Government Operations Committee on May 5th, 2015

[Michel Girard]

That hasn't happened so far.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

It's never happened?

[Michel Girard]

No.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

And if it ever does?

[Michel Girard]

A decision would have to be made at a later point, likely through a joint process involving the Standards Council of Canada and the SDOs. But, as I said, that hasn't happened yet.

The big question for us is mainly where does a standard need to be developed, where are standards missing because of a lack of resources to develop them. In Canada, there are so many gaps in the standards market that SDOs aren't really in competition with one another.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Okay.

In terms of the trend to adopt continent-wide or international standards, has Canada ever been opposed to a standard developed by another organization?

[Michel Girard]

That can happen.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Has it ever happened?

[Michel Girard]

I can't give you any examples, but it can happen.

What I'm getting at, in response to your question, is that if Canada was ever in need of a standard and didn't have the resources to develop it but regional or international resources were available, Canada could adopt that standard. A technical committee would be formed to study the standard and could make any changes or adjustments it saw fit. Statistics-wise, the vast majority of international or regional standards used in Canada are adopted as is.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Who adopts or develops food standards?

[Michel Girard]

We aren't involved in that.

In English we say “SPS”—sanitary and phytosanitary—and “non-SPS”.

We don't deal with sanitary and phytosanitary standards. The Canadian Food Inspection Agency has Codex Alimentarius for that. It has a whole slew of organizations that develop and maintain food safety standards.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

What relationship do you have with them?

[Michel Girard]

We share information on a case-by-case basis, but there really isn't much integration.

As far as the ISO's role is concerned, it will have standards for tractors, engine fuel efficiency and things of that nature. Food safety is entirely separate.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

I have a question for you, Mr. Chairman. As we go through this, will the committee look at the norms for food?

[The Chair, NDP, Pat Martin]

Those are not currently part of the study. Any questions in that regard were to be asked within the context of the study. We'll be hearing from the Canadian General Standards Board next, Mr. Bélanger, and then we'll be wrapping it up.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Okay.

Thank you.

[The Chair, NDP, Pat Martin]

Next is Mr. Warkentin.

You have five minutes, Chris.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Mr. Girard. This is very helpful information. I think the next meeting is going to be interesting, because we are of course going to need to seek additional clarification.

With regard to some of the discussion we were having earlier, I started to become concerned not only for those companies that are trying to import things to Canada but also for the small business owners and their companies, for those folks here in Canada who might be trying to export things internationally. If there are two different standards, one that is outdated in Canada, which you have to meet, and then of course one internationally, which you have to meet in order to reach the international market, there is a need for international standard compliance, and then we'd have a different one here domestically.

There is a cost to testing for these companies. Could you venture a guess? I'm sure every product has a different cost. When you talk about 3% or 4%, that is once the company is mass-producing these items. When it's for the first item that moves off the line, there's a huge cost. Would we say that it's hundreds of thousands of dollars in some cases? Are we talking millions of dollars for testing?

[Michel Girard]

Oh yes, for prototype products, we see in mature sectors such as electrical or plumbing that the cost of prototyping a new product could be up to 50% of the expected revenues for the first year. If you multiply the number of requirements, that makes Canadian SMEs less competitive.

I'll contrast this with what is happening in the European Union. For the past 20 to 25 years the European Union has been putting a system in place so that once our European counterpart to the SCC, CENELEC, approves a standard, every single country under the commission, the European Union, will have to adopt that same standard and withdraw any competing standards from their books. We're talking here about France, Germany, and Italy. The Europeans have created a common market of 600 million consumers.

Here in Canada, because jurisdictions within Canada are not aligned, we hear industry telling us that they sometimes have to do two, three, or four tests for products in order to access the Canadian market. In the U.S., it's one or two. Generally speaking, it is one for the continental U.S. and then one additional one for California, because California has more stringent requirements for energy efficiency and those types of things. But that is two tests for 350 million people versus two, three, or four tests here for a market of 35 million people. That's why we believe there's a really urgent need to align standards among jurisdictions in Canada.

[Chris Warkentin, Conservative, Peace River, AB]

So for the small business trying to start up, if you talk about 50% of their revenues for the first year, and then multiply that by the number of tests, I suspect, it puts these guys out of business before they even start.

You mentioned shower doors, and I recall that when we were in the construction industry, oftentimes there were products we could not access. They might be from a retailer such as Home Depot or something that has a presence in both Canada and the United States, and the retailer would simply tell us that while the product was available in the States, they wouldn't bring it to Canada simply because the redundancy didn't warrant the small market Canada would provide for that product. They would leave it on the American side, and we couldn't import it to Canada, so consumers on the Canadian side sometimes don't even have the right to pay more for that product. They might have no access to that product.

I am thinking of some of the novel and innovative products that could make life easier for Canadians, such as different technologies to reduce encumbrances within the home for those people who are physically disabled or things that increase energy efficiency but that are not available in Canada simply because companies are not willing to pay for additional testing since the market in Canada is so small compared to what they can access around the world based on a single test.

You are nodding your head, so maybe you see this.

[Michel Girard]

I am nodding my head. We hear anecdotal evidence that our standards system is a couple of years or sometimes three years behind what is happening in the U.S. on an ongoing basis. The codes that we maintain here in Canada are one edition back from what's happening in the U.S. That is why we believe there is such an important, urgent need for us to develop more joint standards, so that, in areas that are of critical importance to us, we are at the table right from the get-go to ensure our interests are protected without causing mayhem for industry and SMEs.

[The Chair, NDP, Pat Martin]

That concludes your five minutes, and it also concludes our first round of questioning.

As a point of clarification, Mr. Girard, some of us are still wrestling with the role and functions of the Standards Council and the CGSB. I am just looking at some of the questions prepared by our analysts. The budget for promotion of the activities of the CGSB was about $60,000 annually, but it does not have the right to advertise itself to the public or to users, whereas the budget in the main estimates for the Standards Council of Canada is $500,000 just for the one element of promoting the northern infrastructure design, planning, and management regarding climate risks.

Why would the CGSB not be allowed to promote itself? Is that part of a downward spiral in relevancy, so that if nobody knows about them or about what they do, they will be less likely to use their standards in the general conditions for new construction projects or whatever? How do you explain that? Do you have any insight into that?

[Michel Girard]

No, I don't. The CGSB operates as an agency of the Department of Public Works and Government Services.

[The Chair, NDP, Pat Martin]

But you are a crown corporation that receives money from the federal government as well.

[Michel Girard]

Yes, we are a crown corporation. We get annual appropriations. Our job is to make sure that key decision-makers in the country are aware of the challenges we are facing as a nation when it comes to standardization.