[Recorded by Electronic Apparatus]
Thursday, April 18, 1996
.1009 
[English]
The Vice-Chairman (Mr. Valeri): I call this meeting to order.
This morning we'll be dealing with the main estimates: Ordered that votes 1, 5, L10, L15, 20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80, 85, 90, 95, 100, 105, 110, 115, 120, 125 and 130 be referred to the Standing Committee on Industry.
I'd like to call vote 60, under the Copyright Board, with witnesses Michel Hétu and Ivy Lai.
.1010
I thought that this morning, given that we have three sets of witnesses, we could break up the presentations into 30-minute segments with 5-minute presentations from the witnesses, and then go to questioning by the committee members, if that's acceptable.
I thank the witnesses for coming this morning. I invite you to proceed.
[Translation]
Mr. Michel Hétu (Vice-chairman and Chief Executive Officer, Copyright Board): I do not have any statement to make about the estimates, Mr. Chairman. I am available to answer the questions of the members of the committee.
I have with me Mrs Ivy Lai, the administrative assistant of the Board.
I have brought with me two documents that might be of interest. If you want, I have additional copies. They are the last annual report of the Board as well a copy of the tariff approved by the Board.
You will find in this tariff the rates applied for music played generally as background music in the radio stations, television stations, concert halls and various public places.
For the first time this year, we have included in our tariff proposal the establishment of a rate for the use of music on Internet.
Our rates produce about 66 million dollars per year, amount which is then paid to the authors, composers and music publishers in Canada and abroad.
The Board also establishes rates for other activities, such as the retransmission of television signals. All things considered, its activity bears on a total amount of about 120 million dollars a year.
This is what the role of the Board is and how it uses the budget you approve for it each year.
I will now be pleased to answer your questions. Thank you.
[English]
The Vice-Chairman (Mr. Valeri): Mr. Leblanc.
[Translation]
Mr. Leblanc (Longueuil): I don't know how you evaluate your return on investment. Do you manage to recover your costs?
Mr. Hétu: The Copyright Board does not have any cost recovery program. The budget provided by Parliament allows us to finance our operations and salaries.
There is no cost recovery system. It was not provided for in our legislation. However, in the Act on the Department of Industry, Parliament included last year a system that would allow us to establish such a program, but this would obviously come under the relevant department. So far,I have not heard any proposals about that.
Mr. Leblanc: But you stated that you collect some rates, and I suppose you also collect...
Mr. Hétu: No, the Board does not collect anything. We set the rates that are published in our tariff, and then the process is administered by the various societies representing the authors and composers. In other words, it is those bodies that collect the rates from the users.
I mentionned a while earlier radio stations, television stations, concert halls, bars, discos, and all other public places where music is played. They are the ones paying those rates. As far as we are concerned, we never see a cent of that money.
Mr. Leblanc: Have you ever considered the possibility that the Copyright Board could self-finance by keeping part of the copyrights?
Mr. Hétu: It has never been officially discussed. We know that it could probably be done. However, it would not be easy because the various societies I referred to do not regularly appear before the Board. We would have to establish a system that would be fair to everybody.
.1015
There is also a matter of principle involved. Would it be fair to require payments to cover the costs of a tribunal that has been set up in the public interest, in order to establish rates that the societies could also establish themselves?
If the Board exists, it is because those societies are monopolies. That is why Parliament decided that it would be in the public interest to submit them to some type of regulation. Would it be fair to ask them to pay for this type of government regulation? It would be an interesting debate.
[English]
The Vice-Chairman (Mr. Valeri): Mr. Ianno.
Mr. Ianno (Trinity - Spadina): I just want to carry on from Mr. Leblanc.
The CDIC, which is paid for by the banks and for the public good - is that not the same principle that is being asked regarding the Copyright Board?
Mr. Hétu: I'm not personally against a notion that you go -
Mr. Ianno: No, I'm just asking.
Mr. Hétu: But it's just a question that is being raised. It's a question of fundamental principles. Because you have a tribunal that controls price fixing, really, by those societies, should that activity itself be paid by those who are subject to that control?
Mr. Ianno: So what I'm asking you on the principle is, that's in effect what has taken place with the banks. If that principle is not working -
Mr. Hétu: It could be valid. Of course.
Mr. Ianno: In other words, for those who are governed by the Copyright Act, if it somehow was those who used it most and needed it for protection, etc., if they paid the fees to cover part or all -
Mr. Hétu: Part or all of the expenses.
Mr. Ianno: Could you foresee how that could be implemented?
Mr. Hétu: The way it could be implemented is that a scheme of this sort would have to be proposed by the Minister of Industry. It's under his statute that the power exists. It was introduced for many departments, as you know, last year. Various statutes created new departments. It's a general provision that we find now, allowing ministers to propose schemes of this sort for the various agencies that report to them.
Mr. Ianno: But being involved in the process, have you thought about putting a plan in place that would make it reasonable and doable so that the minister would then consider it?
Mr. Hétu: We have not.
Mr. Ianno: Would you consider doing that?
Mr. Hétu: We could, certainly.
Mr. Ianno: Where would the request have to come from to do that?
Mr. Hétu: I would expect it would have to come from the departments responsible for the copyright. As you know, one department is responsible for the copyright office, and that's Industry Canada. But you also have Heritage, which is responsible with Industry for the copyright revision. Phase two of the copyright revision, which itself may result in more responsibilities being given to the board for rate fixing and so on, will come before the House soon.
Maybe it's in connection with that phase two revision that an issue such as this one should be looked at to see whether, generally speaking, the cost of setting up a board like ours should be covered by the users of the board. Then the question is, who are the users? Is it just the societies that administer copyright or the users themselves, the broadcasters, the cable operators, the owners of bars and so on, who have recourse before the board? They are also using the board.
So there are a few basic underlying problems here as to who, if anyone, should pick up the tab.
Mr. Ianno: What is the overall cost for the board? Is it the $840,000?
Mr. Hétu: Yes, that's right.
Mr. Ianno: So with all the users and participants and stakeholders, would it be a very large cost for each of the participants if it spread out, taking into account broadcasters and all the entities you mentioned?
.1020
Mr. Hétu: No, but indeed, if you wanted to be equitable and have everybody kick in, you would have to think of a regime that really was equitable for everybody. It might be complicated -
Mr. Ianno: Why?
Mr. Hétu: - because of the various users. If users are to be involved -
Mr. Ianno: Are you not there now looking out for the users already?
Mr. Hétu: Users have a right to appear before the board. They can trigger a revision of a tariff that is being proposed. If one of the users, such as a bar, decides to challenge the proposed tariff, that person may be alone challenging the tariff. But if he is successful in his demand, the tariff will be, say, lowered, and will benefit all other users in the country.
Mr. Ianno: Do you not do that already? That's what I'm asking.
Mr. Hétu: Yes, we're doing that.
Mr. Ianno: So if it was then self-financed by all of those stakeholders, what would change?
Mr. Hétu: For us, nothing would change, except for the administration of that regime, which would involve, I suppose, collecting this amount from -
Mr. Ianno: You're talking about just the administration of collecting the moneys.
Mr. Hétu: Yes.
Mr. Ianno: That's the only thing that would change.
Mr. Hétu: Yes.
Mr. Ianno: So there wouldn't be anything else that was tricky.
Mr. Hétu: No, I don't believe so.
Mr. Ianno: Okay.
Thank you, Mr. Chairman.
The Vice-Chairman (Mr. Valeri): Following up on Mr. Ianno's line of questioning, are there any other examples in other countries that might -
Mr. Hétu: For copyright boards?
The Vice-Chairman (Mr. Valeri): Yes.
Mr. Hétu: No, I'm not aware of any. Of course, in Canada, for other tribunals we do have cost recovery mechanisms, for the CRTC and others.
