Mr. Speaker, I would like to begin by commending the member for Etobicoke North for his contribution to improving a very important area of user charging.
The government acknowledges that improvements can be made to our fee setting process. In fact, it is currently working on a policy review which I believe addresses a number of the concerns raised by my colleague in Bill C-212.
I would like to begin by providing some contextual and background information. Cost recovery and charging have existed in one form or another since Confederation. Parks Canada, for example, has been charging for its services since the 1880s.
Today, the Government of Canada, like most other governments, charges for a range of optional and mandatory services for the use of public assets and for rights and privileges. Revenues from these various activities currently amount to about $4 billion per year. This is in relation to a total expenditure of some $170 billion.
Canada's user charges comprise about 2% of total federal government revenues. A study of charging practices in other jurisdictions showed that this was generally in line with other countries studied.
Cost recovery is a fair and equitable way of financing government programs and services, including those of a regulatory nature. Its longevity and universal application are a testament to the soundness of its fundamental principle. This establishes that it is reasonable that those who receive special services in excess of those enjoyed by the general taxpayer should bear some, or all, of the cost of providing those services.
I should emphasize that this rationale is not challenged by those who pay the fees. In fact, private citizens, industry representatives, academics, economists, the Office of the Auditor General and the Standing Committee on Finance have all voiced support for this fundamental principle.
The cost recovery and charging policy ensures that, under the responsibility of the individual ministers, the consideration and implementation of charging initiatives is subject to important principles and requirements.
As I have indicated, user charging is not an activity specific only to Canada. A comparative study on the issue showed that the core objective of user charging does not vary among countries; that is, that users pay for the special services they receive. This includes charging for the full or partial cost of regulatory activities.
As in Canada, other countries' fee setting processes are decentralized, which means that ministers are accountable for the charges implemented by their departments. It is important to note that not a single jurisdiction saw the need to have its user fee requirements set in law.
In terms of policy guidance, Canada was found to be most explicit on a number of important elements, most notably, consultation and service standards.
Further, Canada is one of only two jurisdictions that require departments to provide dispute resolution mechanisms, and the only one to require departments work with fee payers to assess impacts.
Can more be done? Yes, absolutely, and we are striving to make those improvements.
The government is in the latter stages of a comprehensive review of this policy. The review heard from 59 firms, industry associations and other non-governmental organizations. This covered some 70 programs of the 400 federal programs with user charges. The review results indicated that most areas of federal cost recovery programs seemed to be working quite well.
In particular, the review found that the majority of paying users contacted were satisfied with the approach and the level of consultation on user charges. However they did cite a frequent need for greater feedback from departments during consultations.
Also, the review confirmed that paying users have raised relatively few disputes with respect to their fees. When disputes did occur, they were mostly administrative in nature and almost always resolved through informal contact directly with departments.
However the review also found that there should be greater awareness among paying users of the existing dispute resolution mechanisms available to them.
The review, as supported by previous recommendations of the Standing Committee on Finance and the Auditor General, did, however, point to a need for clear direction in implementing the policy.
The proposed changes to the policy, therefore, will consider these recommendations as well as what was heard from users and departments. Namely: improved consistency through clearer overall direction with respect to what departments must do and consider when introducing or amending charges; greater clarification of the objectives and requirements expected for meaningful consultations; all programs with charges to have service standards, as well as consult with stakeholders on performance and on the measures to be taken if those standards are not met; increased attention on monitoring user charging activities within departments through stepped up Treasury Board Secretariat involvement.
In addition, every department will now be required to identify an individual at the assistant deputy minister level or higher to oversee the implementation of the policy and to serve as a point of contact for TBS.
Further recommendations are: increased direction and emphasis on establishing and communicating departmental dispute management mechanisms, including the provisions for independent advisory bodies to make recommendations to ministers; and, more open, clearly communicated information through enhanced annual reporting to Parliament and the public of such things as total revenue collected by the various types of charging activities and the performance provided to stakeholders.
This policy instrument, with its improvements ranging from greater monitoring to enhanced reporting, is intended to complement our existing standing committee system, a system that already provides the mandate for committees to flesh out issues relevant to Canadians.
It is important to note that the government is still working with the hon. member for Etobicoke North, industry representatives and departments on the revised changes to the cost recovery policy. A second draft of the proposed changes was distributed to all advisory committees in December 2002. Members, including industry representatives, are now in the process of submitting their comments.The second draft has also been shared with the Standing Committee on Finance so it can view the direction the government is proposing in a number of important areas.
The point being, that we continue to listen, to be open and to explore ideas for addressing concerns. We cannot , of course, promise across the board satisfaction with the end product given the nature and complexity of the issues at hand. However we are encouraged by the feedback from stakeholders and from the member for Etobicoke North, that we are headed in the right direction in a number of areas of concern.
Much of Bill C-212 appears aimed at issues related to regulatory activities and programs. Let me assure my colleagues that regulation does not exist for its own sake. Regulatory programs exist in response to the calls of generations of Canadians for the protection of their health and safety.
A report drafted last year for the OECD-wide review of regulatory reform in Canada stated the following:
Canada was one of the first OECD countries to adopt a regulatory reform programme and has pursued ever broader and deeper reforms for the past 25 years. The quality of its regulatory governance is almost certainly a key contributor to its successes in terms of both economic performance and the achievement of its social goals.
These words do not describe a system in need of major overhaul. We are striving to do better. The Smart Regulation Strategy announced in the last Speech from the Throne aims to accelerate reforms in key areas to promote health and sustainability, to contribute to innovation and economic growth, and to reduce the administrative burden on business.
No one is arguing against reforms. There is no system or organization that cannot be improved. We continue to work with stakeholders, and again, with my colleague from Etobicoke North, to find solutions and improvements to the cost recovery system.