Bill C-38 (Historical)

Jobs, Growth and Long-term Prosperity Act

An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures

Part 1 of this enactment implements certain income tax measures and related measures proposed in the March 29, 2012 budget. Most notably, it
(a) expands the list of eligible expenses under the Medical Expense Tax Credit to include blood coagulation monitors and their disposable peripherals;
(b) introduces a temporary measure to allow certain family members to open a Registered Disability Savings Plan for an adult individual who might not be able to enter into a contract;
(c) extends, for one year, the temporary Mineral Exploration Tax Credit for flow-through share investors;
(d) allows corporations to make split and late eligible dividend designations;
(e) makes the salary of the Governor General taxable and adjusts that salary;
(f) allows a designated partner of a partnership to provide a waiver on behalf of all partners to extend the time limit for issuing a determination in respect of the partnership;
(g) amends the penalty applicable to promoters of charitable donation tax shelters who file false registration information or who fail to register a tax shelter prior to selling interests in the tax shelter;
(h) introduces a new penalty applicable to tax shelter promoters who fail to respond to a demand to file an information return or who file an information return that contains false or misleading sales information;
(i) limits the period for which a tax shelter identification number is valid to one calendar year;
(j) modifies the rules for registering certain foreign charitable organizations as qualified donees;
(k) amends the rules for determining the extent to which a charity has engaged in political activities; and
(l) provides the Minister of National Revenue with the authority to suspend the privileges, with respect to issuing tax receipts, of a registered charity or a registered Canadian amateur athletic association if the charity or association fails to report information that is required to be filed annually in an information return or devotes resources to political activities in excess of the limits set out in the Income Tax Act.
Part 1 also implements other selected income tax measures and related measures. Most notably, it
(a) amends the Income Tax Act consequential on the implementation of the Marketing Freedom for Grain Farmers Act, including the extension of the tax deferral allowed to farmers in a designated area who produce listed grains and receive deferred cash purchase tickets to all Canadian farmers who produce listed grains and receive deferred cash purchase tickets;
(b) provides authority for the Canada Revenue Agency to issue via online notice or regular mail demands to file a return; and
(c) introduces a requirement for commercial tax preparers to file income tax returns electronically.
Part 2 amends the Excise Tax Act to implement certain excise tax and goods and services tax/harmonized sales tax (GST/HST) measures proposed in the March 29, 2012 Budget. It expands the list of GST/HST zero-rated medical and assistive devices as well as the list of GST/HST zero-rated non-prescription drugs that are used to treat life-threatening diseases. It also exempts certain pharmacists’ professional services from the GST/HST, other than prescription drug dispensing services that are already zero-rated. It further allows certain literacy organizations to claim a rebate of the GST and the federal component of the HST paid on the acquisition of books to be given away for free by those organizations. It also implements legislative requirements relating to the Government of British Columbia’s decision to exit the harmonized sales tax framework. Additional amendments to that Act and related regulations in respect of foreign-based rental vehicles temporarily imported by Canadian residents provide, in certain circumstances, relief from the GST/HST, the Green Levy on fuel-inefficient vehicles and the automobile air conditioner tax. This Part further amends that Act to ensure that changes to the standardized fuel consumption test method used for the EnerGuide, as announced on February 17, 2012 by the Minister of Natural Resources, do not affect the application of the Green Levy.
Finally, Part 2 amends the Air Travellers Security Charge Act, the Excise Act, 2001 and the Excise Tax Act to provide authority for the Canada Revenue Agency to issue via online notice or regular mail demands to file a return.
Part 3 contains certain measures related to responsible resource development.
Division 1 of Part 3 enacts the Canadian Environmental Assessment Act, 2012, which establishes a new federal environmental assessment regime. Assessments are conducted in relation to projects, designated by regulations or by the Minister of the Environment, to determine whether they are likely to cause significant adverse environmental effects that fall within the legislative authority of Parliament, or that are directly linked or necessarily incidental to a federal authority’s exercise of a power or performance of a duty or function that is required for the carrying out of the project.
The Canadian Environmental Assessment Agency, the Canadian Nuclear Safety Commission, the National Energy Board or a review panel established by the Minister are to conduct assessments within applicable time limits. At the end of an assessment, a decision statement is to be issued to the project proponent who is required to comply with the conditions set out in it.
The enactment provides for cooperation between the federal government and other jurisdictions by enabling the delegation of an environmental assessment, the substitution of the process of another jurisdiction for an environmental assessment under the Act and the exclusion of a project from the application of the Act when there is an equivalent assessment by another jurisdiction. The enactment requires that there be opportunities for public participation during an environmental assessment, that participant funding programs and a public registry be established, and that there be follow-up programs in relation to all environmental assessments. It also provides for powers of inspection and fines.
Finally, the enactment specifies that federal authorities are not to take certain measures regarding the carrying out of projects on federal lands or outside Canada unless they determine that those projects are not likely to cause significant adverse environmental effects.
This Division also makes related amendments to the Environmental Violations Administrative Monetary Penalties Act and consequential amendments to other Acts, and repeals the Canadian Environmental Assessment Act.
Division 2 of Part 3 amends the National Energy Board Act to allow the Governor in Council to make the decision about the issuance of certificates for major pipelines. It amends the Act to establish time limits for regulatory reviews under the Act and to enhance the powers of the National Energy Board Chairperson and the Minister responsible for the Act to ensure that those reviews are conducted in a timely manner. It also amends the Act to permit the National Energy Board to exercise federal jurisdiction over navigation in respect of pipelines and power lines that cross navigable waters and it establishes an administrative monetary penalty system.
Division 3 of Part 3 amends the Canada Oil and Gas Operations Act to authorize the National Energy Board to exercise federal jurisdiction over navigation in respect of pipelines and power lines that cross navigable waters.
Division 4 of Part 3 amends the Nuclear Safety and Control Act to extend the maximum allowable term of temporary members of the Canadian Nuclear Safety Commission from six months to three years. It is also amended to allow for a licence to be transferred with the consent of that Commission and it puts in place an administrative monetary penalty system.
Division 5 of Part 3 amends the Fisheries Act to focus that Act on the protection of fish that support commercial, recreational or Aboriginal fisheries and to more effectively manage those activities that pose the greatest threats to these fisheries. The amendments provide additional clarity for the authorization of serious harm to fish and of deposits of deleterious substances. The amendments allow the Minister to enter into agreements with provinces and with other bodies, provide for the control and management of aquatic invasive species, clarify and expand the powers of inspectors, and permit the Governor in Council to designate another Minister as the Minister responsible for the administration and enforcement of subsections 36(3) to (6) of the Fisheries Act for the purposes of, and in relation to, subject matters set out by order.
Division 6 of Part 3 amends the Canadian Environmental Protection Act, 1999 to provide the Minister of the Environment with the authority to renew disposal at sea permits in prescribed circumstances. It is also amended to change the publication requirements for disposal at sea permits and to provide authority to make regulations respecting time limits for their issuance and renewal.
Division 7 of Part 3 amends the Species at Risk Act to allow for the issuance of authorizations with a longer term, to clarify the authority to renew the authorizations and to make compliance with conditions of permits enforceable. The Act is also amended to provide authority to make regulations respecting time limits for the issuance and renewal of permits under the Act. Furthermore, section 77 is amended to ensure that the National Energy Board will be able to issue a certificate when required to do so by the Governor in Council under subsection 54(1) of the National Energy Board Act.
