Evidence of meeting #24 for Veterans Affairs in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was medals.
A recording is available from Parliament.
Conservative
The Chair Conservative Gary Schellenberger
Welcome to everyone.
Today is the 24th meeting of the Standing Committee on Veterans Affairs, and we have before the committee, pursuant to the order of reference of Thursday, April 15, 2010, Bill C-473, An Act to protect insignia of military orders, decorations and medals of cultural significance for future generations.
Before we go into the meeting, I would ask for the consent of the committee to have Mr. Sweet assume the chair and chair this meeting, because this is my bill.
Conservative
The Acting Chair Conservative David Sweet
Good afternoon, ladies and gentlemen. It's good to be back, although my departure wasn't all that long. I hope I won't be revisiting this much, although I do enjoy it quite a bit.
Maybe right at the outset, because we have officials here who are going to give opening remarks, and of course we'll be allowing the usual rotation for questions, and also because we're going to be attempting to get through the bill today clause by clause and there are a number of amendments, could I have consent from the committee that if we're unable to complete our full agenda today--in other words, produce a report from the clause-by-clause--we will have the extension of 30 days on the bill?
Conservative
The Acting Chair Conservative David Sweet
Now we'll go to the officials. Please let me don my appropriate optical help.
We have with us André Lévesque, director of honours and recognition, with the Department of National Defence; Tom Scrimger, assistant deputy minister, citizenship and heritage, from the Department of Canadian Heritage; Lyn Elliot Sherwood, executive director of heritage group; and Kathryn Zedde, senior policy analyst, heritage policy development.
I understand Monsieur Lévesque and Mr. Scrimger have opening remarks. I'll go with you, Mr. Scrimger, and then Mr. Lévesque.
Tom Scrimger Assistant Deputy Minister, Citizenship and Heritage, Department of Canadian Heritage
Thank you, Mr. Chair.
Thank you again for inviting us to make this presentation to the committee. We are pleased to be here today to assist the committee in its consideration of private member's bill C-473.
We thought it would be useful to provide some context for the bill in terms of existing federal legislation. The Cultural Property Import and Export Act, which was enacted in 1977, protects objects of heritage value.
We have a few very brief comments, Mr. Chair.
I am going to give the floor to my colleague Ms. Elliot Sherwood, who will provide you with this information.
Lyn Elliot Sherwood Executive Director, Heritage Group, Department of Canadian Heritage
Thank you, Mr. Chair and members of the committee.
I believe the clerk of the committee has circulated copies of the presentation in both official languages.
There are four areas that we would like to briefly review today. The first is the different approaches adopted by the Cultural Property Export and Import Act and Bill C-473 with respect to the retention of important heritage in Canada.
In keeping with federal jurisdiction over matters of international trade, the cultural property act controls export. That is the term that is used in that act. Export permits are required for all insignia that are defined in the Canadian cultural property export control list, which is a regulation under the cultural property act. Permits are required any time insignia leave Canada for any period of time, for any reason, and irrespective of who the owner or exporter is or who the recipient of the export will be.
In cases of permanent export, if insignia are deemed to be of outstanding significance and national importance, export may be delayed. It's essentially a time out in the export process. That delay is intended to provide an opportunity for designated Canadian museums and public authorities to acquire the insignia.
A grant program exists to assist institutions in the purchase of items threatened with export, and special tax incentives also encourage donations of outstanding insignia to public institutions.
Bill C-473, as we read it, would prohibit the transfer of insignia of cultural importance to non-residents unless the insignia are first offered for sale to the Canadian Museum of Civilization, the Canadian War Museum, or the Department of Canadian Heritage, but those provisions would not apply in cases of transfer to a near relative or an heir.
For consideration by the committee, we would note that the difference in language between the Cultural Property Export and Import Act, which uses the term “export”, and the language in the bill, which uses the term “transfer to a non-resident”, may result in questions about what sorts of transactions are covered by the bill, and we would note that there is also a risk that the phrase “transfer to a non-resident” in the bill does carry with it the risk that questions could be raised related to provincial jurisdiction over the regulation of trade and commerce involving property within a province.
