Bill C-212 (Historical)

User Fees Act

An Act respecting user fees

User Fees Act

[André Harvey, Liberal, Parliamentary Secretary to the Minister of International Cooperation]

Madam Speaker, I am pleased to acknowledge the exceptional work of my colleague, the hon. member for Etobicoke North, particularly this afternoon, when he had the opportunity to comment on the Bloc Quebecois's proposal.

I greatly appreciated his most rational remarks on tax issues. It was very interesting. As for the proposal that was moved and that was debated all day, he even proved to us that the Bloc got the wrong country. In other words, this proposal was developed and prepared on the corner of a table. I thank him for his remarks this afternoon.

The government shares his desire to improve the fee setting process. It is with this in mind that the President of the Treasury Board announced the implementation of a new policy on external user fees in August. This policy is now in effect. I think that the new policy solves many of the problems raised by the member for Etobicoke North. In fact, I am convinced that, in this case, it is preferable to have a policy than to pass the bill before us.

Since it is based on consultation, the policy provides a balance between two sound management practices. While ensuring government wide consistency, it provides individual programs with the flexibility that is needed to satisfy the numerous demands and interests of stakeholders.

The government then decided to consult the businesses and industry associations, those who pay the user fees. It also consulted the members of Parliament, including members of the Standing Committee on Finance.

The review showed that the principles of equity and justice underlying that policy have strong support. However, the review also showed that the stakeholders shared some major concerns which the policy had to take into account, and it did just that in my humble view.

It started from the already existing strong foundation and designed a new policy which would solve the problems uncovered during the review and reflected in the key elements of the bill being proposed by our colleague.

The new policy considerably strengthens the links between user fees and the level of services. The departments must now establish standards of service in consultation with those concerned and determine what measures will be taken if the standards are not met.

However, the policy states that service commitments must also take into account the program's priorities as established in the acts or regulations. Services are provided in the interest of the public, and the policy recognizes that the standards must equitably take into account the needs of all Canadians.

By allowing the departments and stakeholders to explore a broad range of options, the policy reflects the message sent by a majority of external stakeholders, which is that the main goal is to improve services.

Many paying users and their associations said they were willing to pay higher fees if the money was invested in service delivery. Therefore, any effort made to reduce the user fees may not meet the expectations of paying users, especially in terms of service delivery.

The review showed that departments usually handle complaints properly, but that communications might be improved. Therefore, under the revised policy, the dispute resolution mechanism has to be formally structured and clearly explained during the consultations. The policy also recognizes that departments may ask totally independent advisory committees to make recommendations.

During the review, parliamentarians asked for more detailed reports of external charging. Their message was heard loud and clear. The policy takes their concerns into account. Under the new policy, departments will now have to report to Parliament and the public on a yearly basis. This will be done through public accounts, departmental performance reports and reports on plans and priorities. Departments will also have to ensure that more detailed information on costs, revenues and performance is included in these reports.

The government did not wait until the report was completed. It is already honouring its commitment, as the 2002-03 Departmental Performance Report to be released this fall will show.

The over-all purpose of this policy is to provide departments with better guidelines and directives, and to provide more transparency and stability to the users who pay, parliamentarians, and other, external stakeholders, with the ultimate objective of strengthening transparency and accountability.

I would also like to point out that the fundamental objectives of the policy and of Bill C-212 are similar in many aspects: both seek to improve accountability, transparency and service delivery, but there are important differences between them in functional and operational terms.

The policy is more compatible with the existing authorities, since it respects both the principle of ministerial accountability, by which ministers are responsible for user fees charged by their departments, and the role of existing cabinet committees. It provides for more accountability to Parliament, but does so by means of existing mechanisms, particularly Public Accounts, departmental performance reports and planning and priority reports.

These reports also reinforce the role of Parliament and its committees, which should not hesitate to question senior public servants and ministers on their deparments' user fees, since this is one of their duties.

The policy makes more sense that the bill. The approach taken in Bill C-212 seems to have been chosen on the basis of problems related to a relatively small number of regulatory programs. The provisions of the bill would deprive the programs of their flexibility and increase the costs and the workload for all those who charge fees, not only those that have been a cause for concern.

For example, all departments would be encouraged to create an independent dispute settlement mechanism. However, the study carried out before the new policy was drafted has shown that, in most cases, the clients were in fact satisfied with the existing mechanisms.

Bill C-212 also outlines specific severe “consequences” for the departments that do not meet their service standards. It forces departments to consult stakeholders on the alternatives when it is impossible to follow standards, recognizing that a single consequence, such as the fee rebate proposed in the bill, will not always be appropriate.

Passing the bill would implicitly allow the courts, rather than Parliament, to provide detailled monitoring of the management of practices used for the external user fees. Indeed, dissatisfied stakeholders would, as a last resort, be allowed to take their case to court.

The revised policy allows us to avoid being unnecessarily exposed to such risks, since we already have the tools to ensure the improved setting of external user fees.

Bill C-212 would completely change current responsibilities and powers, as Parliament understands them. The consequences of such changes are difficult to assess and could well prove disastrous.

In closing, let me once again congratulate my colleague for the constructive work he has done in this House.

[Joe Peschisolido, Liberal, Parliamentary Secretary to the President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs]

Madam Speaker, let me begin by acknowledging the efforts and the hard work of our colleague, the member for Etobicoke North, aimed at improving the management of user charging.

The government also shares his desire to improve the fee setting process. It is in that spirit that in August the President of the Treasury Board announced the revised external charging policy and this policy is now in effect. I believe it addresses many of the concerns raised by my hon. colleague. I am confident that a policy based approach is more effective than passing Bill C-212 into law. For those reasons I join with the government in not supporting Bill C-212.

The government demonstrated its commitment to make improvements to external charging when it launched its review of the policy. The government consulted with stakeholders in industry associations and firms which pay federal user charges. The government heard from members of Parliament and in particular, members of the Standing Committee on Finance.

The review found that stakeholders, generally, expressed support for the policy's underlying principles of equity and fairness. However, the review did raise a number of important issues, concerns that need a resolution. And the government has indeed responded with a revised policy.

The revised policy builds on this solid foundation to meet the concerns raised during the review, concerns like the key elements of our colleague's bill.

For instance, the revised policy strongly reinforces the link between fees and service performance. Now departments through stakeholder consultations must establish service standards and the action to be taken if these standards are not met.

Another example is the revised policy requires departments to communicate more clearly their dispute management processes and make them available to stakeholders.

In the review, the call of parliamentarians for more complete reporting on external charging was heard loudly and clearly and the impact on the policy is clear. Under the revised policy, departments will now annually report in much greater detail on cost, revenue and performance information to Parliament, and to the public as well, through the public accounts, annual departmental performance reports and annual reports on plans and priorities.

These major improvements taken together with the other revisions demonstrate that retaining a policy based approach has many advantages over Bill C-212.

It should also be noted that the bill and the policy are in many ways in sync, in terms of their underlying objectives of improving accountability, transparency and service delivery. But there are, however, important functional and operational differences.

The policy is more compatible with existing accountabilities in that it is consistent with the notion of ministerial responsibility, namely that ministers are responsible for the fees and charges emanating from their departments. It respects the existing roles of cabinet committees and it strengthens reporting to parliament through existing vehicles, notably the public accounts, departmental performance reports and reports on plans and priorities.

Via this reporting, the role of members of Parliament and committees is also strengthened. Committees can and should call for the departmental officials or ministers and stakeholders alike to question them on the charging activities of their departments.

I believe that this approach, while maintaining the gist of our colleague's bill, is a more balanced one. Bill C-212's perspective appears to be based on the issues known to affect a relatively low number of regulatory programs.

Bill C-212's provisions would remove flexibility and incur additional costs and workload in all programs with charges, not simply the ones that have been the focus of stakeholder concerns. For example, it suggests that every department establish an independent dispute management process, when in fact the policy review indicated that most departments were handling disputes to the satisfaction of their stakeholders.

Bill C-212 also contains explicit consequences for departments that miss their service standards. The revised policy shares this concern with service commitments and departmental performance but its approach is proactive, not punitive, and focuses on consultation and reporting on achievement. It requires consultation on feasible options that can be taken if standards cannot be met. This openly recognizes that a one size fits all consequence, like the fee rebate envisioned by the bill, may not be the best response in all cases.

If paying users are right in saying that service improvement is the key issue, as I believe they are, then we must examine each case on its own merits and find solutions that fit the specific circumstances case by case.

Rebates will not provide a useful signal for a program where funding constraints have an impact on service. They will simply reduce funding and increase red tape.

In that light fee rebates are not a consequence only for the department but for the stakeholder too because they want to see the service improved, not worsened by a focus on disputes, conflict and punishment.

Bill C-212 in general will overhaul authorities and accountabilities as we presently understand them in Parliament but its consequences are not clear and are potentially negative in nature.

