Bill S-2 (Historical)

An Act to amend the Customs Act

This enactment amends the Customs Act to clarify certain provisions and to make technical amendments to others. It also imposes additional requirements in customs controlled areas, amends provisions respecting the determination of value for duty, and modifies the advance commercial reporting requirements. Finally, it provides that regulations may incorporate material by reference.

Customs Act

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I will start with my hon. colleague's last question first. I think the answer is yes. CBSA officers will require additional training to ensure that they exercise their powers in a manner that is both effective and respectful of the rights of all people who are travelling through customs-controlled areas.

In answer to his first question, the change proposed in the legislation, vis-à-vis the current Customs Act, is the addition of the power to question and search people in the area. This is the important distinction to be made and the important—

[The Deputy Speaker, Andrew Scheer]

Resuming debate, the hon. member for Mississauga South.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to offer some thoughts on Bill S-2, which originated in the Senate.

The bill would amend the Customs Act, clarify certain provisions and make technical amendments to others. It would also impose additional requirements in customs' controlled areas, amend provisions respecting the determination of value for duty and modify advanced commercial reporting requirements. The bill provides that regulations may incorporate materials by reference.

It is interesting to see how the debate has gone on. It started off with a member of the official opposition spending a bit of time dealing with the potential implications of border areas on the economy of Canada and a little review of the current economic climate and the financial position of the country right now, which members are concerned about, whether it be with regard to the size of deficits, the level of unemployment, the international difficulties, bailouts and the like.

Having allowed that discussion to take place for some 10 minutes provided a great opportunity to open up the entire debate to talk about the finances of the nation, but the bill is not about that. It is tangentially involved.

There was also an intervention by the parliamentary secretary, who gave us a little lesson about the Canada Border Services Agency. It is helpful for the public to understand that this agency has some responsibilities and they are very serious and onerous.

What caught my attention about the bill is the whole area of the regulatory environment and the expansion of the regulatory reach, which is being enabled by Bill S-2.

I was curious at the outset as to why the bill, which was introduced in the House in the last Parliament, was this time put through the Senate. I will be the first to admit that Senate committees do better work than House of Commons committees for no other reason than their members do not have constituency responsibilities as well as some of the political responsibilities of members of Parliament. Senators are not spread as thin and they can look at bills carefully, and I noted a couple of items senators raised.

The bill passed in the Senate on April 23, about a month ago. It received a quick second reading here and went to committee where it stayed for one day. To me, second reading of bills is an opportunity for a few members to participate in a debate and to talk about their views or about their knowledge, but without having the knowledge of any witnesses or experts to find out exactly what the stakeholders have to say about charter implications or privacy implications. Did the Privacy Commissioner appear? What do airport authorities have to say about this? How do they feel about the changes that are being proposed to the Customs Act?

There is a major implication in Bill S-2 with respect to the way the Customs Act operates and the latitude that people will have. It touches very closely on charter rights, on personal information and electronic documents and on the facilitation of trade activity across our border. Bill S-2 touches on a lot of things, but committee had only one day to discuss it.

The committee met on May 26 and it reported today.

That raises the question about why the committee did not look more carefully at some of the substantive questions that have come up. I do not know why there were not the kinds of witnesses that would be necessary to expose risk areas. The previous speaker was a member of the committee, and I asked him a simple question: What is the definition of a customs controlled area? He was not aware. That definition is in the current Customs Act. I do not happen to have it with me.

There was a speech given earlier this day by a member who mused about whether or not a customs controlled area would include an airport parking lot, or certain other areas as opposed to what we would normally consider to be the customs area, where there are officers and people would be taken to be asked questions. Another question had to do with duty free shops which are customs controlled areas. Duty free shops are in the main part of an airport where the public is going.

This is sloppy. I hate to say it, but this is a sloppy approach to a bill that may have some consequences. When I rose to ask a question earlier, I asked about an area that I spent a lot of time on. It has to do with regulations. I am still not aware of the discussions and I have not had an opportunity to look at the discussions at Senate committee. There is a new section being added to the Customs Act, new section 164.1(1), which states:

A regulation made under this Act may incorporate by reference any material regardless of its source and either as it exists on a particular date or as amended from time to time.