The Vice-Chairman (Mr. Valeri): Okay.
Mr. Ianno: Just to carry on, Mr. Chairman, I guess the question then becomes for this committee, if we agree, to possibly ask the minister to put a request in for either the bureaucrats or the board to figure out an equitable way that this might be achieved without placing too much undue hardship on any one stakeholder.
The Vice-Chairman (Mr. Valeri): The possibility is always there.
Mr. Ianno: That's fine. We'll see the minister in about three or four working days, so we can bring that up.
The Vice-Chairman (Mr. Valeri): Yes.
Mr. Ianno: Thank you.
The Vice-Chairman (Mr. Valeri): Mr. Solomon is here this morning as an associate member of the industry committee.
You're certainly free to ask any questions as well, Mr. Solomon.
Mr. Solomon (Regina - Lumsden): I'll pass, thank you.
The Vice-Chairman (Mr. Valeri): Mr. Leblanc.
[Translation]
Mr. Leblanc: I'll come back to the same question. I am not very familiar with your organisation. However, we know that, more and more, government will have to collect fees for the services it provides. Next year, we forecast that there will be 26 billion dollars less for providing services to Canadians. This leads me to conclude that governement will have to collect more and more fees for the services it provides. Therefore, there should be more contacts between producers, creators, distributors and regulators. I believe that, if people paid for those services, there would perhaps be better relations between the regulators and the users.
Mr. Hétu: Since appearing before the Board would end up costing something, it is possible that people would come to an agreement outside the Board. In that case, there might be some form of self-regulation that would evolve, through agreement rather than through challenges before a Board such as ours. It might be an interesting idea.
However, since those tariffs apply to companies that are not always well organized or well represented by associations, and since there are also many small users, this type of cost recovery mechanism would have to be very well structured in order to avoid creating any difficulties for people who would still have to make use of the Board.
Mr. Leblanc: Would there be better relations between the producers and the distributors?
Mr. Hétu: I do not believe so.
Mr. Leblanc: You do not?
Mr. Hétu: No, because this would be seen simply as a cost recovery mechanism.
.1025
There is absolutely no relationship between our administrative costs and the amounts that the various societies collect from the users, which total about 120 million dollars per year.
Mr. Leblanc: But you are the ones establishing the rules of the game.
Mr. Hétu: Yes.
Mr. Leblanc: And, to establish the rules of a game, you have to have a deep knowledge of the game. How do you work? What are your relationships with...
Mr. Hétu: The Board operates through a system of hearings. The rates are published in the Gazette and the users can challenge them by tabling a formal notice of objection to the Board. Then, a file has to be prepared, with information provided to the Board by the various parties, after which we hold public hearings to allow the representatives of each party to express their opinion. Then, a decision is made and the tariffs are approved, with or without any change. Afterwards, the societies collect the money and they come back the following year with the same proposals or with new proposals, which are once again open to debate and to challenge.
[English]
The Vice-Chairman (Mr. Valeri): Mr. Solomon.
Mr. Solomon: Thank you, Mr. Chair.
What is the amount of money your organization spent? I know in the estimates you forecast you would spend $943,000 and your estimate is for less. What did you actually spend in that fiscal year? How much money did your bureau spend in 1995-96, out of the forecast estimate?
Mr. Hétu: Of the $943,000 that was approved for 1995-96 we spent $860,000. So there was a surplus of $82,000 or $83,000.
Mr. Solomon: So $840,000 will certainly be within the realm of possibility for this coming fiscal year.
Mr. Hétu: Yes.
Mr. Solomon: The other question I had relates to a number of letters I've received from broadcasters in my district in Saskatchewan. They were concerned about the possible increase in tariffs that they would be charged for playing music. I'm wondering if you could give us an overview or a status report on that issue.
Mr. Hétu: You are probably alluding to the fact that as part of the phase two revision of the Copyright Act, which ministers will be tabling in the House soon, we understand, there will be a proposal to introduce what are generally called ``neighbouring rights''. Broadcasters have been vocal about this proposition, and no doubt you'll hear more about it when the bill is introduced.
Insofar as the board is concerned, frankly, there's not much I can say about it. Eventually, whenever those rights become part of the law, presumably the board will be involved in setting the rates, as it is currently involved in setting the rates for the use of music, as opposed to the use of recordings, which is what your constituent is probably referring to.
At the moment it would be premature for me to comment one way or the other on what the implications of the introduction of those rights will be. But numbers have been mentioned.
Mr. Solomon: It may be premature, but could you give us a rough estimate of what the impact might be on these particular broadcasters?
Mr. Hétu: No, I'm really in no position to give you any information on this.
Mr. Solomon: Will they go up?
Mr. Hétu: We don't know whether the regime will be universal or whether it will be based on some principle of reciprocity with foreign countries and so on. We don't know whether all radio stations will be affected, or only certain of them. We don't know whether the government, as part of the regime, will issue directives to the board as to how this system should be implemented. So, frankly, it would not be proper for me even to guess anything about this.
.1030
Mr. Solomon: So possibly those radio stations in Saskatchewan that are fairly small, like the Rosetown and Yorkton stations, may have a different set of regulations applying to them, as opposed to the larger stations in the major cities?
Mr. Hétu: It's always a possibility. We have that in other areas. For instance, for cable operators in retransmission we have special preferential rates for small entities.
The Vice-Chairman (Mr. Valeri): Seeing no further questions, I'd like to thank the witnesses.
You mentioned in your opening remarks that you are available to answer any questions outside of the committee and to any of the members who may want to follow up on their own.
Seeing a quorum, I'd like to consider moving a motion, which is before the committee, with respect to scheduling future meetings.
It is moved by Mr. Lastewka that the following proposed schedule of meetings be adopted....
May I dispense with the reading?
Some hon. members: Agreed.
The Vice-Chairman (Mr. Valeri): One point I'd like to make at item 2, the quarterly reviews of financing a small business, is that the scheduling of those meetings still has to be confirmed. We don't have exact dates yet.
Mr. Solomon: I have a comment on the line-up. At a previous meeting I appeared before the committee and requested that two considerations be given on issues by the steering committee. I note that they are not on here.
One was that the committee look into the fact that some predatory pricing may be taking place in Saskatchewan with respect to Hollinger Inc. Some initial signals that this may actually happen were sent through the media and through Mr. Walker and Mr. Bodnar. We might have the Competition Bureau appear before us to discuss that particular issue. I note that it is not on the agenda.
I noted in today's Globe and Mail that the Competition Bureau has thoroughly investigated this matter and sees no problem with it in terms of owning all of the daily newspapers in Saskatchewan.
I would like to raise with the committee the question of whether or not we could have the Competition Bureau appear before us to discuss that particular matter.
The second issue I requested consideration of was to have the committee look into the issue of energy pricing, in particular gasoline pricing. I remind members that really no justification has been substantiated by the oil companies for the price increases. We have seen the price of oil increase by $4 to $5 a barrel in the last couple of weeks, but the average daily price for the last six years has declined year over year. We've seen the price of gasoline increase by 3¢ or 4¢ a litre right across this country in the last couple of weeks. We have seen oil company profits increase. We have not heard any concrete evidence for why these prices should be increased to consumers.
We see before us estimates with respect to copyright and regulation of communications in this country. Energy affects every single Canadian. It affects industry, small business, and individuals travelling by bus, automobile, or car, whether they have a small business or not. Yet there doesn't seem to be any concern from the committee or from the Government of Canada that perhaps energy should.... There should be some justification, at least to the government and to the taxpayer, as to why increases in gasoline continue to appear and are subjected in a monopolistic fashion. Everyone would know that.
