Bill S-2 (Historical)

Incorporation by Reference in Regulations Act

An Act to amend the Statutory Instruments Act and to make consequential amendments to the Statutory Instruments Regulations

This enactment amends the Statutory Instruments Act to provide for the express power to incorporate by reference in regulations. It imposes an obligation on regulation-making authorities to ensure that a document, index, rate or number that is incorporated by reference is accessible. It also provides that a person is not liable to be found guilty of an offence or subjected to an administrative sanction for a contravention relating to a document, index, rate or number that is incorporated by reference unless certain requirements in relation to accessibility are met. Finally, it makes consequential amendments to the Statutory Instruments Regulations.

[Françoise Boivin, NDP, Gatineau, QC]

I just want to make sure we're clear in case there are any misunderstandings.

Bill S-2 is meant as framework legislation. Everyone it applies to has the authority to incorporate documents by reference in regulations.

My colleague's amendment seeks to limit that authority to provincial and federal legislation, but there is nothing stopping other things from being included. My colleague told us that the purpose of the bill is to allow that. And the government is still free to do that if it wishes. If the government wants to proceed through incorporation by reference in some specific cases, all it has to do is introduce legislation to that effect. As I see it, that approach would afford us better oversight.

[Jacinthe Bourdages, General Counsel and Director, Advisory Services and Legislative Revision Group, Legislative Services Branch, Department of Justice]

On a case-by-base basis, a department could sponsor a specific piece of enabling legislation for that type of incorporation, but it would be excluded from the framework legislation, Bill S-2.

[Françoise Boivin, NDP, Gatineau, QC]

To the point made by my colleague, Mr. Dechert, I would defer to our experts from the Department of Justice.

Would the amendment proposed by my colleague, Ms. Péclet, limit enabling legislation, such as the agreement with the European Union or the legislation of another jurisdiction? Would the amendment exclude that authority from Bill S-2 and prevent regulators from being able to incorporate documents by reference in a regulation?

[The Chair, Conservative, Mike Wallace]

Thank you for that discussion. We'll go now to the clause-by-clause consideration of Bill S-2, an act to amend the Statutory Instruments Act.

We have four amendments, and they all deal with clause 2, but pursuant to Standing Order 75(1) consideration of clause 1, the short title, is postponed until the end.

(On clause 2)

We start with amendment NDP-1.

Madame Péclet, you would like to speak to it.

[The Chair, Conservative, Mike Wallace]

Thank you very much for those questions.

Thank you to our witnesses.

We're going to suspend in one moment, but before we do, we have budget requests for Bill S-2 and Bill S-221.

Those budgets have been moved.

(Motions agreed to)

Thank you very much.

We will suspend for a few minutes as we switch over to the next panel.

[Françoise Boivin, NDP, Gatineau, QC]

Thank you.

I think this group of witnesses has done a good job of identifying the concerns.

What I have gathered from your respective testimony, Ms. Proud, Mr. Walter and Mr. McCuaig, is that everyone agrees on Bill S-2, An Act to amend the Statutory Instruments Act and to make consequential amendments to the Statutory Instruments Regulations.

We understand the idea of modernization and how quickly regulations, agreements and similar documents are prevailing in Canada. Of course, this process is not easy. I listened with interest to the questions of my colleague, Mr. Albas, as both of us were sitting on the Standing Joint Committee for the Scrutiny of Regulations at the same time. Other individuals around this table have perhaps also been members of that committee.

To outside observers, that committee may appear to be the most useless of all, but that is because those individuals don't understand what happens in the committee. Once on the inside, however, we understand that this committee is probably the most important one, after the Standing Committee on Justice and Human Rights. That's at least how I see things. That is where the necessary parliamentary scrutiny and control take place.

One of the issues the joint committee has always raised concerning ambulatory incorporation by reference

—that's “ambulatory”, in English—

was accessibility. We are talking about accessibility and using the term “otherwise accessible”. However, the term “accessible” is not very clear, and I'm not sure that “otherwise accessible” is any clearer. It's a matter of determining how it would be possible to apply the power granted under the Statutory Instruments Act.

How can we ensure that this verification will be done in a parliamentary context?

Correct me if I'm wrong, but I think regulations incorporated by reference can still be reviewed and analyzed. However, that is a bit elusive. That's one of the problems.

Isn't this a way to bypass the role and work of our joint standing committee, here in the House of Commons.

You also talked about the need to have

what you call Treasury Board guidelines on what it is. We need definition of accessibility, knowing about the changes.

This is an approval of Bill S-2, but with a big caveat that we still need this. Will it work without those guidelines or is it going to be a free-for-all in a very short time?

