Industry Committee on Feb. 25th, 2016

[The Chair, Liberal, Dan Ruimy]

Thank you, everybody, for attending the fourth meeting of the Standing Committee on Industry, Science and Technology. We are going to plow right ahead.

In our first hour we have some gentlemen here to see us; in the second hour we'll break into our subcommittee and we'll go from there.

Pursuant to Standing Order 108(2), we are doing an overview of the activities of the organizations under Innovation, Science and Economic Development Canada.

We have two witnesses here from the Standards Council of Canada: Michel Girard, vice-president of strategy; and Stephen Head, manager of strategy.

You have 10 minutes. I'll wave to you, if you are coming down to the end.

Go ahead.

[Michel Girard, Vice-President, Strategy, Standards Council of Canada]

Thank you, Mr. Chair. On behalf of John Walter, the chief executive officer of the Standards Council of Canada, I want to thank you for this invitation.

I will begin by outlining the role that SCC plays before turning to challenges and opportunities related to standardization in Canada.

SCC is a federal crown corporation. It was established by an act of Parliament in 1970. Our mission is to enhance Canada's competitiveness and well-being through standardization. Our organization is composed or 93 staff, and our strategic direction is guided by a 13-member governing council.

SCC is Canada's national accreditation body. What does that mean? It means that we accredit eight organizations that develop and maintain technical standards for Canada. We also accredit hundreds of organizations that test and certify products to relevant standards. Those are called conformity assessment bodies.

This is a crash course in standards development for you today. I hope you will bear with me with all of this terminology.

You will see the logos of these conformity assessment bodies on many products that you buy and use every day, from computers to hockey helmets. The CSA logo would be the one that most people recognize, but there are many other logos associated with the work we do.

SCC represents Canada in international and regional standardization forums, such as the International Organization for Standardization, or ISO, and there are others. We support more than 3,000 Canadian members representing various industry inspectors in hundreds if not thousands of standards development committees.

SCC also works with government to support the priorities that will bring the greatest benefit to Canada. On that front, governments around the world use standards to support public policy objectives. In Canada, a recent SCC search revealed more than 5,000 references to technical standards in federal, provincial, and territorial regulations. So regulators clearly are using standards to support their policy objectives.

Examples of such standards include the flammability of children's sleepwear, the safety of medical devices, the use and storage of explosives, and certification of organic foods. There is a chance that if you regulate and there are technical aspects to your regulation, you may need a standard in order to explain clearly to the regulatee what they need to do in order to comply with the regulation.

In the handout we distributed, you will see a couple of pie charts. You will see that SCC is a relatively small organization with a budget of approximately $21 million. A little bit less than half of our revenues come from federal government appropriations, and we generate the other half of the revenues from our accreditation services and from the sale of standards.

That is a kind of overview of SCC. Now turning to priorities, challenges, and opportunities, let me list the three priorities we are focusing on at SCC.

The first one is providing value for Canada. Our activities must add benefit to Canada before we pursue them. The second priority is entrenching our place as an international leader in standardization, in other words, becoming standards setters, wherever it makes sense to do so. The third one is related to fostering innovation.

If we turn to our key challenges, one of them is a shift to using more and more international standards as distinct from domestic standards. This is not unique to Canada; businesses and regulators around the world rely more and more on international standards. For example, only 39% of standards incorporated by reference in federal regulations have been developed in Canada; 61% have been developed elsewhere, such as in the United States, in Geneva, or in other countries in which international organizations are operating.

Our ability to develop and maintain domestic standards has been impacted by many factors, including a decrease in technical expertise in this country and the globalization of markets and supply chains.

Thousands of Canadians are participating in regional and international standardization activities to ensure these standards meet our needs. However, we need to do more to help Canadian innovators become standards makers internationally as opposed to standards takers if we want them to export their products abroad. That's a key challenge for us, and we aim to continue to pursue that line of thought and develop programs and activities to support our innovators in the global marketplace.

Another challenge is the use of different standards by different jurisdictions within Canada to ensure regulatory compliance. Canadian industry leaders have told us repeatedly that in order for them to be competitive, we need to move toward this concept of one standard, one test, and we need to align standards requirements among jurisdictions for them to be able to be competitive.

Let me turn briefly to opportunities, and they're linked to the challenges that I just outlined. We see many opportunities ahead. For example, we support the government's work to update the Agreement on Internal Trade to better align standards in regulations across Canada. We will continue our effort to improve coordination across jurisdictions by collaborating with provinces and territories to complete the first comprehensive inventory of standards referenced in all regulations, federal, provincial, territorial. This will allow jurisdictions to compare notes and will allow them to begin to align their standards when they are different from one jurisdiction to the other.

