Government Operations Committee on Sept. 26th, 2024

[William Trudel, President, Founder and Chief Executive Officer, Trudel]

Good afternoon, everyone.

I find it somewhat intimidating to be here because this isn't something I do as part of my normal work. I'm not a doctor, an engineer or a lawyer. I'm a former police officer with the Quebec City police force, and I served the Government of Canada for many years abroad.

I started up my business in my twenties with barely $1,000 in my pocket. Today the 18 businesses that I run, mainly in the province of Quebec, are worth nearly $1 billion. We mainly operate in commercial and residential property development and the redevelopment of rundown urban sites. I have received many political party leaders on the site of one of our biggest projects, Place Fleur de Lys and recently spoke with Prime Minister Trudeau in Quebec City.

My appearance here affords me an apolitical platform from which to answer your questions and attempt to explain to you, as a contractor, the difficulties we're facing and the actual impact they're having on housing construction in Canada as they relate to various organizations and federal Crown corporations.

You should know that I don't need interpretation. I understand English. I may even speak in English, but I'll try to be careful to lend the interpreters a hand. I learned English at the United Nations with police officers and military personnel from around the world. Sometimes it was more practical than diplomatic, and perhaps less polished. So I'll be careful. I can be a little more detailed if you speak to me in French, but it won't be a problem if you speak to me in English. I understand it.

Listening to what's been said here, I realize I already have one of the necessary qualifications to become a governor general one day, since I'm bilingual.

[The Chair, Conservative, Kelly McCauley]

Thank you for that.

We'll start our first intervention with Mrs. Block for six minutes, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you, Chair.

Thank you to our witnesses for joining this second hour of today's meeting on red tape reduction, and also, as we have explored with many witnesses, the cost of government policies and the regulatory burden on businesses that ultimately impact Canadians and our economy.

Mr. Beaulieu-Guay, I would like to ask my first questions of you, seeing that you are from the University of Saskatchewan. Would you agree that investments in schools and students are important?

[Dr. Louis-Robert Beaulieu-Guay]

Yes.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

Recent reports show that the Saskatchewan education system is paying over $200 million in carbon tax annually. Isn't that money that could be invested in student education and research like the research that you do?

[Dr. Louis-Robert Beaulieu-Guay]

Yes, that money can be distributed in many ways. It's public money, and politicians decide how to distribute it.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Yes, in 2021, the University of Saskatchewan paid $3.7 million in carbon tax prior to raises in the carbon tax. This will rise to $12.1 million by 2030. According to the 2022-23 operating budget of the University of Saskatchewan, operating revenue cleared operating costs by $17 million.

With such close margins, does the ever-increasing carbon tax not threaten the existence of public institutions such as the University of Saskatchewan and the research that you are conducting?

[Dr. Louis-Robert Beaulieu-Guay]

I don't see the causal link between the carbon tax and the funding of post-secondary educational institutions. I'm sorry, but that's really not my area of expertise. These are two fields that can very easily be separated. Monetary inputs and political outputs are two different things.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

But surely when a government is paying that amount of money in a carbon tax or a province is paying that amount of money to the federal government in a carbon tax, that is money that is not going to fund programs within their own province.

I understand that you have done substantial research on the impact of stakeholders on public administrators and policy formulation. I'm wondering if you could provide us with your opinion on whether or not the current government does enough to consult with businesses of different industries and then implement the recommendations made during those public consultations.

[Dr. Louis-Robert Beaulieu-Guay]

I haven't studied the present government in any specific or particular way. Generally speaking, I take a more macroeconomic view of public administration.

My research concerns the years from 2000 to 2021. I don't have any specific comments to make on the current government. For regulations in particular, the regulatory impact analyses include mechanisms enabling all stakeholders affected or concerned by regulations to take part in consultations and to be consulted. Furthermore, a forum is open to them via the notices of consultation and the calls for comments that are made. It's also quite well documented that large businesses in particular have very close ties with government when the latter wishes to develop regulations. They are one of the stakeholders that interact most with government regulatory bodies, at both the federal and other government levels.

