[Recorded by Electronic Apparatus]
Tuesday, October 31, 1995
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[English]
The Chairman: Ladies and gentlemen, welcome back to the second meeting of the day. I do this just for Mr. Bélanger, of course, because he adores meetings and insists that I have more.
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I should tell you, and I think I'm right in saying this, that our video teleconference with England this morning was a parliamentary first. I believe it was the first international, trans-Atlantic videoconference. That's most appropriate for the industry committee.
Mr. Discepola (Vaudreuil): All this in two days. I can't take this.
The Chairman: I know. The excitement is pretty gripping, isn't it?
Of course, the first international North American videoconference was conducted by the heritage committee under its previous chairman, who shall go nameless.
Ladies and gentlemen, today we are delighted to have with us a galaxy of stars from the world of standards. They are here -
An hon. member: So that's what a galaxy looks like.
The Chairman: Yes, that's what a galaxy looks like.
They are here to bring us up to speed about the little understood but vital role of standards, really as a tool of competitiveness in a modern economy.
We do not as yet have a specific piece of legislation and we don't have an indication of when we're going to get one. We do know that it will come eventually. So rather than getting bogged down in the minutiae of as-yet-to-be-tabled legislation, I think we should bring ourselves up to speed by way of a pre-study on the nature of standards.
I therefore welcome people from both Industry Canada and the Standards Council of Canada. I am not quite sure who the quarterback is. Mr. McSweeney, who is not even on your program, will introduce himself and his team.
Welcome, all.
Mr. David Tobin (Director General, Corporate Governance, Department of Industry): I am going to usurp his role, Mr. Chairman, if that's all right with you. It's a quick hand-off.
The Chairman: These changes do take place.
Mr. Tobin: My name is David Tobin. I am with the Department of Industry.
As you said, Mr. Chairman, we do have a brief presentation to go through on the somewhat mysterious world of standards. Perhaps before we get into the presentation, I will just let people introduce themselves. That might be easier.
Mr. Michael B. McSweeney (Executive Director, Standards Council of Canada): My name is Michael McSweeney. I am the executive director of the Standards Council.
Mr. Jack Perrow (Director, Standardization Branch, Standards Council of Canada): My name is Jack Perrow. I am the director of standardization with the Standards Council of Canada.
Mr. Larry Moore (Director, External Relations, Standards Council of Canada): I am Larry Moore, director of external relations at the Standards Council of Canada.
Mr. Robert G. Main (Director, Regulatory Affairs and Standards Policy Directorate, Department of Industry): I am Bob Main, and I'm the director of regulatory affairs and standards policy at Industry Canada.
Mr. Tobin: Mr. Chairman, I believe a short presentation has been given to the members. With your permission, what I would like to do is just walk you through that fairly quickly. We'd then be available for any questions that you or your members might have.
The presentation is divided into two broad sections. One is a very short introduction dealing with what is entitled ``Marketplace Framework Policies''. The reason we thought we'd spend a couple of pages on that is that it provides the contextual basis for what standards are and why standards are important. What we've attempted to do on the first page, under the heading ``Marketplace Framework Policies: A Working Definition'', is try to define what in fact market framework policies are. They tend to be rules, regulations or statutes, and the important thing is that they tend to define the rights and obligations of participants in the marketplace.
If you look at the first two slides, the first one is entitled ``Marketplace Framework Policies''. The rules are set, people know what they are, and the marketplace then adjusts according to those rules. They're generally viewed as an essential function of government. It's difficult to do these without a government providing some sort of authority for the rules themselves. They are also a mechanism whereby government establishes a socially accepted framework of rights and obligations for marketplace participants.
I think if one imagines exactly how the marketplace has evolved over time, one can see there is a social dimension to those. A hundred years ago, there were certain rules in the marketplace. They existed and people lived by them, but they have changed over the years largely because people found them no longer acceptable or there was a reason for change. Generally, those changes get manifested in some sort of a rule or obligation that governments provide for.
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We also think marketplace interest groups would have difficulty establishing or administering these by themselves. In the field of bankruptcy, for example, if every time you went to get a loan, you had to spell out in a contract the rules and obligations with respect to that loan if in fact you were to go bankrupt, the transactional cost would increase fairly significantly. So there is some benefit in having these rules set in a larger framework. In that way, when people are participating in the marketplace, they know what the rules are before they enter.
I would also refer to an area we're dealing with now. In a country the size of Canada, with goods and services going back and forth across the country, there's some benefit to having some sort of perspective on those that cover the entire country.
As I mentioned before, they provide certainty with respect to transaction costs. Some economic studies have indicated those transaction costs are quite significant in terms of the impact on the marketplace. Some studies have suggested they could be as high as 30% or perhaps even higher.
They also tend to protect marketplace participants from unfair or abusive practices. Who are marketplace participants? People are of different sizes in the marketplace. Some companies are small and some are large. If the rules are known, at least there is some protection for all people in the marketplace. We also suggest that if the rules were not articulated, the transactional costs associated with deciding on those rules for each transaction would be proportionately higher for smaller participants than they would be for larger ones.
Against that backdrop we'd like to try to position standards and the role of standards within the marketplace. To proceed with that, I'd ask Bob Main to walk you through that part of the presentation, which is entitled ``Standards and Micro-economic Policy Agenda.''
Mr. Main: On page 3 you'll see a definition of standards. It's fairly complex wording. I'll read it just to make sure it's clear:
- Standards are specifications, approved by a recognized body, which set out the rules, guidelines
or characteristics for goods or related processes and production methods, or for services,
service providers or their related operating methods.
Clearly all these roles are important, and standards are critical to ensuring the health and safety of Canadians.