Part 4 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends a number of Acts to eliminate the requirement for the Auditor General of Canada to undertake annual financial audits of certain entities and to assess the performance reports of two agencies. This Division also eliminates other related obligations.
Division 2 of Part 4 amends the Trust and Loan Companies Act, the Bank Act and the Cooperative Credit Associations Act to prohibit the issuance of life annuity-like products.
Division 3 of Part 4 provides that PPP Canada Inc. is an agent of Her Majesty for purposes limited to its mandated activities at the federal level, including the provision of advice to federal departments and Crown corporations on public-private partnership projects.
Division 4 of Part 4 amends the Northwest Territories Act, the Nunavut Act and the Yukon Act to provide the authority for the Governor in Council to set, on the recommendation of the Minister of Finance, the maximum amount of territorial borrowings and to make regulations in relation to those maximum amounts, including what constitutes borrowing, the relevant entities and the valuation of the borrowings.
Division 5 of Part 4 amends the Financial Administration Act to modify, for parent Crown corporations, the period to which their quarterly financial reports relate, so that it is aligned with their financial year, and to include in the place of certain annual tabling requirements related to the business and activities of parent Crown corporations a requirement to make public consolidated quarterly reports on their business and activities. It also amends the Alternative Fuels Act and the Public Service Employment Act to eliminate certain reporting requirements.
Division 6 of Part 4 amends the Department of Human Resources and Skills Development Act to establish the Social Security Tribunal and to add provisions authorizing the electronic administration or enforcement of programs, legislation, activities or policies. It also amends the Canada Pension Plan, the Old Age Security Act and the Employment Insurance Act so that appeals from decisions made under those Acts will be heard by the Social Security Tribunal. Finally, it provides for transitional provisions and makes consequential amendments to other Acts.
Division 7 of Part 4 amends the Department of Human Resources and Skills Development Act to add provisions relating to the protection of personal information obtained in the course of administering or enforcing the Canada Pension Plan and the Old Age Security Act and repeals provisions in the Canada Pension Plan and the Old Age Security Act that are substantially the same as those that are added to the Human Resources and Skills Development Act.
Division 8 of Part 4 amends the Department of Human Resources and Skills Development Act to add provisions relating to the social insurance registers and Social Insurance Numbers. It also amends the Canada Pension Plan in relation to Social Insurance Numbers and the Employment Insurance Act to repeal certain provisions relating to the social insurance registers and Social Insurance Numbers and to maintain the power to charge the costs of those registers to the Employment Insurance Operating Account.
Division 9 of Part 4 amends the Parks Canada Agency Act to provide that the Agency may enter into agreements with other ministers or bodies to assist in the administration and enforcement of legislation in places outside national parks, national historic sites, national marine conservation areas and other protected heritage areas if considerations of geography make it impractical for the other minister or body to administer and enforce that legislation in those places. It also amends that Act to provide that the Chief Executive Officer is to report to the Minister of the Environment under section 31 of that Act every five years. It amends that Act to remove the requirements for annual corporate plans, annual reports and annual audits, and amends that Act, the Canada National Parks Act and the Canada National Marine Conservation Areas Act to provide that that Minister is to review management plans for national parks, national historic sites, national marine conservation areas and other protected heritage areas at least every 10 years and is to have any amendments to a plan tabled in Parliament.
Division 10 of Part 4 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act in order to allow public sector investment pools that satisfy certain criteria, including pursuing commercial objectives, to directly invest in a Canadian financial institution, subject to approval by the Minister of Finance.
Division 11 of Part 4 amends the National Housing Act, the Canada Mortgage and Housing Corporation Act and the Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act to enhance the governance and oversight framework of the Canada Mortgage and Housing Corporation.
This Division also amends the National Housing Act to establish a registry for institutions that issue covered bonds and for covered bond programs and to provide for the protection of covered bond contracts and covered bond collateral in the event of an issuer’s bankruptcy or insolvency. It also makes amendments to the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Cooperative Credit Associations Act to prohibit institutions from issuing covered bonds except within the framework established under the National Housing Act. Finally, it includes a coordinating amendment to the Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act.
Division 12 of Part 4 implements the Framework Agreement on Integrated Cross-Border Maritime Law Enforcement Operations between the Government of Canada and the Government of the United States of America signed on May 26, 2009.
Division 13 of Part 4 amends the Bretton Woods and Related Agreements Act to reflect an increase in Canada’s quota subscription, as related to the ratification of the 2010 Quota and Governance reform resolution of the Board of Governors of the International Monetary Fund, and to align the timing of the annual report under that Act to correspond to that of the annual report under the Official Development Assistance Accountability Act.
Division 14 of Part 4 amends the Canada Health Act so that members of the Royal Canadian Mounted Police are included in the definition of “insured person”.
Division 15 of Part 4 amends the Canadian Security Intelligence Service Act to
(a) remove the office of the Inspector General;
(b) require the Security Intelligence Review Committee to submit to the Minister of Public Safety and Emergency Preparedness a certificate on the Director of the Canadian Security Intelligence Service’s annual report; and
(c) increase the information on the Service’s activities to be provided by that Committee to that Minister.
Division 16 of Part 4 amends the Currency Act to clarify certain provisions that relate to the calling in and the redemption of coins.
Division 17 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act in order to implement the total transfer protection for the 2012-2013 fiscal year and to give effect to certain elements of major transfer renewal that were announced by the Minister of Finance on December 19, 2011. It also makes certain administrative amendments to that Act and to the Canada Health Act.
Division 18 of Part 4 amends the Fisheries Act to authorize the Minister of Fisheries and Oceans to allocate fish for the purpose of financing scientific and fisheries management activities in the context of joint project agreements.
Division 19 of Part 4 amends the Food and Drugs Act to give the Minister of Health the power to establish a list that sets out prescription drugs or classes of prescription drugs and to provide that the list may be incorporated by reference. It also gives the Minister the power to issue marketing authorizations that exempt a food, or an advertisement with respect to a food, from certain provisions of the Act. The division also provides that a regulation with respect to a food and a marketing authorization may incorporate by reference any document. It also makes consequential amendments to other Acts.
Division 20 of Part 4 amends the Government Employees Compensation Act to allow prescribed entities to be subrogated to the rights of employees to make claims against third parties.
Division 21 of Part 4 amends the International Development Research Centre Act to reduce the maximum number of governors of the Centre to 14, and to consequently change other rules about the number of governors.
Division 22 of Part 4 amends Part I of the Canada Labour Code to require the parties to a collective agreement to file a copy of it with the Minister of Labour, subject to the regulations, as a condition for it to come into force. It amends Part III of that Act to require employers that provide benefits to their employees under long-term disability plans to insure those plans, subject to certain exceptions. The Division also amends that Part to create an offence and to increase maximum fines for offences under that Part.
Division 23 of Part 4 repeals the Fair Wages and Hours of Labour Act.