For example, it does not define, but appears to fully endorse, the concept of independent dispute resolution.This needs to be fleshed out or we risk undermining the principle of ministerial accountability with no clear vision of how responsible decision making is to occur. The policy by comparison provides greater clarity, as it recognizes a role for independent advisory panels in providing recommendations to ministers.

By passing the bill into law, paying users would be able to take their disputes to court thus potentially giving Canada's judiciary the final say on external charging practices. Bill C-212 would effectively reduce Parliament's role rather than strengthen it.

It is for these reasons, with all due respect to the hard work and solid approach taken by our colleague from Etobicoke North that I feel strongly that Canadians are better served by working within our existing policy based approach.

[Alan Tonks, Liberal, Parliamentary Secretary to the Minister of the Environment]

Madam Speaker, I wish to recognize our colleague, the hon. member for Etobicoke North, and his achievement in raising the profile of the subject of external charging, as has been pointed out.

The government's commitment to greater accountability in this area was affirmed in budget 2003 with a specific commitment to set out principles and enhanced implementation requirements for improved management of the whole architecture of user charges and cost recovery. The external charging policy, which was announced on September 3 by the President of the Treasury Board, delivers on that commitment responsibly and effectively.

And for those reasons, the government is not supporting Bill C-212. With stakeholder consultation as its backbone, the policy strikes a balance between two sound management practices, which if put forward will accommodate some of the concerns of and the suggestions that have been made by the member. While it strives for government wide consistency, it still provides the flexibility for individual programs to meet the needs of the varied and diverse interests of their stakeholders.

This is particularly important given today's fiscal realities that limit finite resources, and it also implicitly recognizes that federal departments face the difficult job of setting priorities within those limits day to day. The revised policy is the result of a thorough review that sought the input of paying users and other external stakeholders as well as departments. Members of Parliament made their views known through the efforts of the Standing Committee on Finance, which has a long-standing interest in this issue.

The review heard that there is broad support for the principles of equity and fairness that underpin the policy, but the review also revealed that stakeholders shared a number of substantive concerns that needed to be addressed. And through the policy, I believe that they have been.

The result is a revised policy that focuses on accountability and transparency as called for by stakeholders and, more importantly, by parliamentarians. Note that during the review a benchmarking study of other jurisdictions showed that Canada's charging policy compared quite favourably to other jurisdictions in terms of the clarity and thoroughness of its guidance and its principles based character.

The revised policy builds on this solid foundation to meet the concerns raised during the review as well as by my colleague's bill. Through the revised policy, the existing link between fees and service performance is made stronger. Service standards are now mandatory for any program with external charges and so is the need to develop them through consultation with stakeholders. But the policy makes clear that service commitments must also take account of the program's priorities as set through legislation or regulation. Service delivery is in the broad public interest and the policy recognizes that standards must reflect the needs of all Canadians in a balanced and even-handed fashion.

Furthermore, while departments are required to consult on actions to be taken if service commitments fail, the policy does not focus solely on fee rebates as Bill C-212 seems to. Instead of concentrating on negative consequences for departments, the policy encourages an approach that resolves the issues proactively. The hope is that consultation up front can reduce the need for confrontation after the fact.

By giving departments and stakeholders the flexibility to explore a range of options, the policy recognizes the message consistently sent by external stakeholders. The key issue is service improvement. Many paying users and their associations have expressed a willingness to pay higher fees in order to invest in better service. It follows logically, therefore, that concentrating on fee rebates may not provide the answer paying users are looking for, namely, improved service delivery.

While the review found that departments generally handle complaints well, better communications were called for. In response, the revised policy requires that dispute management processes be more formally structured, more visible and more clearly communicated during consultation, and the policy explicitly acknowledges that ministers may request recommendations from independent advisory panels.

The government also acknowledged the concerns raised by parliamentarians in that departments must do a better job of reporting detailed information on external charging activities to Parliament and to the public. Therefore the revised policy commits the government to annually report details on cost, revenue and performance information to Parliament through existing vehicles, such as the public accounts, the reports on plans and priorities and the departmental performance reports.

The government did not wait until completing the policy. It has already met this commitment as shown in the 2002-03 departmental performance reports to be tabled this fall.

The revised policy also touches on other important requirements, such as analysis, costing and pricing practices, and monitoring.

The overall aim is to provide better guidance and direction to departments while providing greater clarity and certainty for paying users, parliamentarians and other external stakeholders, all with the overriding objective of enhanced accountability and transparency.

With these improvements, the policy addresses many of the concerns raised by stakeholders and Bill C-212. The policy also has the advantage of avoiding the potential problems contained within Bill C-212, problems associated with its potential impacts on Parliament.

If passed, the bill would establish a confusing system of overlapping authorities, bringing the review powers of committee into conflict with the principle of ministerial responsibility. As well, they would conflict with the current roles of various cabinet committees which themselves have a role in the existing review process. This was enunciated by our former colleague, Mr. Herb Gray, when he appeared before the House finance committee studying Bill C-212. I would encourage members to read his testimony on this important matter.

If passed into law the bill would potentially allow the courts, and not Parliament, to oversee the detailed management of external charging practices. This is because stakeholders, if unsatisfied, could ultimately take their complaints to the court.

The revised policy makes it unnecessary for these risks to be taken. We have the tools now to ensure that implementation of external charging is improved.

For the reasons I have mentioned, and with great respect to my colleague who has given a great deal of consideration to Bill C-212, the existing external charging policy meets many of the concerns expressed by parliamentarians and stakeholders without the potentially problematic issues that would arise from the passage of Bill C-212.

[Norman E. Doyle, Progressive Conservative, St. John's East, NL]

Madam Speaker, I am pleased to say a few words on this bill on behalf of our finance critic, the member for Kings--Hants, who supports the bill in principle and as a consequence of that, all of us in the PC caucus will be supporting it.

As we are all aware, back in 1994 the government moved massively into charging fees for mandatory regulatory services. It increased regulatory fees for businesses in general by almost 47% over a two year period. For manufacturers in Canada, fees increased by 153% over that same period. From inspecting meat to approving ingredients for anti-bacterial kitchen cleaners, if Canadians wanted a regulated product the fee had to be paid. No fee, no product.

The government insisted on more money to regulate products and services and it promised program efficiency, better service and smarter performance. Very little of that has happened. Canadians and their companies are paying much more and getting a whole lot less.

I am told by the member for Kings--Hants that the problem is the vast majority of these user fees were set by regulation, with no parliamentary input and no real consultation on their business impact or how they compared internationally.

Both the Auditor General and the parliamentary finance committee have pointed to the seriousness of this problem. Added to that, the Supreme Court has now decided that some user fees are a tax levied by governments. Individually and viewed together these judgments point to serious problems which the government will now have to be seized with.

We need a public debate about whether services delivered actually give value for money.

This legislation would make Parliament rather than government departments and agencies ultimately responsible for approving new user fees or increasing existing ones. That is why we support Bill C-212 in principle.

User fees are really hidden taxes or taxes under another name and ought to be examined with parliamentary scrutiny to see how effective they are. We have always argued that Parliament needs to play a wider role in how government raises revenues. This is a clear example of that.

While the government asserts that fees are not a tax and are primarily focused on improving resource allocation, the evidence clearly points out that they are having the effect of a tax on business, with the sole purpose of generating revenues for departments.

The Supreme Court appears to agree with that assessment. In its recent ruling in the Eurig case, the court ruled that probate fees in Ontario are a tax. In making its decision, two key points were raised by the court: first, fees must be directly related to the actual cost of providing a service, otherwise they are a tax; and second, taxes must be imposed by an act of the legislative body, not by regulation.

We need to encourage innovation in Canada. For example, we need to ensure that in line with our environmental and health related commitments, new products coming out on the pharmaceutical and chemical markets which are more effective and less toxic receive timely turnaround and can be introduced on the Canadian market to encourage people to use safer products.

Moreover, it is imperative that we take into consideration how we measure up internationally and this bill would require that the departments that wanted to charge a new fee or raise an existing one benchmark it against the country's major trading partners. If a department overshot its timeline to complete the work by more than say 10%, it would start to lose its fee on a sliding scale.

About five years ago our finance critic, the member for Kings—Hants, brought forward the same kind of issue. He argued that the government ought to implement its regulatory budget parallel to the traditional spending budget which would detail estimates of the total cost of each individual regulation. The PC finance critic supported a risk benefit analysis of each regulation to enable a cost benefit analysis of regulations for parliamentarians.

The bill we have before us today differs somewhat in substance but it retains the same important philosophy. Because of that, we support the bill in principle.

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Madam Speaker, it is a pleasure to see you back in the Chair.

I want to, first, commend my colleague from Etobicoke North for the tremendous amount of work that he has done on the subject. He has elevated the subject of external charging to a new level which is very important.

