resource. Recycling and reuse are consistent with this eco-efficiency principle.

The World Business Council for Sustainable Development introduced the term “eco-efficiency”. Eco-efficiency is reached by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity through the life cycle to a level at least in line with the earth's estimated carrying capacity.

Bill C-32 focuses on pollution prevention as an essential and integral component of sustainable development. We have suggested to our members that pollution prevention can best be achieved using the precepts of eco-efficiency. Eco-efficiency does not focus merely on reducing material use and waste. Rather, it emphasizes resource productivity, that is, maximizing the value added per unit of resource input while minimizing resource consumption.

The role of governments in environmental protection must evolve as well. Historically, government's response has been to impose, command, and control regulations. Regulations were and will still be necessary to ensure that we stay the course.

However, we now need more flexible and sophisticated policy regimes to stimulate innovation. The new focus should be on long-term performance skills rather than technology-based prescriptive regulations.

We submit that it's the job of government to create an enabling and stimulating framework by which business can deliver on workable, timely solutions to environmental problems.

Bill C-32 authorizes ministers to charge fees for services required under CEPA. If these fees are, in fact, intended to implement cost-recovery measures, then they should be subject to the rigorous review of cost-recovery initiatives.

The Canadian Chamber of Commerce is on record as supporting the principle of cost recovery for federal government programs and services. The introduction of user fees that reflect delivery costs can reduce the excess demand for services and can contribute to the improved economic efficiency of government operations, especially in times of deficit.

However, we have also indicated our concern that excessive or poorly designated user charges can be extremely harmful to individual businesses and the economy as a whole.

The most serious concern of business is that departments may be increasing user charges in order to offset budget restrictions without first taking steps needed to streamline operations and reduce costs as much as possible. This concern arises especially in those cases where departments are in a monopoly position, able to dictate both the level of user fees charged and the level of services that firms may purchase if they are to continue to do business in Canada.

Cost-recovery fees charged to businesses should not be greater than the direct cost of providing the services rendered as provided for under government policy. Other fees and charges that may be designated to recover indirect service costs and/or excess economic rents really are taxes and should be administered separately from direct cost-recovery fees. Therefore, we believe that the fees as provided for in Bill C-32 are inappropriate.

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The bill establishes a major new waste management role for Environment Canada, duplicating provincial activities. It creates regulation-making power for “import, export, transit and movement within Canada of waste and material”. There is a potential for unnecessary growth in Environment Canada activity, paid for through cost recovery or other mechanisms, creating conflicts with the provinces, who currently regulate the management of wastes and recyclables.

We recognize that one of the objectives of this section is for the federal government to live up to its commitments under the Basel convention. We submit that it is still necessary to work in harmony with the provinces in areas that fall in their jurisdiction.

With respect to international shipments of wastes and recyclables, the Canadian Chamber of Commerce recommends open borders throughout North America. It should be possible to manage waste at the appropriate and most economical facility regardless of the host country or country of origin, assuming equivalent levels of safety have been met.

In conclusion, I should like to thank you for the opportunity to provide these comments on Bill C-32. The chamber believes in clear, workable, enforced laws, and looks forward to working with the government and members in moving the implementation of this important piece of legislation.

Thank you.

The Chairman: Thank you, Mr. Redhead. Perfect timing; ten minutes on the dot. We appreciate that very much.

Who would like to be next? Perhaps you could introduce both yourself and your colleague.

[Translation]

Mr. Jayson Myers (Senior Vice-President and Chief Economist, Alliance of Manufacturers and Exporters Canada): Thank you very much, Mr. Chairman. I'm Jay Myers and I am the Senior Vice- President and Chief Economist of the Alliance of Manufacturers and Exporters of Canada.

[English]

With me today is Nancy Coulas, our director of environmental policy.

The alliance represents 3,500 companies from all provinces and all sectors of Canadian business, predominantly Canadian industry. Our members account for approximately 75% of Canada's total industrial output and 95% of Canada's exports.

Mr. President, first of all, thank you very much for allowing us to comment as well on Bill C-32. Like the chamber, we support many of the provisions of this piece of legislation. From our perspective, we can see how Canadian industry is changing and how the circumstances of the global economy are changing very rapidly, and have been over the past ten years. Our concern is that this legislation provides a framework that is responsive to those changes and that is also cost-effective.

A number of objectives underlie our approach to Bill C-32. Our objectives are: that there be a clear and predictable legislative framework; that environmental and economic considerations are balanced before policy decisions are finalized; that the administrative burden is minimized; and that environmental management regimes in Canada are harmonized. These, I think, are the basics of cost-effective regulation and legislation.

As I said, we support many of the provisions of the bill. I'd like to focus on some of those provisions. We also have concerns about some of the provisions of the bill.

With respect to voluntary measures, clause 57 of the bill allows governments to recognize provincial or other voluntary pollution prevention or emergency response plans for the purpose of meeting requirements of part 4 of the bill. We strongly support that provision, but we think the recognition of voluntary efforts could be expanded in the bill to cover other sections as well. Providing broad enabling powers such as these would empower the minister or Governor in Council to recognize a wider range of non-regulatory instruments, such as codes of practice and MOUs, which are becoming more and more important in Canadian industry today, where these could be treated as equivalent to various requirements under the piece of legislation.

With respect to information gathering, we do need a process, and we recognize that the bill now does respect confidentiality of certain types of in-plant information not related to releases in the environment. I think this is extremely important.

We are concerned, however, that the process of information collection not become unduly expensive. We also question the effectiveness of mandatory pollution prevention initiatives, whether these can be effective in the first place from a business point of view.

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We're concerned, for instance, that pollution prevention often depends on fairly costly and unpredictable research and development initiatives. It's often very difficult to predict the outcome of those initiatives. Prescriptive pollution prevention planning also adds to the administrative burden of companies. I think provision for a more flexible, more voluntary process here would result in more effective pollution prevention. So we do have concerns in that area.

With respect to harmonization—and this is also extremely important—we certainly support the federal government working closely with the provinces. The bill allows for harmonized environmental protection initiatives across jurisdictions in Canada. That is important, but it also leaves unresolved many issues with respect to harmonization and the mechanics for achieving harmonization.

This is particularly an issue and a concern among our members in Quebec, since the Government of Quebec has not yet signed the harmonization accord. We do urge the federal government and the Quebec government to work very closely together on the issue of harmonization.

There are a number of other areas I would like to comment on. First of all, in the area of environmental protection actions, the alliance believes with this provision in place, as set out in Bill C-32, Canadians will run the risk of increased and costly litigation without necessarily any guarantee of improvements in environmental protection.

We really question the establishment of a procedure for environmental protection actions when the federal government and the provinces are increasingly considering alternative means of dispute resolution. We believe existing statutory and common law provisions already afford adequate redress for parties having suffered property damage.

With respect to stop orders, we have a number of concerns. First of all, stop orders should be issued only in circumstances of imminent danger to human health or the environment. We also have concerns about giving authority to field officers to issue orders without proper checks and balances. We feel that field officers should have the approval of a director before issuing stop orders. We also feel that there should be an expedited appeal process to avoid undue and costly delays.

With respect to waste issues, the alliance recommends that subclause 188(1) be deleted so that hazardous waste exports are not phased out as outlined in this provision. I think there's an assumption here that hazardous waste is best treated within the borders of Canada, but if you're moving hazardous waste from one coast to the other, across Canada, it seems to me we are increasing the chance of an environmental emergency, not decreasing it. I think this clause also hinders product stewardship activities within companies, really allowing for unequal treatment of internal and external waste generators, and could be considered a trade barrier.