Division 24 of Part 4 amends the Old Age Security Act to provide the Minister of Human Resources and Skills Development with the authority to waive the requirement for an application for Old Age Security benefits for many eligible seniors, to gradually increase the age of eligibility for the Old Age Security Pension, the Guaranteed Income Supplement, the Allowance and the Allowance for the Survivor and to allow individuals to voluntarily defer their Old Age Security Pension up to five years past the age of eligibility, in exchange for a higher, actuarially adjusted, pension.
Division 25 of Part 4 dissolves the Public Appointments Commission and its secretariat.
Division 26 of Part 4 amends the Seeds Act to give the President of the Canadian Food Inspection Agency the power to issue licences to persons authorizing them to perform activities related to controlling or assuring the quality of seeds or seed crops.
Division 27 of Part 4 amends the Statutory Instruments Act to remove the distribution requirements for the Canada Gazette.
Division 28 of Part 4 amends the Investment Canada Act in order to authorize the Minister of Industry to communicate or disclose certain information relating to investments and to accept security in order to promote compliance with undertakings.
Division 29 of Part 4 amends the Customs Act to allow the Minister of Public Safety and Emergency Preparedness to designate a portion of a roadway or other access way that leads to a customs office and that is used by persons arriving in Canada and by persons travelling within Canada as a mixed-traffic corridor. All persons who are travelling in a mixed-traffic corridor must present themselves to a border services officer and state whether they are arriving from a location outside or within Canada.
Division 30 of Part 4 gives retroactive effect to subsections 39(2) and (3) of the Pension Benefits Standards Act, 1985.
Division 31 of Part 4 amends the Railway Safety Act to limit the apportionment of costs to a road authority when a grant has been made under section 12 of that Act.
Division 32 of Part 4 amends the Canadian International Trade Tribunal Act to replace the two Vice-chairperson positions with two permanent member positions.
Division 33 of Part 4 repeals the International Centre for Human Rights and Democratic Development Act and authorizes the closing out of the affairs of the Centre established by that Act.
Division 34 of Part 4 amends the Health of Animals Act to allow the Minister of Agriculture and Agri-Food to declare certain areas to be control zones in respect of a disease or toxic substance. The enactment also grants the Minister certain powers, including the power to make regulations prohibiting the movement of persons, animals or things in the control zones for the purpose of eliminating a disease or toxic substance or controlling its spread and the power to impose conditions on the movement of animals or things in those zones.
Division 35 of Part 4 amends the Canada School of Public Service Act to abolish the Board of Governors of the Canada School of Public Service and to place certain responsibilities on the Minister designated for the purposes of the Act and on the President of the School.
Division 36 of Part 4 amends the Bank Act by adding a preamble to it.
Division 37 of Part 4 amends the Corrections and Conditional Release Act to eliminate the requirement of a hearing for certain reviews.
Division 38 of Part 4 amends the Coasting Trade Act to add seismic activities to the list of exceptions to the prohibition against foreign ships and non-duty paid ships engaging in the coasting trade.
Division 39 of Part 4 amends the Status of the Artist Act to dissolve the Canadian Artists and Producers Professional Relations Tribunal and transfer its powers and duties to the Canada Industrial Relations Board.
Division 40 of Part 4 amends the National Round Table on the Environment and the Economy Act to give the Round Table the power to sell or otherwise dispose of its assets and satisfy its debts and liabilities and to give the Minister of the Environment the power to direct the Round Table in respect of the exercise of some of its powers. The Division provides for the repeal of the Act and makes consequential amendments to other acts.
Division 41 of Part 4 amends the Telecommunications Act to change the rules relating to foreign ownership of Canadian carriers eligible to operate as telecommunications common carriers and to permit the recovery of costs associated with the administration and enforcement of the national do not call list.
Division 42 of Part 4 amends the Employment Equity Act to remove the requirements that are specific to the Federal Contractors Program for Employment Equity.
Division 43 of Part 4 amends the Employment Insurance Act to permit a person’s benefits to be determined by reference to their highest earnings in a given number of weeks, to permit regulations to be made respecting what constitutes suitable employment, to remove the requirement that a consent to deduction be in writing, to provide a limitation period within which certain repayments of overpayments need to be deducted and paid and to clarify the provisions respecting the refund of premiums to self-employed persons. It also amends that Act to modify the Employment Insurance premium rate-setting mechanism, including requiring that the rate be set on a seven-year break-even basis once the Employment Insurance Operating Account returns to balance. The Division makes consequential amendments to the Canada Employment Insurance Financing Board Act.
Division 44 of Part 4 amends the Customs Tariff to make certain imported fuels duty-free and to increase the travellers’ exemption thresholds.
Division 45 of Part 4 amends the Canada Marine Act to require provisions of a port authority’s letters patent relating to limits on the authority’s power to borrow money to be recommended by the Minister of Transport and the Minister of Finance before they are approved by the Governor in Council.
Division 46 of Part 4 amends the First Nations Land Management Act to implement changes made to the Framework Agreement on First Nation Land Management, including changes relating to the description of land that is to be subject to a land code, and to provide for the coming into force of land codes and the development by First Nations of environmental protection regimes.
Division 47 of Part 4 amends the Canada Travelling Exhibitions Indemnification Act to increase the maximum indemnity in respect of individual travelling exhibitions, as well as the maximum indemnity in respect of all travelling exhibitions.
Division 48 of Part 4 amends the Canadian Air Transport Security Authority Act to provide that the chief executive officer of the Authority is appointed by the Governor in Council and that an employee may not replace the chief executive officer for more than 90 days without the Governor in Council’s approval.
Division 49 of Part 4 amends the First Nations Fiscal and Statistical Management Act to repeal provisions related to the First Nations Statistical Institute and amends that Act and other Acts to remove any reference to that Institute. It authorizes the Minister of Indian Affairs and Northern Development to close out the Institute’s affairs.
Division 50 of Part 4 amends the Canadian Forces Members and Veterans Re-establishment and Compensation Act to provide for the payment or reimbursement of fees for career transition services for veterans or their survivors.
Division 51 of Part 4 amends the Department of Human Resources and Skills Development Act to add powers, duties and functions that are substantially the same as those conferred by the Department of Social Development Act. It repeals the Department of Social Development Act and, in doing so, eliminates the National Council of Welfare.
Division 52 of Part 4 amends the Wage Earner Protection Program Act in order to correct the English version of the definition “eligible wages”.
Division 53 of Part 4 repeals the Kyoto Protocol Implementation Act.
Division 54 of Part 4 amends the Immigration and Refugee Protection Act and the Budget Implementation Act, 2008 to provide for the termination of certain applications for permanent residence that were made before February 27, 2008. This Division also amends the Immigration and Refugee Protection Act to, among other things, authorize the Minister of Citizenship and Immigration to give instructions establishing and governing classes of permanent residents as part of the economic class and to provide that the User Fees Act does not apply in respect of fees set by those instructions. Furthermore, this Division amends the Immigration and Refugee Protection Act to allow for the retrospective application of certain regulations and certain instructions given by the Minister, if those regulations and instructions so provide, and to authorize regulations to be made respecting requirements imposed on employers in relation to authorizations to work in Canada.
Division 55 of Part 4 enacts the Shared Services Canada Act to establish Shared Services Canada to provide certain administrative services specified by the Governor in Council. The Act provides for the Governor in Council to designate a minister to preside over Shared Services Canada.
Division 56 of Part 4 amends the Assisted Human Reproduction Act to respond to the Supreme Court of Canada decision in Reference re Assisted Human Reproduction Act that was rendered in 2010, including by repealing the provisions that were found to be unconstitutional and abolishing the Assisted Human Reproduction Agency of Canada.

