Thank you, Mr. Chair.
Thank you, ladies and gentlemen, for the opportunity to speak today about Bill C-14, the Fairness at the Pumps Act, as well as about Measurement Canada.
Measurement Canada is mandated to ensure the integrity and accuracy of trade measurement in Canada, by contributing to a fair and competitive marketplace for Canadians through the administration of the Weights and Measures Act and the Electricity and Gas Inspection Act. Services provided by Measurement Canada include the approval of devices prior to being introduced into the marketplace, the calibration and certification of test equipment used to inspect devices, the initial inspection of devices prior to their being put into service, as well as periodic inspections of devices once they are in service. Measurement Canada also addresses consumer complaints and disputes related to trade measurement issues in numerous trade sectors, such as retail, wholesale petroleum, dairy, retail food, fishing, logging, grain and grain crops, and the mining sectors.
A good trade measurement framework should have both mandatory periodic inspections as well as random inspections. The mandatory inspections are a preventative measure of ensuring issues are identified and corrected. In most cases, consumers and other purchasers of measured goods cannot easily tell if the measuring device they are using is measuring accurately and if they are actually receiving the amount of product they pay for. For example, it is difficult to tell if you have actually received 20 litres of gasoline as opposed to 19.5 litres, once it has been pumped into your car's fuel tank. Mandatory inspections reduce the risk of this happening by increasing the frequency with which the accuracy of measuring devices is checked.
Random inspections will be used to target known problem areas, to catch those suspected of not playing by the rules, and to provide a more accurate snapshot regarding the status of measuring devices in the marketplace.
Up until the mid-1970s there were mandatory legislated requirements for government inspectors to annually certify the accuracy of every device used in financially based measurement transactions. In the mid-1970s this requirement was amended to require government inspectors to conduct these inspections every two years. Government inspectors charged fees for these inspections. In the 1980s the government decided to remove the requirements for mandatory inspections and associated fees due to resource constraints, and it was believed that the marketplace could manage itself.
Once the requirement for mandatory inspection frequencies was removed, periodic inspections were performed on what was called a "selected” or “targeted” basis, meaning that Measurement Canada focused its discretionary resources to areas it believed to be problematic.
What we noticed, though, was a troubling trend. Data showed that measurement accuracy in financially based measurement transactions was dropping in some areas as our presence in the marketplace was reduced. Some sectors or device types where we had a limited presence had chronically low compliance rates, an indication that the marketplace is not fully managing itself. Devices in the eight trade sectors that would initially be regulated under Bill C-14 often remain in service for years before being recalibrated or inspected.
Measurement Canada was concerned about these poor compliance rates and began consulting with stakeholders to determine whether they shared the same concerns and to begin identifying what could be done to correct the situation. Consultations took place with stakeholders in sectors such as downstream and retail petroleum, retail foods, mining, and grain and field crops, among others. We were truly looking to see if we could find an appropriate level of government intervention in the marketplace. Almost every trade sector came back with consensus recommendations that mandatory inspection frequencies should be reinstated and that these could be implemented via the use of authorized service providers, with the caveat that Measurement Canada continue to provide a strong oversight role.
Implementing these recommendations would require legislative amendments. In an attempt to enhance the protection afforded to vulnerable parties such as consumers, Measurement Canada tried to implement the various trade sector recommendations via a voluntary program in 2004. Not a single regulated party expressed interest in taking this up. Stakeholders told Measurement Canada that these inspections would only take place if they were required by law or regulation.
Accordingly, in 2005 Measurement Canada initiated a review of both the Electricity and Gas Inspection Act and the Weights and Measures Act. This initiative was announced in the 2006-07 Industry Canada report on plans and priorities. Consultations then began with a view to confirming that stakeholders in various trade sectors still believed in the various recommendations set out in the trade sector review recommendations.
While compliance rates for gas pumps are typically around 94%, compliance rates for meters used to deliver home heating oil and for devices used to sell propane are around 70%. Measurement compliance rates in some industrial sectors, such as mining and logging, are typically around 50%, and the bias is largely in favour of the device owner.
In 2008 a CanWest story entitled “Hosed at the Pumps” put the state of trade measurement accuracy in Canada under the microscope. It pointed to compliance rates of 94% for gas pumps, devices the majority of Canadians use on a regular basis. As the bias was significantly skewed in favour of traders, the public reacted strongly to the story and demanded something be done to ensure they get what they pay for at the gas pumps.
Measurement Canada believes that Bill C-14 will go a long way toward protecting consumers and honest businesses by contributing to a fair and competitive marketplace for all Canadians. Our consultations with stakeholders have consistently indicated that the majority of Canadians are expecting this level of protection when they buy or sell products or commodities on the basis of measurement.
I look forward to discussing these legislative amendments with you. Thank you very much.