The importance of external charging extends beyond the House, of course, to those who pay. But it also extends to the broader public interest, which is at the very heart of every program, whether it charges direct users or is funded solely through taxation.

It is through the work of parliamentarians that these interests are brought together so that sound management practices are in place. That is why this debate is so critical.

From the perspective of the House, and of parliamentarians, the fundamental feature of Bill C-212 is the provisions for greater committee scrutiny of departmental charging initiatives.

Ministers would be required to table all proposals for new or amended charges before the House, if the bill is passed. The proposal would then be subject to review by a committee of the House and the committee would then have 40 sitting days to make its recommendations to the House.

In considering the merits of Bill C-212, we should first consider the process that now exists; the process that would be more or less supplanted by the measures of the bill.

At present, it is handled by a committee of cabinet, specifically the special committee of council, or the SCC. Its members are authorized, on behalf of cabinet as a whole, to make decisions with regard to matters that have to be implemented by regulation.

In fact, this includes most user fees which are most commonly established under regulatory authority. Therefore, they must go back to the SCC and subsequently be published in the Canada Gazette . The process followed by the committee is outlined in detail in the public document “Guide to the Regulatory Process”, but the following is a brief sketch of how it works.

When a regulation is signed off by the minister, it goes before the SCC, which then makes a decision on whether the proposed regulation will be pre-published in the Canada Gazette .

The regulation is examined, including its regulatory impact statement, to see if the period proposed for public comment is adequate, given the complexity and importance of the user fee proposal.

The committee may also consider the sensitivities raised by the regulation, even though the decision to pre-publish does not mean that the regulation will ultimately be adopted exactly as it was initially proposed.

Assuming that the committee agrees that there will be pre-publication, the regulation and the regulatory impact statement then appears in the Canada Gazette , along with information that a period for comments is being allowed and where to submit any comments.

It should be noted that departments may also disseminate this information through their own network of stakeholders. These other methods are increasingly used as departments recognize the merit of broadcasting their activities as openly as possible.

The comment period posted in the Canada Gazette is, at a minimum, two weeks. More serious matters may take 75 days, or even longer, depending on the determination of the SCC.

Departments are required to receive these comments and take them into account in terms of amendments to the proposal or in terms of explaining why the comments should not be accepted as offered.

The regulation then comes back to the committee, which then looks at the regulation in more depth. When looking at user fee proposals, the examination typically includes the service to be provided and the terms which apply, such as the service standards, and how the department intends to monitor them.

The committee, at this stage, also has full rights to send the regulation back to the department for further work to improve it with modifications or to send it to a cabinet committee or to full cabinet.

Finally, when the committee agrees with the regulation, possibly with amendments, it then authorizes publication again in the Canada Gazette and the publication will stipulate when the regulations come into force.

My intent, in outlining the existing process, is to ask the House whether it has given this bill full consideration. That requires a look at the existing process, of course, but also the potential impact of this bill on the operation of the House. That, in turn, is the real test of this bill's effect on the quality of Parliament's oversight of external charging.

Given the complex circumstances surrounding some of the user fees and the diverse stakeholder interest that may be involved, a standing committee could be consumed in discussing even a small number of fees.

I have certainly raised this before with the member and I have raised this in committee. Again, with great respect to the member, I know that he has responded to this issue on a number of occasions. The concern, though, is that the committee's time would be used in calling witnesses and engaging in debates. What would be the impact on other responsibilities of a committee to work on policy or regulation? How many regulation changes would in fact be coming to the committee? That would depend obviously on any given time frame. However at present committees sometimes find it very difficult to manage their workload as they ideally like.

What work should be given a lower priority in order to meet the bill's provision for more committee review of charges? As different committees make different decisions given different circumstances in which they work day to day, how consistent will the review be? Is consistency not critically important to our departments, to our stakeholders and of course to Canadians as a whole? This is the only area about which I personally have a concern with regard to the member's bill.

I would suggest in closing that in the final analysis we must consider whether the bill is necessary, given the revised policy. I will be interested to hear further debate on this and whether it is the view of the House to move forward. However those are the considerations we have.

[Jim Abbott, Canadian Alliance, Kootenay—Columbia, BC]

Madam Speaker, it gives me a great deal of pleasure to speak to Bill C-212.

This is a very important bill in spite of the fact that it deals with a tremendous amount of arcane information. It is one of those things where as the country of Canada has become the great nation that it has, over a period of time we have ended up with an awful lot of practices within Parliament. There are parliamentary procedures and practices within the bureaucracy that are responsible for putting together regulations surrounding the laws that are passed in Parliament.

As a consequence, there has been a buildup of detail and a buildup of law that has ended up beyond the control of the people who are elected by Canadians, namely the parliamentarians. We have ended up with a situation where as much as 90% of the law, the rules and regulations, and the procedures that citizens and companies have to go through are actually beyond the control, direction, and oversight of parliamentary procedure. This bill is one of a number of steps that have come from the backbench that would start to correct that situation.

I would like to mention that the member for Surrey Central just recently was successful in having a bill passed that had to do with the disallowance of regulations. As I mentioned, it is a rather arcane topic. It is an arcane description. Let me explain the disallowance of procedures.

Basically, what he managed to do--and it is parallel to what this bill is attempting to do in my judgment--is to put parliamentarians, who are the representatives elected by and accountable to the people of Canada, back into the process. What we will basically be looking at now are a number of fees, regulations, and procedures that have been developed, presumably in good faith by the bureaucracy that have ended up beyond the control of even the ministers of the Crown.

As I understand Bill C-212, it has to do specifically with user fees. According to the documents I have in front of me, it says that this act may be cited as the user fees act. When I go through this bill and I come to clause 5.1, reduction of user fee; clause 6, resolution of the House; and clause 7, adjustments in the applications of user fees; I see very clearly and specifically the intent of the bill, which is basically to allow parliamentarians to review user fees and potentially reduce user fees.

I want to be crystal clear as to where the Canadian Alliance is coming from. We believe in user pay; we believe in user fees. That is not the issue. The issue is how fair they are, and indeed if they are unfair, what the process would be that would be undertaken today prior to the enactment of the provisions in Bill C-212? What would actually take place today?

The fact of the matter is that with the exception of this new bill that my colleague from Surrey Central managed to get through, we have never really had a tool within the parliamentary process to be able to do it. That is why this bill is very complimentary to the bill that my colleague from Surrey Central managed to get through.

Let me give an example. I am the Canadian Heritage critic. I am familiar with what are called part II fees under the Canadian Radio-television and Telecommunications Commission.

The CRTC has basically two levels of fees. The first fee is the actual user pay. I must say that as far as many of the broadcasters and people in the industry that are paying the fees, they feel that the user pay portion is very generous toward the CRTC.

What is part II? Part II has to do with the fee that in no capricious way but nonetheless without any real structure has ended up evolving over a period of time. There is a part of the spectrum that the broadcasters use either for audio or visual transmission or digital transmissions and have access to, have rights to. Therefore, because those frequencies in the spectrum are assigned specifically to them for their use, they bring radio and television, and other broadcasts into that spectrum at that frequency. The thought has been that that is worth x number of dollars.

Again, we are very sensitive in the Canadian Alliance to the fact that there are public commodities like spectrum, like frequencies that indeed do have some commercial value. Unfortunately, for the broadcast industry, what has occurred particularly over the last 10 years--and in an accelerated way over the last 10 years--is that the value of those frequencies within the spectrum has plummeted. It has basically gone through the floor. Why? Simply because of the new technology that permits broadcasters and people wanting to broadcast information to be able to get onto the air.

We speak frequently of the so-called 500 channel universe. It used to be that there was an area, a green tier it was called. A green tier for broadcasters simply meant that one wanted to be on channel 2 through 13 because those were the ones that were on the UHF, the ultra-high frequency dial. Past that, we were getting into a different television frequency and the broadcasters were going to be lost. There has been an historic clamouring on the part of broadcasters to get into the green tier, to the 2 through 13, because they want to be found and easily seen.

As a consequence of digital transmissions, we can now go to channel 163 or channel 359. It does not make any difference. We can program our VCR and television receiver to wherever we want to be on the dial. I was speaking to a colleague about this bill earlier today. He was saying how it used to be that when a familiar channel was bumped for whatever reason and moved to another portion of the dial or frequency, that all of a sudden he would end up with all sorts of calls to his office from people complaining about it being moved. Why are they not complaining now? Well, because there are so many channels being added that it is a simple matter of re-computing one's television set so that for people who are watching CPAC right now on channel 69 in Ottawa, and I am making that up as I do not know what the channel is--

Committees of the House

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I have the honour to present, in both official languages, the fifth report of the Standing Committee on Finance on Bill C-212, coincidentally my private member's bill, an act respecting user fees.

This bill requires more oversight of Parliament when user fees are introduced or increased. It calls for an independent dispute resolution process, the need for greater stakeholder participation in the fee setting process, the requirement for comprehensive stakeholder impact and competitiveness analysis and the establishment of standards by departments and agencies which they must adhere to when they collect a user fee.