[Megan Leslie, NDP, Halifax, NS]

Have you, or has your office, done a review of the budget bill, of Bill C-38?

[Ron Bonnett, President, Canadian Federation of Agriculture]

Thank you, and thank you for the opportunity to present to the committee. I think I've met a number of you.

Just so you're aware, the Canadian Federation of Agriculture represents farmers right across the country, representing all provinces and a number of commodity groups.

We were supportive of some of the changes that had been proposed with respect to Bill C-38 in part 3. I'm going to try to keep my comments focused on why some of these have such an impact on agriculture.

There are several acts that are changed or amended: the Canadian Environmental Assessment Act, the National Energy Board Act, the Canadian Environmental Protection Act, the Fisheries Act, and the Species at Risk Act. I will likely be concentrating most of my comments around the Fisheries Act, although the Canadian Environmental Assessment Act will also have implications for agriculture.

With respect to proposed changes in the Species at Risk Act, we don't see a major impact on agriculture from the proposed Species at Risk Act contained here. However, we understand that changes are being contemplated to the Species at Risk Act later this year and that there will be some changes that we will be commenting on at that time.

We fall under the act because agricultural activities are identified in the context of physical works. It's mainly in the case of drainage ditches and irrigation canals that we fall under it. For a long time there has been a lot of frustration in the agricultural community about the complicated, costly, and convoluted process that is in place to get approvals. We have multiple levels of authority: we have municipal governments, provincial governments, different departments, and the Department of Fisheries and Oceans, all with a role to play in not only constructing drainage ditches, but also in doing ongoing maintenance, which is necessary.

I think it's key to understand that the whole issue of drainage is so important to agriculture that it was among the first kinds of legislation put in place by provinces when they started putting agriculture into the country, recognizing that they had to get rid of excess water. Maybe, to give a better understanding, I should describe the drainage ditch life cycle. These drains in many cases are put together with a very structured process, including some environmental assessments for the initial construction.

They try to describe how the drains are going to be constructed—the standards for construction, mitigation of environmental impacts—but along with that they also have to make provision for maintenance. When most drains are constructed, they have about a 15-year life cycle before they start to fill in again and have to be maintained.

You have to get your mind around the fact that before the dirt ditches were dug there was no fish habitat there. It was basically wet, soggy land with no fish habitat in place. As soon as the drainage ditches were done, naturally the fish swam up those streams. But in order to keep the drainage working and in order to make sure that ongoing fish habitat is maintained, you also have to have maintenance take place from time to time. At any one time, as I said, one in maybe fifteen drains is subject to maintenance.

But the existing description of destruction of habitat under the Fisheries Act basically leaves an opening, at the discretion of offices at the local level, to stall projects that can have a real impact upon farm operations in making sure those drains are properly maintained.

The Fisheries Act provides for protection of the fish and fish habitat. Under section 35, the act talks about “undertaking that results in the harmful alteration, disruption or destruction of fish habitat”. Then in subsection 35(2) it allows the minister or Department of Fisheries and Oceans officials to allow for permitting of clean-outs. This is where the problem is, because the description of “harmful alteration” or “disruption” gets married with this need for permits, and that puts a whole complex situation in place whereby there are extra costs built into the system with no added value.

I think the changes they're proposing actually do give some indication of the types of things that need to be protected. They talk about the new factors, the contribution of relevant fish to ongoing productivity of commercial, recreational, or aboriginal fisheries. It talks about fisheries management objectives. It talks about whether there are measures and standards to avoid or mitigate and offset serious harm to fish. Then it talks about the public interest.

I think that will give more clarity to the minister in making decisions. I think the next step, though, is looking at the regulations that are developed. I think in some of the discussions we've had with others, the development of the regulations is something that's going to have to be looked at to make sure the intent of the changes to the act actually meet the objectives.

The changes to section 35 prohibitions are going to come in two steps. I think the first step is when the act is implemented. They look very similar to the description in place now, but one of the things that has changed is that it's not going to only prohibit works and undertakings, but it will also prohibit activities. That is the first step, when the act is put in place. The second step will occur at some point in the future, through an order of cabinet, when the existing prohibition against harmful alteration, disruption, or destruction would be changed to read “serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or to fish that support such a fishery”; “serious harm to fish” is a new concept defined as “death of fish or any permanent alteration to, or destruction of, fish habitat”. I think the key issue here is that they're removing the strict interpretation of “harmful alteration or disruption”.

If I go back to the drain maintenance issue, we know that in order to maintain one drain, you're likely going to disrupt that fish habitat during that maintenance period. However, you're actually creating habitat for the future years. But the way the act is worded right now, it leaves a situation where you have to go through a whole complicated process to get the approvals in place.

On final comment. I think Bill C-38 puts in place a process to bring improvements about how the Fisheries Act is implemented on minor works so that you don't get hung up with frustration, costs, and overlap of jurisdiction. I think there's clearly scope to improve the efficiency and effectiveness of the Fisheries Act. It has been something that has been going on for years. There is still uncertainty in how the changes will be implemented and the final impact of the regulations.

I think that's something there will have to be engagement on as the regulations are developed. I think, ideally, on drainage ditches, we should be looking at management through a stewardship approach, with clear guidelines on the best practices for maintenance in instances where they do support a fish population. Then not all drainage ditches should be treated equally, but the maintenance needs to be the main priority.

Thank you. That summarizes my comments.

[William Amos]

Oh, eight. That's fabulous. Thank you, Mr. Calkins.

It's difficult to know where to start with this bill. I'm going to do my best to provide what Ecojustice believes is a broad-brush stroke critique of Bill C-38 and of the contents of part 3.

Effectively, what we're looking at are weakened federal protections for fish and fish habitat, an entirely new and entirely less comprehensive federal environmental assessment regime, and greater discretionary powers vested in ministers and in cabinet. We believe there will be less accountability and fewer opportunities for the Canadian public to participate in processes that ultimately lead to sustainable development.

It's our opinion that this is the most significant and devolutionary set of environmental law reforms that have ever been presented to Parliament. There is no law that we can recall that has ever, in such a broad and structural manner, changed the federal environmental governance regime. Thus, our main message here is that Canadians are not ready for this. Parliament is not ready for this. There has been inadequate process to consider the transformative changes that are being proposed.

We would urge this committee to recommend to the finance committee that part 3 of Bill C-38 be excised and be separated and retabled, if the government deems appropriate, in a stand-alone bill.

Now, I understand it is less than likely that this government is going to move in that direction. However, both for the sake of environmental protection and also with a view to social licence going forward for Canadian industries...it's not good for Canadian businesses when environmental laws federally are eviscerated without sufficient buy-in from a number of communities. That isn't to say that the environmental community couldn't appreciate the need for amendments to the environmental assessment process and that, if necessary, we couldn't proceed with changes to the Fisheries Act. Indeed, there are changes that are needed, but the scope and the depth of the changes that are being proposed are simply unacceptable.

To go specifically to the Fisheries Act, this is at the core of Canadian environmental protection. Habitat protection through the Fisheries Act is really where environmental protection started federally, back in the mid-19th century, when the river immediately to our north was being polluted by the sawmills, the industry of the day, with all of its sawdust causing impressive losses of fish, destruction of fish habitat, and actual property damage as well. This history is well documented.

One of the key raisons d'être for the enactment of the Fisheries Act one year after the enactment of the British North America Act was to protect the environment. As a matter of historical process, the protections to the environment have only increased over the years. In particular, in 1977 the Honourable Roméo LeBlanc proposed changes that were adopted to ensure habitat protection and to ensure that deleterious substances wouldn't impact fisheries as well. So this was a progress towards greater protection.

What we're seeing with the amendments proposed in Bill C-38 is a reversal of direction, and we don't think that is in the Canadian public interest. I'd like to quote Roméo LeBlanc, then the Minister of Fisheries and the Environment, who said:

Protecting fish means protecting their habitats. Protecting the aquatic habitat involves controlling the use of wetlands. The banks of streams, the foreshores of estuaries, provide nutrients to the larger eco-system of lakes and oceans in amounts far out of proportion to their size.

The main effect of the changes would be this: for landfill, dredging, excavation, or other such projects in these sensitive areas, we would be able to examine the plans first, and to require modification or, if necessary, prohibition. Instead of accusing someone, after the fact, of destroying fish habitats, we would be part of the planning to save them.

