House of Commons Hansard #144 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was copyright.


Copyright ActGovernment Orders

4:45 p.m.


Brenda Chamberlain Liberal Guelph—Wellington, ON


Motion No. 29

That Bill C-32, in Clause 18, be amended by replacing lines 14 to 16 on page 41 with the following:

"exceptional documentary character, the undertaking may deposit it in an archive and"

Motion No. 30

That Bill C-32, in Clause 18, be amended by deleting lines 20 to 24 on page 41.

Motion No. 31

That Bill C-32, in Clause 18, be amended by deleting lines 25 to 29 on page 41.

Copyright ActGovernment Orders

4:45 p.m.


Gaston Leroux Bloc Richmond—Wolfe, QC


Motion No. 32

That Bill C-32, in Clause 18, be amended by replacing lines 25 to 29 on page 41 with the following:

"(8) This section does not apply where a collective society is authorized to grant a licence to the programming undertaking to make the fixation or reproduction of the performer's performance, work or sound recording."

Copyright ActGovernment Orders

4:45 p.m.


Brenda Chamberlain Liberal Guelph—Wellington, ON


Motion No. 33

That Bill C-32, in Clause 18, be amended by a ) replacing line 33 on page 41 with the following:

"made by a broadcasting undertaking and" b ) replacing lines 39 and 40 on page 41 with the following:

"the broadcasting undertaking, as network is defined in that Act, or is an associate of the broadcasting undertaking, as associate is defined in the regulations to that Act for the purposes of the provisions governing ownership and control."

Motion No. 34

That Bill C-32, in Clause 18, be amended by replacing lines 5 to 8 on page 42 with the following:

"(5) and" b ) within sixty days after the day on which the broadcasting undertaking first broadcasts the fixation or reproduction.''

Copyright ActGovernment Orders

4:50 p.m.


Jim Abbott Reform Kootenay East, BC


Motion No. 35

That Bill C-32, in Clause 18, be amended by replacing line 6 on page 42 with the following: b ) within six months after the day on which ''

Copyright ActGovernment Orders

4:50 p.m.


Brenda Chamberlain Liberal Guelph—Wellington, ON


Motion No. 36

That Bill C-32, in Clause 18, be amended by adding after line 8 on page 42 the following:

"30.9 (1) Notwithstanding any other provision in this Act, there is deemed to have been no infringement of copyright where a broadcasting undertaking, within the meaning of the Broadcasting Act, on or after August 16, 1990, but before the coming into force of section 30.8, fixed or reproduced a performer's performance or work, other than a cinematographic work or sound recording, if the undertaking a ) was authorized to communicate the performer's performance, work or sound recording to the public by telecommunication; b ) made the fixation or the reproduction itself, for its own broadcasts; and c ) did not use the fixation or reproduction to promote a commercial product or service.

(2) For greater certainty, paragraph (1)( a ) applies in respect of any proceeding commenced on or after August 16, 1990, but not concluded before the coming into force of section 30.8, and paragraph (1)( b ) does not affect any proceeding commenced on or after August 16, 1990, but concluded before the coming into force of section 30.8, or any order made pursuant to that proceeding.''

Motion No. 37

That Bill C-32, in Clause 18, be amended by adding after line 8 on page 42 the following:

"30.9 It is not an infringement of copyright for any broadcaster to reproduce any work, performer's performance or sound recording that it is legally entitled to broadcast solely for the purposes of transferring that work, performer's performance or sound recording to a technical format that is appropriate for the purposes of its broadcasts, provided that all such reproductions shall be destroyed immediately when the broadcaster ceases to be legally entitled to broadcast the work or other subject-matter.

30.10 (1) Notwithstanding any other provision in this Act, there is deemed to have been no infringement of copyright where a broadcaster, on or after August 16, 1990 but before the coming into force of section 30.9, reproduced any work, performer's performance or sound recording that it was legally entitled to broadcast solely for the purposes of transferring that work, performer's performance or sound recording to a technical format that was appropriate for the purposes of its broadcasts, provided that all such reproductions shall be destroyed immediately after the day section 30.9 comes into force where the broadcaster on or before that day ceases to be legally entitled to broadcast the work or other subject-matter.

(2) For greater certainty, subsection (1) a ) applies in respect of any proceeding commenced on or after August 16, 1990, but not concluded before the coming into force of section 30.8; and b ) does not affect any proceeding commenced on or after August 16, 1990, but concluded before the coming into force of section 30.8, or any order made pursuant to that proceeding.''

Copyright ActGovernment Orders

4:50 p.m.


Jim Abbott Reform Kootenay East, BC


Motion No. 38

That Bill C-32, in Clause 18, be amended by adding after line 8 on page 42 the following:

"30.9 It is not an infringement of copyright for any broadcaster to a ) reproduce any work or other subject-matter that it is legally entitled to broadcast, where it does so for the purposes of transferring that work or other subject-matter to a technical format that is appropriate for the purposes of its broadcasts, providing that the reproduction:

(i) is essential for the compatibility of the broadcast medium,

(ii) is used solely to facilitate the day-to-day operations of the broadcaster, and

(iii) is, when the broadcaster ceases to be legally entitled to broadcast the work or other subject-matter, immediately destroyed by the broadcaster; or b ) make a single reproduction for backup purposes of any work or other subject-matter reproduced under paragraph ( a ), providing the reproduction for backup purposes is destroyed by the broadcaster immediately following the broadcast of the original subject-matter for which a backup was made.''

Copyright ActGovernment Orders

4:55 p.m.


Brenda Chamberlain Liberal Guelph—Wellington, ON


Motion No. 58

That Bill C-32, in Clause 62, be amended by adding after line 18 on page 96 the following:

"(3) Section 30.9 shall come into force on the coming into force of section 30.8."