With respect to agreements respecting equivalent provisions, we recommend that paragraphs 10(3)(a) and (b) be amended so that provisions in the bill that allow for treating provincial requirements as equivalent to federal requirements are also based on conditions of performance and intent of meeting the requirements of the act, not just on the federal and provincial provisions being identical.

Finally, with respect to national inventory, in clauses 48 and 50 of the bill the alliance recommends that the word “shall” be replaced by the word “may”. The current wording, we think, could force the minister to require excess information and inventories and reports. Again, our objective is to reduce the compliance costs, not to reduce the compliance, in order to make this bill not only effective but also as efficient and as administratively less costly as possible.

Our recommendations and the outline of these proposals are outlined in our submission to the committee. Again, we thank the committee very much for the opportunity to appear. We certainly appreciate the time and effort the government and this committee have put into reviewing the bill, and we certainly look forward to continuing to work very closely in this area of sustainable development.

Thank you.

The Chairman: Thank you, Mr. Myers.

[Translation]

Our next witness will be Mr. Cloghesy, appearing on behalf of the Centre patronal de l'environnement du Québec.

Mr. Michael Cloghesy (President, Centre patronal de l'environnement du Québec): Thank you, Mr. Chairman, and good afternoon to all members of the Environment Committee.

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I represent the Centre patronal de l'environnement du Québec, which is a rather unique group. We work only in the area of environment in a sustainable development context. We represent 125 members from almost all sectors of activity operating in Quebec.

We have the pleasure today of presenting our comments. First, we'd say that this whole process which required perhaps more than four years was very difficult, very long, but probably necessary, taking into account the fact that this legislation is really the keystone of the federal government's policy in the area of environment.

We think it is really essential to ensure that the government is acquiring a legislative tool that, insofar as possible, will serve to ensure respect for the principle of sustainable development which is a principle the federal government supports, of course.

This bill, it is plain to see, is far from being perfect. However, we do believe it generally attains the government's priority objectives. The objective of our remarks today is not to bring about major changes in the bill because we believe that despite its imperfections, it is the reflection of a delicate balance. Therefore, we recommend that the government pass Bill C-32 without any major changes.

We would like to emphasize a few specific points in terms of harmonization between the federal and provincial governments. It's really important for Canada to set up a regulatory and legislative system that is as effective as possible and avoid duplication between federal and provincial levels. We support all provisions of the bill dealing with harmonization. We do not think that you, the politicians and decision-makers of this country, need worry yourselves about the harmonization agreement which, as all those who have seen the text know, provides for very specific mechanisms that will ensure that the level of government that is in the best position and the best-equipped and the one that has the most resources is the one that will intervene in any given area. We don't think that the concern expressed on this point is justified and we very strongly support this very important aspect.

We also support, as far as possible, the flexibility of means and voluntary approaches which may be seen as a goal of this bill. As for those equivalencies provided for in clause 10 of the bill, we suggest you go a bit further and really talk about equivalent performance, results and objectives.

We do not necessarily agree with the approach proposed in Part 2, having to do with the public's participation. We think it would be preferable that any individual wishing to lodge a complaint or undertake legal action in response to an offence against the environment be able to do this against the government and not necessarily against the corporation.

First, as the government in question does not shoulder its responsibilities concerning the control of the movement of dangerous waste as set out in clause 8, we don't agree on the cost recovery principle in that respect. We don't believe the officials are in a proper position to establish a system which would impose costs for a service where a monopoly situation exists. The employers don't really have any other way of procuring that service.

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In conclusion, Mr. Chairman and members of the committee, we strongly suggest that the government adopt Bill C-32 despite its flaws as soon as possible.

Mr. Chairman, I don't know if I can put a question to you at this point. It's important for us to know if you're in agreement with the comments made yesterday by your colleague Mr. Lincoln when he said that this bill was an “unfixable lemon”. Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Cloghesy.

Mr. Lincoln.

[English]

Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.): Just on a point of order, it was a question: Is it an unfixable lemon? I could ask the same question to Mr. Cloghesy or the others.

I was asking them because they have been very critical of many parts, and I was asking the question to get their opinion. I didn't make a statement that it was an unfixable lemon. I asked, is it an unfixable lemon, in your opinion? And they gave me their opinion that it was a fixable non-lemon.

Voices: Oh, oh!

[Translation]

The Chairman: Mr. Cloghesy, there is your answer.

Mr. Michael Cloghesy: Thank you.

The Chairman: Fine. We'll start with Mr. Gilmour, as usual, please.

[English]

Mr. Bill Gilmour (Nanaimo—Alberni, Ref.): Thank you, Mr. Chairman.

Thank you for appearing before us. It's interesting that you bring up yesterday's comments, because we had before us a different group, largely represented by the environmental side of the issue, and their representation, and one of the dilemmas this committee faces—and I think it relates to Clifford's point—is that this needed major, major rejigging.

It's important that we hear your comment that yes, there are some holes in it, but basically you're comfortable with the bill. We need to hear that.

And I must say, I think we have a pretty good representation right across the spectrum for hearings that we'll be going through in this session and into September.

To be specific, I'd like to get into the area of voluntary compliance. My background is in industry. In my view, government should state the objective—get there in five years—but not give you the path on how to get there. However, the problem is—and we had witnesses say this when we were doing our enforcement hearings—perhaps 80% of companies are fine; it's the 20% that aren't.

So the difficulty we face as a committee is yes, there has to be a hammer at the end, but how do we do the balancing act between the voluntary and the compliance so that we have a bill that covers the bases and isn't overly onerous on the business, but at the same time has some clout at the far end for the people who decide to step outside?

Mr. Robert Redhead: Mr. Gilmour, I would be pleased to take a shot at your question.

As someone who's come out of a very highly regulated area of business, we certainly see voluntary as you described it: an objective would be set in concert with or by government, and industry would then be responsible for achieving that through whatever mechanisms they could use.

There are models out there now that show ways of making industry quite accountable for how that is being done. Mechanisms have been put forward by a variety of associations, etc., and maybe the CCPA's Responsible Care process is an example of one of those things where there are undertakings and those undertakings are auditable. So there are examples of mechanisms that achieve what you're asking.

Mr. Bill Gilmour: Secondly is user fees. My home province is British Columbia, and it's more the provincial government than the feds, but there are more and more user fees, whether it be a fishing licence or whatever.

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Some of you have said there shouldn't be any user fees at all, while others agree that basically paying for the program is all right. I think it would be helpful to the committee if you could give us a short rundown of the areas of concern you have with user fees and what you might see as a solution—either no user fee, it's okay as it is, or it's onerous. In the days of shrinking budgets, we don't want to see the programs paying for a reduced budget, and that's what we may be doing. If that could be answered it would be appreciated.

Mr. Jayson Myers: Maybe I could start that off.

We've certainly seen a spate of user fees in a lot of different departments, and we're particularly concerned where user fees are being introduced in the area of regulation, where there are often very few alternatives than to partake of the services offered by the government that is regulating.

We certainly see there can be a benefit in user fees. Many of our members have seen a benefit if they're introduced with service standards, those service standards are met, and they're introduced on a contractual basis. In fact, many of our members would prefer to pay a user fee if those service standards are met. The problem is that the service standards are often not met. This is one of the problems with existing user fee systems that have been introduced by a number of departments. The service standards are not being met and there's very little recourse other than to pay the fee being charged.