The point of this comment is that three years after I was born, the then Minister of Fisheries made amendments to allow for habitat protection of fish, with a view to establishing a planning and environmental protection regime that would ensure we weren't trying to solve environmental problems after the fact. We are reminded of this when it seems that every month there is some other disaster that happens in this world, whether it's the Exxon Valdez spill, the BP disaster, or nuclear incidents in Japan. We're reminded constantly that better decision-making up front saves us money and ultimately is better for the economy.

What I see and what Ecojustice sees with this legislation is a return to an era when this kind of planning in advance is going to be lost, in large measure, whether it be for protection of fish habitat or environmental assessment processes that are no longer going to be done, and we're very concerned about that.

Ecojustice is extremely concerned by the provisions in Bill C-38 that would provide for ministerial regulations exempting certain water bodies and certain classes of works from the application of the fish habitat protection provisions. This has been done before. We've seen it done back in 2009 in the context of the Navigable Waters Protection Act with amendments that were also smuggled into the budget bill.

Also, we know from the ministerial order issued pursuant to the NWPA that certain types of works, such as pipeline crossings, and certain types of waters—the famous drainage ditches, but there are others as well—have been exempted from the authorization process required under the NWPA. In relation to the Fisheries Act, we're expecting that there will be regulations passed exempting these kinds of waters and these projects—like pipeline crossings—from fish habitat protection.

That's clearly not going to ensure that habitats are protected, and we have serious concerns in that regard.

I'll conclude by suggesting—and maybe for the purpose of this comment I will wear my University of Ottawa hat, as a professor there—that this government really does not have any mandate to make the fundamental amendments it's proposing in Bill C-38. The Conservative Party 2011 platform, prior to their majority election, mentioned nothing in the way of environmental law reform. We don't believe there is a mandate to make any amendments, let alone far-reaching amendments. We don't know right now whether risky activities such as offshore drilling in the Arctic or offshore drilling in the Gulf of St. Lawrence—

[National Chief Shawn A-in-chut Atleo]

As I'm alluding to here, there is not confidence, given the process leading up to the development of Bill C-38. The process for its very development has not been satisfactory, which has been stated more than once here already, such that the AFN must state that we're understandably very skeptical about any potential improvements.

The whole purpose of pursuing the crown and first nations gathering was to seek a return to a much more respectful relationship, whereby treaty rights and aboriginal title rights are respected and affirmed and where we jointly design processes going forward. That means agreeing on how to give effect to constitutionally protected rights for fish, the relationship to fish habitat and to water, and therefore to water quality. The previous processes were not acceptable, so there's a great concern with what is being suggested here.

However, a way forward as well, a solution, is that if we were to agree to take these elements, as we had suggested, remove them, and begin to work in earnest on them, first nations, as I said in my opening remarks at the January 24 crown gathering, are ready to do that work. The work rightfully belongs with first nations themselves, so that's what I would strongly recommend. Given that the AFN, even with the conversations we've had, the technical briefings...those do not constitute consultation. The deep work must be done with first nations. That's the hard work. The harder work is trying to suggest an easy way forward that is going to skip by this effort, and I fear that it's not a recipe for efficiency but rather one that suggests conflict.

[National Chief Shawn A-in-chut Atleo]

I think that really is a two-part issue. First of all, we're not sure that the federal government can give up its responsibility to deal directly with first nations—its duty to consult and accommodate. It was the reason for the recent crown-first nations gathering. The relationship is with the crown, and in the steps that were set up in the outcome statement that the Prime Minister issued, it offers the notion that we have to work together to address a way forward, which is what this bill oversteps. This effort oversteps the sentiments that we arrived at this last January.

It relates directly that there is not support from the AFN for the government's current definition of aboriginal fisheries. The Supreme Court of Canada has routinely recognized first nations' right to food, social, and ceremonial...and in the case like mine, the Nuu-chah-nulth commercial fisheries. Many of these cases recognize first nations fishing rights. Bill C-38 does not capture the full scope of first nations fisheries, and it can be interpreted in fact in a way as to limit, prejudice, derogate, or abrogate from first nations fishing rights.

In both content and process there are substantial challenges that first nations face with this bill. Therein lies the suggestion that we do as we've done with other major pieces of legislation. We do have a track record with this government and other governments of jointly designing a way forward, and we would encourage the committee to look deeply at this.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you, Mr. Chair. Thank you, gentlemen, for taking time out of your busy schedules to appear before us on these important issues. I appreciate your being here.

Let me begin with a fellow British Columbian, Chief Atleo. We care about some of the same issues with respect to fisheries. Unless I heard you incorrectly, I thought you were characterizing the changes in Bill C-38 as removing protection of fish habitat. To be frank, I'm not sure how you came to that conclusion. I would have thought you would welcome a more focused approach to protection of recreational, commercial, and aboriginal fisheries. That protection is in a prohibition in the new section 35, which is defined as serious harm to fish, the death of fish, or any permanent alteration to, or destruction of, fish habitat.

I'm just curious, and let's take the Nuu-chah-nulth, for example, and their aboriginal fisheries. Wouldn't this include all those fisheries and all of the habitat that supports those fisheries, and place an obligation on the Minister of Fisheries and Oceans to protect that habitat in order to protect those fisheries as a clear reading of this proposed section in the bill?

[Dr. David Schindler, Professor of Ecology, Department of Biological Sciences, University of Alberta, As an Individual]

Mr. Chairman and members of the committee, I have given Mr. Lafleur several copies of my presentation. It has some figures, and as a result I will not read it. I've always had a thing about somebody giving me something to read and then reading it to me, which is usually one-tenth as fast. So instead, I'll just hit some high points.

Figure 1 is my first point. It shows the rate of increase in the oil sands area, a doubling every 10 years. I can tell you first-hand that a lot of the environmental problems that are developing are because of that rate of development. That rate of development is only matched by China, and it's only been matched in the past during times of war. I wonder what's the hurry. I think we need to take the time to change Bill C-38 to get it right, at least the environmental part of it.

I'll show you several examples of provisions of the bill that don't make environmental or economic sense. The first is the proposed change to species of economic, aboriginal, or recreational value. I'll give you an example from the Experimental Lakes Area, which I directed when I was a scientist with DFO for 22 years. Those were the days when acid rain was considered a problem, or it was debated as to whether it was a problem.

Most of the data, when we began our experiments there, were from short-term lab toxicity studies, mostly done on the fish of interest for economic or cultural reasons. It was decided that acid rain wasn't a problem until these systems reached pH 5.

We began acidifying a small lake to see what happened along the way. We found that some of the key species of food for lake trout were ten times more sensitive. They disappeared when the lake hit pH 6. They were species that would not have been protected by this proposed wording change. Fathead minnows and opossum shrimp, a large crustacean that have co-evolved with the lake trout, are its main items of diet in many lakes. So it's an example of how these key species would not have been protected.

We nearly lost the lake trout in that lake, not because of the toxicity to them but because these other two species that were non-target species disappeared. The lake trout began to starve and they stopped reproducing and the population went into decline.

That's the kind of loophole that we can expect from the proposed change in wording. Some of the figures are of those very organisms. In that same pH range between the normal pH of 6.5 and 5, where it was believed that damage began with our whole ecosystem experiments, we lost 50% of the normal species in the lake. Most of them would not be targeted by the proposed changes.

What it meant was that we lost several key processes in that lake: key biogeochemical processes like nitrification, so we had an ammonium buildup; changes in algae, so that instead of clear water with algae that would be grazed by plankton and zooplankton and then eaten by fish, we had big balls of rolling algae on the bottom of the lake.

So expect big declines in biodiversity without this protection for fish habitat. The work done at ELA was never done solely because of the fish. It was all regarded as work on fish habitat.