Motion No. 59

That Bill C-32, in Clause 62, be amended by adding after line 18 on page 96 the following:

"(3) Section 30.10 shall come into force on the coming into force of section 30.9."

Mr. Speaker, I am pleased to have the opportunity to share with the House the reasons I am introducing amendments to Bill C-32. I appreciate the consideration that members will give the amendments and I am asking for the support of the House as I believe the amendments address a number of concerns expressed to me by local radio stations across Canada and, in particular, the radio station situated in Guelph-Wellington, CJOY-AM and MAGIC-FM.

I want to say from the start that I understand, appreciate and support the need for Canadian artists to be compensated for their work. We should all recognize their contribution. They deserve our encouragement.

Canadians are rightfully proud of their artists. We must recognize the artistic contribution of performers and sound recording producers.

This is an issue in which I have been involved for quite some time. I had the privilege of participating in the national Liberal caucus subcommittee on neighbouring rights, chaired by the hon. member for Essex-Kent. I have met in Kitchener with representatives of the broadcast industry and I hosted a meeting of the national Liberal caucus committee on economic development, which I chair, on April 17, 1996.

I represent the very proud community of Guelph-Wellington. Like many smaller communities, Guelph is served by a local radio station, a daily newspaper, the Guelph Mercury , weekly and bi-weekly newspapers like the Guelph Tribune , the Erin Advocate and the Wellington Advertiser , and a local cable company affiliate, Rogers, which has increased its coverage of local events.

We can and do listen to radio from Toronto, London or even parts of the United States, but we rely on our local AM and FM radio stations for weather, sports, entertainment and news which affects us locally.

I know, for example, that my family listens to CJOY or MAGIC to hear whether the school buses will be late in the event of a snowstorm. This is an important service which cannot be replaced should our radio station cease to operate. I can personally attest to the importance of this medium when I, as a member of Parliament, need to get a message across to my constituents.

The Minister of Finance recently visited Guelph. He was able to participate in a call-in show with my constituents because a radio station exists in my community. I am certain that most, if not all, members of Parliament know the value of a local radio station in their own communities.

Our radio station is a vital part of Guelph-Wellington. CJOY went on the air in 1948. That means it will be celebrating its 50th anniversary next year. CJOY and MAGIC not only broadcast music, news and weather, they participate in the life of Guelph-Wellington. The station provides airtime for the Guelph Little Theatre and for productions at War Memorial Hall at the University of Guelph. It has promoted the new Guelph Performing Arts Centre. It provides scholarships for the annual Kiwanis music festival.

There is no doubt that my community and hundreds like it would be lessened should they lose their radio stations.

This brings me to my concern. Total losses for private radio in 1993-94, for example, amounted to $28 million. The industry has been unprofitable since 1989-90. In fact, in the years between 1990 and 1994, radio lost $180 million in Canada. Many stations have continued in operation because they are cross-subsidized by more profitable stations in the same corporate family. That is one of the reasons I asked for some consideration for smaller and unprofitable stations in this legislation. To an extent the minister of heritage has agreed and I am pleased by that.

Radio is part of the daily life of listeners and remains the most intimate of media. Radio is often the primary source of local news. It has a low concentration of ownership with the five largest owners together owning only 19 per cent of all radio stations. Most important, radio is a vital source of influence in the purchase of music recordings in Canada.

Study after study indicates that radio promotes the sale of CDs, cassettes and videos. In 1993, for example, a Decima Research poll found that 51 per cent of teens who decided on their purchase before buying at a record store stated that the main influence on them was hearing the selection on the radio. Video ranked second at 25 per cent and word of mouth was third.

Studies continue to point in the same direction; that is, airplay on radio represents the single most important source of promotion for recordings and is the most influential factor on the decision to purchase a record, tape or CD. That is good news for our artists, sound producers and music authors.

Radio continues to introduce Canadians to new music. I do have a concern that without the amendments smaller unprofitable radio stations will begin to close across Canada. That means that there will be less performers being heard and less variety for Canadians. Does this really help anyone? I think the answer to that is clearly no.

The amendments I propose essentially deal with time shifting and transfer of format. Let me explain. The local Rogers Cable television station in Guelph, for example, records the annual Santa Claus parade. We all know that this taping is often replayed several times on the station. The bill presently allows Rogers to show the event without paying copyright charges for 30 days from the day the event was held. The amendments I am introducing will extend that period to 60 days, allowing Rogers to play the show at Christmas time or on Christmas day.

Transfer of format allows stations like CJOY to transfer music to its hard drive and back up without having to pay additional fees. Without this amendment, radio stations will pay three times to play one piece of music.

Other amendments allow radio stations to archive the recordings in their own system rather than force the station to archive in an official archive and would allow a network show to rebroadcast without the local station having to pay again for the right to play it.

I recognize the importance of rewarding the artistic contributions of our artists and the people who produce the recordings. I do not believe that the amendments take anything away from what they deserve. What the amendments do is protect local radio, help keep it alive and assist it in its important work at promoting Canadian talent.

I do not believe there is one member of Parliament who represents a community with a local radio station who can say that the community would be better off without that station. That is why I am asking for support of my amendments.

Copyright ActGovernment Orders

5 p.m.


Jim Silye Reform Calgary Centre, AB

Mr. Speaker, I rise in support of the amendments by the member from the Liberal Party who just spoke.

Our critic will elaborate a little more extensively on the one difference I would like to make which is that the exemption should be more than just 60 days. If radio is as important as the member has said, if radio does as much as it does in that riding of hers and allows the finance minister to spread his words of wisdom and myth in that community, then certainly the hon. member would want more than a 60 day exemption and the member would appreciate a six month exemption which our critic has recommended. I think that is about the only difference on this particular amendment that we would have.