We're also concerned that when the fees are imposed they reflect the commercial value of the service, or the value obtained by the private sector. Often the fees are imposed without a great deal of thought about the true cost of the provision of the service, or even whether the impact of those costs on industry itself is adequate. There have been a number of problems across government departments that have arisen because of inadequate cost accounting, auditing procedures, and review of the schemes once they are introduced.

The Chairman: Thank you very much.

Second round, Mr. Bachand.

[Translation]

Mr. Claude Bachand (Saint-Jean, BQ): I'm not a great specialist on the environment. I'm replacing one of my colleagues here this afternoon. In the notes I was provided with, it says that Quebec did not sign the harmonization agreement and that it gave the explanation it first wanted to look at the whole of the federal government's legislation on the environment. There's a principle underlying environmental harmonization: that's decentralization. Quebec wants to see if the federal government is respectful of this spirit of decentralization. Mr. Cloghesy, in your opinion, does Bill C-32, that we have before us today, support greater decentralization?

Mr. Michael Cloghesy: You question is very well put, Mr. Bachand. We of the Centre patronal de l'environnement du Québec admit that this bill does not reflect true decentralization. On the contrary, it does reflect an increase in the extent of federal powers in the area of environment. But, what can I say, I don't think we're necessarily ready to reopen the constitutional debate to specify exactly which are the powers at the provincial and federal levels in the area of environment.

The judgment handed down recently by the Supreme Court clearly indicated that both levels of government could get involved in any environmental area through regulation and legislation. So the situation is such that the federal and provincial governments can get involved in the environment without it being possible to determine through a constitutional judgment which is the proper share of either level.

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The objective of the harmonization agreement is to determine that a government shall intervene in a given area based on properly established criteria and proper follow-up. I think that's a step in the right direction, but it certainly won't settle that area of conflict, if that's what it should be called. A constitutional change would be necessary to clarify that situation once and for all.

Mr. Claude Bachand: Thank you.

Mr. Myers, I read your brief and I see that you consider voluntary measures are very important. I agree with you that a lot of responsible companies go ahead with voluntary measures.

However, some witnesses who appeared before the committee not so long ago and who are responsible for the enforcement of the legislation told us that when there are severe sanctions, a lot more respect is shown for the law. Do you think that we will one day achieve perfect balance between economic development and respect for the environment? Can we attain this perfect balance if harsher steps are not taken against those companies who won't respect the environment?

[English]

Mr. Jayson Myers: As we said before, and I'll turn to Nancy to also respond, it's extremely important to define the objectives of what we're trying to achieve. In terms of how those objectives are achieved, there has to be some degree of flexibility of responsiveness to the changes in technology, business organization, investment and risk that is necessary in order to meet the objectives. I certainly feel there should be some recognition. I don't think anyone is asking for a complete carte blanche to deal with these issues.

There should be some provisions that companies can do what they say they are doing. In fact, this is where industry is going worldwide, where the ISO performance standards are leading—ISO 9000 and ISO 14,000. We're just concerned that it be recognized and the bill not determine what companies should do if this is going to be either onerous in cost or lead the company into an activity that, in the end, would undermine the effectiveness of the legislation. That's our concern.

Nancy, do you want to add something?

Ms. Nancy Coulas (Environmental Policy Analyst, Alliance of Manufacturers and Exporters Canada): Our members truly believe in pollution prevention and they work on these initiatives. Companies that don't spend a lot of time on environmental issues and pollution prevention often find themselves at a disadvantage, so that will almost naturally take care of the bad guys, more or less. It's a competitive advantage to work on pollution prevention. It will minimize costs in the end, but it is a long road.

[Translation]

The Chairman: Thank you, Mr. Bachand. You can come back to this issue during the second round, if you like.

[English]

Mr. Herron, please.

Mr. John Herron (Fundy—Royal, PC): Thank you, Mr. Chair.

I don't know if I picked up any mention, in either one of the briefs, of the alternative measures provisions that are in the act. Could one of you sort of elaborate your position on having the concept of alternative measures introduced in this piece of legislation? Are you comfortable with that?

Mr. Robert Redhead: Could you refer me to one of the sections, Mr. Herron? I'm not sure exactly of the context. Is it equivalent level of safety-type alternatives that you're talking about?

Mr. John Herron: I guess clauses 295 to 309 would introduce environmental protection and alternative measures as an enforcement option for violations under the act.

Mr. Robert Redhead: I can't speak for our members on that particular point.

Mr. John Herron: So you have no opinion on them one way or the other.

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Mr. Robert Redhead: I wouldn't be able to give an opinion without reading them. I would certainly be pleased to provide it back to you.

Mr. John Herron: Essentially, when there isn't a violation under CEPA there may be some other method by which the company could say “We recognize we are wrong when we do this”, in lieu of litigation or something like that. At least that's my interpretation of that section. I think it's kind of progressive.

Mr. Robert Redhead: I'm familiar with some of those mechanisms in the U.S., in terms of negotiated settlements and those kinds of things, and certainly alternatives to court proceedings are worthy of consideration.

Mr. John Herron: You touched briefly on equivalency. If a province has an existing statute, there's always some fear in these things that a statute that ends up being adopted has more of the lowest common denominator kind of effect. Can you appease me on that particular concern?

Mr. Michael Cloghesy: I think that was part of our brief. I'm not sure if anyone else had mentioned it.

With regard to equivalency, we're suggesting a few words be added to clause 10 that pertain to the performance and intent. In other words, if we take equivalency and its meaning in strict terms, it could be interpreted to mean the province would have to have a regulation identical to the federal regulation, whereas if the terms “performance” and “intent” are included, obviously as long as the provincial regulation is comparable in intent, performance, and objectives, it would meet the spirit of that particular section. So that's the point we wanted to make.

Mr. John Herron: Who determines what happens if a province says something is equivalent to the existing statute?

Mr. Michael Cloghesy: This would apply possibly in the harmonization accord, and I believe it's a negotiation between the province and the federal government. Both parties have to agree, and obviously there's a mechanism to verify that whatever has been agreed to is being carried out. In that sense, we don't feel there is cause for concern with regard to abuse in this area.

Mr. John Herron: Thank you.

[Translation]

The Chairman: Mr. Charbonneau.

Mr. Yvon Charbonneau (Anjou—Rivière-des-Prairies, Lib.): I feel that the government of Quebec should sign the accord on harmonization. How could this help? Have you made representations to the government of Quebec encouraging it to sign and how did it respond? How do you assess its response?

Mr. Michael Cloghesy: Mr. Charbonneau, we have a very firm position on this matter. We obviously deplore the fact that Quebec is the only province not to have signed the accord. Obviously, we understand the reasons that it has given for not signing the accord.

Mr. Yvan Charbonneau: What are they?

Mr. Michael Cloghesy: That being said, the only ones who will be at a disadvantage are the Quebeckers, Quebec's industries and the citizens of Quebec. In our opinion, the accord on harmonization truly represents a step ahead. Given the constitutional situation, there is at least some will to sit down together and to establish the most effective system possible for sharing environmental responsibilities.

A few months ago we wrote a letter on this matter to Minister Bégin and we met with him recently. He of course replied that he was reviewing the impact and the scope of Bill C-32. A few months ago, he still had not made a decision. We are continuing to work with this minister and we are considering targeting places such as the Premier's office in order to demonstrate that Quebeckers will be the only losers if this accord on harmonization is not signed.

Mr. Yvon Charbonneau: I have a second question and anyone of you who wishes to may answer.