I think it's a weakness of our current DFO that we have Environment over here studying the environment and Fisheries over here managing fisheries in isolation from the very ecosystems that support it. We're almost unique in the western world for that approach. It is outdated by 70 years. We have to realize that fish are a part of an ecosystem and need to be regulated as part of it. We shouldn't have these disparate things.

If you look at the various mandates of Fisheries, they all have cod or salmon in the top 20 priorities. There is nothing on inland fisheries at all. Yet a lot of our people—mostly aboriginal people and a lot of our recreational fisheries—depend on freshwater fisheries. I can tell you that provinces don't do any research on them, and I have lived in three provinces. It has been up to the federal government, and that mandate should continue.

In the press, soothsayers for DFO have told us about all of the nasty things that happen—how concerts have to be cancelled, and irrigation water back-flow can't be discharged because there are a few fish in it. To me that seems analogous to saying we should be throwing out murder as a charge because there were boo-boos in the Robert Pickton case, or we should get rid of police because of a botched policing action around G20. They're exceptions to the rule.

I can tell you that with 22 years as a DFO scientist, and a daughter with 10 more as a habitat officer, there are some very practical things with respect to habitat that are done. One common example that's very inexpensive to do right, but very expensive to fix afterwards, is called hanging culverts. Typically, someone with no knowledge of fisheries will put a culvert across and water flows through it. There's no regard to whether the flow might be too fast for fish to come upstream and use what is often key spawning habitat. I have seen cases in Alberta where one culvert cut off red-listed bull trout from 60% of their spawning habitat in a stream. The rate of flow through the culvert can be too high. There are simple design features to make them level enough so fish can go through them, or broad enough so the flow can be tolerated by fish—or with some resting baffles. They are very simple things to do.

My daughter was a habitat officer for DFO in the Bella Coola region. She reports that she has never had a hostile incident. The contractors there were always happy to have the design input, and proud of the fact they could put in road crossings and maintain the salmon and other species that were using those streams.

Another example given in the press was lakeshore development. I chaired a committee for the Minister of Environment in Alberta on lakeshore development in Lake Wabamun. All of the cottagers pointed at the big power plant, but we found that the main damage was due to people putting in docks and beaches where there should have been fish habitat. I give you some examples of how cottage development destroys fish habitat, based on studies done by my son in the U.S.

Much of what I have said also applies to terrestrial species. I give you two Alberta examples: sage grouse and woodland caribou. We have known for 20 years that caribou were on the skids. Now we have Environment Canada reporting that it's questionable whether we can recover them at all. The sage grouse probably is not recoverable; it's near zero. Both of them are near zero because their habitat was not protected. We don't need any further weakening of habitat revisions.

To finish, I support the idea of streamlining the review process, but not necessarily to hurry development. The way to go about it isn't to weaken our environmental laws; it's to streamline this stupid process by which the science is collected by a few students who work for consulting firms, 10 pages are hidden on a long shelf, and a committee is expected to find them and make sense of them in a year or less.

It's time we had an organization that did professional environmental impact assessments, based them on good long-term monitoring—we usually know in advance when those systems are going to be targeted for development—gave us an unbiased view of what the changes to those systems would be, and then went back afterward to see if their changes were correct. That's something that is not done in our current environmental impact process. It's not a science, because that self-correcting action simply does not occur.

Thank you for your time.

[National Chief Shawn A-in-chut Atleo, National Chief, Assembly of First Nations]

Thank you Mr. Chair, members of the committee.

[Witness speaks in Nuu-chah-nulth]

Thank you for that pronunciation as well. My name is A-in-chut...[Witness speaks in Nuu-chah-nulth ]

Just a few words in my Nuu-chah-nulth west coast of Vancouver Island language to express my appreciation for being here in Algonquin territory.

Thank you for the opportunity to speak to you today about part 3 of Bill C-38.

As you are aware, I am currently national chief for the Assembly of First Nations. We are a national political advocacy organization for first nations in Canada.

In January of this year, first nations and representatives of the crown and the Government of Canada participated in a historic crown-first nations gathering. The intent of this gathering was to strengthen and reset the relationship between the crown and first nations, to move away from unilateral imposition of policies or laws that have had impacts on first nations peoples and territories to one that recaptures mutual respect and partnership.

Bill C-38 and the wide-sweeping and comprehensive changes to other pieces of legislation it contains continues historic unilateralism and imposition that we have worked, and continue to work, to overcome.

In November 2010, Canada endorsed the United Nations Declaration on the Rights of Indigenous Peoples, which reflects the recognized customary international legal standard of free, prior, and informed consent. Free, prior, and informed consent, Mr. Chair, is not mentioned anywhere in Bill C-38.

Domestic law recognizes and enforces the duty to consult and accommodate first nations when crown conduct or omission may adversely impact established or potential aboriginal and treaty rights. Part 3 of C-38 will have a direct impact on the federal government's ability to fulfill these standards.

The Assembly of First Nations, to be very clear, is not a first nations government. Consultation or engagement with the AFN does not replace or fulfill the crown's duty to consult and accommodate treaty and rights holders where their rights may be infringed. To date, first nations have not been engaged or consulted on any of the changes to the environmental and resource development regime proposed within Bill C-38. This opens the crown to future risk and will have numerous and likely unintended consequences.

The stated intention of these legislative and associated regulatory changes has been said to improve the timeliness and efficiency of environmental regulations and project assessments. In its current form, part 3 of C-38 clearly represents a derogation of established and asserted first nations rights. If enacted, it will increase the time, costs, and effort for all parties and governments, as first nations will take every opportunity to challenge these provisions.

There are a number specific concerns, Mr. Chair, with the changes proposed in part 3 of C-38, which I will outline.

As I know you're aware, C-38 changes the scope and purpose of the Fisheries Act to the protection of fish that supports commercial, recreational, or aboriginal fisheries. Previously the act had prohibited “harmful alteration, disruption or destruction of fish habitat”. The proposed change prohibits “serious harm to fish”, defined as “the death of fish or any permanent alteration to, or destruction of, fish habitat”.

I come from a fishing people, the Nuu-chah-nulth, as I said, on the west coast of Vancouver Island.

[Witness speaks in Nuu-chah-nulth]

In my language, core principles that we govern ourselves and live by are how our people manage aquatic resources within our respective territories. These words in my language describe an understanding about the interconnectedness of all life forms, that nothing is isolated from other aspects of life around it and within it—in essence, the ecosystem. These principles are the basis for respect for ourselves, others, and nature. In managing aquatic resources, these values bring respect for the oneness between humans and the environment and respect for all other life forms. Our obligation is to sustainably manage all aquatic life forms that exist, regardless of their perceived economic value.

The balance of resources in habitats is one that changes over time, and this is something well-known to first nations. However, only enabling the protection of aquatic species once there is certainty of their demise or permanent destruction of their habitats is likely too late and will not restore the necessary balance for their sustainability.

Specifically, C-38 would remove protection for fish habitat from the Fisheries Act and enable the minister to create regulations allowing for the deposit of deleterious substances. This may leave fish species and habitats vulnerable to destruction and prevent first nations from continued enjoyment of their constitutionally protected right to fish.

I feel strongly that first nations have a shared vision with all Canadians, particularly for clean water. Our watersheds provide us life, food, and health. Bill C-38 clouds that vision by creating new political discretion to poison our waters by changing section 36 of the Fisheries Act. Instead of allowing deleterious deposits to destroy our water, we must fulfill our inherent obligation as responsible stewards of the environment.

Changes to the Fisheries Act will also reduce federal decision-making about fisheries management, the effect of which will be to narrow the triggers to consult and accommodate first nations, thereby reducing the federal obligation. First nations will vigorously oppose any attempts by the crown to erode or evade lawful obligations and responsibilities to first nations, which leads to an important element regarding the honour of the crown being called into question.