You may not be aware that with respect to most of the standards system, we talk about voluntary standardization. Voluntary standards are developed by a consensus process, with a broad range of interested parties represented. Committees, including business people, consumer representatives, technical people and regulatory authorities, work together to develop standards. There are something in the range of 14,000 individual volunteers in Canada giving time to the process of developing standards.
Except where they're mandated by government regulation, compliance with standards isn't enforced; rather, it's market driven. An example of a mandated standard is electrical safety standards for appliances, which must be followed by many, if not all, jurisdictions in the country. They are developed, however, through the voluntary process, the consensus-based process.
An example of standards that are not mandated and are entirely voluntary in terms of their use by an industry is computer hardware and software interconnection standards. You're all probably aware of the battle that took place between VHS and Beta standards for video. There is no requirement or need for any government to decide which standards should be followed. The marketplace can shake out the products and determine the best one to use.
A voice: I guess they did.
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Mr. Main: Now, the national standards system, or NSS, which I'll refer to a number of times in the rest of the presentation, consists principally of private sector organizations providing voluntary standardization services in Canada, although there are government organizations involved as well.
The NSS includes the Standards Council of Canada and its committees and standards development organizations. They're the ones that actually prepare the documents. There are five of them, two of which are government organizations - one at the federal level and one at the provincial level - and three of which are not. There are conformity assessment organizations, such as certification organizations, testing laboratories and quality registrars. Of course, the 14,000-odd volunteers I mentioned earlier are also seen as part of the national standards system.
Let me turn to the role of the Standards Council in that system. The council is an arm's-length federal crown corporation. It was created in 1970 to coordinate and oversee the voluntary standards system. The overall objective of the council is to foster and promote voluntary standardization. That includes operating accreditation programs, which ensure the quality of the services offered by the standards organizations I've mentioned; designating Canada's representatives and coordinating Canadian participation in international standards development fora; and participating in other international efforts to harmonize standards, certification and testing.
The SCC has a number of equivalent counterparts in other jurisdictions around the world. They're involved in developing mutual-recognition agreements with similar bodies in other countries. An important role is disseminating standards-related information - not only Canadian standards but international standards as well - to ensure that the standards community, the business and consumer users of standards, can be aware of them.
Now, how does the government see this contributing to jobs and growth in the microeconomic policy agenda? The national standards system has several characteristics that the government believes position it to make an excellent contribution: the broad-based consensus process with the thousands of volunteers, the inevitable involvement of the standards system with leading-edge technology and business practices, and the strong international linkages. For example, the national system directly adapts international standards. You will have heard, for example, of some ISO 9000 quality management standards.
In view of these strengths of the system, the government identified four areas of microeconomic policy where it believes the system can make an especially strong contribution. They're listed at the bottom page 8: regulatory reform, international trade, internal trade, and technology diffusion.
For regulatory reform, consensus-based standards have an advantage in application that regulations sometimes do not have. The fact that the users of those standards, the people who are going to have to comply with them, have been involved in their development ensures you have a document that people can comply with. You don't run into problems such as the inability of industry to comply, which you might get with a regulation that's been developed in a government office in isolation.
Standards can be used to replace regulations or their technical components. Standards organizations have the capacity to develop standards at the request of government for regulatory purposes, and to assess conformity with those standards and therefore compliance with the regulations. The Agreement on Internal Trade calls for increased reliance on the national standards system to further these objectives.
In the international trade arena it is critical that Canadian businesses meet international standards in order to access export markets, especially in the high-technology sectors. The quality management systems standards, the ISO 9000 series I mentioned earlier, are rapidly becoming a sine qua non for market entry around the world.
Canadian businesses need the services of the standards organizations to demonstrate that they meet these international as well as domestic requirements. Canadian standards organizations, including the SCC - but not only the SCC - are active in international trade and standards fora, which offer opportunities to resolve differences in standards and eliminate duplication and conformity assessment procedures that might be required to access foreign markets.
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In the area of technology diffusion, because standards development by its very nature deals with leading-edge technologies and business's best practices, involvement in these activities at home and abroad provides Canadian businesses with early knowledge of developments in both products and markets.
With the pace of technological change increasing, this becomes more and more important to the competitiveness of a broader range of industries. Participation in international standards fora therefore gives them the opportunity to gain intelligence as well as to influence the standards being developed that they will have to meet in order to market their products around the world.
In the area of internal trade, to the extent there may be differences among standards-related regulations in different parts of Canada, these would diminish Canada's competitiveness. Canadian producers could find themselves bearing the additional cost of complying with different requirements in different parts of the country or additional procedures for certification.
Under the provisions of the Agreement on Internal Trade, for the reduction of standards-related barriers federal and provincial governments have placed reliance on the national standards system as a means to establish the cohesion needed in the Canadian market. The national standards system is uniquely placed to provide advice to all levels of government on the elimination of these barriers.
In closing, I'd like to mention that you are all aware, of course, of ``Building a More Innovative Economy'', the microeconomic action plan put out last year about this time. In November the president of the Standards Council was asked by the minister to consult across the country about directions for the Standards Council in the future. This happened in January and the president has reported to the minister. Ministers are considering actions to move forward with the recommendations. Of course, as Mr. Godfrey mentioned earlier, there will be further consideration of this by this committee, no doubt in the relatively near future.
That concludes my presentation. We are here to answer questions, and the individuals here from the Standards Council of Canada also can handle quite detailed technical questions.
Mr. Tobin: Before you go ahead, Mr. Chairman, on consultations, we held a series of cross-country meetings in seven different centres, all very well attended. In addition, a survey was sent out. For those of you who are familiar with techniques and surveys, there were some 3,000 sent out. We had over 700 replies to a survey questionnaire that would probably take you 45 minutes to do seriously. So there seems to have been a bit of a nerve touched there in terms of people recognizing that maybe the council had done a job over the last 20-odd years, but it was time to look at it and see if we were maintaining the proper type of standards system in Canada.