.1035
The final point with respect to that issue is that we always seem to get the gas price increases when a barrel of oil goes up, but the oil companies fail to tell us that 10,000 different products are produced from one barrel of oil. It's not just a matter of gasoline. It's a matter of this plastic thing and all your kitchen utensils, and half the things in this room are petroleum derivatives. Yet these things don't all increase by the same amount within an hour every certain period of time.
So, Mr. Chair, I'd like to see the steering committee reconsider those two issues, and I'd like to have an opportunity to ask these questions of at least the Competition Bureau. And with respect to gasoline pricing, I'd like to have some oil industry representatives appear before our committee to answer some of these questions, and perhaps some citizens and business people as well.
The Vice-Chairman (Mr. Valeri): I appreciate the intervention.
Mr. Bodnar.
Mr. Bodnar (Saskatoon - Dundurn): Thank you, Mr. Chairman.
First of all, the motion you have before you deals with the main estimates. That's what we're dealing with. The matters that Mr. Solomon has raised have not been overlooked, but it should be noted as well - and I am sure that Mr. Solomon is aware of this - that yesterday the Competition Bureau approved the sale of the newspapers to Hollinger Inc. in Saskatchewan.
Secondly, I assure Mr. Solomon as well that his concerns over gas prices are concerns that everyone on the committee has. It is not a matter of the government not being concerned about these matters, but we have more than one government that has concerns. We have governments, such as the Government of Saskatchewan, that have been losing money in the oil industry - especially in the upgraders in Saskatchewan - and all these matters come into effect.
This is not a time to really be involved in a political speech or in rhetoric. It's a matter of getting down to the particular facts. Right now we are dealing with the main estimates, and we will then deal with other matters. I certainly am the last one who wants the Saskatchewan government to continue losing money in the oil patch in Saskatchewan.
The Vice-Chairman (Mr. Valeri): Thank you, Mr. Bodnar.
The motion in front of us is dealing with the main estimates. I do take your intervention,Mr. Solomon, and the steering committee will revisit that issue at our next meeting.
I'd like to leave it at that because you've made your point.
Mr. Solomon: My question was not political, nor was it rhetorical. My question to the chair is: what assurance are you giving that we will have a decision within a week, within a month, within a year? I would like to know, just roughly.
The Vice-Chairman (Mr. Valeri): Mr. Solomon, I appreciate your intervention. I indicated to you that we will look at it at the steering committee and we will advise you accordingly. Thank you very much.
Motion agreed to [See Minutes of Proceedings]
The Vice-Chairman (Mr. Valeri): Thank you.
Because we're moving from vote 60 to vote 120, is it agreed that I call vote 120 under Statistics Canada?
Some hon. Members: Agreed.
The Vice-Chairman (Mr. Valeri): Thank you.
Could we have the witnesses, please.
Dr. Fellegi, I would ask you to introduce the other members of your panel.
Dr. Ivan P. Fellegi (Chief Statistician of Canada): Thank you, Mr. Chairman.
With me is Richard Barnabé, who is in charge of finance and administration generally; Jacob Ryten is in charge of economic statistics; and Bruce Petrie is in charge of the social statistics part of Statistics Canada.
The Vice-Chairman (Mr. Valeri): Do all of the members have the brief?
Ms Brown (Oakville - Milton): No, we don't.
.1040
The Vice-Chairman (Mr. Valeri): Doctor, if you please.
Dr. Fellegi: Thank you. I'm very pleased to have this opportunity to speak to you today and to answer you questions. I would like to focus on the challenges confronting Statistics Canada and how we plan to meet them in the years ahead.
Census and statistics are a constitutional responsibility of the federal government, and Statistics Canada is the core of an integrated, efficient, centralized statistical system. It must therefore serve the needs of all sectors of Canadian society.
In the spirit of tight and declining budgets, the strategic importance of statistical information is becoming more and more critical. Whether it is for the development of government policy, the design of cost-effective programs, or the decisions of individual Canadians, our information must be intrinsically relevant and shed light on the issues they face. At the same time clients are demanding high-quality, cost-effective service, while public confidence increasingly requires evidence of value for money.
In our case it also means upholding our ironclad confidentially guarantee to all providers of information. Our biggest challenge this year is to carry out the 1996 censuses of population and agriculture - huge operations by any standard. Census day is Tuesday, May 14. We will be counting some 30 million people in more than 11 million households and some 280,000 farms. The censuses are of vital importance because they provide the only source of small-area information on Canada's population, housing, and farms, as well as the benchmarks and framework for socio-economic surveys for the next five years.
A continuing challenge is to cope with dwindling resources. This is not immediately apparent in our main estimates, which show an increase in our authorized spending in 1996-97. This is due essentially to the costs of the censuses. Once we exclude those, the funds allocated for specific topics not previously covered by our core program, and activities that are cost-recovered, our budget has actually declined by 13% in the period of 1991-92 to 1995-96.
Furthermore, based on what we know, it will decline by an additional 7% by the year 2000. This is in nominal dollars. The drop would be even greater if adjusted for inflation.
In this context our overriding concern is not only to minimize the loss of current information but to produce the new kinds of information needed to understand Canada's main socio-economic and environmental issues.
[Translation]
Our program was primarily structured in the Sixties to provide macro-economic and socio-demographic indicators, and information on social expenditures. Given the sweeping policy reviews of Canada's economic and social programs now underway, these programs are as relevant now as then.
But new issues have emerged. Information is needed on the effects of economic globalization, the functioning of Canada's economic union, the factors affecting Canada's competitiveness in world markets, the impact of science and technology, the outcomes of health and education expenditures, and the effects of social programs. The cost of producing such information is small in relation to the cost of the complex policy issues and programs that it can illuminate. The cost of not having such information can be immense.
[English]
Our plans follow three main strategies. First, we must make the most of existing information, whether this is information already collected by us or information collected by others for administrative purposes.
Secondly, we must make the most of our existing resources. This means not only getting the most out of every dollar by improving the efficiency of our operations but also making sure we have a highly skilled and motivated staff.
Our third strategy is to fill some of the gaps by attracting new resources through external partnerships and cost recovery.
To do all of this we have to preserve a strong professional and technical infrastructure.To illustrate these strategies, I would like to share with you some of the initiatives we have under way or planned for the coming year.
.1045
First is to make the most of existing information. Good strategic information goes beyond numbers. Our commitment to more issue-oriented analysis is demonstrated in our analytical periodicals - notably Canadian Social Trends, Canadian Economic Observer and Perspectives on Labour and Income - and in compendia of information such as Human Activity and the Environment.
We are especially proud of our efforts with The Daily, the vehicle by which all our information is released. The Daily releases now draw out the most significant findings of the data, put them into context and demonstrate their relevance in a language that working journalists can readily use. The result has been more and better coverage, and this means we are getting more relevant information out to Canadians.
We are also putting great emphasis on data harmonization and integration and the development of better information management tools to help clients more easily locate and retrieve information. Particular emphasis is placed on electronic access to our information.
For many years we have drawn upon tax, unemployment insurance and customs records as a way of reducing both costs and respondent burden. We are now looking to the GST data and the business number records as new ways of avoiding duplication in government information gathering.
In addition to the use of government data, we are increasingly working with our business clients to receive their data electronically. This process is cost-effective and reduces the response burden. This is one of the factors that has led to the response burden for regular business surveys now being only one-third of its 1978 level.
Our second strategy represents our continuing efforts to minimize the impact of budget cuts on our statistical programs by making our operations more cost-effective. We have made enormous strides in this area over the last decade by re-engineering our major surveys, exploiting new technologies and streamlining our infrastructure. These savings have enabled us to cope with over half of our past reductions. Further efficiencies are planned. Much of our success in this area is the result of the high priority we have given to our human resources. We are deeply committed to a well trained, highly skilled, well informed and motivated staff, and we have invested in them accordingly.