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Yesterday, we heard from representatives of environmental groups and they told us that, in their opinion, this bill constituted a major step backward and that we were better off keeping the current legislation and not adopting this one. Obviously, these are people who are very motivated by the environmental cause, as you are, since your presentation seeks to further the goal of sustainable development, according to what you have said.

Do you think that these people were exaggerating when they said that? In your opinion, does this bill represent an improvement on the existing legislation or are we better off keeping the existing legislation?

[English]

Mr. Robert Redhead: Certainly from the Canadian Chamber of Commerce's perspective the bill is an improvement over the existing law. One issue I would point to is pollution prevention, and some of the other provisions there. It's very explicit on the sustainable development theme, so we feel it is an improvement.

There are, as we mentioned earlier, things that we would see differently, but I think it's important that legislation like this moves forward and is put in place so that business is able to move on delivering the requirements of the law, and to do it in a timely fashion.

Do you guys have a comment on that?

[Translation]

Mr. Michael Cloghesy: I would like to add that this bill refers specifically to harmonization, something which is essential in our opinion, and to equivalency. In our opinion, these aspects are really essential. Even with its imperfections, we believe that this bill represents an improvement over the existing legislation. This is why we are recommending that the government adopt it as drafted. Thank you.

[English]

The Chairman: Mr. Myers.

Mr. Jayson Myers: We also see this as an improvement. We've been working, as others have as well, for five years on this bill. I think one thing this bill does do is respond to the changes that are occurring today in industry, not only in Canada but also around the world. That's extremely important not only in terms of the recognition by industry of the importance of sustainable development but also in building a much more responsive system and a much more cost-effective system of achieving the objectives of the bill. That for us is I think the real significance of this bill.

The Chairman: Thank you.

[Translation]

Mr. Lincoln, please.

[English]

Mr. Clifford Lincoln: I must say, Mr. Chairman, to pick up on Mr. Cloghesy's original question about my questioning of the witnesses yesterday, I'm torn between two directions. One side says sure, it has to be admitted that there are improvements in this bill in regard to pollution prevention. Many clauses make the bill more amenable to public participation, and that has to be recognized. At the same time, I think many of us have heard strong evidence that there are weaknesses in there that are fundamental.

This is what we are wrestling with—this dilemma of two opposing forces, one good and one that detracts, in our view, from what we have gained so far.

I'll direct this question to any of the witnesses here. I'll start from the premise that there was a report of the committee, which followed the statutory review of CEPA that led to a government response and that laid the broad parameters of government action and led to Bill C-74 and now Bill C-32. I realize that certainly many sectors, and certainly yours, were not 100% favourable to the government response.

Could you tell me, first of all, if you agreed with the general thrust of the government response to our original report as a basis for legislation?

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Mr. Michael Cloghesy: Yes, Mr. Lincoln. Within, I believe, most of the industries, there was a consensus that was in agreement with the large part of the government response.

Mr. Clifford Lincoln: From our perspective here, it seems to us that the government response was really the setting out by the government itself of its position regarding future legislation.

I'm going to ask you what your views are, if we start from that premise and we look at Bill C-74 and Bill C-32, and these are, for instance, some of the things that disturb us greatly.

Before, this legislation was under the jurisdiction of the Minister of the Environment and the Minister of Health. Now we've introduced a new section, subclause 2(2), which also adds that, where appropriate,

...the minister responsible for the other Act will jointly determine whether the measures that can be taken under the other Act are appropriate and sufficient to address the matter.

If you tie that to subclauses 93(5) and 93(6), which cover... I will point out the total subclause 93(5), which is the main part of this act, really, which is what the act is about: toxic substances.

Really, first of all, you have to have any individual minister now to decide whether a measure is appropriate or not. The Minister of the Environment has lost that position under the act, which was, to our way, sort of important and crucial.

Secondly, now the Governor in Council of cabinet has an ability, if he doesn't like to exempt any applications that are huge—import, export, manufacture, use, handling...

93(6) The Governor in Council shall not make a regulation...if, in the opinion of the Governor in Council, the regulation regulates an aspect of the substance that is regulated by or under any other Act of Parliament.

In other words, it seems to us—and this was a point brought up by some witnesses—that CEPA has become almost a sort of safety-net type of legislation, rather than prime legislation. It has become subservient now to specific legislation.

What is your view of that in relation to the government response, which never touched on all these issues?

Mr. Michael Cloghesy: If I may attempt to answer that question, I believe I sense where you're coming from.

I think the significant difference between the government response, which doesn't perhaps specify exactly the previous bill, which specified the Minister of the Environment and the Minister of Health, and the current bill is that since that time, the government has put into place, in all departments, a strategy for sustainable development. To me, that is the difference.

The government therefore, in all its acts, whether economic or environmental, has to take into account the aspects relating to environment and the economy. So the system should be self-checking.

In other words, ten years ago that wasn't the case. You needed a minister of environment to ensure that, let's say, a department that had an economic outlook or was focused on economy didn't really out-step its bounds with regard to the quality of environment, the objectives of environment within the government.

Currently, all departments should be working within the context of sustainable development, finding that balance between the economic advantages and the environmental disadvantages. So in that sense, personally, I don't feel that this should be a particular concern, because the government now has incorporated the environment into its strategic objectives, just like many companies have into their strategic business plans. Therefore, the checks and balances are not only within the Ministry of the Environment, they're within the whole government. That's my view on that question.

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Mr. Clifford Lincoln: Do you feel that justifies then the Governor in Council from huge exemption powers, so virtually if the Governor in Council were so inclined at any one time, this government, another one, or the next one could almost decide that all these provisions under CEPA could be cancelled just by an order of cabinet?

Mr. Michael Cloghesy: If I may attempt this one, again these are decisions of government. I think they've been removed from the decision of a minister to a decision of government. The government has to live with the decisions it makes. These are political decisions, and I don't think any survey done on the population of Canada recently has indicated that the population wants any lessening of the quality of the environment. On the contrary, the population wants an increase in the quality of the environment.

I think it would be very short-sighted on the part of any government, or political people for that matter, to take decisions that might impact negatively on this objective of improving the quality of government within Canada.

Mr. Clifford Lincoln: My time is running out. I have just one more question.

The Chairman: It has run out. Mrs. Carroll, please.

Ms. Aileen Carroll (Barrie—Simcoe—Bradford, Lib.): We can share.

Like other members of the committee, as they have been expressing their views to you, I'm in a bit of a quandary just because of the extraordinary juxtaposition of yesterday's witnesses who came and shared their views and all of you who have come to do likewise today.

I imagine most of you know that we, as a committee, dealt with the harmonization accord that was mentioned earlier. A preponderance of witnesses came forward at that time to advise that from their perspective—and there were many perspectives shared—the duplications and overlaps we had been perhaps looking at with regard to harmonization did not exist, but instead there were many gaps. They expressed grave concerns about that.

The next report we engaged in was on enforcement. Our concerns again came down to the fact that we had not nearly enough people in the field to enforce the law as it now exists. So after two studies we were looking at gaps, and the fact that in most provinces we didn't have people to enforce the environmental laws, as they pertained to those gaps.

Yesterday we heard that CEPA, as it's being put forward, is flawed and requires considerable addressing, from their point of view, to remedy that. Today you come forward to say it is not flawed. I'm sure you can probably empathize with the conundrum we find ourselves in.

Even though I think, like most of you and certainly as a business person myself, the large majority of Canadian businesses are very conscientious corporate citizens, if we consider the smaller percentage who perhaps are not, look at the gaps that are evident, and look at the fact that we don't have evidence of enforcement facilities, how are we to deal with this very small percentage who can still endanger the environment so much that the commissioner is ringing alarm bells? How are we, as legislators, to deal with that conundrum?