There are a couple of other things I would like to say on this whole issue of broadcasting and radio. What the member failed to say in her speech is that radio is already paying rights to play the music, the rights to record and to delay broadcast and so on and it pays a hefty fee. I have had representations from radio stations in Calgary but obviously SOCAN is charging the music composers and now it wants to extend this and pay royalties to the performers and the record producers. I have a problem with this.

What the radio stations really do is in the process of paying for their right to play the music and to play the artist's production they are promoting the very artists who then are trying to increase, like a tax on the radio stations which makes it very difficult for radio stations to survive. It is not that lucrative, as some may think, and to raise their prices and to raise their costs to promote the very artists who now want more money from them is a problem.

The problem is if we look at performers, they get paid, they get money. The good ones go on to make big money. Record producers charge a hefty fee to get into that studio, to get into an area where they can put an artist on a CD, on a single or on an album. These people get paid for their services and they get paid handsomely for their services. Yet it is the radio stations that promote these artists and now these artists thank them very much by saying "we want to tax you more". This government is going to comply and go along with that. I do not think that is right. It is unacceptable.

The other thing this brings up is the possible conflict with our neighbour the United States. As we all know, Canadian radio stations do not just play Canadian artists. Canadian radio stations also play U.S artists. By making radio stations pay extra for the Canadian talent is going to put them at a disadvantage to their American counterparts who will not have this extra fee imposed on them. They have an association similar to Canada, similar to SOCAN, and they are not doing that.

It is also possible that we might be contravening some of the agreements and rules within the North American Free Trade Agreement with respect to the use of these extra funds by groups like SOCAN and where does that money go and are we then giving a special advantage or favour to the Canadian artists.

SOCAN, the collective which is apparently in charge of collecting the 3.2 per cent royalties from Canadian broadcasters, has an overhead of $19 million annually. This poses a reasonable question. How much of this additional levy imposed on Canadian broadcasters is going to end up in the hands of Canadians artists? The projected annual revenue of neighbouring rights is in the $12 million to $14 million range.

Another reasonable question is where is this additional levy imposed on Canadian broadcasters going to go. The artists tabled a report showing an administrative cost of collecting the neighbouring rights of $1.6 million to $1.8 million annually. This is not credible given the overhead of SOCAN performing a comparable function.

When this legislation was introduced in the spring of 1996 following consultations between the government and the industry a compromise had been reached whereby all radio stations with revenues under $1.25 million would be assessed an annual fee of $100. The neighbouring rights percentage would be applied per station on all revenues in excess of $1.2 million. These were to be phased in over a five year period.

The committee recommendations were that the bill required that a $100 basic royalty be applied to those stations with ad revenues under $1.25 million. Full royalty tariffs would apply to stations with ad revenues above that threshold. However, those stations above $1.25 million ad revenues originally were going to be granted a five year phase in.

These amendments have reduced that phase in period to three years. Sixty-five per cent of the radio stations come under $1.25 million ad revenue.

This reduction from five years to three years is in direct response to demands by artists and pressure from the Bloc Quebecois during committee hearings. Again, we feel the Liberals and the Bloc have worked to the advantage of a small group of Quebec artists at the expense of the users.

The heritage minister did not include ephemeral exemptions in the original legislation and now she is forced to further jeopardize

the industry's compromise in an attempt to get the co-operation of artists, composers and performers.

With respect to the aspects of this amendment, which we are supporting, I want to point out that in all cases what this bill is doing is trying to ensure that certain people get paid for their creativity.

The system we have now has been designed in such a way that the industry itself is supposed to take care of those people who create the product.

The industry itself should be ensuring, through the collection of the SOCAN fees on radio, on television, in entertainment theatres, et cetera, every place where their product is being played, that money gets to the artists.

The artists have, in conjunction with complaining all along, said that they do not get enough of the action from an album, that they do not get enough fees when they perform somewhere, that their agent takes away too much commission, that record producers charge too much, that the money is not distributed fairly, that there are too many layers of administrative red tape just like government. Then what have they done?

What we have to be careful of in this House is that we do not give in to their representations totally and willy-nilly without recognizing that the industry has a responsibility to these artists as well, not just government, not just the Copyright Act.

If these artists come to parliamentarians like us and say they are not getting enough money, and record producers and performers say they are not getting enough money, it is not the Copyright Act that is supposed to ensure that they get enough money. The Copyright Act already guarantees them that they get something for the creative product they have produced.

It is the industry itself that has a responsibility. Members should look into what publishing companies charge for their piece of the action when somebody composes a piece of music.

What do agents get when they represent certain entertainers, certain performers and certain Canadian artists? I know some Canadian artists. I used to book Canadian artists. I know what these people charge. I know what record producers charge to go in and cut an album in their studios.

They are getting paid. If these artists are being taken advantage of, it is not by the government and it is not by the laws of this country. The law in place is good enough to ensure they get paid.

It is the industry itself that should take a look at itself. The artists should be complaining to the industry and the whole layer of bureaucracy on how to get the money to them.

Alanis Morissette apparently has sold 20 million CDs around the world. At $20 each, that represents potentially $400 million. What do members think she gets out of that $400 million? Do the politicians here think she gets 10 per cent? Do politicians here think she has now made $40 million, that she has receivables of $40 million? No. She gets a lot less. She has generated that music. She has generated and made her value worth $400 million on CDs alone.

I will continue. We have some other amendments to continue and debate.

Copyright ActGovernment Orders

5:10 p.m.

Restigouche—Chaleur New Brunswick


Guy Arseneault LiberalParliamentary Secretary to Deputy Prime Minister and Minister of Canadian Heritage

Mr. Speaker, the debate has been going on all day.