This presentation attempted to give you a brief overview of why they're important in the field of endeavours they're involved with, particularly in the area of public health and safety where people are more and more turning to standards for the hockey helmet or the bicycle helmet.
In Canada there are now a little over 2,000 national standards, and more and more we are seeing these based on international standards. So people are taking what has been developed internationally. One of the challenges we cite here is how to get international people to accept Canadian standards and be on the front end rather than the back end of the curve.
The Chairman: Thank you very much. That's a very quick overview. One of the interesting things about this committee is that you learn so much.
In the absence of our colleagues from the Bloc, we'll move straight along to the Reform. Mr. Schmidt.
Mr. Schmidt (Okanagan Centre): Thank you very much, Mr. Chairman.
I have a couple of questions. Right off the top, what is the difference between the Standards Council of Canada and the national standards council?
Mr. Tobin: There is no ``national standards council'', and perhaps we should have made that clear. There is a national standards system of which the Standards Council of Canada is the single coordinator, but the national standards system involves a series of certification groups. There are groups like the Canadian Standards Association. There are the thousands of volunteers.
So one is the entire system and the other, the Standards Council, is a coordinator of that system. But it is only one element of a much more complex package.
Mr. Schmidt: When I looked at this study, I thought that I had to find out what that connection was; otherwise, the whole thing doesn't seem to make much sense.
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Mr. McSweeney: Without the Standards Council of Canada there would really be no national standards system. We would have a loosely knit group of standards development organizations, of which there are five in Canada accredited by the Standards Council. We have two government organizations - the Bureau de normalisation du Québec and the Canadian General Standards Board; the Canadian Standards Association, known as CSA; Underwriters' Laboratories of Canada, known as ULC; and the Canadian Gas Association, known as CGA.
Following that, we have ten certification organizations, some of which are also standards developers, some of which are not. We have fourteen organizations accredited by the Standards Council that register Canadian companies to the quality standard ISO 9000. We also have about 200 test laboratories. Then we have the volunteers.
These people are all coordinated by the Standards Council of Canada, and together that makes up the national standards system.
Mr. Schmidt: That's very helpful, Mr. Chairman. Thank you very much.
You make much of the role of 14,000 volunteers. I certainly recognize the contribution they make. On the other hand, you talk about the test laboratories and the work of the council itself. Surely all these people are not volunteers? What is the relationship now of the Standards Council, the respective test laboratories, the certification agencies and the personnel who actually make this thing go?
Mr. Tobin: I could try to answer that, and I'd ask Mr. McSweeney to jump in.
The volunteers who are involved might be from industry or from consumer groups, users, producers. They're involved and are contributing their time freely in terms of the development of that standard.
Imagine a product that is being developed and someone wants to find out what components have to go into it, what sort of requirements it would take for.... Let's take the hockey helmet. What sort of requirements does it have to meet to be safe? Now, ``safe'' can mean a variety of things to a variety of people. So there's this host of volunteers that would contribute to the discussion of what those things mean.
The people in the testing labs and so on are obviously employed. There's a commercial activity associated with such things as testing. If someone wants to put a product on the market, they may find it to their advantage. Sometimes there's a requirement that the product meet a certain standard. The standard has been developed and to get the product on the market.... It may be mandated by regulation or it may just be the market that says that, to get it on, it has to meet standard so-and-so. The testing for that is done on a commercial basis.
Mr. McSweeney: Mr. Chairman, if you look at our five standards development organizations, each of those organizations is writing standards. The Canadian Gas Association, for example, is writing standards for gas furnaces, gas barbecues and propane tanks. CSA would be writing standards in the electrical field, the quality field. The Canadian General Standards Board would be writing standards for condoms and things of that nature. BNQ would be writing standards for hydroelectric turbines.
That is combined with the Standards Council's participation in the International Organization for Standardization - ISO - and the International Electro-Technical Commission - IEC - where they have 650 committees and thousands of subcommittees working at any given time on standards being written on everything from soup to nuts.
All those activities are then contributed by volunteers in Canada. That's where you get the 14,000 people. For every standard being written there's a committee made up of people in favour of the standard: people from industry, environment groups, consumer groups and labour groups. They are all around the table in order to develop a consensus-based standard. When you add all those people together, you end up with a number close to 14,000 in Canada.
Mr. Schmidt: I think I understand that all right.
The other question I'd like to follow up on is the testing that's done. Let's take this lab. A manufacturer comes and wants to have his particular product tested to see if it meets the standard or otherwise. I think I heard the phrase ``commercial basis''. Does that mean the person requesting the test pays for the lab time and the personnel needed to evaluate the product he's bringing forward?
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Mr. McSweeney: Yes, that is the case.
Mr. Schmidt: By the time you get finished with all these 14,000 advisers to establish this standard, by that time.... In fact, in your earlier statement you acknowledged that the high-tech area is moving so quickly that you don't even have time to write the standards; the marketplace does this. So at what point do you decide that the standards are being established by the marketplace, and at what time are they moving slowly enough that these committees can write the standard before the marketplace is way ahead of them? What criteria do you apply here?
Mr. Tobin: Well, there are a couple of forms of intervention that can take place. First, in the public health and safety areas the marketplace plays a role, but often governments will play a role to intervene and say that to get on the market, the product has to meet a certain type of standard. In other instances, say in the high-tech area, the high-tech industry has got together to say that for their components to meet and be adapted from one to another, there is an industry efficiency -
Mr. Schmidt: Just to make it go.
