Government Operations Committee on June 3rd, 2014

[Gilles Morel]

In the case of fuel, generally other standards, whether it's an ISO standard, an ASTM standard, or the European standard, are all taken into consideration. Many of the experts present at the technical committee also sit on either the ASTM or the ISO committee. All of this is taken into consideration.

What differs here in Canada is that those particular elements that may represent 5% or 10% of the standard that is different from other products. For example, three years ago, when Environment Canada and NRCan introduced biodiesel into the fuel mix, there was no test method to test how those fuels would behave in a cold climate. So our association and various associations spent more than $3 million in total to develop the appropriate test conditions and the test method to validate that. We ended up developing our own test method on how to measure the flowability of product when it's cold. Now that standard is becoming the norm referred to by the U.S. and in Europe.

So a standard is not something that is fixed in time. It evolves continually, and these are the aspects that I call “divergent”. They could perhaps be called an “evolution” or they could be called “improvements” over time.

We are well positioned in Canada and within CGSB to advance that aspect.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

That's very helpful. Thank you.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Ms. Ablonczy.

Ms. Day, you have the floor again.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

I just have two questions. I have been over my questions so far, but I believe they are quite important.

Earlier, Mr. Trottier talked about the issue of privatizing the board. Would it be a good way to proceed?

I imagine one of the reasons it would be preferable to maintain its current status is to ensure its independence and neutrality. One of you answered that a private company involved in all this would be in the middle of it all and that would mean that the results would be different than they otherwise might have been.

However, I would like to hear a bit more about the pros and cons of the board so we can note what to improve. I would also like to hear some more specific recommendations for this.

This question is for all the witnesses. It is a general question and the last one I will be asking.

Mr. Morel, what are your thoughts?

[Gilles Morel]

I will answer the first part of your question.

Is it better for the board to be private or public? While we do not have a preference, having an organization under the auspices of the Standards Council of Canada — the Canadian General Standards Board, for example — does allow for a certain independence. This makes it easier to maintain a balance within the committees and ensures that the process is somewhat protected. Because it is at arm's length, there is no undue influence on the part of individual members to try to change the process.

We are very confident in the way the CGSB manages the secretariat processes and services. This confidence is also due to the fact that the CGSB's work is based on various processes, such as ISO standards. Its development and administrative standards, for example, are essentially parallel to those established by the International Standards Organization. This ensures that it has a certain degree of independence, which we believe is very valuable.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Comtois, what are your thoughts on this?

[Michel Comtois]

I already provided some recommendations on this earlier so I will not repeat them. I also talked about balance among the committees, which is very important. It keeps everyone honest, if I may put it that way. It would be more difficult if it were led by a private organization.

I would like to draw a parallel with the Business Institutional Furniture Manufacturers Association, or BIFMA. Its operations are influenced by the revenues of businesses and manufacturers. I will give you the example of Steelcase Inc. In the 1990s—I do not know whether this is still the case—it owned 70% of the American market. This means that 70% of the BIFMA's operational budget was paid for by Steelcase.

Every company has a vote but, as I often say, some votes are more important than others. Obviously, If I am paying for 70% of your annual operational budget, I expect you to respond quickly when I call you.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Would the departments participate as much if the organization were private? Would the roles be reversed?

[Michel Comtois]

Based on my experience with the committees, I would say that even if they are led by the government and the CGSB, it is difficult to have balanced committees.

For example, there are very few furniture testing experts in Canada. On the CGSB committees, a number of the experts come from American companies. Though it is not the only one, this is one of the reasons why I continue to be a member of these committees. Just this week, I was participating in a committee meeting through a conference call. I was the only Canadian who was able to participate in the technical aspect of this standard's development. The others are more from business. There are very few furniture laboratories in Canada.

The five largest American office furniture companies are also the five largest in the world. Each one of these companies has one or two experts. Canadian companies, which are 10 to 20 times smaller, do not have the means to hire a code and standards expert. It is therefore difficult to ensure that the committees are balanced. Because this takes constant effort, you would almost need a not-for-profit organization to ensure that the committee makeup is balanced.

[The Chair, NDP, Pierre-Luc Dusseault]

Any other comments?

Mr. Dauphin?

[Philippe Dauphin]

I agree with Mr. Morel and Mr. Comtois regarding the importance of proceeding through committees for discussions related to standards and their development. This can be expensive for small businesses. We would need to have principles and technologies that have been tailored to their needs so that people could take part in the process remotely, whether through the filing of submissions or something like that, on a platform that would be accessible to committee members. That would be a positive development.

[The Chair, NDP, Pierre-Luc Dusseault]

Mr. Adler, you now have the floor for five minutes.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Mr. Chair.

Thank you all for being here this morning.

I just want to begin, and I'd ask all of you to just give a yes or no answer, starting with Mr. Morel and working our way down the line.