The CEAA last underwent a legislative review prior to Supreme Court decisions that established the duty to consult and accommodate. The sequence here is very important to point out. It has never been updated to operationalize the duty to consult and accommodate. In this regard, Mr. Chair, CEAA 2012 is a step backward.

Under the current CEAA, projects with minor environmental effects may have profound effects on first nations' rights, which triggers the duty to consult and accommodate. CEAA 2012 ends environmental assessments for minor projects currently referred to as “screenings”.

In addition, CEAA 2012 will continue substitution of provincial environmental assessments for the federal process as well as deem equivalency of such processes, which would exempt CEAA 2012 from further application.

The government is correct to note that where relationships with first nations, provinces, and the federal government have already been established, such as the Mi'kmaq-Nova Scotia-Canada consultation process, substitution in those cases may work well. But this also raises significant concerns, and it could very well lead to more situations that I know many are familiar with, such as the Prosperity Mine project in the interior of British Columbia, which was approved through the provincial environmental assessment process but subsequently rejected following more stringent federal review.

This also invokes for many first nations—for those of you familiar with the situation across the Prairies—the Natural Resources Transfer Agreement, or NRTA, of 1930. This was a unilateral agreement between Canada and the provinces of Manitoba, Saskatchewan, and Alberta to transfer resources and lands that were never ceded or surrendered by way of treaty by the first nations—another major impact.

The impact of the NRTA has been to lesson the scope and implementation of the numbered treaties in the Prairies, and it is a source of continued and ongoing conflict and litigation over 80 years later. This is about all of us, and for Canada, learning from history. This is what the recent crown gathering was an effort to reflect on, and to do much better going forward. First nations will not stand for such unilateral actions and will take all avenues available to them to prevent further derogation of their rights.

The increase in discretionary powers afforded to the minister within the Fisheries Act and the number of cabinet decisions under CEAA 2012 and the National Energy Board Act will severely impair transparency and accountability to first nations. The broad restrictions around cabinet confidences will mean first nations will find it increasingly difficult to know how the government considered first nations rights when developing accommodation measures. This too compromises the crown's ability to discharge its duty to consult and accommodate first nations and is an area for clear challenge.

Finally, on the issue of timeframes established for first nations to respond to notices under CEAA 2012 and the National Energy Board Act, they are insufficient, not allowing adequate time for appropriate review, analysis, and response. It's unreasonable to provide first nations with only 20 days to provide comprehensive scientific and legal materials related to assessing the potential impacts of a project. Any notices under CEAA, NEB, or the Fisheries Act related to development, authorizations, regulations, or policies must be sent directly to communities in an accessible form. The use of online notices limits first nations participation and is therefore insufficient to fulfill the crown's duty to consult with first nations.

While the government has an established legal duty to consult and accommodate first nations under Bill C-38, part 3, as well as any regulations developed under the authority of the act and any new policies created to interpret the act, such consultations have not yet taken place.

Numerous organizations in addition to the Assembly of First Nations, including MKO, in Manitoba, and the Union of B.C. Indian Chiefs, have all registered protest to the CEA agency's call for public comments on regulations to be developed under CEAA 2012, which had a deadline of May 23, 2012.

Paragraph 62(h) of the CEAA and paragraph 105(g) of the CEAA 2012 state that one of the objectives is to consult with first nations. However, to be clear, there's been no identification of a process for funding for such consultations to take place.

In conclusion, Canada, in our view, needs to take a step back and reconsider its approach. Hastily moving forward on significant and broad changes that will impact the exercise of established and asserted rights by first nations will have long-reaching and expensive consequences, contrary to the interest in moving in this direction.

Taking time to work with first nations jointly on resource management and protection plans will achieve far better outcomes in terms of certainty and increased prosperity, and we have many examples we can point to. This is the spirit in which, as I said earlier, we participated in the crown-first nations gathering, and it's in this spirit of a renewed and respectful relationship that we urge Canada to proceed.

We have the following three recommendations:

Part 3 of Bill C-38 needs to be withdrawn to take the time to work with first nations to ensure their rights and interests are reflected and will not be compromised through such legislation. Failing that, I would recommend that the legislative amendments in part 3 be separated from the main bill to ensure appropriate study and amendments can take place with engagement and input from first nations.

Specific funding allocations should be made to engage and consult with first nations on CEAA 2012, amendments to the Fisheries Act, amendments to other legislation within part 3 of the act, regulations under the amendments, and any new policies relevant to the interpretation of amendments to new or existing environmental regulation.

Finally, any and all notices provided with regard to project reviews must be sent directly to first nations.

Bill C-38 unacceptably impacts first nations' rights. While I've been speaking about fish tonight, really I'm talking about the lifeblood that connects all of us, and that's our waterways, our watersheds.

I will close on that notion that we not forget about the need for a vision going forward to achieve pristine water in our country.

[Greg Smith]

Thank you.

The Chief Peguis project was very successful, and we're proud to be a part of that.

Bill C-38 will allow us to enter into very formal, direct relationships with federal departments and agencies to provide our advisory services and pass on to them the knowledge and expertise we've acquired from implementing the P3 Canada fund over the past three years. That's what it will do for us.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much.

My colleagues have spent a lot of time talking about Old Age Security. I am going to take a bit more time to talk about employment insurance. In my constituency, in the east of Quebec, it is a specific concern.

My first question goes to you, Mr. Céré, because you know the reality too. The reforms were announced on Thursday morning. On Thursday afternoon and Friday morning, I spoke with a lot of people in my constituency at some public forums I held on various issues related to Bill C-38.

What surprised me was that more employers than workers came to see me about the problems that Ms. Finley's proposed reforms were going to create. Among them were employers from ZECs—controlled harvesting zones. They were in tourism and cabinet-making. They all told us that they were having a lot of difficulty because they train their workers in the specialist ZEC areas, such as tourism and cabinet-making. Since the employment is seasonal, they have to lay off their employees for two, three or four months. The workers try to find other jobs but getting employment for two, three or four months is not the easiest thing in the world. The employers can hire them back and so can get back the expertise that they provided. The employers are thinking that, because of the reform and the measures that are proposed, they may well lose the employees whom they have trained.

I would like to know what you think about that. You mentioned a lot of employees and workers who are affected. But I feel sure that employers in a region like mine and like those in Atlantic Canada, may well be adversely affected too.

[Greg Smith, Vice-President, Finance, Risk Administration and Chief Financial Officer, PPP Canada Inc.]

Thank you, Mr. Chair.

I'm pleased to be here on behalf of PPP Canada to discuss Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.

The infrastructure delivery model, known as public-private partnerships, or P3s, has been successfully implemented through the creation of government agencies in the United Kingdom, Australia, and across Europe. To date, the provinces have led the way in the use of P3s in Canada, notably Ontario, Quebec, British Columbia, and Alberta. However, with the creation of PPP Canada, we are seeing more and more jurisdictions adopting policies and frameworks to leverage greater value for money through P3 procurement. This increase in their use has contributed to Canada becoming a recognized global leader in the P3 industry.

P3s are a long-term performance-based approach for procuring public infrastructure, where the private sector assumes a major share of the responsibility in terms of risk and financing for the delivery and the performance of the infrastructure from design to structural planning to long-term maintenance.

In practical terms, this means that governments across Canada harness the innovation and expertise of the private sector to provide the most effective solution to deliver services to Canadians. Through allowing the private sector to design, build, finance, operate, and maintain such things as roads, bridges, and water and waste water treatment facilities, it ensures that the overall cost and risk is considered up front.