Moreover, we'll also continue to work with stakeholders to identify the standards, testing, and certification requirements that are the greatest impediment to internal trade. As there are thousands of standards and regulations, we should begin by focusing on the ones that are creating the greatest harm to make a difference with limited resources.

SCC is also committed to creating a more integrated standardization network across North America. Greater harmonization will increase the flow of goods across our borders, make supply chains more efficient, and improve market acceptance of innovative products and services.

Finally, maintaining our position as an international standardization leader can bring significant benefit to Canada. Our role in coordinating, aligning, and supporting the participation of Canadian experts on international standards development committees gives Canada a competitive advantage. It advances innovative ideas and knowledge that can transform our nation into a global standards maker in areas of strategic importance for the economy.

Mr. Chair, this concludes my opening remarks. Stephen and I are more than willing to answer any questions you may have on this complex system.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you. That was good and it was under 10 minutes.

The first question goes to the Liberal side, Mr. Longfield.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair. Through you to Michel and Stephen, thank you for coming.

My background is in manufacturing,. I spent most of my career either owning or managing manufacturing facilities and always drove toward ISO 9001 or its predecessors. Looking at how the setting of a standard impacts our economic growth, our productivity, our efficiencies, are there programs in place or being planned with the SMEs to stimulate the use of international standards like ISO 9001? Many of them don't adopt because of paperwork challenges and costs. Is your department working on any of that?

[Michel Girard]

Thank you. There are two parts to this question.

I think the first priority for us is to make sure that we support members who want to participate internationally, because often an SME will find it difficult to play. There are some barriers to them, such as time and money. So we've established a participation program at SCC to help fund some of the activities of the mirror committees, the Canadian committees that participate internationally. We have $1 million set aside annually to support these organizations.

When it comes to the use of standards by SMEs, yes, we are providing as much information as we can on our website. We are expanding our virtual network of interested parties to share the information and showcase the benefits of standardization to these organizations.

One interesting aspect here is other member bodies like SCC are also seeing the same challenges, so we are encouraging our SMEs to visit the ISO website where they'll see a number of examples where standards make a difference to SMEs and help them to access global markets. We're doing the best we can with the limited resources we have to help them access the standards and benefit from them.

[Lloyd Longfield, Liberal, Guelph, ON]

I have one or two more questions if I can possibly sneak them in.

We've been hearing about EMF, electromagnetic field, standard safety code 6, and communities not wanting to have communications towers around them, and standards around preventing EMF forces from hurting babies or animals. Has your department done any work around the science of safety code 6 that we can use when we're looking at developing policy?

[Michel Girard]

SCC is not a regulatory authority. We encourage organizations to develop standards when there's a need. I can recall some examples, with smart meters, for example, where smart meters were installed but there was no certification program in place to ensure the safety of these devices.

Sometimes industry or regulators will deploy new technologies and will only think about the ramifications when these things are installed. We encourage organizations to actually look at standards to do this. Now in Canada there is a standard being developed regarding the certification of smart meters. I think that when the market and the regulators see a need, then the standards system can support them in order to do that.

[Lloyd Longfield, Liberal, Guelph, ON]

So it is in process.

[Michel Girard]

It is in process for smart meters, and for the other devices you mentioned I'm sure we can take a look at the work programs from the various SDOs, standards development organizations, to make sure that it's included. If it's not, then it's a conversation with regulators that we need to have.

[Lloyd Longfield, Liberal, Guelph, ON]

Super. Thank you. We'll bring that forward as we need to.

The last question for me is around environmental standards and looking at climate change and whether there are some new standards we might need to be aware of or make our constituents aware of, or whether we can provide information back to you around environmental standards.

[Michel Girard]

In terms of climate change, obviously there are two components to that.

There is the mitigation part, that is, how can we reduce greenhouse gas emissions through new technologies. One important standard that is being developed now is related to environmental technology verification. That's a standard Canada put forward internationally. It will allow organizations to test the merits of a new technology compared to a baseline to see if it actually performs the way it's intended to do. That's one area where we see Canada taking the lead, and that's for green technologies.

Regarding adaptation to a changing climate, we also are providing support to the government in terms of developing new standards to help adapt our infrastructure to a new threshold of extreme weather events. A couple of examples of that are related to northern infrastructure equipment being installed and maintained in the north. There's permafrost melting and different snow loads requirements. We're helping to develop standards to meet those new challenges.