[Karen Proud]

Well, I think that's precisely the concern that's trying to be addressed through Bill S-2, and in my words, tying the hands of departments to be able to use ambulatory references. As we recommend, we don't think the proper oversight exists right now for the practice that is going on right now of incorporation by reference. We appreciate the practice that's going on right now with incorporation by reference and we want to see it continue, but we think Treasury Board should have put in place a long time ago guidance in the form of a cabinet directive to departments dictating how they are to use these authorities.

We recommend that the Standing Joint Committee on Scrutiny of Regulations be able to look at regulations in the context of how they were made and not just at the instruments themselves, in order to provide that additional oversight. Without those things in place, we too have concerns about the broad authority given to departments, but we recognize that it is authority that is very important but needs oversight.

[Ian McCuaig, Lawyer, Canadian Council of Criminal Defence Lawyers]

Thank you.

Good afternoon, Chair, and members of the committee.

I am here today as a representative of the Canadian Council of Criminal Defence Lawyers.

The council was formed in November 1992 to offer a national voice and perspective on criminal justice issues. Since the organization's inception, the council has intervened in important cases before the courts of this country, has been invited by the federal government to consult on major pieces of criminal legislation, and has been often asked by the media to comment on current issues.

Our representatives have appeared before the Senate Standing Committee on Legal and Constitutional Affairs, the House of Commons Standing Committee on Justice and Human Rights, and the Standing Committee on Public Safety and Emergency Preparedness.

The current board has representatives from all ten provinces and three territories.

On behalf of the council, I would echo support at least for the spirit of Bill S-2, but I am going to go on and explain a possible concern from a criminal justice point of view.

I consulted a little bit with some of the more accomplished criminal justice lawyers before I came to make this appearance and I can tell you, not very many criminal justice lawyers spend a lot of time thinking about incorporation by reference. However, that doesn't mean that it's not an important and actually really interesting issue from a criminal justice perspective.

Looking at the existing act, if you read the preamble it says:

An Act to provide for the examination, publication and scrutiny of regulations and other statutory instruments

From a criminal justice point of view, that's an important function that this act has, because if you're going to hold people accountable, they have a right to know the law. One of the functions of the Statutory Instruments Act is that it lets people know the law. It gives scrutiny to regulations and it stipulates that they be published in certain ways.

Furthermore, it goes on in section 17 of the existing act to specify the rights of access. It specifies that people have a right to both inspect and obtain copies of regulations.

There is also noted in the act exceptions to the process for making regulations, in section 20, which explains exceptions for publication and different mechanisms for oversight. But even the exceptions provided for by section 20 have oversight because those exceptions have to be defined in the regulations to the Statutory Instruments Act.

What we have is an act that provides for some oversight of the development of regulations. It provides that people will be aware of those regulations once they're developed. The thing is that a lot of the regulatory offences that are defined are defined by regulations, either fully or at least partly.

When you look at the amendments, a combination of a few of them together creates an interesting effect, especially in proposed section 18.1 of the bill, which allows for an ambulatory incorporation by reference.

Proposed sections 18.3 and 18.4 ensure that these documents will be accessible, but it allows that they not be published in the Canada Gazette, which is the normal way that regulations are publicized.

Proposed section 18.6 actually creates an interesting exception. It limits the liability for offences related to incorporated materials if those materials are not accessible. A lot comes down to this word “accessible”, but it doesn't seem to be really adequately defined; in fact, it doesn't seem to be defined at all. So we actually now have a built-in excuse where ignorance of the law is an excuse, but we don't really have a standard for what constitutes whether a person was made aware of the regulation or the incorporated document. This obviously could wind up in front of a court with an argument over what constitutes “accessible”.

Also raised in the legislative summary and some of the debate that's occurred on this already is the notion that there doesn't seem to be a requirement for incorporated documents to be available in French as well as in English. Normally, regulations must be published in both languages. For incorporated materials it doesn't seem that requirement exists.

The other thing is, in a normal regulation-making process, for the translations, obviously, there's quality control, so that we can be sure the French and the English versions are consistent. In a document that does exist that's incorporated by reference and that's available by a third party, there is really no oversight that the French or English or possibly other language versions will have the kind of consistency that a regulation has.

Current practice includes incorporation by reference of documents that are actually published by organizations outside Canada. I've brought along an example for you. The ozone-depleting substances regulations, published pursuant to the Canadian Environmental Protection Act, incorporate the following definition:

“Protocol” means The Montreal Protocol on Substances that Deplete the Ozone Layer, published by the United Nations Environment Programme....