Leaving out the time element, it says very simply that the regulation may incorporate any material regardless of its source. I was astounded when I read that. There are no restrictions. A regulation can incorporate anything. Why would a document be incorporated by reference? Take the example of legislation regarding a tax credit for people who buy tools. There may be an incorporation of the Income Tax Act by reference so that if people wanted to see the kinds of tools that would qualify, they could refer to that document. There is more detail. It is for clarification.

This new section that will go into the Customs Act says “any” document. From a lay perspective, I guess people would say that if there is a piece of legislation called the Customs Act, they can read it and see what the powers are. They can go to the regulations and see those. Members will know that we do not see the regulations on any act until after we have passed the legislation and it has received royal assent. Regulations are made by order-in-council.

This new section goes on to say that those regulations that we do not see until after we have given royal assent to a bill can incorporate by reference any other material. How is a stakeholder or interested party to understand the substantive point of a clause of a bill or an act like the Customs Act without seeing the regulations if they need some clarification? Now it has this other element of incorporation by reference of any other material.

If people are wondering whether or not they are going to be in compliance with the law, they are now almost forced to go to the regulation to see what documents or materials are incorporated by reference and then they are going to have to find those materials to see whether it is in context.

This is a very strange addition. I understand that the matter came up at the Senate committee. There were concerns raised. Here we are at third reading and I have heard a couple of speakers also raise some concerns. There are still outstanding questions about what constitutes a customs controlled area. This problem of the incorporation of any other materials that they want is still a concern. Are there still concerns about privacy? Are there still concerns about charter rights of individuals? Are there concerns about the impact of the authority that is going to be expanded and passed on to customs officers that may have some impact on the flow not only of goods and materials, but also of people? This is part of the economic equation.

Here we are at third reading. We still have questions. The House is not quite sure whether or not a customs controlled area includes the parking lot of an airport. The Greater Toronto Airport Authority has opined on this. It supports the bill. The GTAA supports the bill and feels that it will provide border services officers with the flexibility, and I stress flexibility, to examine goods and question and search people anywhere within customs controlled areas. Under the current Customs Act, the Canada Border Services Agency is only able to exercise this authority at exit points.

It is kind of broad. The Canadian Airports Council also is supportive and indicates that when it was first introduced, trade lawyers expressed concern with parts of the Bill S-2 that it might allow the government to pass regulations regarding what information or advanced data elements would need to be provided by exporters prior to the arrival of goods into Canada without much consultation. The council is concerned also with the extent of the information that will be required and how the requirements to gather and provide the information will affect exporters' trade with Canada.

This is very, very significant. The response of the GTAA and of the Canadian Airports Council about how this is going to impact the flow of people, the flow of goods. The bureaucratic requirement now is almost open-ended. It is almost as if all of a sudden those who have goods or services or other trade matters which come through border areas, or people, may now be exposed to a whole bunch of onerous requirements.

It raises the spectre I have asked businesses on many occasions. What can we do so that they can do more business and be more successful? Time and time again, they want us to reduce the bureaucratic involvement, the paper requirements, the disclosure requirements, the forms, the reporting. All of these things are very important, but the bill opens it wide where advance reporting requirements may bog the system down. It is going to have some implications.

This morning I was at the meeting of the Standing Joint Committee on the Scrutiny of Regulations. It is one of the least known committees in Parliament, but it has an important responsibility.

As I indicated earlier, when a bill comes before us, the House deals with it at second reading. It goes to committee. It comes back, perhaps with report stage amendments. We have third reading debate and a vote. When it passes here, it goes to the Senate and basically goes through the same process.

If a bill indicates that the minister may make regulations in certain areas, and this bill does, members of both houses have debated and discussed all their concerns without seeing the regulations. There is legislation that was given royal assent four years ago which still has not got the regulations in place. Many of the clauses in that particular bill are still not enforced because it is waiting for regulations.

