Industry Committee on June 3rd, 2010

[The Chair, Conservative, Michael Chong]

Thank you.

Did you know that home heating fuel is diesel? There you go. Now you know.

Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

Thank you for coming.

First of all, I want to put on the table that I'm certainly in support of what's here, what's in front of us. I actually happened to have been in the retail gas business for a number of years.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Oh, ho.

[Mike Wallace, Conservative, Burlington, ON]

So I would like to do a little bit of discussion about what actually happens.

I worked for Texaco and I worked for Imperial Oil, and I had one rural area, which had 30-some gas stations, and about half of them were company-owned. I had two urban stations that were 100% company-owned.

So when we talk about retailers, the person behind the desk actually is an agent. They're not really the retailer. It's Imperial Oil that owns all the land, owns the gas in the ground, owns the pumps, owns everything. In my view--based on the agent agreements that I used to sign--it would be the big bad oil company that would be responsible for the cost.

I could be wrong in terms of how the system works in more rural areas and other areas, but the vast majority of gas stations in urban centres, and the gas there, are owned corporately.

The issue for us in those days was that.... I used a service maintenance company--I'm sure they're licensed by you guys--who did all our maintenance. Calibration was often done. I personally did audits monthly on my gas stations, and there was more of a concern about losing product out of the tank that's in the ground than the issue of if we were over or under. We were hoping that it was a calibration problem, because it's a much more expensive and much bigger problem for the oil companies if it's leaky tanks.

I was there when we did a complete tank removal and replacement from steel to fibreglass. So the issue might be different now from what it was when I was there a number of years ago, but I was in the business for six or seven years, and just so you know, for those who don't know, the calibration did happen on a regular basis. When I did an audit and it didn't balance, we had the service maintenance people get their butts out there and get it calibrated to make sure it wasn't a mistake at the pump.

That's why I think it's important for us to keep in mind that there are problems--and there are about 94% or 95% in this case that you're putting--but over 90% are in compliance within the tolerance. The tolerance isn't huge, and they're within the tolerance. And the companies do have a vested interest in fixing that, because they don't want to find out that it wasn't calibration after all, that it was a hole in a 40,000-litre tank that they have underground causing all kinds of contamination, and they do not want to pay for the cleanup.

So that does happen. And I do have faith in our private sector organizations.

I can understand why people think there's a bit of a conflict, but I can tell you that the service company is not interested in ignoring the calibration piece that their customer wants them to be able to fix. They need to make sure that's accurate so they have accurate audits on the amount of fuel they're pumping through the cash register and through the pump so it balances. They need it to balance. I think that's an important piece.

I agree with you on your point that there are probably a few retailers out there who are purposely ignoring the calibration issues, and we need to go after them. And I think more frequent inspections by us and forcing them to do it and providing us the paperwork that they have done it and where they're at is very important, because there are a few where we need to make sure.

I do believe you're right that these are mechanical devices and there are a number of pump manufacturers. I had a variety of pumps at different stations, and some were better than others. Some you had to calibrate all the time. That was years ago, so I'm hoping technology has improved and will continue to improve in that piece.

That was my background. This is important, but you've got to keep in mind that it's not some poor little retailer who is doing it most often. These are big bad oil companies who own most of this stuff, by far.

And will they increase the price? Of course, and things pass through, but I think the consumer would be willing to pay a tenth of a cent more--if that's what it works out to be. And don't forget where the decimal point is on these things, if they know they're getting what they're paying for or not paying for.

My concern is that there are other measurement devices in other industries. We've talked about inspecting gas pumps and stuff. The one that really boggles my mind is on the mining side.

Can you explain if that measurement that the truck comes across that says it's got so much potash or whatever on it may not be accurate, that there's less than what they say and what they're charging for? How big is that problem? Is that 50,000 meters across the country? Is that a small group? I have no idea. I was shocked to see that 50% are out--

[The Chair, Conservative, Michael Chong]

Thank you for the question, Mr. Wallace.

Briefly.

[Alan Johnston]

These types of scales will sit out in an environment. They drive trucks on them, and basically snow, mud, dirt, you name it, can be on these devices. They are out of tolerance by that percentage for many reasons. Now, they're not out of tolerance by a huge amount. As I said, it's not 50% error, but it's 50% of tolerance from the small tolerance.

[The Chair, Conservative, Michael Chong]

Thank you very much.