Mr. Michael Cloghesy: I believe we're all aware that budgets are restricted at the federal, provincial, and municipal levels. This is why we're so much in favour of harmonization, which is really a means of streamlining the process and putting the very few resources that remain where they are most needed. To us, the solution is to utilize those resources among the levels of government that are involved with environment, to the best possible use.

• 1635

Obviously we share the concern you have expressed with regard to enforcement, and it's certainly a concern the government has to look into. Again, it's a political decision as to where the government wants to place its resources, but one of the ways out of this conundrum is to really move ahead full speed with harmonization and design a system that will maximize the use of the very few resources that remain in this area in this country.

Mr. Robert Redhead: I'd like to offer some observations as one who participated in one of the multi-stakeholder panels looking at the environmental assessment component of the harmonization accord.

I certainly share the concern about the view that we're just striving for the lowest common denominator. I don't believe that to be the case. That's not the objective of the harmonization accord. I think all those involved need to make sure that isn't where it goes.

The other component I'd like to touch on is the enforcement or lack thereof. Certainly members of the chamber are very much in favour and concerned about there not being enforcement, because those people who are complying with the law don't like to think others aren't. So I think we're very much on the same side of the fence on that one.

As someone who was a regulator way back in my history, I know how challenging it is to bring these things forward. We would encourage the government to certainly look to its enforcement program, but I would also suggest they not move all the resources or any additional resources to enforcement and leave other aspects of the department unaided, if you will. I would draw a comparison to what happened in Ontario a few years ago when there was a very big concern and enforcement wasn't happening. They hired 57 new enforcement officers, but nobody else to work in the approvals department that issued the permits to correct the things that were wrong. So one has to look at them in balance.

Ms. Aileen Carroll: Thank you. I am going to ask Mr. Myers to respond as well. I thank you, Mr. Cloghesy.

I share that, Mr. Redhead. I would not want to see funds taken from one area and moved into enforcement. But would you agree that we have to see a reinforcing of the environment budget so adequate funds come into enforcement and we don't draw money away from other areas and weaken them?

Mr. Robert Redhead: There has to be strength in the department. I can't speak for how you get there, but I think there certainly needs to be strength there to enforce the laws that are in place, or provide for the interface that's needed for those who will get there voluntarily to be able to ensure that what they're doing is acknowledged and audited.

Ms. Aileen Carroll: I agree. I don't think the bulk of people who are being good citizens should have services withdrawn from other areas by those who are not. Thank you for your insight.

Mr. Myers.

Mr. Jayson Myers: As other members have said here, we're also very concerned about the issue of enforcement. Just to take Mr. Redhead's last point one step further, these are not just issues in the complexity of the legislation, the mandatory prevention plans and the writing in here of plans that are mandated on companies. These are not just matters of cost, although they certainly are that. They're also issues about the effectiveness of sustainable development efforts being undertaken by industry; the issues of overlap and duplication where harmonization is not taking place; of streamlining compliance systems; of defining the objectives but allowing some responsive mechanism by companies to meet those objectives. I think a lot of that has to do with the effectiveness of what you're trying to achieve in the legislation itself. It's not just simply competitiveness and cost.

Mr. Redhead's point was if you move resources from one area in the department to enforcement, you're going to slow down and perhaps impede the approvals process for areas where there'd be some benefit on the part of the company.

• 1640

The same thing goes within the company itself. If you're transferring resources from where the company thinks it can be most effective in pollution prevention, or where the company thinks it can be most effective in environmental improvement, and you're doing that simply because it's mandated by a piece of legislation, then I don't think you're going to achieve effective sustainable development measures either.

So that's our concern. This is not just a matter of the economy versus the environment. It's also very much a matter of cost-effective environmental sustainability.

The Chairman: Thank you, Madam Carroll.

Before we start the second round, is there anyone else who wishes to ask a question?

Mr. Jordan, followed by the chair.

Mr. Joe Jordan (Leeds—Grenville, Lib.): I would like to pick up on that point of cost-effective regulation. I think back to motivation theories, trying to get somebody to do something they don't want to do. I'm not suggesting we're at that adversarial point now, but I think we're probably pretty close.

Is there any point in trying to look at the frameworks governments put in place—the tax policies, the regulations—to try to align society's goals in terms of healthy environment, healthy economy, and healthy society with the goals of business? Because then we don't have to have the command and control. We don't need the carrot and the stick.

I say that because my ears perked up when you made the point, Nancy, that dollars invested in pollution prevention actually increased the competitive position of the company. Could you expand on that a little bit? What is putting the people who don't invest at a competitive disadvantage? What's working there? Is it regulation? Are the pollution prevention research dollars ending up as reducing production costs? What's happening there that this is working so well in a self-policing way?

Ms. Nancy Coulas: I guess for a lot of companies, in the end, if you don't use a certain product in what you're manufacturing, for example, you don't have to deal with the disposal of it at the end, which increases your competitiveness. That's one example.

Mr. Joe Jordan: Okay.

I have a question for the chamber, Mr. Redhead. Has the chamber's environmental committee looked at those kinds of issues, at full costing issues, sometimes called “green accounting”? What types of policies could be put in place to level the playing field so that everybody is working toward the same goals, which we have to align with what government's trying to do?

I just think that's a much easier way to go about it.

Mr. Robert Redhead: We have looked at, if you will, the issues we would like to address as a committee. The combination of climate change and the CEPA review have gotten in the way of taking that as a specific issue very recently. But, yes, we have looked into it, and will be able to offer some more specific comment on it.

I would like to comment on your question about pollution prevention and driving down costs. As someone who came out of a business that provided the service that was required, if you didn't use pollution prevention those costs could be quite high. If you look at the volume of material that goes to those facilities now, as they go down, those are costs that the company does not incur. That's one very simple measure. For anybody who's tracking their disposal costs, those are very easy ones to look at, and they can be very quickly recognized as savings.

Mr. Joe Jordan: I have one more quick point. We touched on the harmonization accord. Clearly, on the surface it makes a lot of sense to have the same standards country-wide. One of the issues that concerned me through that debate, though, was that in a devolution of responsibility to the provinces, it seems to me we're taking the capacity to enforce and we're positioning it a lot closer to the economic gain of not enforcing.

I'll use Ontario as an example, a province that seems to be coming out of a recession, dealing with fiscal problems. If the province is trying to concentrate on growth, then they may also, consciously or not, decide that environmental enforcement impedes that.

Is that an issue? Is it a valid concern that this situation seems to exist when we devolve that authority and responsibility to the province?

• 1645

Mr. Michael Cloghesy: Again, it's stated clearly, right up front in the accord—and I have a copy of it with me—that it's really the level of government that's in the best position, with the best resources to deal with the specific area, that would get involved. There is a negotiation.

Personally, then, I do not see this automatic so-called devolution of powers from the federal government. There are going to be provinces that just will not have the ability to deal with certain areas and that are going to count on the federal government to continue dealing with those, and there will be other provinces that decide to take upon these responsibilities.

Again, there's a mechanism to verify if this system is working or not. So I don't have the fears that a number of people seem to have on this whole area.

Mr. Joe Jordan: Thanks.

The Chairman: Before we start the second round, I have a couple of brief questions for Mr. Cloghesy, and then one of a general nature for anyone who wishes to answer it.