Mr. Tobin: That's right. There are efficiency criteria that say they should have the same type of standards. So the industry has driven that one rather than a government agency requiring that a certain product meet standard X to get on the market.
I think it varies depending on if you're talking...particularly in the public health and safety and environmental areas. Often those are determined by government. For others it really is the marketplace. We go back to the example of Beta and VHS. Nobody mandated Beta or VHS, but try to find a Beta machine nowadays.
Mr. Schmidt: You can't.
Mr. Tobin: And it's not for public health and safety. It's just that the market has said -
Mr. Schmidt: Another area of interest has to do with the internal trade barriers. I understand from the short presentation we had here that one of the purposes was to eliminate the standards as barriers to trade among provinces. Is this one of the reasons the internal trade agreement is having some problems?
Mr. Tobin: I can't really speak for the internal trade agreement in general with respect to the problems you might be associated with, but in the standards -
Mr. Schmidt: We've tried to get this blasted thing off the ground for the last 25 years, and it still isn't off the ground.
Mr. Tobin: I think if you go through the chapter and the annex with respect to standards, this was generally well received by all the participants involved in the internal trade discussions. Essentially it stated that when jurisdictions are setting up standards, they look to see if there's an international standard. Again, there's a trade dimension to this quite often. There was general agreement on that.
Mr. Schmidt: Usually.
Mr. Tobin: Then they said that if there is no international standard, they should attempt to use the national standards system to develop a national standard. I don't think that was a particular problem for anyone who was involved in the internal trade agreement.
As to the other difficulties with it, I guess I'd leave that to someone more familiar with the other chapters than I am.
The Chairman: Thank you very much.
Why don't we move to this side of the House? I have Mr. Bélanger first on my list.
Mr. Bélanger (Ottawa - Vanier): So many questions, so little time.
Mr. Chairman, the question is to you: what is the purpose of today's session?
The Chairman: The purpose was to give us a backgrounder so that when we receive legislation, which we expect dans les plus brefs délais, we would be in a position to respond to it intelligently. It's really just a general background briefing.
You may recall that when we set our work plan, owing to other things that were happening in our lives, we couldn't quite know when various pieces of legislation such as the Small Business Loans Act and so on would be coming at us. So we scheduled this meeting some time ago just to bring ourselves up to speed. It's a general first introduction to the subject.
Mr. Bélanger: Have you any indication as to when legislation might be tabled in the House?
The Chairman: I suspect there's a bit of a backlog. I don't have an indication. I don't think it's perhaps as soon as we might have thought, but I'm not certain of that.
[Translation]
Mr. Bélanger: Was the aim of the survey and the review which were commissioned - I would like to know when - to widen the Council's mandate?
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Mr. Tobin: No, not exactly. The survey was conducted in November, if I am not mistaken.
Mr. Bélanger: Of which year?
Mr. Tobin: I'm sorry. It was conducted during the month of January of this year. Responses reached our offices in January. As I said, there were some 3 000 questionnaires sent and around 700 responses received.
Mr. Bélanger: But what brought that about? What made you decide, at a certain point,...
Mr. Tobin: A survey.
Mr. Bélanger: ...that something had to be done to review that mandate? Were there any problems?
Mr. Tobin: The Council was created in 1970, some 25 years ago. The gouvernement reviewed all of its agencies.
[English]
The Standards Council was part of that review. In doing -
Mr. Bélanger: The program review?
Mr. Tobin: The program review. In doing that we felt it best to check with stakeholders. I say ``we'' meaning the Standards Council in the person of the new president who was appointed. It felt it best to consult stakeholders.
[Translation]
Meetings were held in seven communities of Canada, on top of the survey, to get stakeholders' viewpoints. What you have now in front of you is the report which was prepared following that review.
Mr. Bélanger: I read two conclusions: Participants and respondents. Of course, when you get in touch with people who make common cause with you, you...
The Chairman: On what page of the English text can we find that?
Mr. Bélanger: Mr. Chairman, it is in the document which has been circulated.
The Chairman: Yes, but on what page?
Mr. Bélanger: On page 6.
The Chairman: On page 6 in English.
Mr. Bélanger: In the document which has been circulated few days ago, it said: Participants and respondents. I insist on saying that when you look for the advise of people who know and support you, you come to the following conclusion:
[English]
- ``endorse a broadening of the SCC's powers and responsibilities....'' How else could it be?
Is this a defensive reaction to the program review? I'm really trying to get at whether privatization of the Standards Council was considered at any point.
Mr. Tobin: I would make two points to respond to that. First, I failed to mention earlier,Mr. Chairman, that the whole nature of standards and standards organizations has changed over the last 25 years. When the council was first set up, international discussion with respect to standards was probably non-existent. It has now in fact become an issue. It was discussed in NAFTA. There was a standards issue in the FTA. It has become an issue in a broader multilateral forum as well.
To respond to the member's questions about the stakeholders' comments, the discussions were held with a very broad-based group of people. It was possible that they could have come back and said, get rid of the Standards Council or get rid of government involvement in standards.
Mr. Bélanger: You're not going to have me believing that, are you?
Mr. Tobin: Sure, it could have. There are other groups that in fact have been abolished for a variety of reasons.
Mr. Bélanger: I didn't suggest abolishment.
Mr. Tobin: No, you said privatize.
With respect to privatization, I'd ask Michael to answer that. I don't know if it's ever been considered. The Standards Council is at arm's length from the government now.
The Chairman: How much does it actually cost? We should know this but we don't.
Mr. Tobin: It gets approximately $5 million a year from the federal government, and that has declined from.... I forget the earlier figures.