[Translation]
Despite our efforts in this area, the cumulative effect of cuts to the core budget makes the loss of important statistics inevitable. In choosing which statistical programs need to be strengthened, which expanded and which curtailed, we have to consider many-often competing-factors.
In this, we are guided by a wide array of advisory mechanisms and considerations such as: Is the data required by legislation? What is the cost of producing the data in relation to the costs of the public policies and programs that depend on them? Is the information part of a federal-provincial partnership or a cost-shared effort? Does it provide the base on which additionnal information is gathered and made publicly available on a cost-recovery basis?
[English]
This leads me to our third strategy, which is to expand resources applied to national information by developing partnerships with some of our major clients and through cost recovery of products and services. Our partnerships are of two kinds. For example, in some areas, most notably transportation and agriculture, basic information requirements are met from our own budget but the two major client departments have additional information needs for which they provide additional funds.
In other areas, clients can take advantage of the infrastructure we have in place, but cover the full costs of producing the information they need. We have made particular efforts to develop partnerships with the education sector in order to provide cost-effective ways of putting information into schools and universities.
[Translation]
It is important for me to stress that whether a survey in funded from our own budget or from a client's, we exercise the same rigour essential to public confidence in us. We avoid topics we do not believe we can measure objectively, we maintain strict statistical controls, we carefully test all our surveys and we maintain and exercise the right to publish the results, regardless of who pays for them.
Nevertheless, there are subtle risks we must be mindful of. If our own budget is increasingly unable to cover essential basic information, the availability of important economic and social information may increasingly depend on the funding decisions of others.
.1050
Our other major source of revenues is from the products and services we provide to clients who want larger volumes of data or custom-made packages. Providing information to the public is our first obligation, which we do through the media, through Depository Libraries and our free inquiries service. Those clients with additional and specific needs, however, are asked to pay for them. Marketing will continue to be a high priority as the test of the marketplace will help us improve our products.
[English]
In conclusion, I would like to stress again that relevant and insightful information is one of Canada's most important commodities. It contributes to its competitive advantage.
In fulfilling our responsibility to provide such information, we take pride in the fact that we are often cited as a model by observers of the international statistical community, and have been accorded first place amongst statistical agencies in two rankings published by The Economist newspaper. But we know we must be vigilant and innovative if we are to maintain our institutional reputation and continue to provide Canadians with the quality information they need and deserve.I believe the plans we have put in place will enable us to do so.
Thank you. I will be pleased to answer your questions.
The Vice-Chairman (Mr. Valeri): Thank you, Doctor.
[Translation]
Mr. Leblanc.
Mr. Leblanc: What is the distribution of your staff among the provinces?
M. Richard Barnabé (General Director, Finance, Planning, Audit and Evaluation Branch, Statistics Canada): Statistics Canada is heavily concentrated in Ottawa. Most of our employees, some 4 200 of them, work in our head office in Ottawa, but we also have a number of people in the various regions.
Next year, about 201 persons will work in our regional offices, to whom should be added a number of part-time employees, representing 613 full-time equivalents, working mainly on surveys and hired according to our legislation.
Mr. Leblanc: What is the distribution throughout Canada?
Mr. Barnabé: More or less according to population. There are some variations based on the size of the respective samples of the provinces but it generally mirrors the population levels.
Mr. Leblanc: You referred a while earlier to your international reputation and to your credibility, that you are trying to maintain. I do not have any doubt about that, but I would still like you to explain how you provide information to the people or corporations that need data, and how you make sure that some corporations or sectors are not favored at the expense of others.
Mr. Fellegi: We maintain an important information collecting process on the needs of our clients. We have various methods to stay aware of their needs. For example, we carry out a very strict evaluation of our programs, based on interviews with users. I'm not referring to any internal evaluation but to an external process. Furthermore, we regularly consult a wide range of industrial, scientific and social associations. Also, we participate in international work.
This allows us to stay aware of what happens abroad and what are the major trends.
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I should add that we also have in Statistics Canada an important analysis program aimed at keeping us aware of the most important trends relating to life in Canada, the provinces and various sectors, which is important for us to establish our priorities.
Mr. Leblanc: I would like to pursue the same matter because I know that some sectors could be favored or not depending on wether they receive the same information as others. I am not challenging your honesty or integrity but I would like to know how we can be assured, when we ask for information, that we get the right one.
Mr. Fellegi: Obviously, the users cannot have that assurance on their own. That is why Statistics Canada has to maintain its reputation. Our reputation is the best guarantee for the users. It would be very difficult for them to verify directly that the information received from Statistics Canada is good and unbiased.
That being said, we also have some methods that we use to ensure that we are objective. We have advisory committees with representatives from the private sector, in nearly all the fields that are of interest to us, such as the economy, social issues and education.
Furthermore, in the fields where provinces have a direct constitutional interest or rights, we have much closer relationships. We have established working relationships with them and we grant them the right to establish our priorities. In other words, they are the ones establishing the priorities, within the budget that we can apply to the relevant sectors.
[English]
The Vice-Chairman (Mr. Valeri): Thank you, Mr. Leblanc.
Mr. Ianno.
Mr. Ianno: Thank you. I have several questions that I think go in different directions.
I notice that on the budget you had, I guess possibly because it's a census year, from$288 million to $423 million. Is that mainly due to the census?
Dr. Fellegi: Yes.
Mr. Ianno: You're saying that the census is going to cost approximately $170 million,$180 million?
Dr. Fellegi: Actually, the census is a multi-year affair. This is the year of the highest expenditure on the census, but the expenditure that we have on the census this year is not the full cost of the census.
Mr. Ianno: What is the average cost per year when it's not the big census?
Dr. Fellegi: We have a five-year cycle, and in the year when the census is actually taken, we have the highest cost that year. We have only one or two years of complete low, that's what I'm trying to come to.
Mr. Ianno: Just give me numbers, if you have numbers.
Dr. Fellegi: Mr. Petrie.
Mr. Bruce Petrie (Assistant Chief Statistician, Social, Institutions and Labour Statistics Field, Statistics Canada): Are you asking about the census or the departmental budget?
Mr. Ianno: The five-year plan. What is it every year, and then what does it come to on the fifth year when it's the most expensive?
Mr. Petrie: For the census?
Mr. Ianno: Yes.
Mr. Petrie: The census costs about $350 million over a period of seven to eight years.
Mr. Ianno: So what does it work out to, on average?
Dr. Fellegi: The average is $50 million.
Mr. Ianno: It's $50 million, and maybe $45 million in the year.... For instance, this year is what?
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Mr. Petrie: This year it will be about $180 million.
Mr. Ianno: So it is $180 million. So when you talk about $350 million, you're talking basically -
Dr. Fellegi: Half of it is this year.
Mr. Ianno: So it's $170 million divided by, say, six, which is about $25 million. So it is $25 million per year, and then $180 million - right?
Dr. Fellegi: That's not the actual profile. That is the average -
Mr. Ianno: Well, we're not talking about specific millions. What are millions these days?
What do the people do in between years? Who chooses the groups of people? Why are members of Parliament asked for their input all across boundaries? How is it that, even with qualified people who are suggested, very few appear, and then we find people who are chosen without us understanding how that occurs?
Can you explain that to us, please?
Mr. Petrie: To start with the first question, what people do in the non-collection years, it ranges from the planning of the future information requirements to consulting people who require census data, determining what kinds of information they expect. We're already planning the census of 2001.
Mr. Ianno: When they are asking, when they are consulting, with whom are they are consulting? Give me an example.
Mr. Petrie: Provincial governments, federal government departments, the general public, industry associations, ethnic and cultural groups -
Mr. Ianno: Because these people all want this information, how is the cost recovery occurring with this so in effect the federal government with its reduced budget and concerns all across Canada...? How are the people who need this information the most paying part of the costs?