Mr. Cloghesy, on public participation, in the first part of your statement you indicated that your centre supports giving anyone the right to file a complaint, and that citizens should be able to bring action against the government. As soon as that sentence is over, you state, “This being said, we are opposed to this approach”. Which is the real position of the centre?

Mr. Michael Cloghesy: Right. Let me attempt to clarify that.

Certainly citizens should have a right to take action with regard to an environmental situation that is problematic. What we're saying in this case, though, is that if it is the will of the government to maintain this section, then we feel it's only right that the citizen take action against the government that is at fault, and not necessarily, in the first instance, with the company at fault. I mean, it seems to me, if the government is not taking its responsibility, the citizen should pursue the party that is not doing its duty.

With regard to the second aspect in our point, what we're suggesting is that we really don't like to see this kind of mechanism employed in our laws here in Canada. The reason for this is that we would like to stay away from a litigious society—in other words, similar to the U.S., where everything is decided in the courts. It's very heavy, very costly, and I'm not sure we achieve very much.

We have a system here in Canada where we can talk to each other—

The Chairman: Mr. Cloghesy, excuse me for interrupting, but you're absorbing my time, and I have to respect it in relation to my colleagues as well.

Having said that, do you think Bill C-32 would open the floodgates to U.S.-style litigations? Is that your belief?

Mr. Michael Cloghesy: Yes. Unfortunately, it is.

The Chairman: So is it your centre's position that this clause related to public participation ought to be deleted?

Mr. Michael Cloghesy: If you offered us a choice, yes.

The Chairman: The next question has to with “virtual elimination” in clause 64. Do all your member companies and member associations support that definition?

Mr. Michael Cloghesy: Yes.

The Chairman: All of them?

Mr. Michael Cloghesy: Yes.

The Chairman: The associations as well?

Mr. Michael Cloghesy: Yes, as far I know.

The Chairman: Well, do you know or don't you know?

Mr. Michael Cloghesy: Again, I represent the members—

The Chairman: Have they been consulted? I mean, my question is very plain and straightforward. You have some 15 associations listed here. Have they been consulted and have they supported virtual elimination?

Mr. Michael Cloghesy: Let me explain our mechanism when we prepare a brief. The brief goes to—

The Chairman: No, I need an answer, yes or no. I don't want to know the process.

Mr. Michael Cloghesy: I see.

The Chairman: What is the answer—yes or no?

Mr. Michael Cloghesy: I prefer to answer in the sense that it's our board that decides on our positions, and our board has approved this position.

The Chairman: So is it fair to conclude, then, that each individual association has not been consulted?

Mr. Michael Cloghesy: Not necessarily individually.

The Chairman: Thank you.

The question of a general nature is this. There is a clause in this bill that has some significance for anyone who represents firms and associations and the like. I'm referring to the clause that deals with regulations, clause 330. In essence, this clause could, if required, apply to selected parts of Canada, selected persons, or classes of persons. Is this selective regulatory approach one that concerns you at all?

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Mr. Michael Cloghesy: Not particularly. Again, this is a decision of the government, and therefore the government has to own up to its decisions. In that sense, we feel that the mechanism is there to ensure that there are no abuses.

The Chairman: So if I understand you correctly, you wouldn't be worried if, for instance, in the prairie region, the selective approach would lead to a regulatory system that would be less stringent than one in Ontario or Quebec.

Mr. Michael Cloghesy: We're not sure, obviously, what the implications of this particular section are.

The Chairman: But you just said you are not preoccupied with it, so are you sure or are you not sure?

Mr. Michael Cloghesy: Again, we are not preoccupied with this particular section.

The Chairman: Well, perhaps you should be. Don't you think so?

Mr. Michael Cloghesy: We're not, because we feel the mechanism for balance and checks is there, and therefore we are not preoccupied with that particular section.

The Chairman: Thank you very much.

[Translation]

Mr. Bachand, please.

Mr. Claude Bachand: I'm going to continue along the same line as the Chairman, since I was preparing a question similar to the one he asked a few minutes ago.

There is an idea that is fairly widespread amongst the population, including environmental groups, that you are very much in favour of reducing the administrative workload for your businesses. In a global market, in an international market, it is somewhat understandable that we would want to try to make the administrative burden as light as possible. People are saying that it is impossible to do this and maintain high environmental standards. In other words, we are seeking lower or minimal environmental standards to lighten the administrative burdens as much as possible.

In reading the bill, I realize that this is where public participation is so important. I would like to go a little bit further to the aspect raised by Mr. Cloghesy. It seems to me that the current wording of the bill entitles people to sue. I think that you are coming on too strong by stating, Mr. Cloghesy: “If the government is unable to enforce its own legislation, then we should sue the government.” Isn't the business that harms the environment the party that should initially be held responsible?

I wonder if it's possible to reconcile high environmental standards and a decrease in the administrative burden. I think this has a direct impact on bringing down to a minimum environmental protection clauses. If we reduce the requirements of environmental clauses and if corporations harm or risk harming the environment, it is fair and equitable that the legislation allow a simple citizen to take legal action not against the government, but against the responsible party first. The principle is that the polluter pays.

I'd like to get your reaction to the point I've raised.

Mr. Michael Cloghesy: You raise an interesting point. If a company does not respect the laws and regulations of the country, it is of course up to the government to impose sanctions or penalties. That's what legislation provides for. That's how the company will be penalized. The government has the responsibility and the authority to penalize those companies who don't respect the legislation or the regulations.

The administrative aspects we should really be aiming for are results. We think red tape should be decreased to a minimum. The red tape eats up a lot of resources whether corporate or governmental.

We maintain that the citizens should be able to sue the government if the government does not shoulder its responsibilities. And, as I was mentioning, the government can then penalize the company responsible for the offence.

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The Chairman: Thank you, Mr. Bachand.

[English]

We now have Mr. Charbonneau. Do you want to continue?

Mr. Yvon Charbonneau: No.

The Chairman: Mr. Lincoln.

Mr. Clifford Lincoln: During our session on enforcement we heard testimony which was very interesting. I would like to pick up on Mr. Gilmour's questions regarding voluntary compliance.

The head of the inspections division for the Pacific and Yukon region of Environment Canada, Peter Krahn, made a study of enforcement actions in his territory. I quote his first finding:

...industrial sectors which relied solely on self monitoring or voluntary compliance had a compliance rating of 60% vs. the 90% average compliance rating for those industries which were subject to federal regulations combined with a consistent inspection program. Voluntary compliance programs and peer inspection programs could not achieve satisfactory levels of compliance.

It really sort of backs up what we know from the KPMG report and so forth.

Doesn't this go to what Ms. Carroll was asking you? If we are going to go on with self-monitoring or voluntary compliance instead of regulations with a consistent inspection program, how do we ensure compliance by all corporate citizens, including the black sheep?

Mr. Robert Redhead: Mr. Lincoln, I'd like to offer a response to that.

Certainly from the discussions we've had with the people I've spoken with on what “voluntary” means... And I think sometimes “voluntary” is a poor choice of words, because we're talking about accountability and performance measures being built into these things. I would not equate “self-monitoring” with the way I think the way it was presented—as being equivalent to the voluntary measures that many businesses have in mind. And again, I would point to the responsible care model as one.

The New Directions group has also put out a document that describes the kinds of things that should be in place for true voluntary initiatives, and they call them “non-regulatory” as opposed to voluntary.

I think the first thing to do is to build some real strength into those mechanisms which put in the accountability. And I think all of the people who are proposing this—certainly the ones that I know who are interested in this approach—are looking for accountability in there so that they don't have the “free riders”, the people doing the black sheep thing.