Mr. McSweeney: We receive a $5 million appropriation from Parliament, which is 53% of our total budget. We raise the other 47% from the private sector by way of accreditation fees and sales of standards. And that has declined, Mr. Chairman, since 1985-86, from 87% of the appropriation from the federal government.
We see it as continually declining. In fact, we've already received a request from Minister Eggleton for a reduction of 3.5% for 1998-99. So we continually see it eroding, and we are asking the stakeholders out there to pay for the services. They are virtually doing that because they believe in value added.
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I would like to respond to Mr. Bélanger's question on the respondents and participants in the survey. We went to great lengths to ensure that a broad base of people attended the sessions we had across the country and responded to the survey. We involved labour, consumer and environmental and academic groups, industry and industry associations.
In 70% of the cases when we met these people, we learned they were people we had never done business with in the past. Traditionally we've done business with the standards development and the certification-testing organization. So it was a very worthwhile exercise for us.
Mr. Tobin: Over the past ten years there have been eight studies of one sort or another on the Standards Council and the national standards system.
Mr. McSweeney: I believe that when this government came in and the regulatory affairs standards policy group was set up at Industry Canada, they looked at all the options: whether to keep the Standards Council as an arm's-length organization from the federal government, as a crown corporation; whether to fold it into a federal government department; whether to privatize it. They came up with the existing structure and had that validated by the consultations we did.
When we negotiate mutual recognition agreements in the area of product certification or quality system registration, I believe our international clients are looking for some sort of federal government stamp of approval. They're looking for some direct link to the federal government. That's where you see the real benefit of having the Standards Council as a crown corporation.
Mr. Bélanger: I have another question on the 14,000 volunteers. How do you recruit them?
Mr. McSweeney: In Canada we do not allow competition amongst the five standards developers. We say, for example, CSA will develop standards in electrical safety and the Canadian Gas Association will develop standards in the gas field. It's too expensive and there are not enough resources out there, either financial or human, to allow competition.
So when they're developing their standards, they go out and recruit the people required. Under the criteria for accreditation and under our international participation in the ISO, there are criteria you must live by to formulate committees, to have broad-based committees in order to have a standard adopted either as an international standard in the end or as a national standard of Canada.
Mr. Bélanger: Do you advertise?
Mr. McSweeney: Yes.
Mr. Bélanger: How widely?
Mr. McSweeney: As widely as we have to, because volunteers are few and far between and it's getting more and more difficult to find volunteers.
Mr. Bélanger: What do the volunteers do?
Mr. McSweeney: They attend the standards meetings and they actually sit down and write the standards.
Mr. Tobin: You can imagine if somebody is trying to develop a project. The first thing, for example, if there is an environmental concern, is that the environmentalists would want to be there to say, all right, what's an acceptable amount of leakage? Then you have to set that. Then you ask, what material can this product be made from so it won't leak that way? Then you get to the next step by asking, how long will it be like that, and is it going to be exposed to sunlight?
So there's a series of technical levels associated with it. Then there's a series of other levels regarding the tolerance you can actually sustain with respect to safety. For example, there is a child on a bicycle or a kid playing hockey. How fast can the puck come, or what sort of impact can he get to hit the ice or the street with that helmet protecting him? Then you get into a debate over that.
Then there's some discussion. If that's the sort of speed or impact that must be protected, what sort of material does that? You can imagine if one group was doing it, they'd say, well, if it's made from material X, that would probably do it. But consumers might come into it and say, if it's made from material X, the product would be too heavy and my child would never wear it. Therefore we have to have some input on the consumer side. That's why you have multi-stakeholders around the table.
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Mr. Bélanger: Are any of these groups in the area here? The reason I'm asking is that I don't recall ever seeing ads in any of the local papers recruiting volunteers.
The Chairman: Would they be in specialty papers where you might be a plastics expert or an environmental expert?
Mr. Bélanger: Well, John Q. Public may not get those specialty papers.
Mr. McSweeney: No, but if we were recruiting people for the environmental management systems standards, ISO 14000, for example, we would go out to environmental groups, the Consumers' Association of Canada, the Canadian Labour Congress and so on.
Mr. Bélanger: And never to the public?
Mr. McSweeney: Well, you have to have some sort of interest in it. You wouldn't want to have somebody who knew nothing about the standard. You'd want to have somebody who either was a consumer or an environmentalist.
The Chairman: We will now move to five minutes each. I'm not quite certain which of you would like to ask a question.
Mr. Mayfield.
Mr. Mayfield (Cariboo - Chilcotin): I'm listening to the questions and your responses and finding them very interesting, but I need to have some very elementary questions asked.
In a short answer, what is the council's mandate?
Mr. Tobin: There is a statutory mandate. I don't want to haul out the law and go through that. I don't think you want that. The mandate is generally one of coordination. The mandate is also one of, for example, approving national standards and accreditation of certification groups.
Mr. McSweeney: Mr. Chairman, I could draw to the attention of committee members the Phillip Nicholson report, which is the summary of responses to the survey questionnaire. On page 5, the appendix, we list the current mandate of the Standards Council of Canada. I could go through it quickly.
We promote cooperation among organizations concerned with voluntary standardization, and between those organizations and governments at all levels - for example, as I mentioned when answering Mr. Bélanger's question about not allowing competition between the five standards development organizations. So we promote cooperation in the voluntary standardization field with that group.
Mr. Mayfield: I read the document and -
The Chairman: I have trouble getting this right. I'm not sure we actually have the appendix you refer to. We have the short version.
Mr. Mayfield: No, we don't have it. That wasn't sent out either.
The Chairman: Could I just make a suggestion? As a follow-up to the committee, you might want to send us that as well as an organization chart or wiring diagram that shows the relationship of all these organizations. I've been looking through the literature. There are the five bodies - the gas people and so on - but I don't find it all laid out in a wiring diagram, and that would be helpful for us.