Mr. Petrie: There are two ways in connection with the sale of census products and services, the information that is produced from the census. We produce a series of outputs: publications, electronic output.... The sales of those sorts of products generate about $10 million during the course of a census.
Mr. Ianno: Is that a seven-year census, or is that one year?
Mr. Petrie: Ten million dollars is approximately the amount of revenue that we would generate from the sale of census products for one census.
Mr. Ianno: So over a seven-year period the revenue would be $10 million?
Mr. Petrie: If you equate it to the $350 million cost, yes.
Mr. Ianno: In other words, we pay roughly $25 million a year for people to go out and consult.
Mr. Petrie: No.
Mr. Ianno: Explain it to me. I'm trying to understand.
Mr. Petrie: There are a series of activities. One of the activities is consulting to determine information requirements. We have other activities that relate to maintaining, for example, the boundary files, creating the maps for the census enumerators, developing the data processing systems, the data capture and data processing, doing the testing of alternate questionnaire formats for future use -
Mr. Ianno: With that group there, since Elections Canada deals with a lot of this and it's the same kind of information, why do we have to have two administrations that have to determine maps, etc., when in effect we can tie it together? Have you thought about that at all in order to save money?
Mr. Petrie: We work with Elections Canada to the extent possible, and we combine efforts on things such as the development of maps or geographic -
Mr. Ianno: Does that mean that if Elections Canada were to be here, they would say that in effect they are not doing it exclusively, that in effect they take some of your people and therefore reduce their costs also?
Mr. Petrie: I think they would say that, yes.
Mr. Ianno: So why don't we combine parts of it that can be done in such a way that basically they become the people who deal with numbers overall from the perspective of the 30 million people?
I look at the cost of the administration of Elections Canada when they are doing all of their administrative side, and now I'm hearing that you have all of these costs from the perspective of maps and all of the things you mentioned. So I see two distinct organizations. You say that they share the information, and they also work together. What I'm wondering about is if it is occurring, how can we get rid of two administrations and have them become one in order to save money for the Canadian taxpayer?
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Mr. Petrie: I'm not sure what money would be saved, in the sense that we have quite different activities and mandates. To the extent that we can combine efforts in developing maps or defining boundaries using common sources of information for geographic purposes, we are doing it. So I'm not sure further savings could be envisaged, because the other aspects of our mandates are totally different.
Mr. Ianno: So because some parts are similar they can't be united. Is that what you're getting at?
Dr. Fellegi: To the extent that we can share information, we already do.
Mr. Ianno: Just share. I'm not looking so much at sharing. What I'm looking at is how to save money. What I see is that if we have returning officers who basically deal with maps and the whole network of reaching out and getting enumerators, it's similar to what you do at census time, which costs us $180 million. Instead of setting up the organizations twice, once every four years, roughly, and here once every five years, what I'm looking at is whether there is not a way of saving money.Or has no one looked at it?
Dr. Fellegi: In the non-census years we don't have field staff like the returning officers. What I'm saying is what we do is not done by Elections Canada. It's completely different. We take information they have. We take information from the post office. We take information from Taxation. It's anybody who has information that can help us update our records. What we do is prepare for the next census with what kinds of areas can be assigned and what boundaries need to be identified for people to go out and enumerate households.
Mr. Ianno: That's my point. If you are doing it the way I understand you're doing your census.... In my riding we have fourteen areas. That means basically fourteen people Statistics Canada has on staff aside from the people they just hired. Then we have a returning officer -
Mr. Petrie: No, we don't have -
Mr. Ianno: You have one regional person in the whole riding to take care of that?
Mr. Petrie: We don't have a person per riding. The structure that is set up for the census is very temporary. It's created -
Mr. Ianno: The same thing for Elections Canada. It's also temporary. What I'm trying to figure out -
The Vice-Chairman (Mr. Valeri): I'm going to have jump in here, because we're running out of time. I appreciate the intervention.
Mr. Shepherd, please.
Mr. Shepherd (Durham): Maybe I could ask a general question, and then one more specific, to do with the main estimates themselves.
We live in an information technology revolution. I would think what's very relevant for Canadians to understand their economy and the small and medium-sized business area is the growth of a knowledge-based economy. To what extent is the statistical sampling you're doing basically repetitive? In other words, is it copying the unemployment statistics, etc., such as we've done year after year, possibly over decades, as opposed to having statistics that talk about the manufacture of computer chips and that kind of thing?
I think of somebody like Nuala Beck, who did a whole book saying how irrelevant the statistics of the U.S. administration were because they didn't actually show what was happening in the real world; they were talking about the gold standard and other things that existed twenty, thirty, or fifty years ago. How relevant is the information you're putting out?
Dr. Fellegi: Well, thank God those articles haven't appeared in Canada, because I think we are making a very determined effort to balance two considerations. On the one hand, if we keep changing everything too often - change our concepts, change our approach of measuring things too often - we can be accused of manipulative behaviour, of making adjustments to suit political or other considerations. But most importantly, basically people are interested in measuring change. Is this year different in some fundamental way from last year? Is the economy doing better? Are we doing better or worse in the area of crime? Are we doing better or worse in the area of education?Are we going up or down? It's that kind of analysis.
For that kind of analysis the maintenance of the same concept, the same way of measuring, is very important, because the moment we introduce change, we cannot really strictly speaking compare what we are measuring this year with what we measured last year. On the one hand the consideration favouring continuity is not making changes too often. On the other hand, you are absolutely right; we are experiencing fundamental changes in Canada, not only in the distribution of our industries but also in the way businesses are conducting their affairs. It is important to make changes.
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What we are trying to do is maintain a proper balance between those two conflicting considerations. We want to introduce changes periodically, regularly, but most importantly we want to maintain an awareness of what is happening in the economy and in society so that we can come to a proper judgment about whether or not we should introduce discontinuities in order to be more relevant and measure the new phenomena more meaningfully.
Mr. Shepherd: I wanted to look at labour statistics and pose the question of how many people in the labour force are engaged in so-called knowledge-based industries. Can you tell me that?
Dr. Fellegi: I'll ask Mr. Petrie to answer that question, but actually at this moment we are introducing one of those rather fundamental re-examinations of our monthly labour force survey. The last time it was done was about 20 years ago, so it's time; we have made the decision.
Bruce, do you want to answer the question?
Mr. Petrie: It would depend on how you define the knowledge-based industry. According to that definition, we can usually provide estimates from the monthly labour force survey, but for very detailed statistics the census will provide precise estimates for very small industry groups.
Mr. Shepherd: We're getting into technical aspects. I wasn't basing it on industry, I was basing it on workers, the actual labour force that is actually engaged in knowledge-based industries. You can have an industry that has knowledge-based workers and non-knowledge-based workers. Is that something you're doing?
Mr. Petrie: We do produce breakdowns by type, whether it's by occupation or by industry.I think we would have the kind of information you're referring to, but again it depends on how you define knowledge-based.
Mr. Shepherd: Okay. I have a more specific question. Given the level of technological efficiencies that have occurred in the last five to ten years, I would have thought your cost reductions would have been greater than 7%. In other words, yours is a business or a service that's almost entirely related to the composite of information and so forth, information technology. I would have thought that technology would have dramatically reduced your costs of operation by more than just 7% a year.
Dr. Fellegi: Not really, because 80% of our costs are people. The technology costs are coming down dramatically, but that's a fraction of the remaining 20%. It has had an impact, but it hasn't had the kind of impact that at first blush one would think it might have.
The Vice-Chairman (Mr. Valeri): Thank you, Mr. Shepherd. I'm going to have to cut you off there.
Colleagues, I'm in your hands because six of you have indicated you'd like to ask questions here. We have another set of witnesses. The room is available to go beyond 11:30 a.m. if we run perhaps 10 or 15 minutes later. If everyone is in agreement, we can get everyone in for a short question. Is everyone in agreement?