In the course of my research, I have discovered that both types of stakeholder consultations can indeed have an impact on regulations, whether the consultations are held upstream, which is more bilateral, or whether they are more open consultations involving notices of consultation and calls for comments.

I've noticed that, when businesses appear alone at these consultations and are the government's sole interlocutor, they often manage to make the regulations less binding. When they appear at public consultations and interact with regulatory bodies, they're able to make the regulations less binding because, in most cases, they have the most information on their own activities and can therefore help the regulatory organizations more fully understand their situation.

If I may continue, we—

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you. I appreciate that. My time is limited.

The website of the Johnson Shoyama Graduate School of Public Policy states, in relation to your research, “His research challenges the commonly held belief that public consultations are, at best, useless or, at worst, another venue for corporate lobbying.” .

Would you care to comment on that?

[The Chair, Conservative, Kelly McCauley]

Answer briefly, please.

[Dr. Louis-Robert Beaulieu-Guay]

Yes. I actually show that the broader the public consultation, the more significant the regulatory changes will be. In other words, the more you consult people, the more diverse the opinions expressed will be. Furthermore, a problem that might seem simple may become more complex and be linked to a more significant government intervention.

As regards lobbying, as I said earlier, when businesses are consulted directly by regulatory organizations, they may express their views and make the regulation less binding. However, when other stakeholders are also around the table, they may thwart the business's interests. If non‑governmental organizations, citizens and several sources of information are involved in consultations—

[The Chair, Conservative, Kelly McCauley]

Thank you. I'm afraid that is our time.

We're going to go to Mr. Sousa, please, for six minutes.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Thank you, Mr. Chair.

I'm going to share my time with my colleague.

Before I do, I'd just like to ask a quick question of the professor about the jurisdictions that are engaged in the red tape and regulatory affairs.

Prior to your being here, we had someone from the cannabis industry—also on medical health issue with natural products. I think there was somebody else who was supposed to be speaking about payday loans legislation. All these require provincial regulatory matters as well.

Can you comment on the consultation process that's been had in regard to some of these issues?

Where are we making more advancements?

[Dr. Louis-Robert Beaulieu-Guay]

I have no expertise in any particular sector, whether it be health, transportation or anything else. I really focus on the public policy formulation process and therefore wouldn't be able to identify a problem in any specific sector.

However, I do know that the consultation on the legalization of cannabis was one of the broadest ever conducted for regulatory purposes because it was about paradigm change. It was about a product that was illegal and then became a therapeutic product and ultimately a recreational product. A very broad consultation was conducted of industry people and many experts in the health field. I know that health experts, particularly the Health Canada people, had a considerable influence on the regulatory structure of the legalization of cannabis.

As for the other specific policies that you mentioned, I have no information on those subjects.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Thank you for that.

I know that between 2013 and 2016.... We just heard a member of the Conservative Party talk about their concerns for the universities. Back then, $2.6 billion in cuts were made through the science-based ministries and associations, including some universities that required some support, all of which would be to advance our technology, our advancement and our regulatory affairs in regard to some of this.

With that, Mr. Chair, I'd like to pass on my time to Ireneusz Wlodzimierz Kusmierczyk.

[The Chair, Conservative, Kelly McCauley]

Well done.

Mr. Kusmierczyk, you have almost four minutes.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you.

Thank you very much for that introduction. I will allow it because it's your birthday.

I do have a question for Professor Beaulieu-Guay.

As was mentioned already, your bio on the University of Saskatchewan's website states that your research “challenges the commonly held belief that public consultations are, at best, useless or, at worst, are another venue for corporate lobbying.” You're basically saying that your research indicates that public consultations and stakeholder consultations are important and that they do have an impact.

That's been my experience, and I want to give you two examples. Going back to the natural health product discussion that we had, I too was concerned about the impact of costs, specifically in cost recovery, to be able to fund oversight and accountability. I was concerned about the cost, and I know that other small businesses, especially, in that space were really concerned about the cost of that oversight.