Any system is going to require some oversight, and again, that goes to the resource issue relative to enforcement. We can't necessarily speak for how government should spend its dollars, but to all intents and purposes, the voluntary mechanisms will have audit systems in place. They need to have audit systems in place, with people who can look at them.

That's how I see that particular aspect.

Mr. Clifford Lincoln: But there is some contradiction there which my mind doesn't grasp. If I follow the logic of Mr. Cloghesy's response to Mr. Caccia regarding individual rights to sue, Mr. Cloghesy says the government is responsible for making regulations, so if the government doesn't enforce its regulations, the individual should sue the government, not the industry involved. Yet the industry says to the government, “Don't make regulations.”

Regulations really are the expression of a law. Without a regulation, the law is just meaningless. So on one side we say non-regulation and on the other side we say if the government doesn't enforce a regulation the individual should sue the government, not the industry concerned.

So I would ask Mr. Cloghesy, in the absence of regulation, as desired by the bulk of the industry, in the absence of regulation and a non-regulatory model, why should the citizen then go after the government, rather than the industry that has asked for the regulation not to be there?

• 1700

Mr. Michael Cloghesy: In response, let me clarify something that I think is very basic and has to be well understood.

I don't believe that any of the industry sectors we represent at the centre advocate a system without regulation. On the contrary, we need regulation. We need clear, simple, well-defined regulations that have realistic objectives, and we will be the first to request... And we have lobbied, not necessarily the federal government but at the provincial level, for new regulations to be put in place to level the playing field.

You mustn't misunderstand the statements that are being made with regard to voluntary systems. Voluntary systems are very much a tool, another tool to meet the objective, but you need the regulatory framework in place all the time, because you have good actors and you have bad actors, and that's the way it is in business, as it is in the general population. We are not advocating less regulation but better regulation, streamlined regulation.

The Chairman: Thank you. Madam Carroll.

Ms. Aileen Carroll: I'm going to fall in behind Mr. Lincoln's comments. Bear with me, as I'm not an old hand on the environment committee. I have just a year's experience, so it's been a 90-degree learning curve.

When you talk about an audit of voluntary measures, am I hearing the associations of businesses you represent say that you're willing to take on a responsibility, then, for some of these black sheep? Can we, as legislators, count on you to partner in that regard?

I feel heavily the onus we as legislators bear with respect to the electorate, which says the protection of this environment is one of the top three priorities. And again, let me mention that I have a business background, and that as an alderman in my city, as a downtown ward alderman, I sat as the rep to the chamber. And because it was very comfortable, we were able to forge good partnerships.

But having listened yesterday to very credible environmental groups—by no means could we define them as “fringe” groups—who told us that we have serious flaws here, again creating gaps, like I mentioned, can I feel comfortable that there will be partners in your associations who will be cognizant of the black sheep—cognizant of the cost they are for you—and the good sheep, and that you will be there as we will be there to safeguard together where any gaps might exist?

And I too don't look at the American example of a very litigious society as a road down which I want to go, but on the other hand, I hear a commissioner say that we are not looking well in comparison to our American neighbours in some of these areas.

Mr. Jayson Myers: Let me perhaps start by saying that I feel that under a great deal of our discussions today there's an assumption that voluntary measures are somehow separate from the whole regulatory framework we're talking about and that in doing this we're sort of stepping out of that framework and allowing companies to do whatever they want without adequate accounting procedures, responsibilities and processes that are being monitored and audited.

In fact, in many of these processes, in the ISO process in particular, there is already a process of auditing that is necessary for companies to maintain the standard and to qualify for that quality standard in the first place.

So to some extent, there are built-in auditing and monitoring processes already in place, and I think they should be recognized. I think there is quite a bit of flexibility, which still provides for industry to respond with voluntary measures, but I don't think anyone here is talking about putting in place a process that is totally outside the whole regulatory framework, whereby companies can do whatever they want without adequate accounting procedures in place.

• 1705

Mr. Robert Redhead: To echo those thoughts, I think the question I have been ruminating on here was the one about whether we, as associations, can take on the black sheep any better than a department of the government can.

I think in regard to the opportunities that are put in place through some of these programs, the voluntary ones, those who are complying with them and making them work will be one of the measures whereby you get at those who aren't, because it becomes the standard. And when you look at the stewardship approach to things where you start looking at putting the ISO requirement on your supplier, at those kinds of things, when business starts to put requirements on those people who supply them whereby they have to live up to their standards...those are the ways whereby they can be gotten to.

I think that if somebody decides they're going to not obey the law, it's not something any association necessarily can do. But we can certainly put things in place that make them want to and facilitate their doing this. One of them is to be very strong about the fact that the laws that are there should be enforced.

The Chairman: Mr. Cloghesy, would you like to conclude?

Mr. Michael Cloghesy: If I might just complete that, in no way, I don't think, can you have business or the private sector responsible for the black sheep. The government is there for this reason, and there have to be strong regulations in place to take care of that situation.

However, I must mention that there are many market forces out there that will ensure compliance. You have your boards of directors. No one wants to be on a board of directors of a company that pollutes and breaks the law. You have your shareholders. They don't want necessarily to buy into companies that are major polluters. You have the clients of the companies that are polluters who don't necessarily want to buy from a polluting company. So these are market forces that will move things in a certain direction, but you cannot count on something that's not going to be definite such as a government regulation is. Those need to be in place also.

The Chairman: Mr. Reid.

Mr. Timothy Reid: Mr. Chairman, I'd just like to say that over the past three or four years there's been a big change in the whole governance of private companies and the literature is making it very clear that the directors of a company have a real stewardship here.

I've just been reading a lot about this. I think if you take a look at this change that's taking place in North America about the clarification of governance, about committees of the board looking at the performance of the board of directors, making hard-headed formal assessments of the CEO, and you take a look at the penalties a company and a board can be liable to, including imprisonment—in the section it says imprisonment for a term not more than three years or to the financial penalty in that—boards of directors are going to look at this and say I don't want to be associated with that, Mr. CEO; make sure you have in place everything that's necessary to make sure there's no hint that we may be, in terms of our public image, exposed to this kind of penalty.

So I'd just add this whole governance change that's taking place in the private sector as another force, if you like, that will compel the private sector, through the boards of directors, to be in compliance.

The Chairman: Thank you, Mr. Reid.

Mr. Pratt.

Mr. David Pratt (Nepean—Carleton, Lib.): Thank you, Mr. Chair.

Notwithstanding the comments over the last five minutes or so, I got the impression from the earlier comments, and especially from you, Mr. Cloghesy, that when push came to shove you would really prefer voluntary compliance rather than regulation, enforcement, and monitoring. Am I correct in that assumption?

Mr. Michael Cloghesy: Yes.

Mr. David Pratt: The problem I have, and I'd like a response to this, is that there just simply aren't the accountability mechanisms there when you have voluntary compliance systems in place. You can talk until you're blue in the face, to me at least, about the new system of governance corporately and how the board of directors is concerned and their shareholders are concerned and the buyers are concerned, but if I'm a shareholder in a corporation, if I have stock in a corporation, the thing that concerns me more than anything else, the only thing that concerns me, is earnings per share and whether or not that stock price is going to rise over a given period.

My own impression, at least, is that it's naive to talk about anything... When you're talking about a corporate response to environmental regulations, the bottom line has always been and always will be, based on what I can see in a free market system, the earnings per share and what that stock price is going to do.

