Industry Committee on Feb. 25th, 2016

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

Sometimes when I am having discussions with my colleagues in the technology sector, one of the common complaints I hear is the Standards Council of Canada and your accredited standard development organizations are not proactive.

Let's take an example of cloud computing. I know cloud computing is increasingly being used and major companies like Amazon and Microsoft are pushing for it. The whole system has been developed now, and the data is being located on different servers in various parts of the world. Cloud computing can become as big as telecom. Telecom has standards like IPE, GSM, whatever it is. What is happening there? What is your role? How well are you working with the international organizations in standards on this front?

[Michel Girard]

In terms of telecom standards, the international organization—

[Chandra Arya, Liberal, Nepean, ON]

—the ITU.

[Michel Girard]

—is the ITU, the International Telecommunication Union, and the lead for Canadian participation is held by the Department of Innovation, Science and Economic Development, ISED; Industry Canada was the old name. They're responsible for the coordination of Canadian participation, but as far as we're concerned, we need to let industry decide what's best for them to do. They will decide when to participate, at what level, and what kind of resources they will apply to the committee.

Our role here is to ensure that they're aware of the new committees when they're being created and support them to the best of our ability, so they can get what they need out of the process.

[Chandra Arya, Liberal, Nepean, ON]

Of course, I understand the importance of the industry having its own self-regulatory process, but when it comes to the encryption or the security standardization and things like that, are these also part of ITU?

[Michel Girard]

I don't know. I would have to check and get back to you.

[Chandra Arya, Liberal, Nepean, ON]

That's fine.

On the other front, when the Auditor General of Canada audited you sometime ago, they recommended that you improve your process for accrediting conformity assessment organizations. They also said that you need to improve the timeliness of reassessments carried out by partner organizations. They also said there has to be better monitoring of the performance of Canadian participants on international technical committees.

The Auditor General reported that you agreed with all the recommendations. Have you implemented these recommendations?

[Michel Girard]

My understanding is that we have. We've done a comprehensive review of our accreditation services branch at SCC and established and implemented a quality management system so we can address the recommendations of the Auditor General.

[Chandra Arya, Liberal, Nepean, ON]

Thanks.

Talking about the U.S., you said you have not harmonized standards. Are you talking of different standards or the same ones? What do you mean, especially from the technology sector's point of view?

[Michel Girard]

If you think about the electrical code, for example, the CSA maintains the Canadian electrical code, the CEC, and it's updated every three years. It's then incorporated by reference in provincial regulations, because the provinces are responsible for electrical safety.

In the U.S. there is a code, managed by the National Fire Protection Association, the NFPA. It's called the national electrical code. That code is also issued every three years.

We see differences between the U.S.-based code and the Canadian code, and we also see time lags between the changes that are made to the U.S. code and these changes coming to be accepted or implemented in the Canadian code. In some cases, this results in significant time lags for the incorporation or deployment of new technologies or ideas in Canada, because we're always one cycle late. In other cases, some people will say that they don't agree with this or that, which means that industry needs to certify products twice.

That's the reason we think it's important for us to seek industry input, so that the standards and codes that are not aligned and that create the biggest grief to these organizations are looked at. That way, we can come up with this concept of joint standards when it makes sense to do so.

[Chandra Arya, Liberal, Nepean, ON]

In the challenges, you mentioned that there are more complex standards now and that the European Union is advancing while Canada continues to lag. If you consider technology development over the last 25 to 30 years, there is much more than there was in the last 200 to 300 years combined.

In this context, is it not good for you to collaborate more with international organizations rather than do everything at home?

[Michel Girard]

Absolutely it is. I agree with you entirely. To give you a sense of scope, we did a search of how many technical standards are available online through organizations similar to ours, and the number last year was 335,000 different documents, technical standards for various sectors of industry, manufacturing, and services. Major organizations such as ISO and IAC publish more than 35,000 new standards per year.

It's impossible for a country like Canada to want to duplicate or replicate that or be everything to everybody, when you look at this kind of scale. The challenge for us is to decide when we can afford to be a standard taker and agree that we will use a standard developed internationally, sometimes even when we haven't participated because there is no interest on the part of Canada or no expertise here, and when there are areas in which we absolutely have to be standards makers. When there are leading-edge Canadian technologies and innovations, we need to go international and participate and win, so that we can access the global market. That's the kind of message we're communicating to various stakeholders.