The regulations go on in part 1, controlled substances:

This Part applies to (a) a controlled substance within the meaning of the definition in paragraph 4 of Article 1 of the Protocol, as clarified by Decision I/12A, as amended from time to time;

It's incorporated on an ambulatory basis.

Section 4 of the regulations says:

No person shall import or export a controlled substance from or to a State that is not a Party.

If you go back to the Canadian Environmental Protection Act, section 272(1) creates an offence. That offence has consequences that start in the tens of thousands of dollars and goes up to the millions of dollars and can result in years, in some cases three years, in prison.

What we have is a regulatory offence created through regulation, which incorporates a document that is published by an organization that exists outside of Canada completely beyond the oversight of the Canadian government.

Obviously, in the case of something like the Montreal Protocol, there are some clear advantages to that. This is a well-known organization, the UN, and this is an example of international treaties that have been successful. This is the hallmark of international treaties and there's really little reason to doubt the quality of the work these people do.

But we live in a world where we are negotiating more and more international agreements on more and more subjects. We're negotiating agreements on trade, the environment, and all kinds of things. To give you an example, if you follow in the press the development of the Trans-Pacific Partnership—and there's not really a lot of, I think, reliable information about it—there's a suggestion that it might be required, if we were to sign onto it and other countries sign onto it, to implement sanctions against the breaking of digital locks.

We might have a situation where we create an offence relative to a negotiated trade agreement and that offence again is related to a document that is beyond the control of the Canadian government. As you can see with the Montreal Protocol, it's implemented on an ambulatory basis, and I think that's a reason to just pause for a minute and take some concern. The legal principles that you might run up against in a case like that are the rule of law, which suggests that we should establish a normative order of clear principles for people to follow.

Section 7 of the charter suggests that ambiguity in the law is a problem, and from an administrative law perspective you could run up against the principles of procedural fairness with a situation like that.

Those are my remarks.

Thank you.

[John Walter, Chief Executive Officer, Standards Council of Canada]

Thank you very much, Mr. Chair and members of the committee. I appreciate an opportunity to bring the viewpoint of the Standards Council of Canada and provide our comments in support of Bill S-2.

I'm going to give you a little background on myself personally, because I've been involved in the standards field for close to 25 years. I was appointed as the CEO of the Standards Council of Canada five years ago. Prior to that I was the vice-president for standards development of the Canadian Standards Association, and I was responsible for the development and maintenance of probably 3,000 codes and standards.

Prior to that I worked for the Government of Ontario for 30 years. The last 10 years, I worked as an assistant deputy minister of a technical standards division in the government and I was also the president and CEO of the Technical Standards & Safety Authority. For that last 10 years I was responsible for referencing many national, regional, and international standards into Ontario regulations.

Incorporation by reference has great significance to the entire network of organizations and individuals involved in standardization. I talk about standardization in both senses of the term. Standardization includes the development of standards, but also the testing of products by accredited certification bodies.

Technical standards are among the external documents most often cited by Canadian regulators. SCC monitors the use of standards in regulations by federal departments and agencies. In May of this year, our inventory included 1,118 standards that are referenced in federal regulations. There are a number of departments and agencies that make the greatest use of standards in those regulations: health, transport, environment, natural resources, the Canadian Food Inspection Agency, industry, and Employment and Social Development Canada.

Generally standards are referenced because they provide specifications and guidance to protect the health and safety of Canadians or to safeguard the environment. Examples of standards incorporated by reference in federal regulations include such things as laminated safety glass used in glass enclosures and balconies—you'll be aware of some court cases regarding the use of laminated safety glass—leak detection in fuel tanks, storage and transportation of explosives and dangerous goods, or the certification of organic foods.

In addition to those federal departments, there are thousands of referenced standards in provincial regulations. When you add in the standards referenced in Canada's model codes—and those model codes are the building, fire, and energy codes—you begin to comprehend the magnitude and consequences of the issues being addressed by this bill today.

There are now eight standards development organizations accredited by the Standards Council to develop standards in Canada. To maintain that accreditation, they must develop standards through a formal, rigorous process that is based on internationally accepted guidelines, including the World Trade Organization's code of good practice. That's a process that promotes open, transparent, and inclusive standards development. This is important to understand as you consider the ramifications in this bill.

The first step of the process is to create and maintain standards development committees that consist of a balanced matrix of representatives from affected stakeholder groups. That means that those people represent a combination of interests, expertise, perhaps even countries or regions. The valuable point at this stage, as you understand, is that no single group can dominate the agenda nor decide the outcome of the standard. Content is developed by the group through consensus.

Once consensus is achieved, the draft document is posted for public review and comment. Every comment must be examined and resolved by the technical committee; therefore, the outcome is much more accepted than if the rule were drafted by one group alone.