We are now at Group No. 7 which has a number of amendments that deal basically with the ephemeral. It was well noted by the hon. member in opposition that when we first presented the bill in the House there was no ephemeral exception. Now we have that ephemeral exception which is before the House in the amendments the House is proposing.

There was some concern about whether networks and cable television would be involved with the ephemeral exception. They are under the same package. The government moved amendments in order to clarify that. It felt they were coming out of the amendments in December. We felt they were covered but the industry felt it needed some more reassurance that it was covered. That is why I think that in many cases the hon. member for Guelph-Wellington has withdrawn some of her amendments. With the input from caucus, with her input and the input of a number of others, that is why some of those amendments were made.

We also felt quite strongly that the transfer of format was probably in the bill. Due to requests from caucus members and members of the public who wanted that clarified, who wanted assurance, the government clarified that.

This section goes to the bill in a certain way especially for the Reform members who have been lobbying to have this done, but also for some of our members as well. Credit goes to all parties for the type of balance we have worked for.

It is also important to note that there is a balance. No matter what part of the bill is looked at, some feel we are leaning too far to the creator's side and others feel we are leaning too far to the user's side. We say that we have created a balance. We have taken some, we have given some, we have negotiated some. We have listened to the witnesses.

We listened to over 65 witnesses. We listened to the public and we read the briefs sent to us. We have reacted to them. We said all along that it was a complicated bill. No one would deny that.

In light of the spirit of co-operation we have had today and the type of debate we have had-it has been and continues to be a good debate-and in light of the importance of this bill to both the creators and the users who want to have this bill now and who want it clarified, I would like to move the following motion, pursuant to Standing Order 26(1):

Motion To Extend Hours Of SittingGovernment Orders

5:15 p.m.

Restigouche—Chaleur New Brunswick


Guy Arseneault LiberalParliamentary Secretary to Deputy Prime Minister and Minister of Canadian Heritage

Mr. Speaker, I move:

That, this House continue to sit today beyond the ordinary hour of daily of adjournment for the purpose of concluding the report stage consideration of Bill C-32, an act to amend the Copyright Act.

And fewer than 15 members having risen:

Motion To Extend Hours Of SittingGovernment Orders

5:15 p.m.

The Deputy Speaker

Pursuant to Standing Order 26(2) the motion is deemed to have been adopted.

(Motion agreed to.)

The House resumed consideration of Bill C-32, an act to amend the Copyright Act, as reported (with amendments) from the committee; and of Motions Nos. 17, 19, 20, 24 to 38, 58 and 59.

Copyright ActGovernment Orders

5:20 p.m.


Jim Abbott Reform Kootenay East, BC

Mr. Speaker, the issue of ephemeral exemption or time shifting as it is sometimes referred to falls into the category of the discussion the parliamentary secretary and I had previously. Frequently measures are brought forward by the government that are not what we would consider to be adequate. Although I recognize that they were brought forward in response to the concerns that had been expressed over the issue of ephemeral or time shifting, the measures that have been proposed by the government, unfortunately in my judgment are singularly inadequate.

It is going to put a tremendous onus on charities and cable companies. I recognize that tapes can be maintained for a period of time. But it is my judgment that period of time is simply not long enough.

Many programs that are captured by the local cable companies during the late summer and fall are broadcast at Christmas time. I do not see how the amendments brought forward by the government would capture that. In other words, the exception proposed by the government will not permit that to happen.

I would like to look now on the impact of copyright in Bill C-32 on francophone broadcasters in general. I read from a brief I received: "Even if the proposed ephemeral exemptions limitation respecting the promotion of a cause or institution were removed, other qualifications of the exception would still make it possible for the stations to use the exception. The proposed exception is currently worded so that it will not apply where a collective can licence an ephemeral reproduction".

It is in this area of collectivity that we were speaking earlier today. As a matter of fact, in the province of Quebec with SODRAC, Société du droit de reproduction des auteurs, compositeurs et éditeurs au Canada, because a collective exists and because of the patchwork the legislation actually represents, a problem remains in spite of the government's move to try and alleviate it.

The bill was originally intended to take 1924 legislation and bring it forward into 1997. It has not occurred in this instance. I used the example earlier today of a small market radio station where a person would be faced with row upon row of CDs that someone will be taking down manually and putting into the CD player as opposed to going into a medium or larger market area where cuts from those CDs have been transferred on to a direct drive and can be accessed at the drop of a pin.

This bill does not recognize the difference between physical manual labour filing and electronic filing. Electronic filing is simply lifting those digital impressions from the CDs or from other medium and transferring them to a direct drive or some other medium. The legislation does not reflect the reality of electronics today. That is a real shame.

Broadcasters across Canada are going to be squeezed as undoubtedly the government is going to be forcing neighbouring rights through. This means that some of the larger operations are going to be looking at a fairly sizeable bill. It is not the $100 bill for the small operation, it is the larger bill for the larger operations. Because of the sheer size of these operations and the number of people that work for them, they will be able to make choices to use electronic equipment, possibly to replace some of their staff so they can pay the neighbouring rights. Then they are going to be faced with a dilemma because they do not have a true ephemeral exemption. There is really no transfer of medium possibility that is a sure thing. We could end up with some kind of a collective or some artist coming after us because we electronically transferred a signal back and forth. Then they are caught on double horns of the dilemma.

The first dilemma is that the government is asking them to pay higher fees in the form of neighbouring rights. The second

dilemma is that they do not know if they will be able to pay for that by laying off one or two people or whatever it is going to take to pay that bill. They do not know if they are going to be able to make use of the electronics that are available today because there is no surety with this legislation.

