Finance Committee on May 31st, 2024

[Aaron Skelton]

They're extremely concerned. To be blunt, they're feeling quite hopeless about a future in which they'd see themselves being able to provide these products to Canadians. The conditions are just so detrimental to them that they don't feel it would be viable, moving forward.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Calkins.

We'll go to MP Baker for the next six minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Chair.

Thank you all very much for being here today.

I'm going to direct my questions to Mr. Skelton. Mr. Skelton and I have had a number of meetings on the topic we're about to talk about. We have spoken about this in my constituency office. Mr. Skelton is a constituent of mine.

Mr. Skelton, it's great to see you again. It's great to have you here in Ottawa from Etobicoke. Thank you for your advocacy.

I want to take a step back for the common understanding of the folks in the room and the Canadians watching this.

Are natural health products sold in Canada safe?

[Aaron Skelton]

I appreciate the question.

They are safe. The reason we say so is that Health Canada currently has a very robust regulatory framework. All products Canadians see on a shelf with a natural health product number have been reviewed by Health Canada. All the scientific evidence or any concerns about ingredients and contraindications are reviewed and approved today by Health Canada. At any point in the life cycle of a product, if it's already on the shelf and in the market, Health Canada can request additional information and scientific review, if they so choose. I think, as we've already outlined, they have the tools to remove products if they deem it necessary.

Canadians should have a very high degree of confidence. This is why Canada had been seen as a world leader in addressing and regulating natural health products.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Have problems arisen that Health Canada is trying to address here, and that need to be addressed?

[Aaron Skelton]

I think this speaks to one of the concerns we have.

Health Canada has made some recent attempts to denigrate and demonize the natural health product industry with comments around safety that are yet to be founded in facts. In a recent Standing Committee on Health, they raised some concerns around safety and certain statistics. When we and the committee requested the backup for that information, they were unable to supply it.

There are issues raised by Health Canada, but they're unfounded and have yet to be substantiated.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

If that's the case, why do you think these changes are being proposed?

[Aaron Skelton]

I wish I had a simple answer to that.

I'll answer it with a couple of different points.

Our concern is that these changes will lead to unchecked powers for the minister. Those unchecked powers have some significant implications. We're living in that situation through cost recovery right now: Industry isn't being consulted and Canadians' concerns about how they choose to access these products and incorporate them into their lives aren't being listened to. It's resulting in an extremely concerning impact on the small, medium- and micro-sized businesses we represent. The vast majority of businesses in this category are small. Over 80% of them fall into that category.

I think that's why we've seen the groundswell from Canadians who, in the millions, have sent in.... I'm sure many of you here today have received cards from your constituents with concerns about the impact of the changes that have been proposed. That is the basis for the concern.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Without getting into the specifics of what's being proposed, I'll take a step back. I know you stated your position on Canada's regulatory regime as it stands today.

My question is this: Is there room for improvement in how we regulate natural health products in Canada?

[Aaron Skelton]

Even in a world-class system, there should be continued review and scrutiny of improvements that could be applied. I don't think we're opposed to those discussions, but those discussions should be transparent. They should be done through proper analysis and through proper debate at committee, none of which has taken place here.

As an industry, we believe that the safety and the efficacy of these products are of the utmost importance, but achieving improvements is not done through omnibus bills. It's done through proper debate, which has been excluded in this process.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Let's say we had the debate that you're describing. I'm not opining on what that debate should look like; I'm just taking your testimony at face value. Let's say we had that process that you're describing. Are there specific things that would make you say, “Okay, look, these are things that can be improved upon, one way or the other”?

[Aaron Skelton]

There's some work that could be reviewed around the lower-risk categories of products and how those are reviewed. There are some redundancies in the system today, some overlap between different departments and some additional work that could be done on proof of evidence that comes through some of the work done by Health Canada.

There are always ways to streamline the system. There are some inefficiencies currently in the system, which is one of our bigger concerns with the cost recovery process; it doesn't account for the necessity of some of those improvements. Even though we live in a modern world, we're not embracing some modern solutions to some of the administrative work that happens. There will always be opportunities for improvement.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Chair, what's my time?