Sorry, Mr. Mayfield.
Mr. Mayfield: That's all right, as long as it's on your time and not mine.
The Chairman: Oh, absolutely.
Mr. McSweeney: Would you like me to continue to to try to put it in -
Mr. Mayfield: Maybe I could just zero in a little. I'm wondering about overlaps. You say there's no competition among the various organizations, but what testing...? Do you compete? What about overlaps with, say, provincial health agencies that control the quality of milk? I raise that because you used that as an example in here. Is there competition in that area? How do these standards affect a health agency or provincial groups?
Mr. Tobin: In some instances some of these health agencies would set their own standards, yes. In other instances they would incorporate by regulation the standard that has been determined by the voluntary system we have just described.
We think there is some increased potential for the voluntary system in easing the burden on both regulators and those being regulated to increase the volume that is developed by the voluntary sector. In fact, I think the internal trade agreement had that as an objective as well. As I said, we felt it would make some inroads into compliance costs because it has been developed by a voluntary group.
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I don't have figures here to be able to say how many federal-provincial regulations actually mandate voluntary standards, but I think there was a figure at the national level, at least, for how many of them incorporate voluntary standards.
Mr. Mayfield: After reading this summary, it seems to me there is some question about the mandate of your council. Is that correct?
Mr. Tobin: I'm not sure of the document, Mr. Chairman. Is this the Nicholson document?
The Chairman: This is the only one I had before I got here.
Mr. Mayfield: The appendix list survey document.
Mr. Tobin: Yes. That survey was carried out by the president. We were trying to put the cards on the table.
Mr. Mayfield: I wanted to get to your understanding of the reasons behind the suggestion that perhaps there should be some limiting of your efforts.
Mr. Tobin: There is a reason behind it. As I say, if you go back before 25 years of existence, standards have now found their way into international agreements. The whole re-examination as to the regulatory issue.... People said, all right, do we have it right? Do we have the right type of mechanism to deal with standards for a Canadian economy that is growing more and more global? Is it the right type of structure? Never mind for a moment how important standards are. We all realize that if in fact standards are to play a certain role, the structure you have can go some way in determining how efficient that would be.
So it asked, should it be part of government? Should it be at arm's length? Where do we actually want to put it? Should it be a general coordinating role? That's why we put the questions the way they were put in the questionnaire, to ask people to give us their view. How do they think it should function after 25 years of existence?
The survey came back and with respect to things like accreditation and certification it said, you're doing a good job. It's important that the rest of the world knows that when something comes out of Canada with a certain mark on it, it has gone through a certain rigorous process and therefore it has earned the right to have a mark put on it. It means something when you're trying to market the product internationally.
As the survey demonstrated, continue to do that tombstone work, but at the same time venture out into new areas and try to accomplish those with respect to trade, technology diffusion, and things of that nature.
Mr. Mayfield: What liability does the federal government or your agency have in setting standards like this? Is that a question -
Mr. Tobin: I'm not sure I can answer that, Mr. Chairman. I don't really know. We don't set the standards, of course.
The Chairman: If you certify something, are you liable for that for any financial failure?
Mr. Tobin: We don't certify -
The Chairman: Well, I mean, if any of the attendant organizations.... Is there any liability for the federal government because of the existing -
Mr. Mayfield: You must have something to say about the standards, have you not?
Mr. Main: Perhaps to clarify, it would help to say that the Standards Council simply provides the accreditation to the organizations that develop standards, that certify that products meet standards, and that do the testing to show whether products meet the standards or not.
The council provides the assurance to the user of the product that the organization that has said this product meets an electrical safety standard is in fact qualified and has the right procedures in place. So they know when the CSA says that the plug on this earphone isn't going to transmit whatever amount of electricity into your ear, they have an assurance that an authority in Canada has said the CSA has the ability, the structures in place, and it runs its operations in such a way that you can be sure of that certification. That's really the fundamental administrative role of the Standards Council.
The council itself is not involved in writing standards or certifying products. The federal government isn't, except to the extent that part of the federal government is a standards development organization.
As to the question of liability on certifications, well, it doesn't come through to the federal government. It's an issue for the standards certification body, for example, to ensure they're following the practices they're supposed to.
The Chairman: Okay. Mr. Murray is next.
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Mr. Murray (Lanark - Carleton): Mr. Main, in your presentation I believe you were talking about how government or the Standards Council doesn't get involved in setting industrial standards, but it tends to be the businesses themselves that evolve standards. I guess we're getting back to the Beta-VHS example that David talked about. Then in your presentation on the role of the Standards Council, you mentioned on page 7 that one of the things the Standards Council does is designate Canada's representatives and coordinate Canadian participation in international standards development fora.
Is that a pro forma thing? Does industry really designate them and then a rubber stamp is put on them? Or do you actually designate the people who are going to represent Canada in these international fora?
Mr. Main: Michael could probably answer in more detail, but it is a relatively formal process. The aim is to ensure that the Canadian representatives are indeed experts and know what they're doing there. But there is a process they go through in determining who will be the formal Canadian representative. Perhaps Michael or Larry could tell us about that.
Mr. McSweeney: For all of the international committees, there are Canadian advisory committees that parallel the work of the international committee. They meet in Canada, because of course we couldn't have 20 or 30 people attend every technical committee around the world. The group is called the Canadian Advisory Committee. It would nominate one of its own to attend the international meeting, and we would accredit that person to attend and represent the Standards Council of Canada and the Canadian Advisory Committee.
Mr. Murray: We've touched on your answer to Mr. Mayfield on the question of how the world is shrinking and international standards-setting is more important than it was 25 years ago. In fact, it's hard to imagine that only ``Made in Canada'' standards are of much importance anymore, except in some very limited sense.