More importantly, governments do not pay for the asset until it is built and a substantial portion is paid over the life of the asset if it is properly maintained and performs its services. Moreover, the costs are fixed over the life cycle of the asset, meaning that taxpayers are not on the financial hook for cost overruns, delays, or any performance issues over the asset's life.

For example, imagine that the company that built your house was also responsible for any repairs and maintenance over your 25-year mortgage. Given the amount that you will pay them every year, once it is constructed, is agreed to before the house is built, your payments do not go up if something breaks or needs replacement. Your builder, therefore, would consider the most cost-efficient way of doing something, perhaps installing a metal roof rather than shingles. More expensive to install, but more durable, and easier and cheaper to maintain in the long-run. Moreover, if your dishwasher breaks and they don't come to repair it in the agreed amount of time, you can deduct that from your next payment.

The Government of Canada has recognized the potential benefits of the P3 model and created PPP Canada, a crown corporation, to improve the delivery of public infrastructure by achieving better value, timeliness, and accountability to taxpayers through P3s.

PPP Canada's operational focus is threefold: acting as a source of expertise and advice on public-private partnerships through knowledge development, and sharing that knowledge; building P3 procurement, knowledge, and capacity among federal departments; and leveraging greater value for money from federal investments in provincial, territorial, municipal, and first nation infrastructure through the P3 Canada fund.

Budget 2011 created a new federal P3 screen for infrastructure with capital costs of $100 million or more and a useful life of at least 20 years. Federal departments are now required to evaluate the potential for using a P3 for large federal capital projects. Should the assessment conclude that there is P3 potential, the procuring department will be required to develop a P3 proposal among the procurement options. Furthermore, the budget also encouraged departments to explore the potential of a P3 approach for other types of procurements.

[Pierre Céré, Spokesperson, Conseil national des chômeurs et chômeuses]

Mr. Chair, members of the committee, thank you for inviting us to speak to you today.

My testimony will be solely about the part of the budget implementation Bill C-38 that deals with employment insurance.

Mr. Chair, I must tell you that we hesitated a little before accepting this invitation because we are very well aware, as is everyone here, that Bill C-38 is going to be passed anyway. But we have a deep belief in democracy, we are democrats. We feel that Quebeckers and Canadians have to know about the issues that underlie the proposed changes to employment insurance, because those changes will have very serious consequences.

Clause 605 on page 372 of this 452-page bill, which affects 60 separate acts, contains four lines that rescind section 27 of the Employment Insurance Act. The entire historical definition of unsuitable employment is removed, a definition that protected workers who found themselves out of work and gave them a reasonable amount of time in which to keep looking for work in their areas of expertise and experience. From now on, unsuitable work becomes suitable. From now on, what was unacceptable becomes acceptable.

Mr. Chair, we knew of course that a new definition would eventually be introduced into the employment insurance regulations, regulations that do not go through Parliament. Last Thursday, Ms. Finley, the Minister of Human Resources and Skills Development, tabled such a document. We now know more about the spirit in which that definition of suitable and unsuitable work will be couched.

This is a historic stage in the history of employment insurance, a program that has existed since 1940. Three separate classes of the unemployed are now created; they will not have the same rights nor be subject to the same requirements. That is unheard of. Specifically, a new sub-class of the unemployed is being created; they are called frequent claimants and they are no longer entitled to a reasonable search period. They will be required to accept any work at 80% of their previous earnings starting in the first week of unemployment. In the seventh week of unemployment, they will have to take any work paying 70% of their previous earnings.

Who are these frequent claimants? Principally, they are seasonal workers. And where are those seasonal workers, ladies and gentlemen? In eastern Canada. In Quebec, 34% of those receiving employment insurance benefits are seasonal workers. In Atlantic Canada, the percentage in Nova Scotia is 38%, in New Brunswick, it is 46% and in Newfoundland, it is 52%. In Ontario, it is 19%, in British Columbia, it is 14% and in Alberta, it is 9%. In a way, they are declaring war on eastern Canada by penalizing those who live in those regions where a major part of the economic activity comes from seasonal work.

Who are these so-called frequent claimants? Generally speaking, they are people who have no opportunities for a full-time, year-round job. They may be, for example, in the film, cultural, television or advertising industries. They are support workers, like those in school cafeterias. According to the Department of Human Resources and Skills Development's own figures, one-third of the Canadian workforce is in a vulnerable situation. Those are the workers being targeted. They form the newly-created sub-class of unemployed that will be forced to accept unacceptable conditions.

The same bill proposes to abolish the administrative tribunals, meaning the boards of referees and the umpires. My colleague here from the Canadian Labour Congress brought that up as well. I point out in passing that the boards of referees were tripartite—with representation from labour, employers and the government—in order to ensure a measure of balance in the decision-making process. That will all be replaced by a new Social Security Tribunal with only one member. There will be 74 of them for all of Canada, only half of which will be assigned to employment insurance.

I have been mandated to tell you that the current government is in the process of breaking the social contract on which employment insurance was built in 1940, when it was called unemployment insurance. All observers, commentators and columnists, the entire political class in Quebec and the Atlantic provinces, are opposed to these changes.

Let me finish with these words. Mr. Chair, this government is sowing the wind. Those who sow the wind can expect to reap the whirlwind, and the whirlwind is coming.

Thank you.

[The Chair, Conservative, James Rajotte]

I call to order the 64th meeting of the Standing Committee on Finance.

I want to welcome our witnesses here this afternoon.

Our orders today, pursuant to the order of reference of Monday, May 14, are for our study of Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.

We have four organizations with us in this panel.

Firstly, we have the Canadian Labour Congress.

Next we have the Conseil national des chômeurs et chômeuses.

Thirdly, we have the Macdonald-Laurier Institute.

Then we have PPP Canada Inc.

Thanks to all of you for being with us here this afternoon. You will each have up to five minutes for an opening statement, and then we'll have questions from members.

We will begin with the Canadian Labour Congress, please.

[Sean Casey, Liberal, Charlottetown, PE]

Thank you.

You have the motion before you. Essentially, as you know, this is an attempt by the Liberal Party to have the budget bill subjected to closer scrutiny, in particular by the committees responsible for the statutes that have been directly affected. You would also know that since this committee was formed after the last election, we have not had any legislation come before it. There have been no changes proposed to any of the statutes for which we are responsible. So here we are, knowing that one of the things that we're supposed to do is to consider changes to the statutes falling within our jurisdiction, and the first time one of them comes along, that statute has not been sent to the committee. So I'm asking the committee basically to do the work for which it has been mandated.

You will note that the motion calls for the formation of a subcommittee, and that's specifically out of respect for Mr. Harris's motion that we examine the transformation agenda. That is very important work that we're now doing. By striking a subcommittee, that work can continue and we can proceed on a parallel track. We could strike a subcommittee of this group to examine the impacts of Bill C-38 at the same time as continuing with the important work we're doing here today. So the motion is not meant to derail the work of the committee but to do it in parallel.

That's the motion and that's the rationale for it. Thank you.

[Sean Casey, Liberal, Charlottetown, PE]

Thank you, Mr. Chairman.

I provided a notice of motion to the committee on May 16. I advised the witnesses ahead of time that I would be presenting the motion here.

I move that the Standing Committee on Veterans Affairs establish a subcommittee to immediately undertake a study regarding the subject matter of the sections of Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures, which directly fall within the mandate of this committee, namely part 4, division 50: Canadian Forces Members and Veterans Re-establishment and Compensation Act .

That's the motion for which I provided notice.

May I speak to it now, or do you want to put me on the speakers list?