[The Chair, Liberal, Peter Fonseca]

You have 20 seconds.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I'll leave it there.

Thanks very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

We'll now go to MP Ste-Marie, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Greetings to my colleagues.

I'd like to thank all the witnesses for coming, and for their testimony.

We can see that there are very serious concerns about three completely different matters. As my speaking time is limited, my questions will be for Mr. Brun of the Desjardins Group.

Thank you for your blunt testimony. You're merely suggesting the removal of division 16 in part 4 of Bill C‑69 to prevent a false start.

To begin with, why do you think it's important to adopt a framework for an open banking system?

[Bernard Brun]

It's essential because although there are already some open financial services, there's no framework for them. That means that institutions could be open to exposure and thereby expose Canadian consumers to all sorts of risks. That's why it's important to have a framework.

Not only that, but the framework would promote innovation. The Desjardins Group is completely in favour of this kind of innovation and I think that's also the case for the whole financial sector.

Now the success of a framework and its attendant innovation will depend on the adoption of this framework. People will have to adopt this new framework and use it. They will in fact use it if it's secure, if it's accessible and if it provides the best possible conditions. Right now, the foundations as stated in the bill indicate that the framework to be introduced would apply to federal institutions, while remaining optional for other institutions, and possibly create overlapping frameworks for them. That would be totally counterproductive.

Provincial financial institutions will face a major dilemma. If they adopt the federal framework, comply with it, and request accreditation under it, they'll be put at a disadvantage. People often talk about the importance of a level playing field. That's where the issue lies. When the starter's gun is fired, everyone has to be on the same starting line. If the provincial financial institutions decide to start from a few paces back, they're going to pay the price in terms of screen scraping. In other words, without respect for the rules and without a framework, some entities will obtain data from financial institutions that have left themselves exposed to all kinds of risks.

That's why it's really important to come up with a framework, but it has to be built on solid foundations.

I'll conclude by asking all the committee members to discuss it with representatives of provincial financial institutions. You certainly have some in your ridings, whether you're in Quebec or another province of Canada. Speak to them and ask for their opinion. Ask them if their financial institutions are in a position to work within a dual framework that would actually benefit their Canadian members and consumers.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

If the framework were to be adopted in the form described by the Department of Finance, what impact would it have on Desjardins members?

[Bernard Brun]

The government's decision wasn't explained. I know that some representatives of the Financial Consumer Agency of Canada, the federal agency designated by the government, are going to be testifying before the committee. I would suggest that you ask them some questions, including about who decided to assign responsibility for the framework to this agency, which doesn't really have any expertise in cybersecurity or data management. We don't really understand this decision.

Provincial financial institutions, and Desjardins in particular, will find themselves operating within a dual framework. It will negatively affect competitiveness and innovation, and risks will increase for clients and members of these provincial financial institutions.

We believe that the solution is very simple: just remove this proposed piece of legislation from the omnibus financial bill. It is short and covers only 12 to 14 pages. More time should be taken to discuss and agree on the standpoint of the provincial counterparts to ensure that the framework would apply to everyone.

We are definitely in favour of adopting an innovative framework, but it needs to include guidelines and ensure that the overall outcome would be secure. Otherwise, we'd be opening Pandora's box.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

That's very worrisome.

There was a great deal of discussion about governance in Senate testimony concerning this bill. Why is this aspect so important?

[Bernard Brun]

Governance underpins this system. Governance will determine not only how the standard will be established, but also how security is to be dealt with, and how it will interact with all the financial institutions. Canada is a federal system. This has advantages, but also limitations. At the moment, the approach is actually very limited. It was decided that a framework would be established for federal institutions and that other institutions would be able to join. It's a partial and imperfect framework that exposes people to a high level of risk in the financial system. The foundations have to be very solid before going ahead.

I'd like to remind you that there have been discussions on this for years, at least 6 to 8 years, so another few weeks won't hurt. As we know, a second omnibus financial bill is to be tabled this fall. I believe that it's worth taking the time to do things properly.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Understood. Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

The time has expired.

We'll go now to MP Davies, please.