User Fees Act

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

Mr. Speaker, it is my pleasure to rise and address Bill C-212 today, an act that deals with user fees.

I want to compliment the member across the way from Etobicoke North for bringing this forward. This is an issue that my party has been concerned about in the past. In fact, I brought forward a private member's bill on this very issue a number of years ago which was similar if not the same as this private member's bill. Right from the start I will state my sympathies.

It is important for people watching this debate on television to understand a bit of the background behind why this is an important issue and why it is important to have some way to govern the exploding use of user fees by the government. Right now there are about 50 different departments bringing in about $4 billion a year in user fees. There is something like 500 different fees that are in place right now.

The idea behind user fees is actually quite laudatory. The idea is to ensure that if a government service is provided for the benefit of a particular business or individual, then in that case it makes sense to charge a fee for that as opposed to taking the money out of general revenue because the benefits accrue to only one person or one business. Therefore it makes sense to have something like user fees.

Having said that, the concern is that the government does not have in place proper rules to ensure that the fees which are charged are actually what is necessary to cover the costs. Sometimes we find they exceed the costs. We also find very often, because we are talking about government monopolies, when these fees come in, they do not bring about the benefits which they are supposed to bring.

There is a famous example. Fees were brought in to deal with the approval of new medications for the veterinary industry, dealing with animal husbandry and that kind of thing. If I remember right, in 1996 there was a whole new regimen of user fees that came into place. The result is that since 1996 the cost of the fees have exploded and at the same time it now takes twice as long to get approval to use various medications that veterinarians need to practise their discipline. There is that case and there are many other cases.

Another example is the Pest Management Regulatory Agency. This is a famous, almost poster child, example of what happens when agencies become unregulated but on the other hand also have the power to charge user fees. In that case exactly the same thing happened. All these fees started pouring in but the agency actually became less efficient and was unable to approve pesticide use in anywhere near the time that it had previously. In fact it became slower and slower.

As a result of that, a number of people became quite concerned. I brought forward a private member's bill a number of years ago. The Auditor General has looked into this. A large coalition of industry people got together to bring this to the government's attention. The coalition included the Canadian Federation of Independent Business, the chamber of commerce, Canadian Manufacturers and Exporters and a number of others all jumped on board and said that it was ridiculous and it was costing them a tremendous amount of money. Representatives came before the finance committee, testified, brought forward their own report, if I recall correctly, and made a number of recommendations.

My friend from Etobicoke North has adopted a number of those recommendations. I think he has adopted some ideas from the Auditor General's report and has included them in Bill C-212.

When I brought this forward, the government had all kinds of reasons why my bill should not go forward. That was a number of years ago now. I think my friend across the way has a number of his own colleagues interested in this issue now, and I hope he will find on his side a majority of people who will support the bill because it really is important.

I will not belabour this. I know there is an interest on a lot of sides to push the bill forward. I support it and I am sure that my colleagues in general support the drift and direction of the legislation. It is a good step. It is about time we brought forward something like this.

There is nothing worse than taxation without representation. In effect, that is what we have because agencies and departments bring these forward with really no discussion and really no representation. There is no parliamentary oversight at present to ensure that these fees are reasonable, that they are somehow tied to the benefits that are accruing to the businesses.

The last thing we want is taxation without representation. User fees yes, but taxation as just another way of bringing additional revenue into the government, no, we do not want that. That is not what this is about, just some way to ensure that costs are recovered when the government provides some kind of a legitimate service for a business or individual and they are the ones who solely benefit.

I have not used a lot of time, but suffice it to say that this is a step in the right direction. I will recommend to my colleagues on this side of the House that we support the member for Etobicoke North in his desire to bring forward this legislation and rein in that uncontrollable beast, the bureaucracy, that sometimes misunderstands the purpose of its powers. In this case, we have many examples of that so I will recommend to my colleagues that we support the bill.

[Julian Reed, Liberal, Halton, ON]

Mr. Speaker, I would like to recognize the efforts of my colleague from Etobicoke North that are aimed at improving the federal fee setting process in Canada.

I would like to provide the House with some information on cost recovery and user charging in relation to what is in place and what my colleague's bill aims to achieve.

Currently, pursuant to the authorities granted to them by Parliament, individual ministers are responsible for establishing and amending fees. As such, ministers are responsible for evaluating and responding to the many factors relevant to a charging decision. They are accountable to the public and to Parliament.

The Treasury Board cost recovery and charging policy works inside this legislative framework, as it must. It sets out the conditions and factors ministers are to consider when users are charged.

Bill C-212 would change Canada's approach. It would establish a standing committee or mandate an existing standing committee to scrutinize all proposed user charges and make recommendations to the House for their approval or rejection.

This overlooks that standing committees currently have the power to examine user charges in their departmental portfolios and call on ministers to provide information.

As this debate has shown, the Standing Committee on Finance is willing and able to examine a government-wide practice like user charging in a very effective way.

The additional provisions of Bill C-212 would create an unprecedented overlap in responsibilities and authority between ministers, the standing committee, the House, and new undefined independent dispute mechanisms. It would create a new role for legal challenges so that ultimately the courts would decide.

That would make existing parliamentary oversight much less effective. This is because the bill would replace existing lines of authority with a very complex, costly and unwieldy new process. First, the bill's proposed approval process would require the House of Commons to approve, reject or amend all user charge proposals upon consideration of the committees recommendation. This would stray from the current practice and philosophy that Parliament delegates questions of application and detail, such as fee setting, to the executive which is done in the name of efficiency.

Second, as an act, the provisions of the bill would be enshrined in law. The ultimate arbiters of user charging then would not be parliamentarians or the executive. It would instead be Canada's court system. Complainants dissatisfied with a departmental decision or simply seeking to delay things might well go to court to argue a technical issue. For example, paragraph 4(1)(a) of the bill would require that:

Before a regulating authority fixes [or amends a fee]... it must take reasonable measures to notify clients...of the user fee proposed...

Paragraph 4(1)(b) adds that the regulating authority:

give all clients or service users a reasonable opportunity to provide ideas or proposals for ways to improve the services to which the user fee relates;

There is no definition as to what constitutes reasonable in these cases. Therefore complainants lose nothing by contending in court that the Canada Gazette and the Internet were not reasonable means of notification, or that a four week consultation period was not reasonable as it coincided with a busy period in their work cycle.

Imagine the caseload on the already overburdened court system. Consider how this would delay decision making for new fee proposals. Imagine how all this would impede the courts' ability to hear more serious cases, such as violent crime, and consider, of course, the court and legal costs.

Third, paragraph 4(1)(e) calls for each charging authority to:

establish an independent dispute resolution process to address a complaint or grievance submitted by a client regarding the user fee or change.

The bill does not establish whether this new ruling authority would overrule the minister responsible for the charge. For that matter, it might overrule the authority of the House committee.

Nor does the bill define what constitutes a complaint or grievance. The government is well aware that complaints range from relatively minor practical questions to challenges of a department's fundamental right to institute charges.

Fourth, the bill would extend the reach of this approval process more broadly than perhaps was intended. We must note that it would also apply to crown corporations. Their ability to quickly respond to clients would be delayed by this new process and that contradicts the reason Parliament granted them a reasonable degree of independent authority: so that government could be more businesslike.

Much hard work was done here in Parliament to create crown corporations like Canada Post. The intent was to make these organizations more efficient and reduce the red tape burden on delivering these services to Canadians. Why would we undo that work and effectively make them less responsive? Yet that is what the bill would do.

Furthermore, the bill reads, “This Act applies to all fees fixed by a regulating authority”. The bill defines “regulating authority” as:

--a department, agency, board, Crown corporation, commission, or any other body that has the power to fix a user fee or a cost recovery charge under the authority of an Act of Parliament.

As worded, the bill could also apply to private sector entities, such as Bell Canada and Shaw cable, whose prices are “fixed by a regulating authority”, like the CRTC. These businesses would be embroiled in yet another round of hearings and the expense and delay associated with them. The repercussions would be far reaching and potentially very serious for firms who rely on faster, not slower, decision making authorities, which in turn affects their bottom line.

Fifth, the proposed process would also require fees to be justified in comparison to all those of all other OECD countries. This risks pressuring Canada to establish fees at an international lowest common denominator. Canadians feel strongly about their government's role in protecting public health, safety and security. They expect better of us than such an unsophisticated approach. They understand that many complex factors determine the level of service people want and the amount they are willing and able to pay.

I wish to convey strongly that the government is committed to the values of transparency and accountability which are so important to this subject. It is very serious about improving the current policy on user charging, which is now in the final stages of development. Extensive consultations have been held with internal and external stakeholders. In December, the government distributed a second draft of proposed policy changes to all policy review advisory committees. For its part, the government remains committed to acting on this feedback to address outstanding concerns.