It is so bad that a Senate private member's bill actually passed in this place which says that if a bill does not get royal assent or items are not proclaimed and enacted within 10 years, they will sunset. They will die. It happens; that is the reality.

Now we have a situation in this bill where the regulations are expanding the horizons by permitting incorporation of materials, any material, by reference. It will make it more difficult for people to understand what the law really says. It is the responsibility of the Standing Joint Committee on the Scrutiny of Regulations to be vigilant and to look at the regulations as they are gazetted to make sure that those regulations clarify or provide the additional information so that people understand what the clauses in the bill say.

There can be no regulations that are not enabled by the legislation. The legislation itself must have clauses that say that the minister can make a regulation to amplify or clarify the details. For instance, if there is a tax credit for tools, in the regulations there might be a list of the kinds of tools that would be eligible for a tax credit. That would be an example of a regulation doing what it should.

What has been happening for a long time is something called backdoor legislation. It is in fact putting into regulations intent or activities which have not been specifically enabled in the legislation. It means that the House of Commons and the Senate can do all their work, but once the bill passes and it gets royal assent, it then goes into the hands of cabinet. It is cabinet that does the regulations. Those regulations start to creep and have a broader implication to the bill. If we look at the regulations, our understanding of what the clause in the bill actually says may be different. It should not be. It should be the other way around. There should be no surprises in regulations.

I have some grave concerns about this. I do not think there is anything I can do about it. I will say that the potential implications concern me. It concerns me that the committee seems to have given it fairly short shrift. That is problematic. There are potentially some sweeping implications of this. There have been some assurances given with regard to the charter issues and privacy issues. I would have had a greater comfort level if the representatives from the Office of the Privacy Commissioner had been there to give their view to the committee about the privacy considerations, because if a customs controlled area is much broader than we think it is, the public could be subjected to questions on any matter that someone has a reasonable suspicion to think might affect the Customs Act.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I listened with great interest to the member's comments. He has made similar comments in the past and I certainly agree with him that all too often legislatures pass bills for which regulations will be promulgated in the future, and we never get updates as to what the process is and how it is developing.

There was a bill passed three or four years ago in Parliament to establish all-in pricing for airline fares. After two years that provision was lost in space. We will probably never hear about it again and regulations will never be brought into force.

Clause 6 of this bill creates a new section under the Customs Act to allow the governor in council to make regulations regarding the advanced information that is required for the importation of goods, information about the persons and goods on board the conveyance.

I would like to ask the member a question. Does he think there are any planned consultations for the development of these regulations? Clearly, that is a question that should be asked by the committee. What is the process going to be, who is going to be consulted, and when are they going to be consulted?

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, consultation on a regulation should not actually be necessary because it provides clarification. There should be consultation on clauses of the bill, the act itself.

The member raised a question. This is where the scrutiny of regulations committee comes in. From time to time there have been additional clauses put in bills that basically say that any regulations made pursuant to legislation shall be reviewed by the appropriate committee of both Houses to ensure that the meaning, intent, scope, et cetera, is enabled by and is the intent of the legislation.

Committees should understand that they have the extraordinary authority, right and responsibility, where necessary, to make amendments at the committee stage. Where there is some concern about the regulation-making process and where there are potentially some very serious consequences, the committee should have the opportunity to review them, maybe not to reject or accept them but at least to examine them, and make comment to the minister before the regulations are gazetted.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Madam Speaker, I would like to ask my hon. colleague from Mississauga South a question. He has become a renowned expert on parliamentary procedure in this place and has picked up on a very important issue in this particular bill, and that is the protection of the rights of individuals as per some of the language that is being used, at least in my experience, and I agree with him, for the very first time in many a year.

I note that in his presentation he talked about protection of the rights of individuals as we try to build in greater efficiencies in the way that we handle our border crossings and the movement of people and goods back and forth. I am wondering if he could take a moment to comment on just what it means, at least from the perspective of parliamentarians, when the government says that there will effectively be no restrictions on the kinds of things that a border official can demand of someone crossing the border.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, I am the chair of the Access to Information, Privacy and Ethics Standing Committee of the House. We have been doing a fair bit of work. We are in the middle of a project on the Privacy Act. There is another act. It is called the Personal Information Protection and Electronic Documents Act which also covers a lot of these things.