Some hon. members: Yes.
The Vice-Chairman (Mr. Valeri): Thank you.
Ms Brown: Mr. Chairman, I think the question is whether we are committed to having this group back again. I think this is the most interesting set of witnesses on the morning's agenda. Perhaps my question isn't so much related to the estimates as it is to knowing more about Statistics Canada. If they're committed to come back I can pass this time. If you as acting chair will commit to a meeting in the near future when they will come back, then -
The Vice-Chairman (Mr. Valeri): Certainly I'm in favour of bringing Statistics Canada back. It's something we could bring to the steering committee and look at very seriously. I'm a member of that steering committee, so I will certainly voice that opinion at the committee level. It's just a matter of scheduling them back in.
Mr. Ianno: I recommend we have them back with more details.
The Vice-Chairman (Mr. Valeri): Okay.
I will go to Mr. Leblanc. We should try to get very quick, concise questioning in if we can. Thank you.
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[Translation]
M. Leblanc: Considering the evolution of international markets, free-trade and the ever increasing exchange of information on the information highway, what is the position of Statistics Canada within that context?
What services do you provide to industries? We know that there is information on finance, on industries, on technological change, on the information highway. I would like to know how much you are involved in this global process of change.
Mr. Jacob Ryten (Assistant Chief Statistician, Business and Trade Statistics Field, Statistics Canada): We try to keep up-to-date at the national and international levels. The international level is rather interesting and is specific to us.
We are able to provide to any Canadian company complete information on any world market, on any exporter, on any importer and on all the products in a category of goods including about1,000 entries.
We do that each year and we can provide this information on paper or on an electronic medium. Apart from 2 or 3 countries of the Far East, I believe we are the only ones able to provide this type of service to companies.
Let me come back to an earlier question. When we provide information to a company, this information is by definition public. Anybody can have access to it. This must be quite clear.
Unfortunately, no statistics organisation can have as much detailed information on the services as on the products, because the field of services is changing extremely rapidly.
The reason is quite simple: there is no customs organisation that can capture the trade of services. We do have information on the services, but at a much more global level. That being said, we do have in Canada much more detailed information than most of our competitors, USA included, about our balance of payments and about our purchases and sales of services.
Thirdly, we are the most up-to-date organisation as far as technological innovation is concerned in the field of information collection and distribution. We were the first to provide information on CDs. It's just an example.
[English]
The Vice-Chairman (Mr. Valeri): Thank you, Mr. Leblanc. Mr. Murray.
Mr. Murray (Lanark - Carleton): Thank you, Mr. Chairman.
Dr. Fellegi, Statistics Canada has a well-deserved reputation for independence and professionalism, but I notice you have to have cabinet approval of the content of the census. I'm just wondering whether cabinet ever changes the content you submit for a census.
Dr. Fellegi: It happened once, in my recollection, a few decades ago, and has not happened since.
Mr. Murray: Okay. As well, you're required by legislation to collect certain statistics. I'm not clear whether there are pieces of legislation enacted by Parliament that have the requirement that you collect statistics. If there are, do we have a situation where perhaps there should be some sunset clause, that it has become an anachronism now, and you no longer need to require statistics under certain legislation that was passed years ago? Is that a concern or a problem?
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Dr. Fellegi: Generally the information we provide, which is legally mandated, is certainly not part of the Statistics Act. It's part of other acts. I'll give you some examples, just to illustrate. One of the most important ones, of course, is equalization payments. There is a very complex formula to calculate the equalization payments.
I don't know if, anywhere in those regulations passed to determine the exact formula, Statistics Canada is mentioned as such. I don't know whether it is. But certainly the data overwhelmingly - not all, but overwhelmingly - come from Statistics Canada. Such an enormous amount of money changes hands that it clearly becomes a huge priority.
The consumer price index is used in various indexation forms, including tax deductions. Whether or not Statistics Canada specifically is referred to, the consumer price index might be.
I could go through a whole range of legislation. Unemployment insurance benefits depend on data coming from the labour force survey, the regional differentiation in the benefits. The information coming from the Corporations and Labour Unions Returns Act is used in a regulatory....
So there is a whole variety of ways in which formulae, devised to index or to share money or to distribute government funds, use information from Statistics Canada. We consider those as basically legally mandated. We can't just not collect the information or not have the information available.
Mr. Murray: I'm sure it's quite an extensive list.
How quickly will we get the results of this next census? Has the timeframe been compressed with technology to the point now that we get information within a matter of months and have essentially all that we've learned from that census?
Mr. Petrie: The first results will be out in about nine or nine and a half months after the census day.
Dr. Fellegi: Which is somewhat of a record in international terms.
Mr. Murray: Thanks very much.
The Vice-Chairman (Mr. Valeri): Thank you, Mr. Murray. Ms Skoke.
Ms Skoke (Central Nova): Thank you.
My question is one that I feel is very current. As you've indicated, your big challenge now is to deal with our 1996 census. Census day is Tuesday, May 14. But already we've had some concerns expressed by the various members of Parliament across the country with respect to the hiring of those who are going to be conducting the census. I want to ask you some specific questions, and I'd appreciate some specific answers.
One has to do with the hiring of our census commissioners and the other has to do with the census enumerators. I'd like to know who devised the test that was administered and who administered the tests, who evaluated them. Can this committee have a copy of those tests?
My major concern is that in some ridings, mine included, we've had individuals with masters degrees in education, for instance, fail these tests. On the other hand, our census enumerators, who traditionally have been people from the community, particularly women, ages 45 to 55, have also failed these tests.
I want you to file with this committee statistics on the basis of who's applied for these positions and what were the failure and success rates, and on the basis of male and female. Does the test itself consider language, ethnicity and culture of a particular region and so on? There's a great concern.As you say, you have a big challenge. So far you've failed to meet that challenge, and we haven't even reached our census day.
This is a concern because of the taxpayers' dollars, obviously, that are going into conducting this census. But more particularly, historically and traditionally at the local level we have relied upon people to be our census enumerators. I'd like to know who's administering the tests and if we can get these results and see these tests - particularly those who have passed the tests but weren't hired.We have those who failed and who obviously weren't considered, and we have those who passed the test but also were not considered.
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I'm asking that a complete review be done across this nation of the conduct of Statistics Canada in this hiring process.
The Vice-Chairman (Mr. Valeri): I just want to raise this point. I appreciate where the member is going with this, but Statistics Canada is in front of us today to deal with the estimates.Ms Brown made a comment earlier about bringing Statistics Canada back, and I'm certainly in favour of that.
If you can be relatively.... It's a very complex question. It's going to take some time.
Ms Skoke: It's complex, Mr. Chairman, but it's also current. It's also dealing with the expenditures. It's talking about how we're spending taxpayers' dollars in 1996. Once May 14 arrives this is no longer an issue. This is an issue right now, and I think we should deal with it as a committee. We have these individuals before us. It's very current, and I want it dealt with.
The Vice-Chairman (Mr. Valeri): Sure. They can provide you with some type of response, but you're also asking for a national review of what has gone on here. So I would ask the witness to address the question as best he can at this point, understanding the request being made, and also understanding they are coming back.
Mr. Petrie: The question is complex. We do have a testing process for both the commissioners, which are the supervisory level, and the census representatives - the enumerators. The tests are administered by Statistics Canada. The text was devised by Statistics Canada in consultation with the Public Service Commission. We administer that test to ensure we get people who have the qualifications that are needed to do the census.
In the case of the commissioners it's a combination of supervisory abilities and other skills. It's very important for us to have people who are able to take on a very difficult job in a short time, particularly the job of census commissioner, and carry that out successfully over a period of three months. The test is designed to ensure we get people with those qualifications.