There were thousands of stakeholder consultations that were accepted by Health Canada. There were about 4,600 submissions in which they talked about everything from the burden of labelling to the burden of cost for cost recovery. Since that time, very recently, Health Canada responded with changes to cost recovery where they lowered the total cost recovery by half, and also, in some cases, they actually reduced the fees by up to 72%. They also phased in the cost-recovery approach over seven years to make sure that it would have less of an impact and would allow businesses to adjust. On top of that phased-in approach and reduction in fees, it also kept the already existing small business discounts. Again, it recognized the fact that it heard from Canadians about the potential impact this could have on small businesses, so it kept the small business discounts as well.

That's just one example of where the interaction among Canadians, small businesses and Health Canada had an impact. I would say it was a large impact on proposed regulations that were going to come into force.

Can you speak a little about how stakeholders and non-experts actually do influence the regulations that come out of organizations like Health Canada?

[Dr. Louis-Robert Beaulieu-Guay]

Administrators don't have all the information they need to anticipate all potential regulatory consequences. People understood that quite quickly, and that's why many provisions require administrators to consult people on the ground, particularly those experiencing the effects of public policies and those who are targeted by those policies.

Consequently, the model under which administrators develop the regulations themselves and impose them on everyone has been abandoned in favour of a more open model in which people who want and are able to comment on those regulations may do so. However, certain segments of the population may not have access to those consultations. The people who most often interact with regulatory bodies, who adopt the language of those bodies and who are most knowledgeable about the specific aspects of each regulation will have the greatest influence. It's very hard for citizens to get involved and have any real impact, particularly on matters requiring considerable technical expertise.

Overall though, consultations can have a beneficial impact even if only to prevent future conflict and legal challenges by stakeholders where the regulations initially considered were inadequate. Consequently, consultations and the fact that you have—

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

I'm afraid that's past our time.

Mrs. Vignola, go ahead, please.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair.

Mr. Trudel, thank you for being with us today. How many people in your business are specifically assigned to deal with red tape?

[William Trudel]

Easily a dozen people in our businesses are assigned to paperwork. In our legal department alone, at least two or three of our five full-time lawyers are assigned to corporate compliance with the regulations of the various levels of government, which often include the federal government. Given the nature of our operations, we frequently interact with the federal government through Crown corporations such as the Canada Mortgage and Housing Corporation, the Business Development Bank of Canada and, more generally, the Office of the Superintendent of Financial Institutions.

We also hire many people as consultants, although they aren't direct employees of our businesses. They may include lawyers, cost consultants and engineers. In short, there's a whole range.

It would be complicated to calculate the exact cost to hire all the people who work directly in our businesses and all the consultants we have to engage on a daily basis, but we spend several million dollars a year to meet the federal government's compliance requirements associated with very simple matters that are becoming extremely complicated for no reason.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Would you please cite a few examples illustrating the limits of compliance criteria, particularly with regard to preserving heritage buildings that are essential?

[William Trudel]

I recently spoke with people from the Business Development Bank of Canada, the BDC. These are highly competent and dedicated people, and the BDC does a great deal to develop entrepreneurs in Canada. However, it doesn't take long for you to hit a roadblock. What I often don't like, and this is at the Crown corporations, not just BDC, is that I get the impression they've lost all common sense. When I speak to people, sometimes I realize from the expressions on their faces that they're scanning their brains for the right compliance table in the computer system, the third tab or the fourth paragraph that will enable them to answer my question.

I recently spoke with someone at BDC when we visited the former Sears building at Place Fleur de Lys, in Quebec City, which is a registered heritage building. We're completely renovating the building and restoring it to its original state. I asked the BDC representatives if they could help me with the file and they told me that would be a good idea. However, one person started explaining the regulatory compliance framework to me and ultimately discovered, 14 subquestions later, that no compliance check mark is required for heritage buildings that are being restored to their original state. That person then began to explain to us that, on the other hand, if we went the green energy route in such and such a way, he'd be able to bring the project into compliance.

So now we've come to a point where we're working with officials who help us legally circumvent Crown corporation rules for meeting compliance tables using little check marks because we've completely lost all common sense.