Finance Committee on May 14th, 2019

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, and you have our support in terms of continuing the movement forward to ensure a more competitive financial services sector across Canada.

Shannon, welcome. We've met several times over the last couple of years with you and with your organization. The regulatory reform aspect, or regulations, are obviously very important for the economy to innovate and for companies to invest. It's my personal opinion, with regard to the issue that you've brought forward, that we need to examine it judiciously. You have made some very valid points with regard to oversight that is potentially not necessarily needed when things are in place.

Can you comment further in terms of what your members, your stakeholders, are saying on this issue?

[Shannon Coombs]

Thank you for the question.

As I mentioned in my comments, we are very excited about the opportunities with an annual regulatory modernization bill. The fact that the first one has been incorporated into this bill is why we're here today. We are striving to deliver against the very ambitious agenda that the government has set out. I believe that when the officials were here, they talked about how the regulatory modernization banner that was added within the bill is to help cut costs for both regulated parties and regulators in a bid to make regulation more efficient, and many of these changes will respond to long-standing irritants.

I hope I've been able to highlight that today. We are going to be able to save $17.5 million a year for our companies. They won't have to make that initial investment to this unique requirement. I know from other stakeholders that we have support in the industry. The Canadian Paint and Coatings Association has also submitted a letter providing comments on how it's an $18.5 million cost to their industry. I know that our Chemistry Industry Association also has a member that is looking at a $3-million investment up front, with around $750,000 a year for this requirement. As well, Responsible Distribution, which is another organization that represents suppliers, is also looking at a $2-million cost per year to be able to implement this—unique to Canada.

We're hopeful that we'll be able to take this amendment and—

[The Chair, Liberal, Wayne Easter]

We will have to end it there.

Mr. Richards, you have seven minutes.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Thanks.

Actually, I want to touch on this issue of regulatory burdens and barriers as well.

Ms. Coombs, if you have anything you want to add, you can certainly do that.

Mr. Prouse, I also noticed that you had mentioned in your opening remarks about some regulatory concerns. This is something that I certainly hear. In fact, it's probably the number one issue that I hear when I meet with chambers of commerce or business owners across the country. I hear about the regulatory burden, the regulatory compliance and how much time is taken away from the important things that a business owner should be doing, like serving customers, mentoring employees and growing their business, in order to comply with government red tape.

Mr. Prouse, I'll give you an opportunity and Ms. Coombs, too, if you have anything you want to add.

Mr. Achen, I don't know if you had anything you'd like to say on this as well. In terms of the regulatory burden in this country and how it's stifling innovation and reducing our ability to be competitive globally, I want to hear thoughts on that.

I'll start with you, Mr. Prouse.

[Dennis Prouse]

Thank you, Mr. Richards.

I would say the biggest issue flagged by our members is re-evaluation of existing products—existing pesticides—by PMRA. It's a very large and onerous job. The number of re-evals coming through are increasing and will be increasing over the next 10 years. There have been a number of decisions that are going to place Canada out of alignment with our key global competitors. That is a huge concern and it's going to make farmers less competitive if this continues on. It makes Canada a less attractive place to invest.

This is why we're pushing hard to have that competitiveness lens that was discussed in the budget actually placed because regulators need to have a mandate that includes competitiveness. Absent that, they're going to do a very strict interpretation of the act, and they have. I'm here to beseech the political leadership to apply that competitiveness lens to a regulatory body like Health Canada's pest management regulatory agency.

I share some common membership with Shannon's organization. I'm sure she'll have some additional thoughts.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Ms. Coombs, did you have anything you wanted to add to your previous comments?

[Shannon Coombs]

I just wanted to highlight that CCSPA has been very engaged in the regulatory modernization agenda since it was first announced and we did provide comments to the minister, Scott Brison, at the time. We provided addendums and then an addendum with a costing on this particular issue. We want to be very engaged on how we can bring these issues forward in a productive manner.

Given that the timing is here to fix this now, we would ask that the committee consider that this would be the appropriate time to make this amendment and deliver against the regulatory reform agenda.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Mr. Achen, was there anything you wanted to add as well?

[Clayton Achen]

I'll just quickly comment that over the last few years, simple things for middle-class small business families—like paying a dividend—have now become such onerous chores. To go see your tax professional.... I'm talking about general accountants who are not specifically trained in tax. A lot of them aren't even equipped to handle these new rules that have come out.

In fact, at a round table as early as last week, the CRA couldn't even answer a bunch of questions about them. It's a national issue, they say, so they skipped by a bunch of questions on it in Red Deer. How on earth are we supposed to advise our clients on how to pay a dividend from their company to their holding company or to their spouse? How on earth are we supposed to manage that when we can't even get answers from the tax administrator in this country? We can't get consensus on how to apply these new rules because they're so vague, onerous and open to interpretation. This is going to keep the courts busy for a long time.

[Blake Richards, Conservative, Banff—Airdrie, AB]

I'd like to come back to that in a minute, if I can.

Mr. Prouse, I want to go back to you first. In terms of some of these regulatory burdens, in your opening remarks and just now in your response, you mentioned specifically the PMRA, and you also mentioned the CFIA. I hear at different times from constituents and others about some of the challenges, particularly in comparison to the U.S. and how products there can be treated much differently than they are here, which therefore makes us uncompetitive against our U.S. neighbours.

Do you have any examples that you can share with us of that type of thing that you've seen in your organization?

[Dennis Prouse]

Actually, there's a very good example, very close to Ottawa. It's a company called Sevita seeds. They developed a soybean that has a healthier oil profile to meet a market demand in Japan. It doesn't need pre-market assessment anywhere else in the world. It's not a GMO. It's not a product of gene editing, but unfortunately CFIA couldn't decide whether it needed to go through the two-year assessment process or not. As a result, Sevita took its seeds, took its technology, went to the United States and farmers in the United States will now grow this product to ship to Japan. That is a very real-life example of a regulatory barrier that costs the Canadian industry.