It was repeated time and time again in committee that what the broadcasters and those in the broadcasting business so desperately need is the assurance of knowing where they are going.

I respect the artists who came before us as I respect the collectives and the artist organizations when they say: "We do not intend to use our privilege of having these copyright privileges". That is all very well and good but if a business is making a $20,000, $200,000 or $200 million decision on what it is going to be doing about new electronic equipment, would it not be nice if it had a bit of an idea of what the rules were going to be when a new crop of artists or perhaps some new people are involved in managing that collective?

This is one of the most flawed parts of the legislation in that a dollar and cent number cannot be applied to it. This is going to create an insecurity within the broadcast industry that should have, would have and could have been resolved with a little bit clearer intent expressed by the government. I think it is a shame.

All I can say is that contrary to all of the wonderful catcalls that we get from the other side, I really believe that at some point, probably in this next election, Reform is going to prevail and when we become government we are going to straighten this sucker out.

Private Members' BusinessGovernment Orders

5:25 p.m.


Alex Shepherd Liberal Durham, ON

Mr. Speaker, I believe you will find consent for the following order:

That at the conclusion of the debate on Private Members' Business today, if a recorded division is requested on Bill C-214 it will be deemed deferred to the end of the time provided for Government Orders on Monday, March 17.

Private Members' BusinessGovernment Orders

5:25 p.m.

The Deputy Speaker

Is there unanimous consent?

Private Members' BusinessGovernment Orders

5:25 p.m.

Some hon. members


The House resumed consideration of Bill C-32, an act to amend the Copyright Act, as reported (with amendments) from the committee; and Motions Nos. 17, 19, 20, 24 to 38, 58 and 59.

Copyright ActGovernment Orders

March 13th, 1997 / 5:25 p.m.


Lee Morrison Reform Swift Current—Maple Creek—Assiniboia, SK

Mr. Speaker, listening to this prolonged debate and looking at the eleven and a half pages of amendments in the Order Paper, I cannot help but think there must be a lot of disorganization in the background of this legislation. I wonder why the government does not go back to the drawing board and start out with something that makes sense to all concerned and the public can use.

However, we are now debating these amendments line by line. The question of the ephemeral exemptions is a particularly trying one in my riding. Although it is a vast area, probably about one-fifth the size of the province of Ontario, there are within that area only three radio stations, one cable outlet and one independent television station. They are all going to suffer from this legislation. Some of them are going to suffer so much that I am afraid they might be lost.

That does not make any difference to the government members or to their friends and accomplices on the separatist side who have been working hand in glove devising this legislation.

As a somewhat technical person, one of the things in this legislation that I find most offensive is the lack of any real exemption for the transfer of formats. Most smaller radio stations have fairly extensive libraries, some of them in two, three or even four formats. It is a dog's breakfast. It is that way because they cannot afford to make a massive conversion. Now we are going to tell them, when we pass this bill, that their libraries, unless they are willing to pay for the transfer of formats every time they take something off the shelf, have become basically useless.

Copyright ActGovernment Orders

5:25 p.m.

The Deputy Speaker

I am very sorry to interrupt the hon. member. He will have eight minutes left in his intervention when we revert to this matter after Private Members' Business.

It being 5.30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

The House resumed from December 13, 1996 consideration of the motion that Bill C-214, an act to provide for improved information on the cost of proposed government programs, be read the second time and referred to a committee.

Program Cost Declaration ActPrivate Members' Business

5:25 p.m.


Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, it is a pleasure to participate in the debate on Bill C-214, sponsored by my hon. colleague from Durham.

Just by way of background, there is a kinship between us. During the 1993 election the member for Durham and I were the only two chartered accountants to be elected to the House of Commons. That is a shame because one of the things that we have found is that virtually everything we touch in this place eventually has something to do with dollars.

This is a very important bill from the standpoint that the member has asked somewhat of a rhetorical question of the House to consider and that is whether we have all the information we need to do the job we have to do. Certainly, as members well know, there are many items which come before us for consideration.

I just had a quick look at the House business summary. I was somewhat taken aback when I looked at the second session of the 35th Parliament. We have had quite a substantial number of proposals come before the House. There were about 84 government bills presented to the House. I believe there were 176 private members' bills, a third of which were votable items. There were another 276 private members' motions. About a third of those were also votable items. There has been one Senate bill in this session.

The member raises an interesting issue. There are an awful lot of matters which come before this place for consideration. In his speech the member quite correctly pointed out that sometimes members come to this place to vote on an issue and they are not familiar with the bill, the motion or the item before the House. It is fair to say that it is not possible for members of Parliament to be fully apprised of absolutely everything that comes before the House. Indeed, that is why there are committees on which members participate more fully in the issues coming before them. Members cannot possibly even read them, never mind appreciate the complexity and the implications of them.

The member raised a very important point and that is with respect to fiscal accountability. Recently in the tobacco bill there was a report stage motion which was passed by this place and incorporated into the bill which has been referred to the Senate. The motion was proposed by the hon. member for Lambton-Middlesex. It basically said that the regulations associated with a piece of legislation would have to come back to the committee for review and for scrutiny prior to being approved, rather than going through the normal process.

That tends to show the concern and the interest of the House to work toward ways to improve where possible fiscal responsibility and accountability so that we can say to our constituents that we have on those matters which we are directly involved in had an opportunity to fully scrutinize not only the intent and the context of legislation coming before us but certainly the financial and fiscal impact of any legislation, whether it be to do with programs or bills or modification of existing programs that the government may have.

I looked at one of the most interesting questions that the member for Durham raised. It was how did this $600 billion deficit get created. Is it something that could have been avoided had we been in a position to perhaps scrutinize more fully in history the matters that came before the House of Commons during the last 25 years when this deficit was created.