It's unfortunate, but sometimes there is the sense that if the standard is made in Canada, it will invariably be better than if it's made internationally, and that's not always the case. For us, the issue is when we should focus internationally.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We will now go to the second round, which is five minutes.

We will start with Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair, and welcome to our guests.

I noted a couple of items when I read through the report and listened to what you presented.

One of the key things you spoke about, of course, had to do with internal trade and some of the issues associated with it. I was on the agriculture committee in our last Parliament, and this was something we looked at in a lot of detail. Hopefully we'll be able to take some of the information that came from that study, so that we don't reinvent the wheel—we have to have new standards for that as well.

I think a critical aspect of it is to make sure we recognize that when 13 provinces and territories all have their own ideas as to how they should put things together, it is difficult for Canada to move ahead as a brand when moving into other countries. The work you have to do and of course the different incorporations by reference that are required in each of the governments make your task extremely difficult.

That, perhaps, is one of the things people look at when they try to deal with Canada, where do they go, and who is it that is going to set the bar, so that they know where it is. That's one of the important parts.

It was mentioned earlier—I believe Mr. Arya mentioned it—that you had the AG report. I was also on the public accounts committee when that was taking place. You have done a good job of trying to make sure you have dealt with all of the things that auditors general look at, which often are more a question of how you do things than whether or not something is wrong.

Mr. Masse and I had an opportunity last evening to present some awards at an eBay award ceremony. There were some amazing young women entrepreneurs talking about some of the things that are important, but what they see as a barrier is some regulations and standards issues.

One of those happens to be selling things across the border when there is a de minimis cost, which basically means that above $20 there has to be a tax on it. If it comes back from the U.S. into Canada, at the present time it is set at $200, and I believe the U.S. has just bumped that to $800. This makes it very difficult for them to move product across the line, and it puts our businesses at a disadvantage.

Is this something you would deal with, or should I be looking somewhere else on behalf of those individuals?

[Michel Girard]

Well, we deal with voluntary standardization, and I think what you're referring to is basically a tariff that would be imposed on a product. We would not have any role to play there.

But just to support your statement, we've done a case study with the Canadian Institute of Plumbing and Heating to try to ascertain what the costs are associated with multiple certifications, if you have different standards in Canada and the U.S.

We took a very simple example of a water heater. We found that to sell a water heater in Canada, you need to certify your product more than once, sometimes three to four times. That results in an increased price for the water heater here in Canada, up to 2% to 4%, just because somebody forgot somewhere to update their old standard in their regulation.

That's the kind of work we want to pursue with the provinces, so that they know what the different requirements are between jurisdictions. Then we can have an enlightened conversation about the best way to approach this to align the standards and reduce costs for manufacturers, but ultimately for consumers.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

I just have half a minute or so left. Perhaps you could discuss how Canadian industries and businesses can use you as a tool to make things run more smoothly.

[Michel Girard]

We are engaged in a dialogue with major industry associations in this country. We have been doing this now for five years. The dialogue is about these irritants. When irritants can be identified, whether it's within Canada or between Canada and the U.S., then we connect with our counterpart, the American National Standards Institute, and then have a discussion about the best way to align those voluntary standards so that we can get to a single one.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We will now move to Mr. Baylis. You have five minutes.

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

Thank you.

I'm going to dial it back and try to understand the roles between standards and regulations. Maybe you could explain, first of all, how they move. You develop a standard, but it doesn't necessarily have to be implemented or followed. Could you explain that?

[Michel Girard]

Exactly. A standard is a voluntary instrument. We accredit organizations that will bring together people from industry into a technical committee: regulators, consumers, academics. They will ascertain if a new document is needed to support a new product, and then we'll publish this document.

Once it's published, if regulators then decide there are health and safety issues with a particular product, they may decide to use the standard and incorporate it by reference in their regulations to specify these other types of things that the regulatee needs to do to comply with the intent of the regulation.

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

Okay. Then in that light, Mr. Bernier was asking a lot about avionics regulations. You don't touch anything to do with standards in that area.

[Michel Girard]

No.

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

That's correct. Nor would you have anything to do with regulations.

[Michel Girard]

No, exactly. We provide the goods, and then regulators decide if they want to use them.

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

There are other people who are developing those standards. You're not necessarily filling in. There's no need, say, for avionics standards done by your group.