The policy remains open and the review continues. The direction it is taking will provide more explicit guidance to departments who charge. This will strengthen the accountability of the fee setting process to Parliament, to stakeholders and to the public to bring about greater consistency.

This is in response to previous recommendations of the Standing Committee on Finance and the Auditor General. The changes clearly address the concerns raised by my hon. colleague's bill, which include: improved consistency through clear overall direction with respect to what departments must do and consider when introducing or amending charges; greater clarification of the objectives and requirements expected for meaningful consultations and that these consultations will be ongoing throughout the life of the charging program and not just at the inception of the charges; all programs with charges to have service standards; increased attention to monitoring user charging activities within departments; increased direction and emphasis on establishing and communicating dispute management mechanisms; and more open, clearly communicating information through enhanced annual reporting to Parliament and the public.

These are the reasons why I commend my hon. colleague's concern about improving the situation. I hope I have injected some of the reasons why the system we have now, while it can be improved and I hope it will be improved, is working quite well.

[Tony Tirabassi, Liberal, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, I would like to begin by commending the member for Etobicoke North for his contribution to improving a very important area of user charging.

The government acknowledges that improvements can be made to our fee setting process. In fact, it is currently working on a policy review which I believe addresses a number of the concerns raised by my colleague in Bill C-212.

I would like to begin by providing some contextual and background information. Cost recovery and charging have existed in one form or another since Confederation. Parks Canada, for example, has been charging for its services since the 1880s.

Today, the Government of Canada, like most other governments, charges for a range of optional and mandatory services for the use of public assets and for rights and privileges. Revenues from these various activities currently amount to about $4 billion per year. This is in relation to a total expenditure of some $170 billion.

Canada's user charges comprise about 2% of total federal government revenues. A study of charging practices in other jurisdictions showed that this was generally in line with other countries studied.

Cost recovery is a fair and equitable way of financing government programs and services, including those of a regulatory nature. Its longevity and universal application are a testament to the soundness of its fundamental principle. This establishes that it is reasonable that those who receive special services in excess of those enjoyed by the general taxpayer should bear some, or all, of the cost of providing those services.

I should emphasize that this rationale is not challenged by those who pay the fees. In fact, private citizens, industry representatives, academics, economists, the Office of the Auditor General and the Standing Committee on Finance have all voiced support for this fundamental principle.

The cost recovery and charging policy ensures that, under the responsibility of the individual ministers, the consideration and implementation of charging initiatives is subject to important principles and requirements.

As I have indicated, user charging is not an activity specific only to Canada. A comparative study on the issue showed that the core objective of user charging does not vary among countries; that is, that users pay for the special services they receive. This includes charging for the full or partial cost of regulatory activities.

As in Canada, other countries' fee setting processes are decentralized, which means that ministers are accountable for the charges implemented by their departments. It is important to note that not a single jurisdiction saw the need to have its user fee requirements set in law.

In terms of policy guidance, Canada was found to be most explicit on a number of important elements, most notably, consultation and service standards.

Further, Canada is one of only two jurisdictions that require departments to provide dispute resolution mechanisms, and the only one to require departments work with fee payers to assess impacts.

Can more be done? Yes, absolutely, and we are striving to make those improvements.

The government is in the latter stages of a comprehensive review of this policy. The review heard from 59 firms, industry associations and other non-governmental organizations. This covered some 70 programs of the 400 federal programs with user charges. The review results indicated that most areas of federal cost recovery programs seemed to be working quite well.

In particular, the review found that the majority of paying users contacted were satisfied with the approach and the level of consultation on user charges. However they did cite a frequent need for greater feedback from departments during consultations.

Also, the review confirmed that paying users have raised relatively few disputes with respect to their fees. When disputes did occur, they were mostly administrative in nature and almost always resolved through informal contact directly with departments.

However the review also found that there should be greater awareness among paying users of the existing dispute resolution mechanisms available to them.

The review, as supported by previous recommendations of the Standing Committee on Finance and the Auditor General, did, however, point to a need for clear direction in implementing the policy.

The proposed changes to the policy, therefore, will consider these recommendations as well as what was heard from users and departments. Namely: improved consistency through clearer overall direction with respect to what departments must do and consider when introducing or amending charges; greater clarification of the objectives and requirements expected for meaningful consultations; all programs with charges to have service standards, as well as consult with stakeholders on performance and on the measures to be taken if those standards are not met; increased attention on monitoring user charging activities within departments through stepped up Treasury Board Secretariat involvement.

In addition, every department will now be required to identify an individual at the assistant deputy minister level or higher to oversee the implementation of the policy and to serve as a point of contact for TBS.

Further recommendations are: increased direction and emphasis on establishing and communicating departmental dispute management mechanisms, including the provisions for independent advisory bodies to make recommendations to ministers; and, more open, clearly communicated information through enhanced annual reporting to Parliament and the public of such things as total revenue collected by the various types of charging activities and the performance provided to stakeholders.

This policy instrument, with its improvements ranging from greater monitoring to enhanced reporting, is intended to complement our existing standing committee system, a system that already provides the mandate for committees to flesh out issues relevant to Canadians.

It is important to note that the government is still working with the hon. member for Etobicoke North, industry representatives and departments on the revised changes to the cost recovery policy. A second draft of the proposed changes was distributed to all advisory committees in December 2002. Members, including industry representatives, are now in the process of submitting their comments.The second draft has also been shared with the Standing Committee on Finance so it can view the direction the government is proposing in a number of important areas.

The point being, that we continue to listen, to be open and to explore ideas for addressing concerns. We cannot , of course, promise across the board satisfaction with the end product given the nature and complexity of the issues at hand. However we are encouraged by the feedback from stakeholders and from the member for Etobicoke North, that we are headed in the right direction in a number of areas of concern.

Much of Bill C-212 appears aimed at issues related to regulatory activities and programs. Let me assure my colleagues that regulation does not exist for its own sake. Regulatory programs exist in response to the calls of generations of Canadians for the protection of their health and safety.

A report drafted last year for the OECD-wide review of regulatory reform in Canada stated the following:

Canada was one of the first OECD countries to adopt a regulatory reform programme and has pursued ever broader and deeper reforms for the past 25 years. The quality of its regulatory governance is almost certainly a key contributor to its successes in terms of both economic performance and the achievement of its social goals.

These words do not describe a system in need of major overhaul. We are striving to do better. The Smart Regulation Strategy announced in the last Speech from the Throne aims to accelerate reforms in key areas to promote health and sustainability, to contribute to innovation and economic growth, and to reduce the administrative burden on business.

No one is arguing against reforms. There is no system or organization that cannot be improved. We continue to work with stakeholders, and again, with my colleague from Etobicoke North, to find solutions and improvements to the cost recovery system.

[Dick Harris, Canadian Alliance, Prince George—Bulkley Valley, BC]

Mr. Speaker, I am happy to rise today and speak to on behalf of our party to Bill C-212, the private member's bill which deals with criteria for user fees.

I want to remind the House that this problem has been around for a long time. To support that, I want to quote what the auditor general said in 1993 about the ability to scrutinize this. He said:

We are concerned that Parliament cannot readily scrutinize the user fees established by contracts and other non-regulatory means. There does not exist a government-wide summary of the fees being charged, the revenues raised and the authorities under which they are established.

This caused our member for Medicine Hat to introduce a private member's bill on this very same topic in 1997, which was Bill C-205. I know he intended that his private member's bill would be an opportunity to fulfill those concerns which were raised by the auditor general of the day.

I know the member for Etobicoke North has raised a number of interesting areas and key points that need to be addressed. Quite frankly we agree with him when he calls for the need for more parliamentary oversight when user fees are introduced or changed. We agree with him when he calls for the need for greater stakeholder participation in the fee setting process, which is part of what I just said. We agree with him when he calls for the improved linkages between user fees, the federal department and the agency performance specification and standard.

He talks about the requirement for more comprehensive stakeholder impact and competitiveness analysis when new user fees or fee increases are contemplated. He talks about the goal of increased transparency addressing these fees where applicable. He goes on to talk about the need for independent dispute resolution process and the need for annual reports outlining all user fees. We understand what he is saying and we agree with his observations.

However in addition to having parliamentary scrutiny on user fees, we submit that the following principles should also apply. I know the member will probably agree with a lot of these as well and hopefully, in a collective fashion, we will be able to make some changes.

One, the fees must be based upon the actual cost to providing the service. Unfortunately they are not necessarily set that way now. Some fees are much higher than the actual cost of service being provided.

Two, services must be cost effective. I know the member opposite is a prudent type of thinker and will agree with that. This is a key point. In many cases we believe the services are not being provided in a cost effective way and we have to ensure they are.