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Mr. Michael Cloghesy: My view on this is that there are some business decisions that are made, and they might be for the short term, they might be to produce the highest return on investment for the stockholders, but these might not pay off in the medium and longer term. What we're seeing is a trend from what I'd refer to as more responsible companies, from an environmental point of view, that view the medium and longer term with more importance than the short term. So these are business decisions. If you're a CEO of a company you have those decisions to make, and what can I say.

That's why I say there has to be a regulatory backdrop, and I don't think any one of us has said today that these voluntary systems replace the regulations—in no way. They are just alternate mechanisms that allow for more flexibility for the company to go even further than what the regulations called for. Why? Because there are advantages from a cost point of view to doing this kind of thing. We have many examples that we could demonstrate and illustrate to the committee if you so wish. They're win-win situations from an economic point of view. The environment is now viewed by many CEOs as a business opportunity.

Mr. David Pratt: I don't disagree that there are some companies that are doing some good things this way, but in terms of a long-term view of the environment and environmental considerations, it comes back to not what's happening this year, not what's happening two years from now or three years from now; it comes down to what's happening in this quarter and the next quarter and the quarter after that, and how the market is going to respond. Surely you would agree with that observation.

Mr. Michael Cloghesy: Again, these are business decisions, and it's each individual CEO and his board who make these decisions. Some are leaders and some... There are different ways of doing business. So I can't really go any further, I don't think, on that. I don't know if my colleagues have anything to say on this.

The Chairman: Thank you, Mr. Cloghesy.

Are there any further thoughts on that? Mr. Reid.

Mr. Timothy Reid: I think what I've seen—and it's eclectic, it's not survey—is that the CEOs in North America who are getting a reputation for looking only at the short term don't stay around very long. And certainly this is a result of a lot of the work of the World Economic Forum. I think we're going to see more of that, that the performance is not going to be on the quarter results. It's what the newspapers pick up, I grant that; but I think you're seeing much longer term. You get the mutual funds that won't buy into certain companies. There's a market force right there.

I come back to members of boards of directors: their liability is becoming much clearer. There's nothing like a director knowing that unless they're compliant, if you like, whether it's with this or some other requirements, they may be embarrassed in public by having the company they're associated with and the board being in the newspapers as not being a good corporate citizen. I think there are some forces at work here that are changing where we may have been at ten years ago.

The Chairman: Thank you, Mr. Pratt.

We will have one final round of questions on the subject of stop orders. But let me just make this brief observation on this latest exchange here, which brings at least to mind two different, for lack of a better word, philosophical approaches. One is the react-and-cure approach, namely if certain misbehaviour takes place and so on and so forth, then of course certain consequences will take place and the price will have to be paid and the system will correct itself. And the other approach is one of anticipate and prevent. This is what probably governments are all about, that they cannot hope that correcting, improving, or reversing a situation in air, water, and soil is better than anticipating and preventing. This is where we seem to be running on two different tracks of thought.

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I would like to ask Mr. Myers the following question, because he's the only one who brought forward a question of stop orders. In one of your three recommendations on stop orders, you recommend that field officers must get approval of a directive before issuing a stop order. What is the logic for that recommendation?

Mr. Jayson Myers: Let me ask Nancy to answer that.

Ms. Nancy Coulas: When we say a “director”, we mean a very senior person within the environment ministry. Often field officers are inexperienced, perhaps, and we don't feel—

The Chairman: I'm sorry, but why do you say they're inexperienced? Where does that notion come in?

Ms. Nancy Coulas: That's just often the case.

The Chairman: Do you have evidence?

Ms. Nancy Coulas: Yes.

The Chairman: Please give us the evidence.

Ms. Nancy Coulas: I would have to go back to some of our companies to get evidence, but that's what I've been told by several of our member companies.

The Chairman: You have been told. So this is second-hand information; you have not verified it, have you?

Ms. Nancy Coulas: I could verify it.

The Chairman: Could you? It would be very appreciated.

Carry on. So what is the rationale, then?

Ms. Nancy Coulas: The rationale is that it's a very serious problem for a company, obviously, to have its operations stopped for any amount of time. It could effectively close down a company permanently.

The Chairman: And your second recommendation reads that “The order must be issued only in circumstances of imminent danger to human health or the environment”. What is your definition of “imminent”?

Mr. Jayson Myers: I think the concern here is that the issuing of stop orders should not be taken lightly. As Nancy was saying, to issue a stop order could have fatal effects for the business itself. The concern of our members was that these should be issued only when necessary and through a process with due checks and balances.

The Chairman: Well, “when necessary” is one thing and “imminent” is another. Would you like to modify perhaps your recommendation to put “when necessary” in place of “imminent”? Would that be your line of thought?

Mr. Jayson Myers: Well, “necessary” means where significant damage to the environment is clearly going to take place, where there's an actual need that cannot be dealt with in any way other than issuing a stop order.

The Chairman: Well, that's different from “imminent”.

Mr. Jayson Myers: Then the recommendation can be read in the way I've just interpreted it.

The Chairman: So it's “when necessary”?

Mr. Jayson Myers: “When necessary” means when no other alternative could be seen.

The Chairman: Fine.

Would the Canadian Chamber of Commerce or the Centre Patronal de l'Environnement du Québec wish to comment on stop orders not comment on the stop orders as they did not comment on this in their respective briefs?

Mr. Robert Redhead: No, sir.

The Chairman: Does it mean that you agree with the alliance or that you have no views to offer?

Mr. Robert Redhead: Certainly we haven't considered the specific issue, so I can't answer in response to my committee.

The Chairman: Is it the same for Mr. Cloghesy?

Mr. Michael Cloghesy: That's correct. We have not examined this in full detail.

The Chairman: All right. Are there any further questions?

Mr. Clifford Lincoln: I have just one brief question for Mr. Cloghesy.

I noticed in the conclusion of the brief of the centre that you say we should pass Bill C-32 like it is or with your own amendments. If you're going to amend it, are you saying that all the other suggested amendments by other people should be discarded?

Mr. Michael Cloghesy: Let me check the original version in French.

It's basically with the amendments that we propose.

Mr. Clifford Lincoln: Yes, the Centre Patronal de l'Environnement du Québec, not you personally.

Mr. Michael Cloghesy: Yes, yes.

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Mr. Clifford Lincoln: Are you suggesting in effect that we're doing this exercise and we should stop here? Should we either pass Bill C-32 the way it is, or if not the way it is, then with new amendments, so that we shouldn't really look at any other amendments that other people might bring that might be different? We could say that it doesn't go far enough and we should improve it, because we're going to be seeing a lot of people and obviously each one of them will have a different perspective and bring amendments. In your view, we should just kind of say that Bill C-32 is the way it is, and if we consider amendments, they only are to be those that the Centre Patronal de l'Environnement du Québec suggests.

Mr. Michael Cloghesy: Obviously we're entitled to our view. That being said, basically the message there is that, as we mentioned earlier in our brief, we see this as a delicate balance. If minor adjustments are made, then I don't think that will affect that balance. So we're talking about minor adjustments. That's the point we're making.

The Chairman: Thank you.

We will certainly take note of the fact that the Centre Patronal de l'Environnement du Québec and the Canadian Chamber of Commerce and the Alliance of Manufacturers and Exports Canada are favouring the speedy passage of this bill. We appreciate your answers today, and your appearance of course, and the briefs, and the candid manner in which you answered questions. We want to therefore thank you for your time and effort, and we look forward to other opportunities on other pieces of legislations to hear your views.

The meeting is adjourned.