Would you agree, yes or no, that the Canadian General Standards Board plays a valuable role?

[Gilles Morel]

Yes, absolutely.

[Peter Boag]

Yes.

[Michel Comtois]

Yes.

[Philippe Dauphin]

Yes.

[Mark Adler, Conservative, York Centre, ON]

Thank you.

The board is now celebrating its eightieth year of existence. In fact, it's having a celebration next week. I hope we all get invited.

Canada is now a signatory to a lot of trade agreements, particularly even some multilateral trade agreements. We're involved in the World Trade Organization, NAFTA, and that sort of thing. As a result, we've had to sign on to an agreement to diminish the technical barriers to trade. One of those technical barriers, of course, is standards.

A lot of you were talking about the unique conditions of Canada. Do we run a risk, as a result of having to conform to various technical barriers of trade, that the unique characteristics of our own standards here in Canada could be diminished at all?

Who wants to tackle that one?

[Gilles Morel]

I can answer fairly quickly on this one.

There's always a risk in everything, but I would have to say that the risk is minimized here. There are two reasons for that.

All of the people participating in the committee—and I think CGSB does a good job at ensuring that this is met and this is well up front in any of the discussions—are very aware that the standard cannot be, or be perceived to be, a barrier to trade.

Secondly, this being said, if we were just to say that we'll adopt a standard from the European Union or a standard from Korea, for example, there would be a real risk, because, at the end of the day, what works well in a Fiat car in Italy will not work in a car in Sudbury. At the end of the day, the standard is there. It's kind of a check and balance to make sure that generally the standards work well. But ultimately, what's specific to Canada has to be addressed by a standard that is Canadian, to make sure that 38 million Canadians and all the drivers have good product in their car and they can feel safe that they will be able to go from point A to point B and not stall on the road in the middle of the winter.

[Peter Boag]

If I could just add, I think the real key there, in terms of the differentiation between standards that are adopted and accepted in other parts of the world, is legitimacy. We work very hard in the context of the CGSB—I think Gilles talked about it—and 85% to 90% of any given standard finds its basis in either a European or a U.S. standard, with much larger markets. On that 10% to 15% difference, there's a real effort to ensure that if we're going to have a slightly different standard, it's for legitimate reasons. I think we've been very successful at that. As a result, that helps mitigate any potential risk that it will be seen as a trade barrier.

[Mark Adler, Conservative, York Centre, ON]

Okay, excellent. I was hoping you would say that, and I suspected you would.

So can Canadians now rest assured that their specific standards are not being compromised at all by virtue of any standardization or harmonization of attempts to harmonize standards, period?

[Peter Boag]

That's correct. Actually, from a fundamental position, we believe in harmonized standards. In fact, when we're working with the government on regulatory issues, it's largely about ensuring that the outcomes are harmonized with those of our biggest competitors, which is largely the U.S. , in an integrated North American fuel market. We start from the premise that harmonization is the proper outcome, but recognize that there are legitimate reasons from time to time, and in the case of fuel standards, primarily around climatic conditions, where complete harmonization is not in the best interests of Canadians, and so there's a legitimate reason to have a standards differentiation.

[Mark Adler, Conservative, York Centre, ON]

I've got it. Okay.

This coming summer, the Minister of Industry is going to be meeting with his provincial counterparts to talk about freer trade within Canada and breaking down provincial trade barriers, some of which are more onerous than some of the international trade barriers.

Are there different standards? And will these standards be addressed in these kinds of discussions? Do they vary a lot? We know about trade barriers, as such, among provinces, but what about standards among provinces? Do they exist to an extent whereby they are impediments to interprovincial trade?

[Peter Boag]

In our business I would not say it's so much in the standards area, from a CGSB context, but it's in the case of regulated standards. There's a significant degree of regulation on a province-to-province basis, primarily in the area of the growing renewable content requirements. We have a different regulatory requirement in B.C., we have a different regulatory requirement in Alberta, and we have a different regulatory requirement in Saskatchewan. And then we have, of course, the federal regulatory requirement for renewable content.

So that is a big issue. It has a big impact on the ability to move fuel across provincial borders, in terms of the fungibility of fuel. So, absolutely, internal barriers to trade exist. In our business it's principally around what we see in the continued and growing fragmentation of what is already, by virtue of there being only 38 million people in the country, making it a relatively small fuel market compared to the market south of the border. We continue to see the market being fragmented, which, in the end, adds inefficiencies and additional costs, and certainly makes it more difficult to move fuel on a short-term emergency basis, whether because of a flood in Manitoba, an ice storm somewhere else, from one provincial jurisdiction to another because, “Oh, that doesn't actually meet our regulatory requirement on biocontent”.

So a big issue for us, absolutely, but it's not so much on the CGSB standards side of the business; it's provincial and federal regulation differences.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. Adler.

Now to Mr. Byrne for five minutes.