The member raised the point that currently $4 billion was going into the federal treasury in user fees. If that cost is reflective of the program that needs to be put in place to administer it in the way which has been just outlined so that the different groups are not paying costs which are not their own or not inflated costs, then that is fine. However in many cases we believe those costs are in fact exaggerated and it is just another form of a hidden tax on the industry itself.

Three, administrative costs must be as low as possible and the documentation requirements must be there in the operation of business.

Four, there should be no cross-subsidization of services for commodities or region. This is a very important point. We have seen too much of this kind of thing in the past. We have seen too many cases where the costs are borne by one area that should be borne by another sector, another industry or another part of the country. Cross-subsidization should not and must not occur.

Five, wherever possible, fees should be directly applied to prevent fee inflation to indirect application through the service provider.

Six, there must be a system in place for tracking the overall incident of fees and the effect on industry with a process for consultation.

Simply put, we do not mind the idea of user fees or a cost recovery. We think that is important. However the user fees must reflect what is a reasonable amount of cost recovery to actually do the job and should not bear out an overinflated bureaucracy that does not adapt quickly to where that individual sector is itself.

It is important that these industries be allowed to function. We have a tough time already in this country. Taxes are very high. We have to compete internationally. Our productivity has fallen against that of the United States for about 25 years and we have to look at ways to cause that to change.

My party has held hearings across Ontario over the last few years. We have been told that regulation is just as big a cost to businesses, especially small businesses, as taxation is. In fact, it is disproportionately higher for small businesses because they do not have the people dedicated specifically to complying with regulation or people who are administrating these cost recovery programs on them.

Regulation is a huge cost. I think in some of the studies done by the Fraser Institute it showed a total regulation cost of $100 billion annually to industry in Canada. That is an astronomical amount. It hurts industry in terms of being competitive. It hurts the economy, and the bottom lines of businesses are tremendously affected.

To sum up, we understand what the member for Etobicoke North is trying to say in his bill. We support it. We have offered some further suggestions. We believe this is the time to get the user fee regime right after so many years. This is a step in the right direction and I suggest that all members in the House should support the bill.

[Steve Mahoney, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I am pleased to have an opportunity to share some thoughts on this bill. I will begin by saying that I was asked by the sponsor of the bill, the member for Etobicoke North, and by the parliamentary secretary, the member for Niagara Centre, if I supported the bill? My answer was unequivocal. I said that I absolutely supported it, which means there are some things in the bill that make sense, but there are some concerns that need to be addressed.

To simply support it outright would probably cause some difficulty, unless we are absolutely sure, and I think this process will allow this to happen, that we will have an opportunity to make some changes.

Let me focus on a couple of things. I would not be surprised if the opposition supports a bill of this nature simply because the process which would be put in place would allow the opposition the opportunity to vote against every user fee that the government might deem necessary to put in place. To my friend, there is clearly an opportunity for political grandstanding if this is not handled properly, not that my hon. friends opposite would ever do that. Therefore we would be politicizing the process of putting in place fees, users fees, that were necessary for the proper functioning of agencies, departments of government. On the other hand, should Parliament not have a role in the oversight? That is where the balance here makes some sense.

I tend to agree with the principles the member has outlined in the bill of the need for more parliamentary oversight. We have to be careful about the process, not necessarily in terms of one fee or one issue, but in terms of the huge operation of public institutions in the government. In fact, there is even a suggestion that this could impact into the private sector whenever we deal with agencies or corporations that are regulated by government bodies. The obvious example would be Bell being regulated by the CRTC, or the music industry, or television or something of that kind. Some people might like it if we could have a more hands on ability to affect the fees that Bell charges. I do not know that we want to take the government, any government of any political stripe, down the road where we interfere to that level.

One issue is that when we at any level of government deal with a particular project, we should deal with the big picture. We should not micromanage. I do not believe that is what we were elected to do.

I use the example in days gone by when I was in municipal government. I was president of the Peel Non-Profit Housing Corporation, which builds housing projects. When we built a housing project, some members of the board literally wanted to pick the colour of the curtains or the design of the building. That is not the role of the board of that corporation. The role is to approve projects, put in place the financing and give the professionals the opportunity to build the facility, deliver it on time and hopefully on budget. To have the politicians involved in the everyday decisions and management of it would frankly cause me some concern.

I have spoken to the member about this. I believe if the bill receives approval in the House, it will go to committee. I am told it may go to the finance committee. It perhaps should go to government operations. I would ask the member to give some thought to that. It is more of an operational situation. The finance committee might find itself too busy to deal with the bill in a timely fashion.

One area I would want to deal with at committee would be the impact on crown corporations. In my role as parliamentary secretary of transport, the balance of that statement is four crown corporations. My role in working with the minister is to work with Canada Mortgage and Housing, Canada Lands, Canada Post, Queen's Quay and the old port of Montreal.

The concern I have is that many of these corporations, and I will just give a couple of examples, like Canada Post, CMHC and the Mint, have been given commercial mandates. They have a responsibility to market their services and products.

Canada Post is renowned throughout the world. It is a very typical Canadian institution. At home we tend to denigrate Canada Post and say nasty things about it. Yet there are some 26 countries throughout the world which hire the international marketing arm of Canada Post to help them do a better job of delivering mail in those countries. As is often so typical, a service developed here in Canada is recognized in other parts of the world in a better way and with greater acknowledgement of its success.

CMHC has a commercial mandate. The commercial mandate takes it to the point where it runs a very large and successful mortgage insurance operation. If it were impacted on the setting of its fees by the fact that it had to go through the actual fee setting outside the commercial realm or if it had to come to a parliamentary committee, we would be putting an unfair burden upon that corporation. It does have to compete. GE Capital has a mortgage insurance arm and it would be under no such obligation to come before a parliamentary committee to set its fees.

We have to look at some exemptions if we are to look at this. We have to be able to say that perhaps there are some fees or some areas that are more directly involved with Parliament and should have greater oversight and involvement. However clearly we should not penalize crown corporations or private sector corporations in their ability to compete in the marketplace.

This comes to the very issue of the role of Parliament versus the role of government. We have had calls recently for a vote in this place on whether Canada should participate in a war in Iraq if a resolution comes down through the United Nations. It seems to make some sense to the people on the street that Parliament should make that decision. However the basic fundamental problem in differentiating between the role of Parliament and the role of government goes to the very root of my argument with regard to micromanaging.

The government has certain executive responsibilities. The government is the Prime Minister and the cabinet. The rest of the people members of Parliament in support of the government or members of Parliament in opposition to the government. Technically the government is that group of men and women who form the governor in council, which is the cabinet of the government, and they have a responsibility. If they had to come to Parliament for a vote every time they needed to make a decision which had widespread impact on the country or in our relationships in foreign affairs, because of the debates we see in this place where positions are entrenched because of certain beliefs and certain political parties, the risk would be that we would paralyze the country and make it impossible for the government to fulfill its mandate.

That does not mean Parliament should not have a lot to say and a lot to do with regard to all these decisions. That is why we have the committee system and the opportunity to go forward with ideas, good ideas such as Bill C-212.

Let me just wrap up by saying that having identified a couple of concerns to my colleague, the member for Etobicoke North, I hope we can take out of the bill some of the areas that would lead to micromanaging, that would hurt the commercialized mandates of crown corporations and private sector companies and that would take Parliament as a group into the areas in which frankly none of us were elected to be involved. At the same time, if we adopt the principle involved here, we can say that we stand for more accountability and transparency in the setting of user fees because at the end of the day, a user fee is simply another form of taxation. It may be voluntary taxation. In other cases it is mandatory and people require it.

I could go on about whether we should have user fees in health care, which would be the obvious one that comes to mind. That would not be a voluntary user fee, and our party is opposed to that. However I do not want to get into the debate of that issue in relationship to this bill.

We should support the bill in principle and send it to committee. However there needs to be an awful lot of work done among the member sponsoring it, the committee and the government to make this a useful tool where we can say to the people of Canada that we have indeed improved the system of governing this great nation.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am pleased to take part in the debate on Bill C-212, An Act respecting user fees, introduced by the hon. member for Etobicoke North. I can say from the outset that the Bloc Quebecois will support this initiative.

Indeed, user fees, whether they are set by departments or other federal agencies, are a recent development, but one that seems to be gaining momentum. As we know, in recent years, not only in Canada, but also in a large part of the western world, governments have had a tendency to reduce personal and corporate income taxes, while trying to find other means, which are often less visible than personal income taxes, to fund the activities and services provided by their various departments or agencies.

It is estimated that, for last year alone, consumers paid $4 billion for services provided by government agencies or departments.

Taxpayers are not stupid. They realize that if, on the one hand, taxes are lowered but, on the other hand, user fees increase, they might end up being the losers.

As the bill proposes, there is a need for greater transparence about what these user fees really are and for Parliament to play a role in setting these fees. We know that, contrary to income tax, which is a progressive tax—the higher the income, the higher the marginal tax rate—user fees are the same for everyone. They represent a form of regressive taxation, which may be totally legitimate—there is no denying that—but which still affects taxpayers and the people of Canada and Quebec differently.