The member will know that a substantial portion of that debt is interest and compound interest. Notwithstanding, it still is a substantial amount of dollars.

On that point alone I do not believe and I am not going to accept the member's full analysis that the scrutiny might have dealt with the issue of the national debt. The member will well know that there are things which occur in our society which are very expensive. As an example, spousal abuse in our society is a very terrible thing. There was a joint Canada-U.S. forum last summer in which an analysis was done and papers were presented.

In Canada it was estimated that the cost of spousal abuse to the Canadian taxpayer, health, productivity and other costs associated with it, was something like $2.1 billion. That is an awful lot of money. There is no amount of scrutiny of legislation or regulations that could help us avoid that cost and yet that cost is an incremental cost, a burden to the taxpayer which in fact eventually finds its way to the national debt.

Second, there is the issue of alcohol abuse. Alcohol abuse is an issue which I have spent a lot of time on. I have given some information to the House from time to time about the cost of substance and alcohol abuse. The most recent information is that alcohol abuse costs Canadians something like $15 billion a year, not to mention the loss of life, to do with whether it be straight medical problems, or accidents, suicides and the like. There are some 19,000 people a year who die from alcohol misuse. That is a significant expenditure which is occurring on an annual basis, $15 billion a year. We can imagine how those costs accumulate and compound and add to the national debt.

I would then suggest a recent issue, the tobacco issue. It is another one that Canadians well know. It is a very serious problem in terms on its health impacts on Canadians. Forty thousand Canadians die each from it. There is a significant cost. I believe it was estimated that the provinces alone spend $3.5 billion on health care directly related to tobacco related problems. If we look at all of the other ancillary costs, that does accumulate closer to some $10 billion a year.

I could give some examples to show that the principle is something that I support, the fiscal accountability and the responsibility and the ability to be able to communicate that, that I have done my job, or I have seconded that responsibility to those I feel have taken up the responsibility to do the work on my behalf and I will rely on them.

That principle of secondment is extremely important. It is an element which perhaps the member did not develop as much as he might have in his speech.

When I was a hospital trustee for the Mississauga hospital for nine years there was an awful lot going on there. The public hospitals act said that the full 100 per cent of the responsibilities for the operations of that hospital were in the hands of the trustees. There is no possibility that the delivery of the direct medical services, the administration and virtually every aspect of the operation of a major urban hospital could be handled by a board of trustees on a voluntary basis, some 20 men and women.

Under the Ontario hospitals act one of the things we had was the trustee's guide which basically said we are responsible to make sure that we hire responsible people. As a chief of staff, as a senior administrator we are responsible for making sure that we have people we feel have the credentials and to whom we can second that responsibility so as trustees we could discharge our responsibilities not directly but in a combination of direct and indirect secondment.

In this case we do as members of Parliament second an awful lot of responsibility and rely very heavily on committees and other members to do the work. To that extent I am not as critical maybe of House operations.

In summary I would simply like to say that the aspect of fiscal accountability responsibility is something I know the member has worked very hard for. I congratulate him on the initiative. It is an excellent example of how people in this place, backbenchers, have made a contribution to the thinking of this place. If more members of Parliament would think and show initiative like the member for Durham I think this place would be a better place for all.

Program Cost Declaration ActPrivate Members' Business

5:40 p.m.


Richard Bélisle Bloc La Prairie, QC

Mr. Speaker, this bill, C-214, was presented in this House by the hon. member for Durham. It is intended to provide for improved information on the cost of proposed government programs.

I know the hon. member for Durham well, as he was vice-chair of the Standing Committee on Public Accounts when I was chair. From that time on, I have been aware of the interest the hon. member has in any administrative or legislative measure with a potential for improving the government's accountability and responsibility, more necessary than ever because of the astronomical amounts invested by the taxpayers annually in the workings of the federal government.

Like the hon. member for Longueuil, who has already spoken on Bill C-214 on behalf of the Bloc Quebecois, I wish to assure the hon. member for Durham who introduced this bill of my support and to require the Liberal government, at the time of introducing a bill in Parliament that authorizes the program, or when the regulation that authorizes the program, to make a declaration of the estimated annual cost of each new program, expressed as a total cost and as a per capita cost.

The bill also calls for the auditor general to be involved, providing proof that the method of calculation of the costs is valid and a good estimate, as stated in the hon. member's bill. This evaluation of the method of calculating and estimating costs by the auditor general would reassure the public about the objectivity of the calculations and cost estimates.

The objective of Bill C-24 is to require all departments to provide a financial analysis or a detailed cost breakdown of any new legislative measure. Assessing these costs on a per capita basis will enable each citizen to have a better grasp of what each new piece of legislation will cost him personally, what will really come out of his pocket each time the government creates a new program.

This bill is also intended to make legislators and public servants more aware of the financial impact of the various legislative measures. It is also intended to get the public to scrutinize the various government expenditures more closely.

The Liberal government prefers camouflage to transparency and to the analysis of the true costs of government programs. The Liberals' policy has always been: it is better to keep the public in the dark about the true costs of programs, and it is far better to keep the auditor general at a distance, for he could make an objective and transparent judgment of them.

We saw this during the finance committee hearings on the transfer of $2 billion in Canadian capital to the United States, tax-free. The Liberal majority and the chair of the committee himself tried to back the auditor general into a corner for having dared voice a dissenting opinion on the controversial decision by Revenue and Finance concerning this unusual transfer of funds to the U.S.

In terms of political debate and public morality, we have seen better. Instead of going after the message, the Liberals go after the messenger. They want to continue to ensure that the Office of the Auditor General gets involved only after the fact, when the deed has already been done, and taxpayers' money has been committed and spent.