The second issue that we would like to put before the committee is the approach to the definition of what insignia are covered. Under the Cultural Property Export and Import Act, military insignia that are controlled for export must be more than 50 years old and must have a fair market value in Canada of more than $3,000. The value threshold is used in essence as the means, the proxy, for defining those insignia that are most likely to be of outstanding significance and of national importance, which are the criteria set forth in the act.
Bill C-473 covers insignia awarded by Her Majesty in right of Canada, which we understand therefore to be insignia awarded after 1967. Prior to 1967, Canadian insignia were awarded by Her Majesty the Queen in right of the United Kingdom, and legally there is a distinction. The bill would also require the insignia to be of cultural significance, with the concept to be defined in regulation.
For the committee's consideration, we note that the earliest of the insignia covered by the bill, those granted in 1967, will be 50 years old in 2017. At that point, depending on their value, they could be covered both by the Cultural Property Export and Import Act and by the provisions in Bill C-473. As a result, we believe there is some risk that Canadians could be confused about their legal obligations, which are somewhat different under the existing legislation and under the proposed legislation.
The third issue we would like to raise relates to the determination of “fair market value”. This is an exercise in obscure dictionary definitions and Revenue Canada definitions. Mr. Chair, I ask the committee to bear with me as I work through that.
The term “fair market value” is used in both the cultural property act and Bill C-473, but in very different contexts. It's used in the cultural property act in reference to the role of the Canadian Cultural Property Export Review Board in determining the importance and value of objects that are donated or sold to Canadian institutions and public authorities. It's used very specifically to determine the value for the tax certificate, the tax incentive.
A different term is used in the cultural property act for the board's role in relation to situations where an object is subject to export delay and there may be disagreement between the owner of the object and a potential Canadian purchaser as to what would constitute a fair offer. The term in that context used in the cultural property act is “fair cash offer” rather than “fair market value”. The amount of a fair cash offer might be the same as fair market value, but it doesn't have to be. Fair market value is a larger concept that takes into account the purchasing power of foreign buyers—in essence, whatever anyone anywhere is prepared to pay for an object. The term “fair cash offer” is used to refer to what a fair offer would be within the Canadian context. So fair market value is anywhere in the world; fair cash offer is in the context of the Canadian market.
In clause 6, Bill C-473 sets out a role for the Canadian Cultural Property Export Review Board in assessing the value of an insignia that would be offered up for sale to the institutions that are listed in the bill.
The bill uses the term “fair market value” for the function that is described in the cultural property act as determining a fair cash offer. There is a risk of confusion concerning which meaning is intended and therefore what considerations of the Cultural Property Export Review Board would have to take into consideration in determining value.
Finally we'd like to draw the committee's attention to the issue of maximum fines for violations. The cultural property act and Bill C-473 take different approaches to the maximum fines for violations of their provisions. The act specifies a specific dollar amount for a maximum penalty. For illegal export, the maximum fine is $5,000 on summary conviction and $25,000 on indictment. Bill C-473 provides for a penalty for summary conviction in any amount up to five times the fair market value of the insignia in question, rather than specifying a dollar amount.
We would draw to the committee's attention that this provision in the bill could possibly result in a situation where the penalty for the illegal transfer of a modern medal could be greater than the penalty set out in the cultural property act for the illegal export of a historic model, such as the Victoria Cross. We would also note that the norm in federal legislation is a specific amount to provide clarity to Canadians as to what the penalties could be.
Mr. Chair, that concludes my presentation on behalf of the Department of Canadian Heritage. At the appropriate time we'd be pleased to answer any questions the committee may have.
Conservative
The Acting Chair Conservative David Sweet
Thank you, Madam Sherwood.
Now I'm going to introduce Mr. Lévesque.
Mr. Lévesque, are you simply going to introduce your colleague, Madam Zedde, or do you have opening remarks?
André Lévesque Director, Honours and Recognition, Department of National Defence
I have a statement, and that will be it, sir.
Conservative
The Acting Chair Conservative David Sweet
Good. I felt that I didn't give the appropriate introduction because it was a kind of transfer.
Go ahead.
Director, Honours and Recognition, Department of National Defence
Thank you, Mr. Chair.
Good afternoon, ladies and gentlemen. My name is André Lévesque. I am the Director, Honours and Recognition, for the Department of National Defence, and I am responsible for administering honours and recognitions for members of the Canadian Forces.