How aggressive can Canada be in using this as a competitive advantage? Do we have some ability beyond the highly regarded stamp of approval that Canada now gives? As mentioned, I believe, we have credibility when a standard is accredited in Canada, but can we be quite aggressive in promoting that? What are the chances that we can do more in that area?
Mr. Tobin: There's probably room for improvement; we can do more. That was part of the whole notion of what the government put into the book Building a More Innovative Economy. That's why I think the standards attracted some of the attention: it was felt we could do more in that area and maybe we should refocus our attention and try to do more.
We do have some involvement right now in ISO 9000 and 14000. I think we are well regarded out there, and I think part of the initiatives announced in the orange book was to try to ask if we can do more. Obviously I think there is a possibility of doing more, and what the government is considering now, based on the reports you have before you, is trying to translate that into action.
As Mr. Godfrey indicated earlier, we will probably be back to the committee with some further information as to how the government is translating those initiatives that were announced in the orange book into more substantive action.
Mr. Murray: We were talking earlier about funding. Would you be able to do more with more money? Is that relevant to this discussion about being more competitive?
The Chairman: Heavens, no.
Mr. Murray: Well, it doesn't necessarily have to come from government; it could come from -
Mr. Tobin: I think that the Standards Council, like everyone else, is aware of the fiscal reality of the day. You could probably do more, but I think the question now is how you can do it with what you have - through increased volunteers or maybe through being a bit more efficient in how you get people out into the field.
One of the things they want to try to look at - and I think it was announced in the orange book - is whether there are particular sectors on which we should be concentrating because there's a natural advantage, or whether there are some particular areas of the world in which we want to concentrate our standards activity, be it negotiation of mutual recognition agreements or whatever. I think that's part of what's going on right now within the government, within the Department of Industry, within the Standards Council and the myriad volunteers that make it up.
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Mr. Murray: But we have to have clout internationally based on something; I guess that's what I'm trying to get at. You have very fierce competitors offshore who tend to dominate certain industries, and Canada perhaps has fledgling industries that, if they were able to establish a standard that would be accepted universally, could give us a real leg up. That's really why I'm looking at this question of investing. Actually, I was asking the question of whether we should be investing more in standards as a nation.
Mr. Tobin: The government announced in the jobs and growth book that it would be putting additional money in this area. I didn't bring it with me, but in the orange book last year there was an announcement that they would be contributing additional moneys to this over the next four-year period, precisely to address some of the questions Mr. Murray has raised. Perhaps I should have brought it.
The Chairman: I think these are important questions to which we'll have to come back in more detail when we actually have something before us that will be concrete proof of what we're talking about here.
Mr. Schmidt: Could you quickly review for me the five agencies or the standards-writing groups? There is the Canadian Gas Association....
Mr. McSweeney: Yes. There is also the Canadian Standards Association, CSA; Underwriters' Laboratories of Canada, ULC; the Canadian General Standards Board, which is part of Government Services and Public Works Canada federally; and in Quebec, the Bureau de normalisation du Québec, BNQ.
Mr. Schmidt: My next question has to do with the relationship between the Canadian Standards Council, these groups that write these standards, and government labs such as the National Research Council. Within the National Research Council I believe there are a number of other things. They grant to councils as well. There are a number of government labs. What is the relationship between the Canadian Standards Council and the various government labs, and specifically which government labs?
Mr. Perrow: Many of the government labs participate in our activities. The NRC, which you mentioned, has a lot of its members because they have technical expertise and participate on the standards development committees. They also serve on a number of our advisory committees to give us advice on developing our criteria for accreditation. In addition, council staff serve on some of their committees to provide the link between our programs and theirs.
So there is a close relationship, especially with NRC, but also with other government labs.
The milk labs were mentioned. In that case Agriculture Canada used to operate a program for accrediting or recognizing milk labs. Because we had a national program that they thought served their needs, they turned that program over to us.
We work with Health Canada, Transport Canada, and the various departments in an effort to cooperate in the recognition of competent labs to do work for government.
Mr. Schmidt: I find it very interesting that you are able to coordinate among Health Canada, Agriculture Canada, Transport Canada, and Industry Canada, yet we have a division in our research and development component. There's research in health, there's research in agriculture, and so on down the line. About ten different departments have their own science and technology research types of activities. Yet you are somehow able to coordinate among all of them and write standards. They give you advice on what the standards should be, and you in turn go to them to check whether that works. Could you tell me how it is possible that you can coordinate, but this other science and technology group can't?
The Chairman: Answer half the question.
Mr. McSweeney: We don't write standards. All we do is accredit and provide a framework for standards development organizations.
Mr. Schmidt: But that's exactly at the heart of the issue. Precisely, you are able somehow to coordinate this work that's being done independently to make it come together. That's what is not happening over here. How is it that you've achieved this? It's a miracle in Canada that you somehow are able to do this.
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Mr. McSweeney: I guess we'll have to look to our forefather Jean-Luc Pepin when he was minister and he put this together.
Mr. Schmidt: But you are the guys who do this.
Mr. McSweeney: We live with the legacy we were provided with.
Mr. Schmidt: Are you saying you don't know?
The Chairman: No, they're just well administered.
Mr. McSweeney: We follow our mandate.
Mr. Schmidt: I appreciate that. I'm not trying to embarrass anybody here. But the fact remains that there's a very serious problem, a very serious question, behind this, something we need to address.
The Chairman: If I may editorialize briefly before moving to our very last speaker, I would simply say this. We've learned one thing: if it's possible to have a national standards system, it should be possible to have a national innovation system.
Mr. Schmidt: I would think so.
The Chairman: But we'll be talking about that in the future as well.