However, with regard to privacy issues, the member is absolutely right. We have a creeping going on in terms of the exposure of information that is being disclosed. We had a proviso where the U.S. authorities wanted to have airline manifests, even for aircraft that was just flying over U.S. airspace. Now we have other legislation which is allowing CSIS and even the RCMP, for security reasons, for personal information to be shared with foreign jurisdictions. There are other cases where concerns are raised even with respect to companies like Google whereby Google view software is taking pictures of people. Those are already subject to concern and they require that faces be blocked out, that original information be destroyed, and that the retention be limited.

Therefore, the members is quite right. This seems to be much broader than some of those things. It raises some concerns and I think the House should be very concerned and vigilant about the implications not only to the charter but also to the privacy rights of Canadians.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Madam Speaker, I want to follow up on that exchange that the member just had.

I know that his interest in privacy runs very deep, partly from his work as the chair of the standing committee. I am wondering if this legislation is in place whether a requirement for a privacy impact assessment might be part of this kind of legislation. It is an example of where that should be a legislated part of legislation, such as the bill that we are discussing today.

I also want to ask the member if he could respond. For many of my constituents, the key border issue, not to diminish the importance of cross-border trade, is the flow of illegal weapons across the border.

It seems to me that even though that is the view of many people as the most serious border issue between Canada and the United States, this legislation does not seem to add anything to our ability to stop that flow of illegal weapons across the border.

I wonder if the member could comment on whether he sees that as a serious deficiency of this opportunity to make changes to the customs legislation.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, with regard to the privacy impact assessments, as the member who is also a member of our committee well knows, this was discretionary at the time. I think it is becoming more and more clear that they should be a prerequisite to have been conducted prior to legislation being considered or drafted. There are pitfalls. The member will know that we have a case where it has been two years of waiting for a privacy impact assessment which seems that there is not a buy-in yet.

With regard to illegal weapons, the member is absolutely right. It is a very important area. I think the two encouraging things in the bill are: first, that the authority to search and to question and so on which is now restricted to Canada Border Services Agency personnel will be broadened to I guess the whole customs area. That is very important. Second, and I have raised it before, I am hoping that the definition of what is a customs controlled area will be interpreted based on the intent of the legislation to include a broader range of areas, other than just simply the entry point. That would certainly give more opportunity for the authorities involved to be able to be vigilant for potential areas where illegal weapons may be coming in.

[Andrew Kania, Liberal, Brampton West, ON]

Madam Speaker, in terms of this bill, as a general concept, I support it.

We did review this before the public safety committee, of which I am a member. Generally speaking, there were very few questions but there are some problems, two in particular I wish to highlight during the latter part of my speech.

Initially, I simply wish to comment upon what is good about this bill. First, it must be remembered that this particular statute, the Customs Act, its simple purpose is to administer and enforce the collection of duties and taxes. This is not actually a taxing statute. This is also not comprehensive legislation in terms of border security and the arming of guards. We have other statutes for that.

What must remembered any time we are passing amendments to one of these statutes in this area is that we live in a different time. When this was initially passed many years ago, we did not have the same number of concerns with the border and we did not have 9/11. Various things have changed. At this point in time, we have to find a reasonable balance between safety and the enforcement of these various charges.

No act is perfect, but generally speaking I think this is a relatively good act, and I would be surprised if all parties did not support this in the House. This already passed the Senate on April 23, 2009. The Senate has done a good job in terms of considering this act.

There are two main changes to the Customs Act in terms of what this bill does. First, is the expansion of activity within a customs controlled area. My esteemed colleague already commented on that. Essentially, we are creating a customs controlled area that would be under the supervision of these officials without having restrictions upon their ability to actually enforce the legislation and to make sure that things are not actually happening in an illegal manner.

