Government Operations Committee on May 27th, 2024

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

We'll go over to you, Mrs. Atwin, for five minutes, please.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much, Mr. Chair, and thank you to our witnesses. I'm joining you from Fredericton, New Brunswick.

I'm going to follow up on that last line of questioning and go to De Thomasis.

Are there any drawbacks or risks to a potential free trade zone?

[Tony De Thomasis]

From our perspective, I think it encourages trade.

Positioned at the busiest international crossing in North America, I think it makes a lot of sense to have a free trade zone in our area, with the investments that the federal government has made in Windsor totalling almost $36 million for warehousing and a new shorewall for the movement of goods from Europe into the North American continent. I think it's a great designation for Windsor to have to exemplify that trade route across the Detroit River by rail, by truck or by water.

As far as a drawback or negative consequence is concerned, I don't see much in the way of negatives if it's developed under the proper regulations and the proper structure. I think there are a lot of benefits, including job creation, streamlining of trade and movement of commodities. That helps both countries.

[Jenica Atwin, Liberal, Fredericton, NB]

Great. Thank you very much.

Mr. Girard, we noticed the 2024 budget mentioned the words “regulatory sandbox”.

Can you explain that to the folks at home, and to me? What is your opinion on this? Were you pleased to see that? Is it a useful tool? Is it a step in the right direction?

[Michel Girard]

Thank you. It's a good question.

It absolutely is, in my opinion, a step in the right direction, because you allow a conversation to take place between regulators and those impacted by future regulations. You allow them to play and try new things, so I think that's great.

The only recommendation I would make is in terms of the wording. I have seen a couple of papers from Treasury Board on regulatory sandboxes, and they seem to insist on being able to do this before new technologies are commercialized. I think we need to be realistic. We're takers when it comes to technology. If there is a new technology deployed—new social media, a new platform, a new generative AI—why don't we use the regulatory sandboxes after it's commercialized and try to adapt it or make some changes to it before it's too late?

Yes, it's a good idea, but let's use it after products are commercialized, because we have no control over that.

[Jenica Atwin, Liberal, Fredericton, NB]

Have you met at all with Minister Anand since she became the Treasury Board president?

[Michel Girard]

I have, a couple of times.

[Jenica Atwin, Liberal, Fredericton, NB]

Okay. Can you share with us any of the ideas or topics that may have been raised during those conversations?

[Michel Girard]

Minister Anand is very interested in the concept of standards. I think she's interested in the idea of incorporation by reference, of having standards incorporated by reference in regulations. She thinks it's a good idea. I think she's looking at innovative ideas with interest. I will leave it at that.

[Jenica Atwin, Liberal, Fredericton, NB]

Incorporation by reference is in fact used by some departments today. Which ones do you see as perhaps leading the way, or which might be lagging behind?

[Michel Girard]

In the paper, I have a list of some of the regulations in which standards are incorporated by reference. Some departments will take the “as amended from time to time” method, which allows new standards to be accepted as is when they are being published, so you don't need to go back and redraft your regulation every time. That's a good thing.

There are some departments here that are going a step further. For example, Health Canada has a regulation on medical devices, but they also have a list on their website of recognized standards that allow compliance with the medical devices regulation. This means you don't need to change your regulation every time a new hip replacement part comes up in the marketplace. You just need to add the new standard to the list.

I think that's a great way of doing things. It would make life simpler for industry and it would make life simpler for regulators as well, and it does not impact accountability, in my opinion.

[Jenica Atwin, Liberal, Fredericton, NB]

We know that some stakeholders are worried about incorporation by reference. They see it as not the most democratic way to oversee regulations, as perhaps giving too much power to government bureaucracy.

What do you make of that assessment?

[Michel Girard]

I completely disagree with that.

I was at the Standards Council of Canada for nine years. I was VP of policy there. I engaged with every single department and agency in Ottawa, and also the provinces. Regulators that are using standards are participating in standards development. There's no regulatory capture or industry capture. As a matter of fact, I think the biggest problem we have is that we don't know enough about it. Standards are invisible, and that's the biggest problem we're facing. We need to raise awareness about the merits of standardization in this country.

I'm sorry. I'm taking too long.

[The Chair, Conservative, Kelly McCauley]

That's okay. Thanks, Mr. Girard.

Mrs. Kusie, go ahead, please.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Mr. Chair.

Mr. De Thomasis, I will ask the same question of you that I asked another witness regarding the border officers at the CBSA voting last week in favour of strike action due to the lack of a contract for the last two years.

How concerned are you that this border disruption will cause a massive impact on Canadian businesses? You mentioned moving commodities into Mexico. I note that your short track is within Canadian borders, but a review of your railway mentions several interchanges where there would be commodities moving from the U.S. and, as you indicated, going into Mexico.

I'm wondering what the potential impact of a strike at CBSA would be on your railway company.

[Tony De Thomasis]

It would have significant impacts.

One part of our business is the movement of finished vehicles from Windsor into the U.S. and other markets, as well as the import of vehicles from the U.S. into Canada for further shipment within Canada. We do all those movements by rail. Any strike or interruption at the border would pose significant threats to that business.

We also move smaller volumes of steel and different commodities into the U.S. It would significantly impact that business as well.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Right. Thank you. It's not surprising.

My colleague questioned the Richmond Chamber of Commerce relative to the carbon tax. We now understand that the regulation or administration of the carbon tax is different in British Columbia, but I thought I would also follow through on this question with you, Mr. De Thomasis: What effect does the carbon tax have on the operation of your railway company, please?

[Tony De Thomasis]

It does have an impact on our railway. I don't know if it's a significant impact or not.

I could provide a response to that question, because right now I'm not prepared to answer. I don't have the information in front of me.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Okay. Thank you for that.

Going back to you, Monsieur Girard, I want to talk about the regulatory burdens on you from the CRA.

They currently do not require any cutbacks to their regulatory burdens, despite being the most significant burden to small businesses in Canada. Given your specialty in standardization, in your opinion, what regulation should the CRA focus on cutting to reduce their negative impacts on Canadian small businesses? Would you have any comments relative to the CRA?

[Michel Girard]

I am sorry. In my world, it's about tangible products or intangible products. Here we're talking about applying fiscal policy. I would not have any advice or recommendations to make on that front. I apologize.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Okay. Thank you.

We recently saw the passing of standardizations within Bill S-6. My understanding, as shadow minister for the Treasury Board, is that this was going to be an annual occurrence, an evaluation of standardizations, with Bill S-6 being the most recent iteration after the pandemic. Of course, the first three or four iterations were focusing, I believe, on the low-hanging fruit.

In your opinion, is the government keeping to their commitment in Bill S-6 and beyond in completing the review of standardizations and the further implementation of broader consultation as the regulation of standardizations for efficiencies continues?

[Michel Girard]

I think they're going in the right direction.

Obviously, if there were more resources, they would probably be able to do it in a more expeditious manner. What I'm seeing is that there are more and more standards added to regulations, whether it's at the federal level, provincial level or territorial level. That problem of reviewing standards in regulation will become bigger as you review your regulations going forward. We have to do something about this.

Sorry, Mr. Chair.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you to the witnesses.

[The Chair, Conservative, Kelly McCauley]

I'm getting into the habit of cutting you off, Mr. Girard. I do apologize.

Mr. Sousa, go ahead, please, and then in five minutes we'll cut off Mr. Girard again.