In addition, the developer of these standards is required to assess the need for revisions to the documents at least once within a five-year period. Many standards are in almost constant review and revision.

Federal regulators are among the experts participating in standards development committees. They're an integral part of the balanced matrix of interest that I mentioned. To give you a sense of scale, there are probably close to 365 federal government employees who actively participate in the development of just international standards. Those international standards are at ISO, the International Organization for Standardization; IEC, the International Electrotechnical Commission; or ITU, the International Telecommunications Union. That's just at the international level. Many hundreds more also participate in specific Canadian standards development activities for hundreds of standards that find their way into regulations.

Standards developed by either Canadian or international organizations can be submitted to SCC for approval as national standards of Canada. National standards of Canada provide regulators with clear confirmation, a stamp of approval you might add, that Canadian conditions and requirements have been appropriately considered. For a standard to become a national standard of Canada, public consultation with Canadians is required. NSCs must be made available in both official languages.

Although it is clear that many standards are incorporated by reference in federal regulations, our concern is that we've noted many challenges and inconsistencies in the methods by which incorporation by reference is currently being employed. Both the static and ambulatory methods of incorporation are currently being used. Both have merits in their own right. Unfortunately, we believe that the rationale and approach to a selection of a method of incorporation are not always understood or consistently applied by departments.

Each method has certain particularities which should be evaluated in the context of the rationale for citing that reference. For example, an important consideration would simply be, did the regulator participate in the technical committee of the standard in question?

For these reasons, and I'd like to support the earlier speaker, we believe that a government-wide policy or guideline, probably by Treasury Board, that provides guidance to regulators on the appropriate considerations is needed. We have witnessed first-hand the many benefits to Canadian regulators of using the drafting technique of incorporation by reference. For example, they leverage existing credible infrastructure without incurring additional costs, resources, or time.

But for the system to work, we believe that the references to standard and federal regulations need to be up to date and that standards used by regulators across jurisdictions need to be aligned when possible. This isn't just an issue for the Government of Canada. It's an issue for the 13 provincial and territorial governments.

Aligning regulatory requirements to regional or international standards is a way for regulators to establish compliance requirements without introducing additional red tape. That's because Canadian industry certifies many products to regional or international standards in order to access global markets.

In addition, referencing the latest available version of a standard in a regulation can contribute to higher levels of protections for Canadians. That's because new standards as a rule set the bar higher in terms of safety and performance.

In conclusion, it is evident to us that standardization represents a necessary and valuable complement to Canada's regulatory framework. Standards must be updated on a regular basis to reflect rapid changes in technologies, markets, and safety requirements. Therefore, it makes sense to equally modernize Canada's legislative framework to ensure that references to standards in federal regulations are accurate and reflect the latest available edition.

That's why we support this bill.

Thank you.

[Karen Proud, President, Consumer Health Products Canada]

Thank you very much.

Good afternoon, Mr. Chair and ladies and gentlemen of the committee.

My name is Karen Proud and I am the president of Consumer Health Products Canada. For those of you who don't know us, we're the trade association that represents the companies that make evidence-based over-the-counter medications and natural health products. These are products you find in medicine cabinets in every Canadian home. From sunscreens and vitamins to pain relievers and allergy medications, people use consumer health products to maintain their health and manage their minor ailments. This is a fundamental part of self-care that is vital to the health of Canadians and to the sustainability of our health care system.

I'm very pleased to be here today to speak in support of Bill S-2 and want to thank the committee for the opportunity.

In our opinion this bill is important in two ways. It provides express authority for departmental regulatory authorities to utilize an important tool in the drafting toolbox where currently there exists ambiguity. More importantly, it creates efficiencies and flexibilities within the regulatory process that are necessary to keep pace with the rapid rate of change in the regulatory environment.

The bill also contains a number of safeguards that have been put in place to ensure that the use of these new authorities is in line with current regulatory practices. While we certainly support safeguards related to ensuring accessibility and maintaining official languages, we would call into question the limitations that this bill imposes on regulatory authorities when it comes to referencing documents they produce internally.

As it stands today, this bill would not allow departments to use dynamic references for documents they produce themselves or produce with a person or body in the federal public administration. We think this is a bit short-sighted. Our members' products are currently regulated under the Food and Drugs Act. The act, which was amended in 2012 through the budget implementation bill, Bill C-38 and again this past fall with Bill C-17, gives the Minister of Health the authority to incorporate by reference any document, regardless of its source, either as it exists on a particular date or as amended from time to time. The Safe Food for Canadians Act, which passed in November 2012, has similar broad authorities for incorporation by reference.