[Lloyd Longfield, Liberal, Guelph, ON]

It's good to hear that it's being responsive. Some of our trade agreements will require these types of adjustments. I'm thinking of how the CE standard and the UL and CSA standards all needed to be integrated, and probably we need to look at that going forward. So it's good to hear.

[Michel Girard]

We absolutely need to. On that, we maintain mutual recognition agreements between SCC and other member bodies around the world so that products that are certified to our standards can be tested elsewhere and be accepted here.

[Lloyd Longfield, Liberal, Guelph, ON]

Perfect. Thank you very much.

[Michel Girard]

You're welcome.

[The Chair, Liberal, Dan Ruimy]

Gentlemen, that was good.

We'll now go to Monsieur Bernier.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you, Mr. Chair.

Mr. Girard, thank you very much for your presentation. We truly appreciate it.

You talked about the impact of standards on small and large businesses. My question is specifically about international standards.

You just talked about mutual recognition of standards. Often, business people tell us that there are too many standards and regulations and that that hampers productivity. What are you doing to ensure that different industries, such as the aerospace industry, can be subject to competing international standards that are safety standards at the same time? In the aerospace industry, do you have a mutual recognition agreement with other standardization bodies elsewhere in the world?

[Michel Girard]

Unfortunately, we don't have a formal mutual recognition agreement in that sector.

Recently, however, we signed an agreement with our European counterpart, CEN-CENELEC. Under that agreement, Canadian observers can now attend meetings of the technical committees managed by CEN-CENELEC, including for the aerospace sector.

In several cases, Canadian industries have told us that they are concerned about the European standards. Thanks to this agreement, we have gotten CEN-CENELEC to open its doors and listen to Canadian businesses' complaints about clauses seen as too restrictive.

[Maxime Bernier, Conservative, Beauce, QC]

Do any aerospace companies, such as Bombardier or others, have complaints about the adjustment of the standards for aircraft construction?

[Michel Girard]

We have not received any request from Bombardier about that.

[Maxime Bernier, Conservative, Beauce, QC]

Speaking of Bombardier, you may know that a motion was moved in this committee to receive representatives of Bombardier in order to study the impact of government subsidies on its competitiveness.

It is your job to ensure that we have the most effective standards possible. Can something be done for Bombardier's competitiveness? If my colleagues in the governing party so choose, we are going to hear from Bombardier representatives in the coming weeks in order to study how the company operates, its productivity and its future challenges. Is there something in the standards that could help that company?

[Michel Girard]

I imagine that Transport Canada is very interested in the technical issues Bombardier faces to have its aircraft certified. That is highly regulated.

When it comes to voluntary standardization, there are hundreds of technical committees that are directly or indirectly related to this sector at the International Organization for Standardization and the International Electrotechnical Commission. If someone shares specific concerns with us, we can react and tell you whether Canada is involved in these activities. In some cases, Canada is not even involved in international standardization activities. If it is involved, we can tell you whether it is satisfied with the results of the committee work.

[Maxime Bernier, Conservative, Beauce, QC]

That is important to know, because if our colleagues in the governing party agree to our motion, we will be able to ask the right people these questions.

I'd like some more information about how mutual recognition works. If I understand correctly, we don't make other standards here in Canada. If another country's standards are not similar, we don't aim for similarity in the standards. We want standards that have the same objective when it comes to mutual recognition in a given sector.

Do you rely on the objective of a standard or are you more concerned with the details of regulation? In other words, if European standards are really different from Canadian standards in terms of the details, could there be mutual recognition or would you be picky and ensure that the standards are more harmonized? I think that harmonization is not what we should be aiming for. We should be aiming for mutual recognition.

Do you have the same logic on this? We often talk about mutual recognition when basically what we are aiming for is harmonization, but that is not what we should be aiming for. What is your philosophy on that and what happens in practice?

[Michel Girard]

It really depends on the legal documents that are signed by the governments to do one thing or another.

There is no mutual recognition of standards as such between Canada and Europe. If there were, it would have to do with the capacity of the bodies that certify products and services. The countries involved continue to determine which are the appropriate and acceptable standards in their respective jurisdictions. To my knowledge, there is no mechanism for mutual recognition of specific standards between Canada and the European Union.

As for our relations with the United States, it is very clear that we feel that a great deal of effort should be made to develop joint standards. We are not talking about harmonized standards, where there would be two separate documents and potentially significant differences between the two texts. We are talking about rules that would be created and maintained by Canadians and Americans. We have already developed pilot projects in this area because this need was identified several years ago by the business sector.

Canada and the United States are making progress on developing joint voluntary standards. Those standards can then be used and incorporated by reference by regulatory authorities, where appropriate.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you.