Before user fees are imposed or changes are made to them, it is imperative that Parliament have the authority to look at the impact of imposing or changing these fees. Especially since this is not only a regressive tax, but user fees will often be charged for a service that is a monopoly.

Take passports for instance. If I need a passport, I have no choice. I must contact the department responsible be issuing passports, fill out the form and pay for the service. This is a monopolistic situation.

Regulation is necessary, as in the case of most monopolies. Parliament must ensure that imposing user fees will not have disproportionate and unfair consequences for Canadians and Quebeckers.

Also, and this is in keeping with the debate we had this morning, there is the matter of the quality of service. If user fees become common and increase, but the quality of service available to the taxpayers and users decreases, and there is a monopoly, there will certainly be public frustration and even questions about the public nature of these services, as is already the case.

So it is perfectly normal for Parliament to be able to make a decision using the procedure set out in this bill, one I find quite appropriate. Parliament must be able to vote on the imposition and amount of user fees.

This bill also proposes to establish a federal regulatory body—which is quite appropriate—to hear complaints and also examine the imposition of user fees or changes to user fees. We have no problem with this. I think that the Standing Committee on Finance should also play a major role in considering requests to implement user fees, as well as the amount of such fees, based of course on all the documents prepared by this federal regulatory body.

Should the House support this bill at second reading, and I hope it does, and refer it to a committee, I would like to look at a particular issue that is not covered by the hon. member's bill, namely private foundations.

In her April 2002 report, the Auditor General said, and I am quoting the first paragraph of the main points in chapter one:

The federal government has paid billions of taxpayers' dollars to private foundations and other delegated arrangements set up to achieve public objectives, transferring the funds years before Canadians receive the intended benefits.

I draw the attention of the House to the following sentence:

The government has delegated program responsibilities to these arrangements, but they are often beyond the reach of Parliament's scrutiny.

The Auditor General is referring here to public programs.

It seems to me some private foundations could also provide services and collect user fees. We should take a close look at this. I am not referring to all the activities of these foundations. Indeed, as regards this aspect, the Auditor General is already proposing greater accountability to Parliament on the part of the government and of these foundations, which receive billions of dollars from the federal government.

In addition to what the Auditor General proposed, I think that during consideration of Bill C-212, we could see whether there is interest in expanding this bill to certain private-based activities—as the Auditor General mentioned herself—that have responsibilities with respect to public programs.

At this stage, I have made a list of foundations that we might find interesting, and there are many. I think the committee will have to take a more technical approach to all this information, namely whether a foundation to which delegated a certain number of responsibilities in public programming have been delegated, imposed user fees.

At this time, I will not dispute the fact that Bill C-212, An Act respecting user fees, could also apply to the activities of some private foundations.

I think the basic principle of the bill is entirely valid. It has a close connection with current discussions within all the political parties about enhancing the role of Parliament and the role of its members. It is a duty that is expected of the elected members, that is, to ensure that user fees are valid and reasonable when they are implemented, and that these fees do not become prohibitive.

It is part of the role of Parliament. It is also an issue of transparency, especially in a context where tax breaks totalling $100 billion have been announced for the next five years. The government should not give tax breaks with one hand and take back user fees with the other. This amounts to regressive taxing. There are already examples of what this government is capable of, with employment insurance.

So, in terms of transparency and democracy, I think that Bill C-212 deserves the support of the House. As I mentioned at the beginning of my comments, the member can be assured of the support of the Bloc Quebecois.

[Alex Shepherd, Liberal, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, it is a great pleasure to enter this debate on Bill C-212 put forward by the member for Etobicoke North. I respect the member. We have been great colleagues for a long time and we share many functions on various committees. I know how much this issue means to him. Indeed, I am very interested in this issue as well because of course the government brought in user fees a number of years ago and sometimes people think that we just do not have it quite right.

I would like to report that the Treasury Board in fact is abreast of the issue. It has undertaken a change, a policy framework process, and has dealt with industry in trying to bring forward a revision to the policy. It is not here quite yet and that is partially what my argument would be: that the bill is somewhat premature because there is work and progress going on. However, the member opposite is very concerned that it is not going fast enough, and so maybe he should be.

I must state that the government is opposed to the bill for a number of reasons. Today I would like to describe these reasons as well as provide the House with some additional information on cost recovery and user charging.

Bill C-212, despite its good intentions, would be detrimental to the effective functioning of government. It contains a number of constructive measures, but these are already in place in existing federal policies. I believe that accountability and transparency can be better strengthened through improving these existing policies and existing mechanisms for reporting to Parliament and the public.

Currently, pursuant to the authorities granted them by Parliament, individual ministers are responsible for establishing and amending fees. As such, ministers are responsible for evaluating and responding to the many factors relevant to charging decisions. They are accountable to the public and to Parliament. Ministerial accountability is a fundamental principle in all parliamentary democracies. The Treasury Board cost recovery and charging policy supports this legislative framework by setting out the conditions and factors ministers are to consider when users are charged.

This bill would change Canada's approach. It would establish a standing committee to scrutinize and make recommendations to the House of Commons for the approval or rejection of all federal user charges. I know that all of us who serve on various standing committees look forward to the possibility of a another standing committee and wonder how we could provide our time accordingly.

The bill's additional provisions would create an unprecedented overlap in responsibilities and accountabilities between ministers, the standing committee, the House, undefined independent dispute mechanisms and ultimately the courts. This would dismantle the existing ministerial responsibilities, and existing parliamentary oversight would in fact be supplanted.

Ironically, the sum effect would be to undo the worthy objectives of the hon. member's bill. I say this because it would skew accountability by replacing existing lines of authority with a process that would be very complex, costly and unwieldy.

First, the bill's proposed approval process would require the House of Commons to approve, reject or amend all user charge proposals upon consideration and recommendation of the House committee. This would stray from the current practice and philosophy that Parliament delegates questions of application and detail, such as fee setting, to the executive, which is done in the name of efficiency. In other words, the bill would require the Parliament of Canada to in fact micromanage this whole file.

For example, let us imagine that a small agency under Health Canada is seeking approval of a minor change to its fee schedule. In this example, the proposed fee change is intended to simplify the fee structure and process. The bottom line, or the public purse, would not be affected by this change. The proposal is deemed to be revenue neutral. Is this really the type of proposal that requires a separate committee and the House to spend time reviewing? I think not, but the bill would capture this type of transaction

Second, as an act, the provisions of the bill will be enshrined in law. The ultimate arbitrators of issues regarding its interpretation and implementation, then, will not be parliamentarians or the executive, but rather Canada's court system. Complainants dissatisfied with the departmental position or simply seeking to delay fee implementation are liable to avail themselves of the court process to argue potentially frivolous technical issues. In other words, we can actually visualize people starting a court action simply to avoid the possible imposition or increase of a fee.

For example, paragraph 4(1)(a) of the bill requires that “Before a regulating authority fixes” or amends a fee, “it must take reasonable measures” to notify clients of the user fee proposal. Paragraph 4(1)(b) adds that the regulating authority must also give “all clients or service users a reasonable opportunity to provide ideas or proposals for ways to improve” the fee-related services.

With no definition as to what constitutes “reasonable” in these cases, complainants lose nothing by contending in court that the Canada Gazette and the Internet were not reasonable means of notification in their case or, for example, that a four week opportunity to provide ideas was not reasonable as it coincided with a busy period in their work cycle, et cetera.

We can imagine the caseload on an already overburdened court system. We must consider the time delays on implementing potential fee proposals and the delaying effects this would have on the courts' ability to hear more serious cases, and we must consider of course, the court and legal costs.

Third, paragraph 4(1)(e) calls for each charging authority to “establish an independent dispute resolution process to address a complaint or grievance submitted by a client regarding the user fee or change”.

The bill does not establish whether the ruling authority of such a process would supersede that of the minister responsible for the charge or, for that matter, the authority of the committee. Nor does the bill define what constitutes “a complaint or grievance”. The government is well aware that complaints can range from fairly practical questions of application to those that challenge the right or rationale for the department to institute a charge.

Fourth, the bill would extend the reach of this approval process more broadly than perhaps was intended. We note that it would also apply to crown corporations. Their ability to quickly respond to their clients would be subject to the delays created by this new process. That contradicts the reason Parliament granted them a reasonable degree of independent authority: so that government could be more businesslike.

The operational independence granted crown corporations has long been considered an integral part of making government more effective and responsible. Much hard work has been done here in Parliament to create crown corporations like Canada Post so that we could make these organizations more efficient and reduce the red tape burden on the delivering of these services to Canadians. Why would we undo that work? Why place new limits on these organizations after directing them to be more businesslike? Yet that is what the bill would do.