Mr. Schmidt: I'm not finished with my questions. I wish to get into some of these other areas, for example IRAP. Do you have any relationship with IRAP or with CANARIE or with NSERC or with...well, you wouldn't have with SSHRC - or would you?
Mr. McSweeney: We work very closely with the National Research Council and certain divisions of the National Research Council.
Jack or Larry, do we have any actual dealings with IRAP?
Mr. Moore: We do have some but they're informational exchanges, mostly through CISTI.
Mr. Schmidt: That was my next question.
Mr. Moore: I thought it might be.
We have had one of our databases on the CISTI information system, but we are shortly going to have our own standards information system up and running. We will certainly have the ability to hot-link that into the NRC's databases. We are now undergoing training with the CISTI people on what information they have. We have information. We're also involving the IRAP people, in that we recognize we have to have their cooperation to help get the word out about standards across the country.
The Chairman: I hate to intervene, but we are under some pressure of time here.
Ms Brown.
Ms Brown (Oakville - Milton): Gentlemen, I'd like to follow along on what Mr. Schmidt was talking about, except not so much the coordination between and among government departments but how the conflicts of the modern world are resolved within these voluntary groups that devise standards.
For example, an industry that may be a highly technical industry decides it wants a set of standards. You bring together volunteers from the various companies, scientists, business persons, etc., and into the mix we throw maybe an environmentalist and a representative of the consumer association. How can we be sure the main goal of the businesses in that industry, which is to make profits for their shareholders, doesn't outweigh the views of the consumer and environmental representatives? In other words, how can we be sure the standards we're developing in Canada are indeed for the public good?
Before you answer that one, I want to complicate it further. That would be just with Canadian standards. Say there's some product we use only here and it isn't of international interest.
The second thing is, suppose we get a set of standards in a certain industry and we're happy with them and everybody agrees they're wonderful. Then we go into the international marketplace. We're a small country and we find that while we think we have excellent standards, ten other countries that are bigger have much lower standards. For us to get an international standard and more trade in that particular item, they insist we lower our standards. How do we solve that?
The third question is this. Even within the country, or internationally, how do you get around an issue where, for example, the oil companies set standards and do lab tests and prove that MMT is a great thing to put in gasoline, but our equally viable and productive auto industry does the same test and says it doesn't want MMT in the gas because it gums up the cars and all this is bad for the consumers? How do you do it when you have the conflict between the two industries?
So there's the public-good question, the lowering of international standards through the search for harmonization, and the third one, when two viable industries in Canada are in conflict. How do you resolve conflict in these cases?
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Mr. Tobin: Let me try to start off.
In terms of the potential conflict with regard to someone coming in and wanting to produce something and how you ensure that it meets the public good, I suppose that the public authority, at whatever level it is, could have the ultimate jurisdiction to set a regulation that mandates a standard. While the voluntary sector may decide and come up with a particular standard, the market can react to that by saying no to it, and ultimately the public authority can either reject or add to that standard.
Ms Brown: What do you mean by the public authority? Us?
Mr. Tobin: The government. That's right.
Ms Brown: So the buck stops with us on that issue.
Mr. Tobin: It depends on where it is. I suppose that's the whole notion of where the public authority intervenes and in what areas the public authority, the government, wants to intervene and to require some level of approval.
What happens in many cases, of course, is that the public authority is satisfied with what the voluntary sector has put together. In that case, the one who produces it feels as well that there's a need to satisfy the public authority, so the standard they ultimately agree to and agree with and promote is one that will meet the needs of the public.
When you were asking your question, I was trying to think of an example of where that hasn't worked, where the public authority has added on, if I could use that expression, to what the voluntary system has produced. I couldn't. Perhaps when we come back I will be able to come up with some examples.
That probably gets at your notion of the public good. You think that the people at the table, the consumers at the table, will ultimately speak to what the public good would be.
Ms Brown: I don't know that I trust the consumers to define the public good.
Mr. Tobin: Aren't they part of -
Ms Brown: They're part of the team, but are they always half the people at the table? If there is a group of ten, would it be eight from the industry and one from the Consumers' Association, or is it about half and half and they have to fight it out?
Mr. Tobin: I shall ask Mr. McSweeney to answer, because there is a document put out by the Standards Council that requires certain procedures to be followed prior to a standard being accepted.
Mr. McSweeney: Mr. Chairman, I'd like to ask Mr. Perrow to answer that as the director of standardization.
Mr. Perrow: For standards development committees, usually a matrix is developed for the membership. Depending on the standard being developed, it will define that they need consumers, environmentalists, business people, industry, warehousers, and a variety of sectors. Within this matrix they'll ensure that no one sector can dominate the outcome of the proceedings. That's how they resolve that conflict.
The approval of the standard is by the consensus process. It doesn't have to be unanimous, but certainly it has to be well in excess of a simple majority. Any negative votes have to be dealt with and documented. They have to be identified as being non-persuasive or non-germane. They go through a series of regulations to try to ensure the public good.
The Chairman: I'm have to intervene at this point because we have a vote coming up at5:15 p.m. Some people have to have a quick meeting as well. They have asked me to bring things to a first halt, understanding that we will be meeting again. I think we've opened up an extremely -
Mr. Schmidt: May I intervene briefly?
The Chairman: Sure.
Mr. Schmidt: I want to express, through you, Mr. Chairman, my appreciation for these gentlemen appearing. They have done a very fine job. I really appreciate the material, but give us the appendix to that report.
The Chairman: And the wiring diagram.
Mr. Schmidt: Yes. Thank you.
The Chairman: What you've done is exactly what I had hoped you would do, which is get all of us interested in this subject that we haven't thought enough about.
The meeting stands adjourned.