Bill C-214, introduced by the member for Durham will not, unfortunately, be given the support of his party, because he calls for innovative administration, public transparency and objectivity defining the role of the auditor general. Such an honest, open and frank approach to voters and taxpayers is also totally foreign to the tradition and the culture of the Liberal Party of Canada.

Bill C-214 will likely, regretfully, remain wishful thinking, whereas the astronomical debt of $600 billion will urgently require greater transparency and vigorous action, which the government to date has been unable to provide.

The latest budget is indicative in this regard. The Minister of Finance could have done a lot better. He could have taken advantage of an extraordinary economic situation, shall we say, and real manoeuvring room-much more than he claims to have-to really help the unemployed and children in poverty.

These diversionary tactics of which the Liberals are past masters may well abort Bill C-214, and its objectives will no doubt remain a dead issue.

Program Cost Declaration ActPrivate Members' Business

5:45 p.m.

Bruce—Grey Ontario


Ovid Jackson LiberalParliamentary Secretary to President of the Treasury Board

Mr. Speaker, it is my pleasure to address the House in the debate with regard to private member's Bill C-214.

This bill is an act to provide improved information on the cost of proposed government programs and has been introduced by my colleague, the hon. member for Durham.

As members will recall, the bill purports disclosing in Parliament the estimated annual cost of every new program the government decides to implement.

If a new program had to be authorized by legislation, this proposal would require that a disclosure be made when the bill was introduced. If enabling legislation was not required, the disclosure would be made at the time a regulation order or one of the instruments was issued.

This proposal further requires that the auditor general provides an opinion on the validity of each cost estimate. The underlying objective of the proposed legislation is laudable but the results of such a bill, if passed, would be costly and administratively cumbersome. This act would result in such red tape for approvals of any kind that the business of the government would slow to a halt.

Applying this legislation to all new programming proposals regardless of size would raise all sorts of issues of interpretation, of applying this act, what constitutes a new program, what should be included in the cost calculations, direct costs only, indirect costs, opportunity costs. This proposal itself would constitute a program for which costs and benefits have yet to be determined.

This bill would also create a new role for the auditor general's office in the expenditure management process. The bill would require that the auditor general's office carry out detailed reviews of thousands of individual transactions before they take place to verify whether costing assumptions that the governments use were valid.

This would create a huge additional workload for the auditor general's office to perform these pretransaction audits. It would have to divert most of its resources away from the audits that focus on whether programs deliver value for money.

Our auditor general and those in many other countries have moved away from this type of detailed pretransaction control and toward broader value for money auditing. The auditor general's mandate is generally one of an ex post review and critique of government spending. It is not likely that the auditor general would readily agree to validate cost estimates on this scale.

I applaud the basic premise of the bill but unfortunately it presumes that we are currently not providing this type of cost information for government programs. This assumption is not correct. I am sure my colleagues would agree that the steps this government has taken toward more open and cost effective government are unparalleled in the Canadian federal government. Perhaps it would be useful to cast our gaze south of the Canadian border for a minute before considering this proposal.

One will observe that there are a number of Republican representatives in the American Senate who want to institute extremely complex regulatory procedures. Implementing those procedures would so complicate the U.S. system that the regulators would be prevented from implementing regulations in the interest of the public good. One could characterize such a system as being a state of paralysis by analysis. Excessive red tape would slow the system down to a crawl in spite of the insistent public demand for more responsible government.

In Canada we have taken a different approach to the regulatory process. Ours is a process that is concerned with cost effective regulation. The Canadian regulatory system already has mechanisms in place to get the cost information. Every regulatory initiative must be included in the Treasury Board's annual regulatory plan which lays out the government's regulatory initiative for the coming year.

Departments and agencies have to list what is planned and why it is necessary. This includes a brief description of benefits, costs, alternatives considered and how the department and agency will consult. There is also a section that provides information on initiatives that are scheduled to be implemented in the coming year.

For every initiative submitted the department or agency must make a cost declaration to identify the anticipated costs. The initiative is then classified based on both anticipated cost and degree of acceptance. For example, an initiative with an anticipated cost of $1 million will be considered a major initiative if it has a low degree of acceptance, but an intermediate cost initiative if it has a high degree of acceptance. From the beginning of the process regulators are mindful of costs.

That is just the beginning of accountability for costs in Canadian regulation. In November 1995 the Treasury Board of Canada secretariat introduced federal regulatory policy which discusses the requirements for new regulations. The objective of this policy is to ensure the government uses its regulatory powers for the greatest

net benefit to Canadian society, in other words, that its regulations are cost effective.

When regulating authorities must ensure that they comply with six general policy requirements. First, a program or a risk exists, intervention by the federal government is justified and regulation is the best alternative. Second, Canadians are consulted and they have the opportunity to participate in developing or modifying regulations and regulatory programs. Third, the benefits outweigh the costs to Canadians, their governments and businesses. In managing risks, resources are used where they do the most good.

Fourth, adverse impacts on the capacity of the economy to generate wealth and employment are minimized and no unnecessary regulatory burden is imposed. In particular, information and administrative requirements are limited and they impose the least cost possible, the special circumstances of small businesses are addressed, and parties proposing equivalent means to conform with regulatory requirements are given positive consideration.

Fifth, intergovernmental agreements are respected and full advantage is taken of opportunities for co-ordination with other governments and agencies.

Sixth, systems are in place to manage the resources effectively. In particular, to ensure that the regulatory process management standards are followed, compliance and enforcement policies are articulated as appropriate, and resources have been approved and are adequate to discharge enforcement responsibilities effectively and to ensure compliance where the regulation binds the government.