Monsieur Bouchard.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chairman. I too would like to thank the witnesses for being here this morning to discuss Bill C-14.

Mr. Vinet told my colleague that Bill C-14 covers all meters and measuring devices in Canada. Is that so?

With regard to water meters, does Measurement Canada have a role to play with regard to those that municipalities install for certain businesses?

[Gilles Vinet]

At present, water meters are exempted from inspection under the Weights and Measures Regulations. They are covered by the law, but the regulations provide an exemption for water meters. This exception dates quite far back.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Excellent.

In certain municipalities, when a water meter is installed in a business, it is the merchant who pays. The water meter is the property of the business and it is up to the merchant, who is the owner of the water meter, to prove to the municipality that it is in compliance with the regulations. In that sense, as far as that application is concerned, I do not believe that Measurement Canada has a role to play, since the water meter is the property of the merchant.

If I understand correctly, that does not involve you.

[Gilles Vinet]

It is covered by the legislation. That is a sector for which we have carried out consultations. It is a sector that we are presently studying. If Measurement Canada ever deemed it necessary to regulate water meters, then the regulations would have to be amended. It would not be necessary to change the law to cover water meters, but the regulations would have to be amended.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Excellent. Thank you.

Complaints are usually filed with the police. That means that, in the case of a retailer committing fraud, who does not have the required devices or who refuses to follow an inspector's recommendation in order to correct the situation, a complaint would be filed with the police. Would this complaint be made to the municipal police force, to the Sûreté du Québec, in the case of Quebec, or to the RCMP?

[Gilles Vinet]

In our case, when we talk about complaints, we are always talking about complaints made to Measurement Canada by consumers who are of the belief that specific devices are inaccurate. We then investigate. In the context of our work, obviously, if we discover or have strong suspicions that there is fraud going on, then we will inform the police.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Which police? The municipal police force or the Sûreté du Québec?

[Gilles Vinet]

In the case of extreme fraud, in the past, we called upon the Sûreté du Québec. We have, in a few cases, worked with the Sûreté du Québec. At Measurement Canada, when we talk about complaints, these are always consumer complaints and not complaints made to the police. However, complaints to the police are a possibility.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

I would like to provide a concrete example. In Quebec, Hydro Quebec or Gaz Métro supply natural gas to private homes or businesses. Hydro Quebec must purchase meters certified by Measurement Canada. Correct me if I am mistaken. These meters are installed at each property.

Am I to understand that it is up to Hydro Quebec to provide proof, every two years, that these meters are up to standard? Hydro Quebec is therefore responsible for proving that these meters are in compliance with Measurement Canada's requirements, or perhaps that is not its responsibility? Is it Measurement Canada that takes care of verifying if the meters are to standard?

[Gilles Vinet]

With regard to electric meters and gas meters, such as those used in the case of Gaz Métro or Hydro Quebec, the law is clear. It is their responsibility to ensure that the meters are accurate.

However, the system is such that an initial inspection of all meters is done, and then there are periodic inspections.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

An initial inspection is done by Measurement Canada?

[Gilles Vinet]

No. By authorized service providers, recognized organizations...

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Paid by Hydro Quebec?

[Gilles Vinet]

Yes, but in this case, Hydro Quebec is an organization that is accredited by Measurement Canada to carry out device certification and inspection. Therefore, they will verify their meters and fulfil all of our requirements. We do a follow-up on their quality assurance system. We also do an annual follow-up of their operations' audits — they must provide us with information on the results they have obtained.

In a nutshell, the law provides that these meters be verified and inspected again. In the case of electric meters, for example, this is done every six years — or every ten years, in certain cases.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

To summarize, Measurement Canada never involves itself with Hydro Quebec's or Gaz Métro's measuring devices, especially not meters installed in private homes or businesses.

[Gilles Vinet]

We only intervene in those cases where there is a dispute, an objection made by a consumer. But usually we do not, no.

Hydro Quebec is accredited by us to carry out inspections on our behalf. It must follow all of our rules and execute the inspections in accordance with the frequency set out in the law. We verify and we audit what Hydro Quebec does.

The only exception, as I mentioned, is for consumer complaints — what we call “disputes“ under the Electricity and Gas Inspection Act — , in which case we test these meters ourselves.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Bouchard.

Thank you, Mr. Vinet.

Mr. Braid.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you, Chair.

Thank you to our witnesses for being here this morning.

I will look forward to seeing the video at another time. I presume it's on the Measurement Canada website, is it?