Furthermore, I note that the bill states, “This Act applies to all fees fixed by a regulating authority”, and the bill defines a regulating authority as “a department, agency, board, Crown corporation, commission, or any other body that has the power to fix a user fee or a cost recovery charge under the authority of an Act of Parliament.”

As worded, the bill also could apply to private sector entities such as Bell Canada and Shaw Cable, whose prices are “fixed by a regulating authority” like the CRTC. The repercussions for these businesses would be yet another round of hearings and the expense associated with them. The added delay implied by the effects of the bill, creating various layers of parliamentary, judicial and independent oversight, would be far reaching and potentially very serious for firms who rely on faster, not slower, decision making authorities, which in turn would affect their bottom line.

Fifth, the proposed approval process would also require fees to be justified in comparison to those of other OECD countries.This risks putting pressure on Canada to establish fees at an international lowest common denominator. Canadians feel strongly about their government's role in protecting public health, safety and security. They expect better of their government than an unsophisticated comparison when so many economic, social and political factors determine the level of service people want and the amount they are willing and able to pay.

I wish to convey a strong message that the government is committed to the values of transparency and accountability and is acutely aware of their importance in the user fee environment. It is very serious about making substantive improvements to the current policy on cost recovery.

The government is presently in the latter stages of a balanced and comprehensive review of this policy. Extensive consultations have been held with internal and external stakeholders. Based on the comments received, the government has proposed, in the form of a draft revised policy, a number of changes. Following comments on these proposals, the government is considering further refinements.

The proposed changes will strengthen the accountability of the fee setting process to Parliament, stakeholders and the public and bring about more consistency in the implementation of the policy. This is in response to the previous recommendations of the Standing Committee on Finance and the Auditor General. The proposed changes will provide more explicit guidance to departments that charge.

It is important to note that the government is still in consultation with industry representatives and departments, but there are differing perspectives and competing objectives to consider. Not every issue will be resolved to the satisfaction of all stakeholders. We will continue to listen and to explore ideas for addressing concerns before concluding this review. As we are still consulting--

[Bill Casey, Progressive Conservative, Cumberland—Colchester, NS]

Mr. Speaker, it is a pleasure to speak to this bill. We support the bill and we commend the member for bringing it forward. It is very comprehensive. It seems very fair and well thought out. It addresses not just user fees per se but many other aspects of the user fee issue.

I just wondered, as I sat here and listened to the debate, how the user fees that we face now would be different had this bill been in place. What comes to mind is the airline industry. On our airline tickets there is now a user fee for Nav Canada. It was always included with the Department of Transport expenses and it was not charged to people. Now there is a charge right on the ticket for Nav Canada air traffic control services. There is usually a fee for airport improvement. There is another fee now for airport security and one for a fuel surtax, which is not government.

I am sure that if the member's bill had been in place when the proponents of those user fees brought them in, they would not be as they are now and perhaps they would not be there at all.

For a Liberal bill, it is certainly a very good one. I compliment the member for bringing it forward. We will be supporting it when it comes to a vote.

Air traffic fees are the ones that come to mind. There is a toll highway in my riding. It is the only toll highway in Canada on the Trans-Canada Highway. It is the only section of the Trans-Canada Highway that is tolled. It was originally to be funded through a federal-provincial agreement, but a federal minister and a provincial minister in Nova Scotia decided to take some of the money out and move it to an area of their own riding. They even had the agreement changed. The funding was supposed to be specifically for national highways. The funding was there for this highway, but a former minister of transport a few years ago and a minister of transport in Nova Scotia decided to redirect the money. In the end we ended up with a toll on a section of the Trans-Canada Highway instead of being properly funded by the federal-provincial agreement.

This is simply a user fee. It costs $3.50 to go one way or the other. It is going to be $4.50 if the predictions are right about increases next year. What that means for the people where I live in Amherst who drive to Truro in the centre of Nova Scotia on a four lane highway and back is they have to pay $9 in user fees. However, for people in Pictou who drive the same distance to the same town on a four lane highway that is provided by the government, it is free. People in Halifax can drive to the same town of Truro on a four lane highway and back and it is free. It is just the people who live in my community in Cumberland County, Amherst and Springhill in Nova Scotia, who must pay a user fee. It is completely inconsistent. It is an aberration. It is not fair. That is the way it is with many user fees.

If this bill had been in place, I would say that the user fee would never have been allowed to stand. The requirement under the original funding agreement would have been imposed and the highway would have been paid for. It was a federal-provincial agreement with no user fee required.

It is the inequity in the system that is so unfair. Most people in my province of Nova Scotia can drive on a four lane highway for free. There is just one small group that has to pay $9 to go back and forth on a four lane highway. It is exactly the same as the other highways. It goes to exactly the same places. It serves exactly the same purpose. It is owned and operated by the province of Nova Scotia. However because there was no scrutiny, because there were no regulations, because there was no accountability, this user fee was imposed on that highway. It has been a thorn in my side from the beginning and it continues to be a thorn in my side.

The air costs are certainly imposing a great burden on the smaller airports and the smaller distance flights. The member for Gander—Grand Falls was telling me how the flights are being reduced so much because of the extra surcharges. Because of the surcharges the number of passengers is down. When the number of passengers is down, the flights are discontinued. To go home tonight he has to fly to St. John's, Newfoundland, stay overnight and then fly to Gander tomorrow because of the reduction in flights. That is a direct result of user fees being charged.

Again, I do not believe those user fees would be in place the way they are now had this bill been in place. All this bill does is it allows for accountability. It requires that there be scrutiny. It requires the proponents to explain and justify what they are doing. That was never done on the toll highway that I mentioned, the aircraft security fee or the Nav Canada fees. There was no scrutiny. There was no discussion and no debate. They went through and each is simply a tax.

These user fees are a dedicated tax that are focused on one specific group of people. If there is a tax imposed on Canadians, it should go through the House. It should be subject to committee scrutiny. It has to be justified, but by calling it a user fee, everything seems to slide right through, no questions asked.

We support the bill just the way it is. It is probably not perfect, but it is a heck of a lot better than what we have now. When it comes time to vote on the bill, we will be voting in favour of it, because again, it is simply accountability, fairness, equity and justification.

I hope all members look at this. I hope people on all sides think about this, realize how important the bill is and what a good move forward it would be. It will not cost; it will save. It will make people think. It will make people accountable and ensure that they do the right thing. It will force federal government departments, all departments, agencies, boards, crown corporations, departments of highways, ferries and everything else to apply to Parliament to justify their fees, their raises and whatever they plan to do. It will make them subject to committee scrutiny. Right now there is no such scrutiny. They just decide what they want to do and they do it. There is no accountability, no transparency and no justification.

In fact my colleague, the Conservative member for Kings--Hants about five years ago brought up the same kind of issue. He said that the government should implement its regulatory budget parallel to the traditional spending budget which would detail estimates of the total cost of each individual regulation, user fees, including the government enforcement costs as well as the cost of compliance to individual citizens and businesses, and include a risk benefit analysis of each regulation to enable cost benefit analysis of regulations for parliamentarians.

It differs a little in form and substance, but the same goal is there, the same philosophy is there to add some accountability to this loosey-goosey arrangement. Even though the member for Kings--Hants presented that five years ago prior to many of the user fees that have been brought in since then, it is certainly even more applicable now and is reflected in Bill C-212.

The underlying principle is simply more transparency and accountability. What could be more appropriate than that? It is something we talk about all the time.

The bill, if enacted, would provide parliamentary scrutiny and approval for federal user fees. It would provide greater transparency in the fee setting process. It would ensure public consultation, and there is none now, prior to introducing or amending these fees.

I have a list of organizations that support the bill. I will not repeat them because the member has done a good job of outlining them. One is the Canadian Federation of Independent Business which represents 103,000 small and medium size businesses. They are the people who end up bearing the brunt of many of the user fees that are in place now. Surely we should be listening to these small businesses, which are the backbone of communities like mine, the small and medium size towns in rural Canada.

If the government fees continue to go unchecked, they will continue to hurt small business. They have made this message very clear. In turn, this will impede job creation and hinder our country's overall productivity and ability to compete. In my area, every single cent is important. Every cost reduction is important. Everything that provides a hurdle for competitiveness is very painful for us and it costs us a lot in jobs.

I commend the member for his bill. Canadian taxpayers want value for their money. They want transparency. They want accountability and they want fairness.

Again, I go back to that toll highway. It should never have been a toll highway, but just because it was easy to do, even though there was a federal and a provincial contribution, the way it was handled resulted in a significant toll that will just go up. I believe if that issue had come back to the House, it never would have happened. Under the member's bill that whole issue would have been here. It would have been debated. It would have had public scrutiny. It would have gone to committee and it never would have happened. It is eminently unfair.

I have a lot more thoughts on this. Maybe I will have another chance to share them later on, but essentially we applaud the member for bringing forth the bill. We will support it just the way it is.