The regulatory policy provides for cost effective regulation. It provides for regulation that is flexible, focused on ends rather than means, focused on high priority problems rather than unnecessary detail and based on a partnership model with other governments and those subject to the regulation. It guarantees an open and transparent development process and requires that the government consider all alternatives before choosing the regulation.

This policy goes a long way toward to ensuring that Canadians have smarter regulation, free from unnecessary and costly burden. It provides for regulation only where it is the best alternative and only where the overall benefits clearly exceed the costs.

In other cases the government provides a clear indication of costs either at the time a new program is announced or in the budget if these costs are significant. In the budget of March 6 of this year the Minister of Finance emphasized the need for frugality in everything we do. Waste in government is simply not tolerated.

We have put aside the notion that new government programs require additional spending. What they do require is the will to reallocate. In the March budget every initiative involved a shift of resources from lower to higher priority areas.

The announcement in 1995 of the expenditure management system committed the government to making the best use of taxpayer dollars to deliver quality services to Canadians. The system is built on the principles of funding for new initiatives or priorities by reviewing existing expenditures and then reallocating money.

The expenditure management system will foster greater fiscal responsibility and help the government to meet its fiscal targets. Using business plans will allow departments to set out strategies for changing their businesses to reflect budget targets and government priorities.

The presentation to standing committees of departmental outlooks on program priorities and expenditures will help us to review expenditure trends and priorities for the coming years and provides a context for examining the estimates of the Government of Canada.

On March 7, 1996 the government released its progress report on getting government right. We recognized that the people of Canada are concerned about the cost of government and how those costs are being controlled. They want better governance. We have laid out for them what we have done and what we will continue to do to achieve this.

The program review exercise launched two years ago was the most fundamental review of federal programs and services since World War II. Its goal was to identify the federal government's core roles and to refocus resources on primary areas where reducing overall spending was important. The results of this review are changing the face of the federal government and will continue to do so for many years.

The government continues to ask the important question of how can programs be delivered in the most efficient manner. The auditor general continues to provide advice in this area. As long as this remains a government priority, departments and agencies will continue to do a good job in following up on every opportunity for improvement.

The combination of the two initiatives, the revamped expenditure management system and program review, opened the door for what we are now engaged in, an effort to bring results orientation to the information we in Parliament use.

We are entering a new era of governance, an era that will be characterized by greater transparency and dialogue about policy directions.

Program Cost Declaration ActPrivate Members' Business

6 p.m.


Derek Lee Liberal Scarborough—Rouge River, ON

Mr. Speaker, I am please to continue the debate on this private member's bill moved and drafted by my hon. colleague from Durham.

I endorse the bill. I support the bill. I endorse the concept. The member would agree that some fine tuning of all our bills which emanate from private members' business can best be done at committee.

The bill causes the taxpayer, the parliamentarian and the drafter of a bill or statute to recognize at the front end the fiscal costs associated with the change, whatever it might be. It is not a new idea but it is the first time it has been proposed here. It is an excellent idea.

The current procedure, as I understand it, begins in the executive branch of government where a bill is drafted and proposed. Although I have never sat at the cabinet table I understand that modern cabinets have financial assessment figures and projections at the front end whenever they consider legislation. As we are all aware a bill proposed in the House by the government has the support of cabinet. Before cabinet makes a decision cabinet knows what the numbers will be.

I would have thought it would be a fairly simple operation to make the same numbers available when the bill is presented in the House of Commons. Someone has already done the work on the calculator. I would have thought it would be pretty easy to add one page to the bill or the proposal and make it available for parliamentary debate and committee perusal as the statute or reform is being considered.

As it sits now, the House does not necessarily have this information as it considers a bill. It may in some cases be made privy to the departmental calculations as the bill goes through the committee process. In addition I have noted, as I am sure all members have noted, that most ministries deal with these issues publicly when they put forward a proposal. In any event I do not think it is a bad idea at all to nail this little procedure down at the front end.

To draw two analogies of similar concepts at work, the parliamentary secretary referred to what is called the regulatory impact analysis statement, RIAS, which is now used for almost all government regulatory initiatives. That impact statement for regulations includes references to the cost. That is a useful tool. It does not show up in this House because it is regulatory. The field has already been delegated by another statute to the executive branch. The RIAS is a very useful document. My colleague's proposal would in effect put a financial impact statement on the front end of a bill.

The second analogy is with environmental impact statements that are required by statute in many different areas now. They are

very useful in assessing the potential impact of statutes and changes in the way we do things in government.

The backdrop of this should include a recognition that the parliamentary estimates procedure, the process by which Parliament is supposed to review government spending, does not always work as effectively as we would like. Over the years this has been reformed from time to time. Every few years we revise the estimates procedures to try to enable Parliament to get a better handle on what is a very large and complex matter these days, government spending. It is quite huge, exceeding the $100 billion mark. I understand there is ongoing work to improve, change and update this procedure in the House of Commons. The initiative put forward by my colleague from Durham can only enhance whatever process we might subsequently adopt in the House.

As I understand it, given that the government and cabinet already do calculations for all government initiatives put forward by way of statute or changes in policy, given that it already happens in camera in cabinet, and given that the information is not always made public in the process that brings bills into the House, I am very much in favour of a House mandated procedure that would cause the numbers to be placed in front of all of us as we debate, pass and not pass legislation.

With tongue in cheek I might ask-and I do not need the answer-whether there is an estimate provided by the mover of the bill of its financial impact. It might have been a nice start. I do not know whether the hon. member has done that, but it is a great idea and I will support it.

Program Cost Declaration ActPrivate Members' Business

6:05 p.m.

The Deputy Speaker

The hon. member for Durham will sum up the debate, there being no further speakers wishing to rise.