I can't table the test. I don't have it with me. I also think it's a document we obviously would not want published, in the sense that it then becomes rather easy for somebody to pass the test.
Ms Skoke: But I'm asking that it be tabled with this committee.
Mr. Petrie: I certainly have no problem with that.
The Vice-Chairman (Mr. Valeri): That's fine.
Dr. Fellegi: On a confidential basis until the census is over, because parts of this test are still being used to administer tests to people who are quitting on us and we have to hire new people so we have to keep testing. For the duration of the census operations the test itself must remain confidential.
Mr. Ianno: I would think, just gathering the gist of what Ms Skoke was saying, it's not so much those who failed who are of concern, it's more those who passed and the subjective method that was used by your supervisors or the people there. When we know many members of Parliament, across party lines, suggested names of qualified people who should have had no problem passing and then when we find that out of a group of fourteen names only three of the names you suggested actually got chosen...where was the subjective side and what happened? We're just curious about howit works.
Mr. Petrie: There are two components to the testing process. One is a written test. Then there is -
Mr. Ianno: Let's assume they all passed.
Mr. Petrie: It is then a matter of an interview to determine the personal suitability of individuals, assess their communication skills, their ability to deal with people.
Mr. Ianno: I'm sure I can speak on behalf of some of the other members of Parliament I spoke with. They gave people who were bright, very outgoing, able to manage and communicate, and they had experience. Yet they still were not chosen. Some of the people were in very executive positions.
Mr. Petrie: The process involved interviewing a large number of people and selecting the most qualified. Some people were qualified but not taken because we didn't need so many. Some people did pass the written test but not the interview. But by and large -
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Mr. Ianno: I understand those who didn't, but I'm wondering how the subjective side gets into the equation.
Mr. Petrie: It's subjective in the sense that like any job interview where an individual is applying for a job, the person who is doing the hiring conducts an interview and attempts in the course of that interview to determine whether the candidate possesses the kinds of skills that the job requires. It is a particular job that we're talking about, requiring certain skills.
Mr. Ianno: Most members of Parliament understand the skills required.
The Vice-Chairman (Mr. Valeri): I'm sorry Mr. Ianno, I'm going to have to jump in here.I appreciate the intervention, but given the the fact that it's going on right now and the confidentiality of the tests, it's something that I think we could take up after this meeting and see where we can go with it.
Mr. Bodnar has a quick comment on the test, and then I need to go to Mr. Lastewka and wrap up with the witnesses. No, I'm sorry, we have Mr. Solomon.
Mr. Bodnar: Mr. Chairman, because of the confidentiality of the test it is my suggestion it not be filed - not even with this committee. That way no problems arise. The problem may have been with the oral interviews, but the written test should not be filed with this committee because of the confidential nature of it.
The Vice-Chairman (Mr. Valeri): I appreciate the comment.
Mr. Lastewka.
Mr. Lastewka (St. Catharines): Thank you, Mr. Chairman. I'll be very short.
My question might have been answered partly when Mr. Murray asked his question. I want to discuss the legislated required data, of which you mentioned a few. My concern is that over time we might have legislated data that is not being used any more. What is the process to cleanse out legislated data and recommend to the proper departments that it be reviewed and removed? That's number one.
Number two, with the industry program strategists being put out across the country, am I right in assuming that over time we should be able to get all the inquiries we need from Statistics Canada over the Internet?
Dr. Fellegi: Whether or not you can get your answers back from us on the Internet - is that the question?
Mr. Lastewka: No, my question is whether we will be able to get all the data we want questioned by Statistics Canada, for which we would go through 1-800 lines or phone calls or faxes, directly through the Internet?
Dr. Fellegi: We're working on that, and it should come on stream later on this year.
In respect to your first question, how do we get rid of information that is collected for an administrative purpose only, we have an annual review of everything that we are doing and it is regularly cleansed of information that is no longer needed for that kind of a purpose.
Mr. Lastewka: So do you advise the departments that legislated the data by saying that you're collecting this data to reconfirm through that department that the data is still needed?
Dr. Fellegi: We have regular contact, it's not just an annual one, with all the major departments that are clients of ours. We are in contact with them on a monthly basis and know exactly what their requirements are.
Mr. Lastewka: So I should be able to find some legislated data and go to the department and ask them when they reviewed it, and they'll be able to say it was last June or last February?
Dr. Fellegi: They certainly should.
Mr. Lastewka: Okay, we'll do that.
The Vice-Chairman (Mr. Valeri): Thank you, Mr. Lastewka. Mr. Solomon is next.
Mr. Solomon: Excepting the process that we've talked about with respect to hiring commissioners and enumerators, I believe Statistics Canada has done a very good job with respect to providing information to Canadians. It certainly helped people in Saskatchewan in a very substantial way with respect to business and government and other information you provide to us. So I want it to be on the record that I am quite pleased with the general performance of Statistics Canada.
My question relates to the Internet. I understand that Statistics Canada has undertaken to put a lot of information on the Internet, and it seems to be an interesting concept and technology that many people are learning to use. Does Statistics Canada have information as to the number of Canadian adults who subscribe to the Internet or are on the Internet? Could you give us a general idea?
Dr. Fellegi: I honestly don't know whether we can. I doubt it. It's such a dynamic hugely changing number, market and phenomenon, and we are not surveying them specifically.
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Mr. Solomon: Mr. Chair, I believe the Internet has a lot of potential and it's a very powerful tool, but my concern is that the vast majority of people aren't on it. I've seen statistics that say 3% of Canadians have access to it.
Dr. Fellegi: We can provide information. We have collected information in one of our surveys about the number of households with a computer at home and the number among those that have a modem, so we can approximate that. Those who don't have a modem with their computer are not possible users of the Internet, so we can certainly say who are not users of the Internet.
Mr. Solomon: Thank you. I'd appreciate having that information.
The point I want to make is that there tends to be a trend towards saving money in government by using Internet and e-mail and eliminating the paper flow side of it. That trend, in my view, should be watched very closely because it basically censors the amount of information available to the general population.
I know that in my constituency the vast minority have access to Internet, and sometimes I'm worried about having information that's available. I know that the information Statistics Canada has on the Internet is very powerful, and if you have access to it, it's probably better using the Internet and the computer than using the written information. You can do a lot of work with it.
I just want to put that on the record. I do have some concerns about it, which is not your problem. I will appreciate receiving information.
The Vice-Chairman (Mr. Valeri): I'd like to thank the witnesses. Doctor, as you can see, there's a lot of interest with Statistics Canada. I welcome you back when we can facilitate that, and we'll be bringing it up at the steering committee. Thank you.
Since we're now moving from vote 120 back to vote 55, is it agreed that I call vote 55 under the Competition Tribunal?
Some hon. members: Agreed.
The Vice-Chairman (Mr. Valeri): We have with us Annaline Lubbe, the registrar, and Carole Ménard. Welcome.
[Translation]
Mrs Annaline Lubbe (Registrar, Competition Tribunal): Mr. Chairman, Members of the committee, since it is rather late, I will not make any opening statement and will start answering your questions immediately, if you wish.
[English]
Your questions will be welcomed.
The Vice-Chairman (Mr. Valeri): Mr. Leblanc.
[Translation]
Mr. Leblanc: I would have liked to hear some kind of statement because your organisation is rather recent and I do not know very much about it.
Ms Lubbe: The Tribunal was set up 10 years ago, in 1986. It is a specialized tribunal composed of 4 judges of the Federal Court and 8 members providing their professional expertise in various fields relating to competition.
We are a specialized tribunal having specific expertise in economic and trade matters, and our role is to make decisions through the judges, on matters based on part VIII of the Competition Act. These matters are, among other things, mergers intended to obtain a position of excessive domination of a market, and unfair and anti-competitive practices.