The Department of National Defence supports the spirit of the proposed bill, but would like to make the following observations.
As we all know, recognition is one of the key factors in building morale in the military. It promotes esprit de corps and provides models that can inspire others. Maritime, land and air personnel wear the insignia of their military order and the decorations and medals on their uniforms proudly, because they represent official recognition by the Crown of their outstanding service and the gallantry, courage, merit and loyalty they have exhibited.
Insignia themselves, which are the physical representation of the recognitions bestowed, have important symbolic power. They become historical artefacts that are of interest to many people in addition to the individuals on whom they are bestowed. Insignia of military orders, decorations and medals have always had a monetary value. They are often made of precious metals, and they are art objects of high quality and great beauty.
In addition, because they represent part of our heritage, these articles have been collected, bought and sold since the beginning of time, in the same way as stamps and coins. This is a good thing, in some respects, since if these objects had no value, it would be much less worthwhile to conserve them, and so many of them would certainly have been lost, destroyed or thrown out over the years.
Having said that, there are regulations within the National Defence Act and the Queen's Regulations and Orders that prevent the sale of insignia by serving members of the Canadian Forces. However, once military personnel retire, they're no longer covered by the Code of Service Discipline, and they or their families are free to dispose of the awards as they see fit. With the exception of the insignia of orders, such as the Order of Military Merit, which remain by regulation property of the crown, insignia of decorations and medals, once presented, become the sole property of the individual.
The Department of National Defence supports the spirit of the bill, as it seems to strike an appropriate balance between the protection of our heritage and the rights of individuals to dispose of their personal property. It also has the advantage of avoiding the creation of additional structures and processes, as these are already in place under the Cultural Property Export and Import Act. This bill proposes to extend existing export rules to cover any historically significant insignia that is less than 50 years old. This change would go a long way to help keep our heritage in Canada, while remaining effective and enforceable.
Despite the good basis of the bill, I would like to bring four considerations to the attention of the committee.
First, as we said earlier, subclause 2(1) of the bill, in its present form, excludes the spouse or common-law partner from the list of people to whom an insignia may be given without consequences, regardless of their place of residence. That situation could prompt forceful objections from the parties concerned, who are ordinarily the legal beneficiaries and the first-degree heirs, who ordinarily inherit the medals belonging to a member of the military when they die.
Second, although the public institutions referred to in subclause 3(1) could certainly help play a role in the proposed legislation as potential purchasers of insignia with historical importance, I would like to inform the committee that the Canadian Forces have a network of 68 museums whose mission is to preserve, protect, exhibit and interpret part of our military heritage. These accredited national institutions could also play a crucial role in relation to the proposed legislation, alongside the institutions already listed.
Third, it is noted that the bill does not set a required minimum value associated with the medals for the legislation to be applicable. This would mean that if someone were to sell a medal worth as little as $10 to a buyer overseas, the entire approval process described in the proposed legislation would have to be followed. This would cause an immense administrative burden for objects of very low significance.
The Cultural Property Export and Import Act, on the other hand, applies only to objects that have a minimum value of $3,000. It would seem appropriate and practical that the same amount could be applied to this bill. In effect, this would mean that the proposed bill would not apply to hundreds of thousands of medals that have low cultural or historical value but rather focus on those that have a truly significant heritage value.
Fourth, while we do appreciate this effort to protect our valuable military heritage, it should be noted that honours, in particular the modern Canadian honour system, are not the exclusive realm of the military. To illustrate this, I would like to give the example of the Cross of Valour. It is the second highest decoration in our honour system, immediately below the Victoria Cross, which has only been awarded on 20 occasions since its creation in 1972. Of these, five members of the Canadian Forces--Sergeant Garrammone, Master Corporal Mitchell, Chief Warrant Officer Partanen, Master Corporal Pierce, and Sergeant Stringer--received Canada's highest honour for bravery, recognizing their acts of the most conspicuous courage in circumstances of extreme peril. If this civilian decoration were coming onto the market and being bought by a foreign collector, there might be a considerable amount of negative reaction to the export of such a rare and prestigious Canadian honour. By removing the word “military” before the word “insignia” within the bill, it would broaden the intent of the legislation to cover all insignia of orders, decoration, and medals in our modern honours system. This would not only help us honour our men and women in uniform who have acted selflessly in a civilian setting; it might also serve us even better to protect our wide Canadian history and heritage.