For example, if there is a flight that has come into Canada, there may be a parcel that was international in origin. Smuggling does take place. We have gun problems, narcotic problems and things do happen. If the package is taken from an international cargo area and somebody trying to do something wrong tries to bring it into the domestic area, it might become one of those packages that simply does not get searched.

One of the things this act is trying to accomplish is to allow officers to search people in these customs controlled areas, even if they are not passengers, and if there are reasonable and probable grounds. For example, somebody who works there obviously cannot be checked in and out every time, that is just not practical. There is too much going on. I think the stats at Pearson in Toronto, as one example, indicate that a plane is either touching down or lifting off every minute. In those circumstances, the laws have to be practical and efficient as well.

Going back to my example, in the situation where a parcel is now in the domestic area, which ordinarily would not be searched, it would now be in one of these customs controlled areas. Whatever the parcels may be, or is going back and forth, or people are going in and out of these areas, there is now the ability to search these people and search these parcels. Essentially, it is an expansion of what the legislation previously was. I think that is a good thing to do in these times with these various problems that we are having.

The second main purpose of this amendment is to advance passenger information in terms of providing information to the Canadian authorities before people come into Canada. That makes sense. There is nothing wrong with letting us know in advance who is coming and what information there may be about those people. We will have a better opportunity to guard against what should not be occurring. I think that is another supportable feature of this legislation.

Another issue, in terms of clause 2, is that the minister will now have the power to directly authorize access to customs controlled areas. Before this, it could only be done by regulation. That is not very practical. If a minister now wants to authorize, for example, a member of Parliament to come and examine the site, he or she could do that. We do not have to wait for a regulation. I think that is a very practical measure which makes sense.

There was also an exemption previously in terms of persons boarding a flight to a destination outside of Canada and leaving a customs controlled area. They did not have to present or identify themselves to an officer. They did not have to report any goods that were obtained in the area and they did not have to answer any questions from an officer.

To be safe, in this day and age I believe it is reasonable to include a requirement that officers can in fact question people, examine them, ask for identification and see what goods they have. In essence that is part of an overall deterrence package. Once again, with so much traffic coming in and out of Canada, if people know these powers are there and they are now subject to inspection, perhaps that in itself would modify a good portion of conduct that should not be taking place.

It is important we recognize that something in the range of $1.6 billion of daily trade goes back and forth between Canada and the United States. These amendments obviously do not apply just to the United States, but since 80% of Canada's trade is with the United States, it is important that we have these various types of reasonable requirements. We especially have an obligation to all our trading partners and all our friends around the world to make sure we are doing what is necessary to ensure that laws here are being enforced.

Other improvements, specifically clauses 10 and 11, deal with inspections on the reasonable and probable grounds that I was mentioning. These clauses are very substantial, good changes that will allow us to fight smuggling specifically. I very strongly support those.

In terms of support from stakeholder groups, we have the GTAA and the Canadian Airports Council. A number of persons have supported this. I am not speaking for all parties formally, but I believe this will be supported by all parties when it comes to a vote.

Now, there are problems. There are two problems in particular that I do want to address. Once again, bills are not perfect, and perhaps they can be changed, but I do want to identify the problems. The first one has already been pointed out by my colleague, which specifically is proposed subsection 164.1(1), and I am going to read it. It is with respect to regulations, and it indicates:

A regulation made under this Act may incorporate by reference any material regardless of its source and either as it exists on a particular date or as amended from time to time.

In terms of law, one of the first principles is that there is no certainty to this. When we consider, once again, “on a particular date or as amended from time to time”, I would strongly prefer that this provision be tightened up so it specifically notes how regulations would be made and that there is not this incorporation by reference, especially with the phrase “as amended from time to time”. That does not provide certainty under the law, and I would like to see that changed.

I should mention that I do have the honour of being the joint chair of the scrutiny of regulations committee and this is what we deal with all the time. When these various regulations come to us and there is a problem, we seek to change or amend them. If something cannot be done, there is the power of disallowance, which is very rare. But it is better to try to avoid these problems now rather than having to deal with them in the future, so I would like to see that changed if possible.