It may surprise the committee to hear that we fully support providing regulatory authorities with these broad authorities under the proper circumstances. Under the Food and Drugs Act, our members rely on the fact that the department can incorporate by reference documents that it produces, which change over time. For example, the “Compendium of Monographs” is a document produced by Health Canada and incorporated by reference into the natural health products regulations. It allows new product applicants to reference the data contained in the monographs to support the safety and efficacy of their products rather than providing evidence for ingredients that are already known to be safe and efficacious when used under the conditions specified in the monographs. This significantly reduces the regulatory burden for industry and helps speed the evaluation of applications without compromising safety and efficacy requirements.

One of the biggest challenges with regulation is to maintain flexibility within the system to adapt to changing environments, so why tie the hands of regulators? Why not, instead, ensure that they have the tools they need and create a system of checks and balances to ensure that these tools are used responsibly? We recommend removing the limitations that are contained in Bill S-2 but ensuring that there is proper oversight so that these authorities, both in this bill and as they exist in other legislation, are used consistently and in the spirit in which they were intended by Parliament.

Specifically, we ask that the Treasury Board Secretariat be tasked to immediately develop guidance in the form of a cabinet directive that must be followed by departments when exercising the authority to incorporate by reference. We would also suggest that the Standing Joint Committee on Scrutiny of Regulations broaden its mandate to look not only at regulatory instruments but at the departments' adherence to Treasury Board guidance. With these two things in place, we feel departments will have access to an important regulatory tool with the proper oversight.

While I understand that the clause-by-clause review of this bill will take place immediately following this round of testimony, I do hope that you will consider our proposals. I look forward to any questions you may have.

Thank you.

[The Chair, Conservative, Mike Wallace]

I call this meeting to order.

Pursuant to the order of reference of Friday, October 24, 2014, we're dealing with Bill S-2, an act to amend the Statutory Instruments Act and to make consequential amendments to the statutory instruments regulations.

We are joined for the first hour by three witnesses. We have Ms. Proud from Consumer Health Products Canada. From the Standards Council of Canada, we have Mr. Walter and Mr. Girard. From the Canadian Council of Criminal Defence Lawyers we have Ian McCuaig.

Thank you for joining us. You'll each have approximately 10 minutes to give us your view on this piece of legislation. Then we'll do a round of questions.

Based on the order presented in front of us, we'll start with Ms. Proud from Consumer Health Products Canada.

[Patricia Pledge]

As my colleague mentioned, one of the main drivers behind the tabling of this legislation was to settle the dispute between the government and the Standing Joint Committee on the Scrutiny of Regulations, because we did not agree as to when incorporation by reference could be used or could not be used on an ambulatory basis.

One of the benefits or implications of this bill is that it will set a legal baseline. It will confirm the legal authority to do what the government had relied on the common law to support and the SJC had insisted be expressly authorized by each individual act of Parliament. So the benefit of enacting Bill S-2 is that there will be a solid expressed legal basis for the use of the technique.

[Patricia Pledge]

There are constitutional interdelegation cases that relate to how the federal government and the provincial governments deal with their shared constitutional responsibilities. But they are not directly on point when it comes to incorporation by reference of the type that Bill S-2 proposes to be enabled here. So there's no case of that nature directly on point.

[Jacinthe Bourdages]

This legislation provides for a cadre. It's in the general application, if you will, but it does not expand on our current practice. There are some statutes that go further than Bill S-2. These are statutes, obviously, that were enacted by Parliament. There are statutes that don't go as far as Bill S-2.

Bill S-2 provides that for those statutes that didn't say anything about incorporation by reference, this will be the guide for them. It merely codifies the position of the government on incorporation by reference.

[Jacinthe Bourdages]

I'll try to be. There are many points in there; I'll try, though.

Under this bill, the government is proposing to amend the Statutory Instruments Act precisely because section 3 of that act is always relevant and that it also applies to documents that are incorporated by reference.

Of course, at the same time, section 3 deals with the limit of the power of regulations and documents that are incorporated by reference, as well as with Charter obligations. Documents incorporated by reference, just like the regulations into which they are incorporated, must be submitted to those tests. You are quite right to mention that.

As for the Standing Joint Committee on Scrutiny of Regulations, it is possible that members do not agree with the direction of Bill S-2. However, as I understand it, they do agree that dynamic incorporation by reference should henceforth be expressly authorized.

I believe that they would like dynamic incorporation to be limited to Canadian provincial legislation. That is a question of direction, but I feel that they do agree that, in legal terms, if Bill S-2 becomes law, that part of the issue will be solved.