Mr. Speaker, in response to (a), the fees charged by non-government inspectors to conduct mandatory inspections would be determined by market forces rather than the government. The current fees for inspections performed by non-government inspectors are expected to decline with the introduction of mandatory inspection requirements due to efficiencies gained through the economies of scale resulting from increased demand for inspection services and competition for business among non-government inspectors.
Measurement Canada has surveyed current non-government inspection fees. These fees are typically between $50 and $200 per device inspection. This represents a minor incremental increase over service contracts that responsible device owners typically have in place for maintenance of their devices.
Many non-government inspectors are currently located in non-urban communities such as Prince George, Saguenay, Thunder Bay, Timmins and Sudbury, and it is expected that services to rural communities will increase once Bill C-14 becomes law.
For the following sample costs, based on current non-government inspection fees, the assumption is that a non-government inspector would need to travel three hours to perform the inspection. It is unlikely that travel costs such as these would be applied in this manner, as many non-government inspectors are located in non-urban centres and would schedule multiple inspection activities in a geographic region for reasons of efficiency. If the non-government inspector performs examination activities at the same time as service work, no additional travel costs would be incurred by the device owner.
Examples of costs are as follows: for a device owner in the retail petroleum sector with four gas pumps that need to be certified, the cost would be approximately $90 per pump every two years. For the owner of four small platform scales, e.g. scales capable of measuring up to 50 kg, employed in any trade sector, the cost of the inspection and certification would be approximately $125 per device every two years. For the owner of four computing scales, e.g. scales found at a grocery store checkout, used in the retail food trade sector, the cost would be approximately $125 per device every five years. If
Measurement Canada conducted these inspections and uncovered non-compliance issues, the device owner would be required to call in a service organization to repair and recalibrate the devices. This legislative proposal will allow issues to be corrected immediately upon detection by non-government inspectors, an efficiency that will reduce device owners’ costs as well as enhance consumer protection.
Inspection costs are minimal considering the value of goods purchased and sold annually, and the possible negative implications for both device owners and consumers. For example, a typical gas pump measures approximately $500,000 worth of product over a two-year period.
In response to (b) and (c), the Birch report, a case study conducted in 2003 by the Organisation Internationale de la Métrologie Légale, used Canadian device compliance rates to estimate the "dollars at risk" for each type of device. When these figures were related to the cost of certification activities performed by government agencies, it was found that, for each dollar spent, $11 of inaccurate measurement was corrected. It was also found that, on average, total trade measurement inequity comprised 65% short measure, i.e., in favour of the device owner, and 35% over measure, i.e., in favour of the consumer.
In the same report it was stated that when the value of goods measured across trade measurement devices was determined and combined with the performance of these devices, the estimated benefit-cost ratio of the inspection system was found to be 11.4 for periodic inspection and 28.7 for targeted inspection. Periodic inspections would be equivalent to the mandatory frequencies that could be established as a result of Bill C-14 and targeted inspections are inspections of known problem areas.