The second potential problem deals with solicitor-client privilege. Specifically, it is not clear to me from the wording in this legislation that it is protected. Solicitor-client privilege is one of those legal rights that is accepted essentially in all common law countries, and it is something that needs to be enumerated specifically here. An example would be this. We are providing these powers in customs controlled areas to inspect essentially anybody at any time. The bill refers to reasonable or probable grounds. There are various passengers coming in and out to these various customs controlled areas.

I would like to see something that specifically says if it is a lawyer with solicitor-client documentation that it cannot in any way be inspected, period. I myself have had this situation, not in a negative manner, bringing legal documents back and forth for cases I had in the United States. It never has been a problem. However, I want to make sure that it never becomes a problem for anybody. I think it would be better if this was enumerated so we know that right would not be abrogated.

Overall, I believe that the statute is worthy of becoming law. There will always be problems. It would be my preference to see these problems that I noted solved. However, that being the case, I think that overall this is good work by the Senate, and I think we should support it.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I note that the Auditor General's report of 2007 also made recommendations on the need for the Canada Border Services Agency to improve its framework and strategy for managing and assessing risks. Specifically, the report recommended that the Canada Border Services Agency should better develop its risk-based approach for the delivery of integrated border services and use this as a basis for deploying its resources and focusing enforcement efforts.

I would like to ask the member how the provisions of Bill S-2 would improve the Canada Border Services Agency management and risk assessment procedures in his view?

[Andrew Kania, Liberal, Brampton West, ON]

Madam Speaker, I do not think it would do much. It would provide the additional power and abilities to enforce in these customs controlled designated areas. However, this is not a statute that deals specifically with the border. There are other methods to do that, and I fully agree with my colleague that we do need to be focusing on this.

There are various problems that still remain, which the Conservative government has not dealt with. One example is the arming of border guards. I understand there are no studies to actually show this is necessary, nothing to show that it is cost-efficient. In fact the studies I did see, or at least that were referred to, indicate the RCMP should be doing this rather than arming border guards, some of whom will not be able to do it. In those cases we would have to pension them off or have buyout packages for them. We do not know what the costs would be. This could be some large monstrosity.

In terms of this particular statute, this does not really focus on it. However, I think the Conservatives should be focusing on the other problems that do exist and changing their policies in terms of some of the problems such as arming border guards.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Madam Speaker, one of the issues I have followed in the past is the whole issue of racial and religious profiling applied to people, often at border points, in customs areas. We have had many Canadians who have felt they have been targeted solely on the basis of their belonging to a racial or religious minority. This legislation does not talk about how people are to be treated specifically in these customs controlled areas.

I wonder if the member would agree with me that the practice of racial and religious profiling should be banned--I actually have a private member's bill to that effect--and that it would be sensible to include that kind of policy in legislation like this bill before us to look at exactly what happens in customs controlled areas at the border points, at our airports, at our ports, to ensure this very odious practice of targeting specific people because of belonging to a religious or racial minority is ended. Does he think this is something that might have been included in this bill if we were doing a very thorough job of updating our customs legislation?

[Andrew Kania, Liberal, Brampton West, ON]

Madam Speaker, I think that is an excellent point. Obviously we do oppose any such profiling, very strenuously. There are many examples where we have been advised that this has occurred. We have had Canadians coming back across the border in buses, from events, where they have been stopped and held up for hours. This is a serious problem.

What I might suggest for this legislation, and what I think should happen at a minimum--I mean if the legislation is amended, that is wonderful, but if it isn't, at a minimum to stop this practice there should be some form of specific, approved training standards in the regulations so the people who are actually applying these rules would be told in advance what they are not allowed to do. I think it is an excellent point.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I would like to ask the member a follow-up question.

Has there been any economic impact on shippers and businesses in recent years stemming from problems experienced crossing the border in his view? Which specific provisions of Bill S-2 would contribute to alleviating those problems? How would the provisions of the bill pertaining to advance information requirements facilitate low-risk commercial shipping?