It's easily fixable by having a clear mandate for an agency such as CFIA to consider the competitiveness.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Thank you. Unfortunately, I hear those types of examples all too often. Those are the types of things that we obviously need to be looking at to try to address with regulatory compliance.

Mr. Achen, regarding the CRA, you raised an issue that is also one I hear so frequently. You mentioned, and I actually hadn't heard this statistic before, that we have five times the number of agents per capita in the CRA than does the IRS. I've heard that expressed in different ways before, about the thousands and thousands of agents that we have at CRA, yet when you make a phone call, you can never get any one of them on the phone. People always wonder how the heck it is possible, with all those people there, that you can't even get someone on the phone. Then they say, if you ever do get someone on the phone, you might talk to four different agents and get six or eight different opinions, so that's obviously a source of frustration.

I wonder if you might speak to the opportunity that's lost for our businesses, particularly our small businesses, when they're dealing with these types of compliance burdens with the CRA. Obviously the complicated nature of the tax code and the fact that even the CRA agents can't really give you a proper interpretation of it, what do those effects mean for our small businesses in terms of lost opportunity to be able to be competitive and to be able to grow their businesses, mentor employees and so on?

[Clayton Achen]

In terms of one of the biggest challenges, of course, we live in a self-assessment system where you're expected to file your own taxes and the tax of your corporation. You're responsible for those. A common source, particularly for middle-class small business owners who can't afford a fancy accountant, is to turn to the CRA for answers, and unfortunately, we get the wrong answers a lot.

Coming back to the impact that has on them, that results in improper tax filing, probably, in some cases, diminished revenues to the government, and a very high level of frustration when the CRA figures out that they've filed something wrong, and particularly in the area of GST/HST we see this quite a lot.

In a lot of cases, for people who can't afford tax accountants, the real costs are a sense of frustration, followed by a sense of a lack of trust in the tax system, followed by CRA reassessments because they got something wrong when they tried their best to comply with it.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We'll go to Mr. Dusseault, and then back to Mr. Fragiskatos.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

I want to thank all the witnesses here today.

My first questions are for Ms. Macklin, who is joining us by video conference from Toronto.

First, I want to know whether you find that the division of the bill that amends the Immigration and Refugee Protection Act creates two classes of refugees, namely, those who have entered the country in a regular way and those who have entered the country in an irregular way.

[Prof. Audrey Macklin]

It certainly creates classes of refugee claimants: those who are deemed worthy of a proper, full and fair refugee hearing, and those who are not.

As I explained, those who are not and who are relegated to the PRRA process, are not mainly, or even probably, those who have entered irregularly. Relatively few of those who have entered irregularly, it appears, have in fact claimed refugee status in the United States. What it does do is set up a distinction between those who deserve a proper hearing and those who, apparently, for reasons that are never fully explained or justified, don't warrant a full hearing.

Let me add to that. The pre-removal risk assessment was designed to be a supplement to the refugee determination system. Somebody who went through the system and had been refused, but for whom a long time had passed before they were about to be removed, had the chance to say, “Here is new evidence. Something has changed since I was refused refugee status. Please look at it before you make the final removal.”

The idea is that they had already had one fair and full decision made, and this is a supplement to that. In the present circumstances, the bill will take people who don't have any decision made about them in the United States, Australia, England or anywhere else. They are simply people who have claimed refugee protection, yet for that reason, they are denied a full and fair hearing and confined only to this inferior process.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Exactly.

I want to know the consequences for a refugee claimant who has entered the country in an irregular way.

Last week, our committee met with Seidu Mohammed, who spoke about his experience. He said that, if the amendments to the act proposed today had been in effect, he would have most likely been sent back and his life would have been in danger.

After the pre-removal risk assessment, are refugee claimants ultimately sent back to the country where they came from, meaning the country where they made their claim, which in most cases happens to be the United States, or are they sent back to their country of origin, where their safety is at risk?

[Prof. Audrey Macklin]

They are sent back to their country of origin.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

They aren't sent back to the United States, for example, which is the country where most claims are made.

In Mr. Mohammed's case, he would have been sent directly to Ghana because he came from Ghana.

[Prof. Audrey Macklin]

That is correct.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

This would have occurred even without a full and independent review of his refugee claim, such as the one carried out for all other refugee claims.

[Prof. Audrey Macklin]

That's correct. If he had made a refugee claim in the United States, he would, under this system, only have access to a pre-removal risk assessment before people who are not independent, not expert, not trained and, at least under the present law and the law proposed, have no obligation to provide an oral hearing.

Given all of those factors, the risks of an erroneous refusal—that is, a false negative—are heightened, and that would lead to refoulement to a place where he has a reasonable fear of persecution.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

As you said, no appeal mechanism has been incorporated into the bill. After the pre-removal risk assessment, claimants would have no way to appeal the decision to say that an error occurred and that they're in danger in their country of origin.

[Prof. Audrey Macklin]

Under current law, there is an appeal from a refugee protection division hearing to the refugee appeal division. There is no appeal to the refugee appeal division for a pre-removal risk assessment. The most one can do is to apply for what's called judicial review, but you need leave, that is, you need the permission of the court to get judicial review. The court denies it in the vast majority of cases, and there is no stay. You can be deported while you're waiting for that.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I have one last question about this issue.

In your opinion, are there any ways to improve the bill, Division 16 in particular, or should we simply remove this division from the bill, repeal it completely and not make the changes?