In closing, I would like to reiterate that the proposed bill is welcomed by the department I represent, but the committee may wish to consider the four areas I have highlighted with a view to further strengthening the intent and effect of the resulting legislation. We feel the bill is a practical resolution that will enable us to better protect our heritage while respecting the rights of property owners. Other, perhaps more drastic measures might invariably prove more difficult to impose and enforce, giving rise to a number of unintended consequences.
Thank you.
Conservative
The Acting Chair Conservative David Sweet
Thank you, Mr. Lévesque.
We'll go on to questions regarding the concerns of members before going to clause-by-clause.
Because we're going to try to keep this to an hour and then go to clause-by-clause in the second hour, we'll start with five-minute rounds. When they're exhausted, we'll go right to clause-by-clause.
Madam Sgro, for five minutes.
Liberal
Judy Sgro Liberal York West, ON
Thank you very much.
And thank you all very much for coming today. We appreciate the information.
We have a variety of amendments that have been put on the table, and Mr. Kerr or Mr. Lévesque, I don't know if you've had a chance to look at those amendments.
Liberal
Judy Sgro Liberal York West, ON
They cover some of the issues you raised.
I also have to say that we had the Legion here on Tuesday, and clearly they feel that whatever insignia or medals they have were given to them.
Has there ever been a discussion about presenting those medals and saying, “We are presenting you with these medals but these are the following conditions”, and have them sign the contract? Has that ever been done?
Are you aware of that, Mr. Lévesque?
Director, Honours and Recognition, Department of National Defence
There's no such contract. However, in the constitution for orders it basically says that the medals belong to the crown, so that's very clear to everyone. In terms of medals and decorations, it has always been, from our very early roots when we received medals from Britain, that declarations and medals presented to you were your personal property. But no one has ever been asked to sign a piece of paper, other than saying they received the medal. That's about it.
Liberal
Judy Sgro Liberal York West, ON
Certainly many of us are very supportive of what Mr. Schellenberger is trying to accomplish. I think most of us feel very uncomfortable with the idea that medals are being sold for profit. It gives us all an uncomfortable feeling. The question becomes how we best make those changes.
The Legion is suggesting that changes to the Cultural Property Export and Import Act would be a more appropriate way of achieving the goals that many of us would like to see done.
Can I get some comment on that?
Assistant Deputy Minister, Citizenship and Heritage, Department of Canadian Heritage
Without knowing all the precise recommendations put forward by the Legion, I will have to comment that if we are looking to control or to have an opportunity to have oversight before medals or insignia of cultural and national importance leave the country, then there may be some consideration given to using the export act or a structure like the export control act.
It really becomes a matter of what we are trying to accomplish. I understand there is a continuum of viewpoints, going from the opinion that no medal should ever be allowed to be sold to--what I think was a viewpoint expressed by the Legion--the opinion that unless there is a precondition that a medal belongs to the honour system, it is a piece of personal property.
I understand the difficulty the committee faces in trying to reconcile those two viewpoints while at the same time trying to ensure that insignia medals that are truly important to Canada's history--and that is significant--are not leaving the country.
I'm afraid I can't be much more help to you than that.
Liberal
Judy Sgro Liberal York West, ON
Just how many export permits would be issued on an annual basis for this kind of insignia that would have to be transferred or taken out of the country?
Assistant Deputy Minister, Citizenship and Heritage, Department of Canadian Heritage
We have that number somewhere, if you'll just give us a moment.
Executive Director, Heritage Group, Department of Canadian Heritage
I'm sorry, we don't have the export number. We do have information on the number that are certified for donation or sale for the special tax incentives every year. It's not an outrageously high number. The number of export permits overall is a few hundred for all categories of material that are covered. There are a relatively small number of historic medals that have a value of more than $3,000, which is the threshold at which the requirement for an export permit would apply for medals that are more than 50 years old.
I think we can certainly research that information, but I'm sorry, I don't have it today.
Liberal
Judy Sgro Liberal York West, ON
That's fine. Thank you very much.
I don't have any further questions. If my colleagues do.... Lise, do you have any questions?
