Industry Committee on Feb. 21st, 2019

[Michael MacGillivray]

We're actually in transition. We're in the second year of transitioning our farm to organic, so a lot of this is new. We were coming from a monoculture cropping type of system—a cash crop—and we're now moving into diversified organic. A regenerative agriculture system is what we're using. As we moved out of that type of business into this new business of organic, diversified farming, a lot of it is learning as we go. There are some resources, but not as many in Canada as there are for our neighbours in the south. They have a much better system in place with respect to the federal government, which looks after the USDA organic aspect.

One of the challenges we're facing is that there is no organic regulation in Ontario. The act is actually going through right now and is sponsored by Jim McDonell, our MPP for Stormont—Dundas—South Glengarry. Then again, that's an Ontario act. Quebec has their own regulations, and you go across the country. Whereas, if we had something like a “USDA Organic”, for example—an overarching “this is what organic means in Canada”—it would give consumers a bit better understanding that if they buy a product that has a Canadian organic sticker on it, whether it comes from Quebec, B.C., Ontario, or wherever, it meets the standards. Right now, a Quebec-based product versus an Ontario-based product versus another part of Canada may be different because the regulations are not the same.

[Brian Masse, NDP, Windsor West, ON]

That's important.

I'll give you a quick example. I represent Windsor, across from Detroit, Michigan. A lot of people want to buy halal meat from Detroit, but if you're a small business—a restaurant, for example—you can't buy small quantities. They could literally cross over and do that in 10 minutes in Detroit and bring the smaller quantity back, but you have to wait for it to cross, even though there's full regulatory process in the U.S. and the FDA's involved. At any rate, they have to drive up the 401 for four hours to get to Toronto to get the same amount because it's just a number on a sheet. I've tried to get the government to change that over the years. It's been very difficult, even though it can go through the same food inspection process when it crosses the border, and all that different stuff. It's just that they're stuck on wanting it to be large volumes as an easy thing.

Is that the kind of thing you're running into?

[Michael MacGillivray]

Yes, and I think you were alluding, as part of that, to small versus medium versus large. A lot of the regulations are written around the majority of the business that's being done, which is on the large scale. You have abattoirs or food processors that are very large in scale. Once you try to apply those regulations on a smaller scale, it becomes challenging just because in a large processing facility you may have someone dedicated just to compliance. You may have someone who's dedicated to different aspects.

I filled out this form to come here today, and it says that my title is “owner”. Well, I'm also the chief financial officer, the director of sales and marketing, and the health and safety officer. As a small business, you have to wear multiple hats and it becomes very challenging, especially when you get into some of these regulatory aspects. As soon as you start to dig into it, you find that you're opening up Pandora's box, because this regulation refers you to another one, and then it gets to the point where you're just trying to do it as best you can.

[Brian Masse, NDP, Windsor West, ON]

From successive attempts at this, it appears that just because you don't do the volume, you are collateral damage. It's seen as the way it is; just grin and bear it. You'll have experiences like we're having in a border town, where 40,000 vehicles a day cross, but it's still not enough to warrant a change because maybe 12 restaurants want to do this. It's also very important for our local economy, but we still can't get that message through.

I want to quickly move to one of the things that have been discussed. Mr. Medeiros mentioned the regulatory process. In some respects I understand some of the arguments against regulations. We need to look at that, for example, workplace-related deaths. The last number for that is from 2016, when there were 905 deaths in Canada. I know Mr. Moody talked about an issue about the office. A good example is my office in Windsor. It was flooded, and we're fighting with the landlord right now because there's mould and other issues that not only affect the people working in my office, but also the public who come to get services.

What I worry about too is how we do this in a fair way. If we have a reduction in regulation, the bad operators—who often are the reasons regulations are created in the first place, because people couldn't behave properly, and there needed to be some oversight—could use that as a business-related expense to run good operators out of business who are following the proper regulatory regimes, regardless of whether they may or may not believe in them. They follow them—which is a business-related expense, perhaps—for public safety reasons and for fair competition.

[The Chair, Liberal, Dan Ruimy]

He didn't give you a lot of time to answer, but keep it brief, please.

[Paul Medeiros]

Health and safety isn't my area of expertise per se. As it relates to food safety and microbiology, common sense is not that common. I run into many owners who say this is how they've done it, and how their parents did it. They say it's common sense, and in fact, it is not. It does require training. I think in fairness to all companies, we need a level playing field.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Baylis, you have seven minutes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Mr. Moody, you gave a quote, and I want to make sure I got it right. You said that in the end, businesses and investors “seek fairness, consistency and simplicity”.

[Kim Moody]

Yes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

That's your quote, and you think that should be applied across the board, whether it's tax or any other regulation: fairness, consistency and simplicity.

[Kim Moody]

In general, I think, sure.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

We're going to steal that quote from you. At $1,000 an hour, I don't know how much that's going to cost us, but....

[Kim Moody]

A fair amount.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You said the comprehensive review began in 1966 and was implemented in 1972.

[Kim Moody]

The Royal Commission on Taxation was started by Prime Minister Diefenbaker in 1962 and the commission ended in 1966. Then there was vigorous debate—you can look throughout the following six years—and it ended with comprehensive tax reform in 1972.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

With the use of technology, globalization and all the things that have piled on in the last 50 years or so, your argument is that we should have a look at a comprehensive review. We should do that process again. Is that what I understand?

[Kim Moody]

Absolutely.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You didn't mention it, but I'm led to believe that a lot of work is done among multinationals as they move their.... I don't know if you work with these types of companies, where they move money around to low-tax jurisdictions. All western countries are suffering from that. They're losing their tax base. Are you familiar with that or not?

[Kim Moody]

Generally. I don't work on a day-to-day basis with multinationals. My specialty is private business owners, but I'm certainly aware of the tax implications.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you.

Mr. McEwan, I'm particularly interested in your experiences in British Columbia. You're the second witness to come forward and tell us how they managed to lower the number of their regulations. You mentioned they had one for one. We were told before they had a two-for-one rule that moved to one for one. Is that your understanding?

[Tim McEwan]

Yes, where it stands now is net zero. That's the way it's couched in policy, so it's essentially a one for one. If you introduce a new regulation, you have to find one somewhere else to come off the books. It creates—or it did in my time— a fair bit of competition between agencies, to ensure that they're not seen to be adding regulation but contributing to the overall effort to hold the line and drive it down.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

That's when you were in the bureaucracy. You're saying there was competition between your....

[Tim McEwan]

Yes. It's a friendly sort of competition. You do not want to be seen as an agency to be larding on more regulation than absolutely necessary to accomplish your public policy objectives.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So they were able to get right into the systems of government that sense that they did not just have a mandate to.... You mentioned the ministers' mandate letters. Sometimes, the political class will come through in a mandate letter, but it doesn't work its way into the bureaucracy that will take hold of it as a challenge. How did they make that part of the culture?

[Tim McEwan]

In B.C., from 2001 through 2005, there was actually a minister of state for deregulation who had a secretariat to put in place the accounting regime and database that tracks regulation from year to year. A lot came out in the first four years, as I mentioned in my remarks, and then you have diminishing returns to scale after that, which makes sense.

The service improvement side of things, where we conducted social media engagement, in my time, between 2015 and 2017, was an additional effort to gather ideas from the public and business about areas where regulation or process improvements could be driven into the system. Each minister had within their mandate letters a requirement to commit to working on red tape reduction. When you do that, you drive a culture throughout the system. The bureaucracy.... I was charged with that file and was very surprised with how much uptake there was in terms of working toward driving improvements through the system.