Our tribunal is very similar to a regular court. Our process is based on the law and the cases resolved by the tribunal are very complex. Furthermore, they generally relate to very urgent matters. As we say in English, time is always of the essence.
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Our cases bear on very important financial interests, and our judges, helped by other members of the Tribunal who are experts in their field, are the ones who make decisions and resolve conflicts. Does that answer your question?
Mr. Leblanc: Yes. Do you think that the Competition Tribunal is very useful? Would it not be possible to use very specialized lawyers to fight those cases, instead of a very specialized Tribunal?
Ms Lubbe: That matter was raised 10 years ago, when the governement decided to set up the Tribunal. I seem to remember that someone stated at the time that Canada was the last western country to create such a body.
The major problem with relying on the regular courts is that, as I said, time is of the essence in our field, and our role is to manage progress. We are very proactive. One of our concerns is always to expedite matters.
I will give you a recent example showing how our Tribunal can expedite matters. It is the Gemini case. PWA was threatened, because of financial difficulties, and it tabled a complaint on November 5, if I remember correctly. The case was challenged and the decision was published on April 23, I believe. At the end of April, in any case.
Even though there was the Christmas period in-between, we manage to resolve the case in5 months. It took eight weeks to prepare the hearings, and we held 5 weeks of hearings. The case was very complex and the lawyers made extremely positive comments about our effectiveness.
Mr. Leblanc: Thank you.
[English]
The Vice-Chairman (Mr. Valeri): Thank you, Monsieur Leblanc.
Mr. Shepherd.
Mr. Shepherd: I look at your mandate, which talks about mergers, etc., and one of those things is pricing. But when I look over the actual cases that you've heard in the last year or so, I'm surprised that none of them deal with pricing. Why is that?
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Ms Lubbe: With respect, sir, you have to ask that question of the Competition Bureau. The only person that can bring cases before the tribunal is the Director of Investigation and Research, who is responsible for the administration of the act. When he gets a complaint, or of his own accord, or if the minister asks him, he carries out an investigation. He decides whether and where a case will be taken - if it's obviously outside the tribunal's jurisdiction, to the ordinary courts; if it's a criminal matter, for example, predatory pricing; or whether it would be coming to the tribunal.
That is one of the key features, that there is this total arm's length distance between the person who brings the case and those who will decide. The tribunal has absolutely no investigatory powers and has no function of overseeing the bureau in any way, shape or form.
Mr. Shepherd: Once again, just to look at the actual activity of the tribunal, you would say it seems to be skewed in the area of mergers?
Ms Lubbe: Mergers and abuse of dominant position. You will notice in the director's reports he points out that there are - I think he has five - priority areas. Two of those areas are mergers and abuse of dominance, which fall under our jurisdiction. Then he decides which cases he will actually pursue. Some screening criteria are applied - overall effectiveness, etc., and they decide on that. As I understand it, resource jurisdictions obviously play a role in what they decide to pursue. But those are questions that you could pursue with the bureau.
Mr. Shepherd: We talk about the concept of a tribunal. Is that how you actually hear the proceedings - in the form of a tribunal?
Ms Lubbe: You know, I think we probably would avoid a lot of misunderstanding if we didn't use the world ``tribunal'', if it would be simply ``court''.
Mr. Shepherd: It's not a tribunal? It's not three?
Ms Lubbe: These are matters, like mergers and abuse of dominant position, which used to be before the ordinary courts under the criminal law. There never were, until the tribunal was created, any successful prosecutions or litigation. It was with the massive reform of Canada's competition regime that, within that structure, the tribunal was created as the court under whose jurisdiction these matters would come. They were decriminalized, in other words - mergers and abuse of dominant position, which used to be monopolies.
Mr. Shepherd: You mentioned four judges and, I believe, eight directors. Is that...?
Ms Lubbe: No. The four judges are judges of the Federal Court trial division. They are appointed as judges of the tribunal, and one of them is designated as the chairman. When they do not sit on tribunal matters, they carry on with their work at the Federal Court.
The up to eight members who are so-called ``lay members'' are not really ``lay'', in our common understanding of the word. They are people who bring expertise as economists, as business people, accountants - varied business backgrounds.
The whole idea is that you create a decision-making body that has on the one hand the legal expertise to assure you a fair hearing, because you don't want to proceed in these matters that after all are (a) complex and (b) involve a lot of money and have to be decided in the interests involved rather quicker than slower. You don't want, for procedural reasons, to go off the tracks. But on the other hand, you bring these other areas of expertise to supplement, because basically what you are working with is economic legislation. You are applying economic analyses, and the expert evidence that is put forward in the cases obviously is of rarefied economic -
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Mr. Shepherd: Of the actual decisions that you've made here dealing with mergers, have you ever reversed any - denied a merger application?
Ms Lubbe: Was there a merger that was denied? I'm thinking of Hillsdown. It was, yes, partly and partly not. The same with Southam. There was the one part of the order that said no. The director didn't win on one half of it, but he won on the other half.
Mr. Shepherd: But generally speaking, it's pretty rare to reverse a merger application. That's the history.
Ms Lubbe: The question is whether you're going to have a contested matter before you or whether it's a consent matter. Most of the mergers have been on consent, which means that the director had problems with the merger, that the parties negotiated and they agreed to restructure the merger so that he was satisfied it would not lessen or wouldn't be likely to lessen competition. He then applies for order on consent, which in effect is the agreement that the parties have arrived at. If the tribunal agrees with it, it would then become an order of the tribunal, and if the parties don't live up to the order, then of course they're in a position of contempt of court.
Now, we are currently receiving the Interac consent order application, which involves all the major banks and the credit unions. But you see, it's not a rubber-stamp procedure, because interveners can come in. Just like in the Imperial-Texaco consent proceeding, which was very vigorously fought against the objections of the interveners, in the Interac case there are very vigorous interveners who are challenging the terms of the consent order.
The Vice-Chairman (Mr. Valeri): Thank you. Mr. Solomon is next.
Mr. Solomon: I think I'll pass, Mr. Chair, for the sake of time.
The Vice-Chairman (Mr. Valeri): Thank you. Are there any other questions? I see none.
Our next scheduled meeting is on Tuesday, April 23, at 3:30 p.m.
Mr. Solomon: Mr. Chair, I thought there were other questions. I was going to defer to the members, but I do have one quick question, if I might.
The Vice-Chairman (Mr. Valeri): Okay.
Mr. Solomon: Sorry, I was being cooperative here.
The question I have for the witness, Mr. Chair, is in relation to the changes with respect to decriminalization. Prior to 1986 there was the Combines Investigation Act. What changes specifically were taken to decriminalize? What was the process before 1986; do you recall that?
Ms Lubbe: Before 1986 in the case of a monopoly or in case of mergers, it was based on criminal burden of proof. If there was something that you wanted to object to before a court of law, you had to go under the criminal provisions, and you had a criminal burden of proof. Obviously when what your problems really are in these activities is that they're usually just ordinary business activities, and the only concern that you have is when it crosses - perhaps - a line and impacts on competition in the marketplace, to prove beyond a reasonable doubt that there was criminal intent, etc., obviously is literally quite impossible. That's why there weren't successful prosecutions - or very few, in actual fact.
Mr. Solomon: Have we had any prosecutions or any reversals of these since it's been changed?
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Ms Lubbe: You see, these matters were taken out of the criminal law and put into a civil context before the tribunal. The Competition Act sets the criteria, under various sections, for the threshold you have to meet to prove there is a likely lessening or a lessening of competition, which you would do by economic evidence.
Mr. Solomon: Thank you.
The Vice-Chairman (Mr. Valeri): Thank you, Mr. Solomon.
Thank you very much for your patience. We appreciate the presentation today.
Our next meeting, as I said earlier, is on Tuesday, April 23, at 3:30 p.m.
Thank you. The meeting is adjourned.