Thank you, Mr. Chairman.
Thank you for inviting me to provide comments on Bill C-21, an act to amend the Customs Act. My name is Cyndee Todgham Cherniak. I am a Canadian international trade lawyer, and I specialize in the areas of customs law and export controls and economic sanctions.
Bill C-21 amends the Customs Act to implement the Beyond the Border initiative between Canada and the United States. It has three main parts.
Bill C-21 starts with the provision to authorize the CBSA to collect limited information about persons and conveyances that are leaving or exiting Canada. Then, Bill C-21 adds proposed new section 94 of the Customs Act, which requires that, if requested, every person who is leaving Canada present themselves to the CBSA and answer questions truthfully. Bill C-21also amends section 95 of the Customs Act, which puts a positive obligation on persons to report all goods that are exported. Finally, Bill C-21 adds a new export smuggling offence in subsection 159(2) of the Customs Act.
Whenever a new offence provision is created, the government needs to be careful. When interpreting a statutory provision, we must ask what the intention of Parliament was when they passed this provision. The rules for an export smuggling offence need to be very clear. It's not fair to Canadians and travellers to Canada for there to be punishable export-related smuggling rules and only be told when the rule has been broken. Proposed new subsection 159(2) of the Customs Act provides:
Every person commits an offence who smuggles or attempts to smuggle out of Canada, whether clandestinely or not, any goods that are subject to duties, or any goods the exportation of which is prohibited, controlled or regulated under this or any other act of Parliament.
What does smuggle mean? This term is not defined in Bill C-21 or the Customs Act.
Proposed subsection 159(2) of the Customs Act tells us what can't be smuggled out of Canada: one, “goods that are subject to duties”, and, two, goods that “the exportation of which is prohibited, controlled or regulated” under the Customs Act or any other act of Parliament.
Let's start with goods that are subject to duties. The term “duties” is defined in section 2 of the Customs Act with reference to imported goods. There is no definition of duties in the context of exported goods. Bill C-21 does not amend the statutory definition of the word “duties” in the Customs Act.
The words “subject to duties” must have meaning. Is it the intended result that all goods that are not duty-free when imported into Canada are covered by the new export smuggling provision when they are exported? Or, is the intended result, by virtue of amended subsection 95(1) of the Customs Act, which requires all goods to be reported, that all goods will be considered to be regulated and therefore all goods must be reported, and if the goods in your luggage or my luggage are not reported, they will be considered to be smuggled?
What is envisioned? Will there be export clearance at Canadian airports for all passengers, so that they must report the goods in their luggage? Will there be a new export checkpoint staffed by the CBSA? When travellers pre-clear U.S. customs, do they also have to go through a CBSA export checkpoint, or this going to be like the requirement in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which puts a positive obligation on persons to report all exports of more than $10,000? Are travellers supposed to find the small CBSA office in the airport and complete some paperwork before leaving Canada?
With respect to the second category of goods to be covered by the export smuggling offence, do any of you know what are “goods the exportation of which is prohibited, controlled, or regulated” under the thousands of acts and regulations that we have? What does this even mean? The terms “prohibited”, “controlled” and “regulated” are not defined in Bill C-21 or the current Customs Act. I can tell you from experience in my practice that most people do not know how many restrictions there are under Canadian laws and regulations relating to exports.
This is not just the Export and Import Permits Act and the export control list that place restrictions on exports. There are hundreds of restrictions that are not obvious, and there are hundreds of different disconnected statutes and regulations. Do you have a complete list? Does a complete list even exit?
The export control list is only one list, and not an easy list for the average person or even a business person at a small to medium-sized business to use. Dual-use goods, miscellaneous goods, U.S.-made goods, computers, encryption software—the export control list is really complicated. In addition, the export control list does not contain or include many other export-regulated items, such as, rough diamonds, hazardous materials, fireworks, live animals, cultural property, fish, seafood, health products, regulated drugs, precursor chemicals, and the list goes on.
Did you know that there are restrictions on exports of honey, maple syrup products, and peanut butter under different and disconnected regulations? These and other goods are covered by other laws and other regulations.
My recommendation would be that there needs to be some clarity with respect to which goods must be reported and will be considered to be smuggled out of Canada if they're not reported. There needs to be a consolidated list of goods that are subject to export restrictions, and if there isn't a single, consolidated, searchable database of export restrictions and regulations, good Canadians will make mistakes.
There are inconsistencies between the regulatory schemes. A second recommendation I'd like to give you is that there needs to be some consistency. As you know, the minister of foreign affairs does not have the authority to issue export permits to non-residents, but non-residents of Canada leave by air, ship, and rail. How is this new smuggling offence provision going to be applied to the millions of foreign visitors to Canada who can't obtain export permits? As you know, when a Canadian resident uses a general export permit to export controlled goods under the Export and Import Permits Act, they must refer to the general export permit number on the export documentation. How will the CBSA enforce this general export permit requirement in respect of the individual traveller who does not use export documentation when leaving with goods in their luggage?
While I can understand that the Government of Canada would like to be able to charge individuals who try to break export control rules by personally exporting the goods, this proposed provision is going to capture a whole lot of other people. Further, the Export and Import Permits Act and other statutes contain punishment for not obtaining export permits and export licences when required. Ask what the export smuggling provision is really supposed to accomplish. We may already have this covered in our law.
What about information on electronic devices? On September 27, 2017, Mr. Martin Bolduc of the CBSA testified before the ETHI committee that the CBSA's position is that, pursuant to the Customs Act, the word “goods” includes electronic records on electronic devices. He took the position that the CBSA may examine all electronic documents that are being imported. The CBSA's analysis on imported goods would also apply to exported goods.
Based on the proposed amended subsection 95(1) of the Customs Act, all electronic documents on your computer, my computer, or our electronic devices must be reported. There have to be regulations promulgated to support proposed subsection 95(1). I would hope that, in those regulations, electronic records would be specifically addressed and an exception cover electronic records. Laptops contain hundreds of thousands of emails and documents, and it would take a long time to report these goods at the airport before leaving Canada, and it's not even feasible to report all the goods.
Anyone, including all of us, could commit a smuggling offence if every electronic record on our computer must be reported to the CBSA, and anyone with a NEXUS card would be at risk of losing their NEXUS card if they failed to recall one document.
We should also protect solicitor-client privilege at the border. Solicitor-client privilege is fundamental to the proper functioning of the Canadian legal system. As a result, steps must be taken to ensure that solicitor-client privilege is protected at Canadian airports and Canadian ports of exit when lawyers and clients are leaving Canada. It is essential that the CBSA maintain a transparent policy and process to address solicitor-client privilege when questioning persons leaving Canada.
Finally, on the issue of privacy and the sharing of information, the CBSA's information can be wrong. We need to have a mechanism so that travellers can correct the information relating to answers they've provided to the CBSA and when they've left.
I'd be happy to answer any of your questions.