Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 20 - Evidence
OTTAWA, Thursday, October 5, 2000
The Standing Senate Committee on Banking, Trade and Commerce, to which was referred Bill S-25, to amend the Defence Production Act, met this date at 11:00 a.m. to give consideration to the bill.
Senator E. Leo Kolber (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, I see a quorum. We are meeting to discuss Bill S-25, to amend the Defence Production Act. Appearing before us will be the Honourable Alphonso Gagliano, Minister of Public Works and Government Services, along with witnesses from the Department of Public Works and Government Services and the Department of Foreign Affairs and International Trade.
Hon. Alphonso L. Gagliano, Minister of Public Works and Government Services: Honourable senators, I am happy to be here to make some comments on this very important bill. I wish to thank you for your expeditious handling of it.
[Translation]
Why is this bill important to Canada? There are two reasons: firstly, it will make it easier to resolve the situation with the United States, but secondly, and more importantly, it will ensure that a system is instituted here in Canada to effectively monitor Canadian and U.S. security interests.
The environment is changing. New threats to security have emerged in the form of intra-national conflicts, the proliferation of weapons of mass destruction and international terrorism.
[English]
These new challenges are causing western countries, including Canada, to look at their defence needs in new ways. In the U.S., the changed perception of this threat, especially in Congress, has led to an increased focus on domestic security issues. As a global response to the increased risk of diversion, the U.S. tightened up its export controls over sensitive goods and technology. Canada was sideswiped by these broad concerns of new perceived security threats when the U.S. State Department amended the Canadian exemptions provision under ITAR, the International Traffic in Arms Regulations.
Many preferential elements that had previously been available to Canadian firms were removed and the definition of who could take advantage of Canadian exemptions was also narrowed considerably. This had major repercussions for Canada's industrial sectors, in particular, the defence, aerospace, and satellite industries. This action did, however, provide Canada and the U.S. with a convenient and timely opportunity to pursue extensive discussions on export controls of sensitive goods.
[Translation]
The amendments introduced have eliminated the preferential position previously enjoyed by Canadian businesses and imposed new licensing requirements for a wide range of goods and technologies. The changes have also narrowed the definition of who can benefit from the Canadian exemption. As far as our industry is concerned, the changes mean new administrative formalities and fees and significant delays, which result in lost business opportunities.
[English]
This is why we need Bill S-25. Canada must establish appropriate safeguards to assure both ourselves and our U.S. defence partners that certain controlled goods and technology, as set out in Canada's export control list, are available only to authorized individuals and companies. We need such assurance not only to protect certain controlled goods and associated technology of the North American defence, aerospace and satellite infrastructure, but also to encourage trade and improve Canada's national economic stability.
Putting these safeguards in place will be an important step toward reinstating the ITAR exemptions for Canadian firms, allowing once again for licence-free, cross-border transfer of most U.S. origin controlled goods and technology. A large part of this new system of safeguards is the proposed controlled goods registration program.
This Canadian-made registration system will be housed within my department and will ensure effective control of access to and the transfer within Canada of controlled goods and technology.
[Translation]
The new registration system is described in Part 2 of Bill S-25. The Defence Production Act is being amended to prohibit the examination, possession or transfer of controlled goods in Canada to a person who is not registered or exempt from registration under the Controlled Goods Registration Program.
Part 2 of the bill sets out the aim and objective of the program, describes the roles and responsibilities of the various parties involved, authorizes the Governor in Council to make regulations and places the Minister of Public Works and Government Services in charge of administering the system. Existing provisions in the Defence Production Act will become Part 1 of the new legislation, with the exception of those provisions respecting offences and punishment which will be included in a new Part 3.
[English]
Mr. Chairman, the registration system will work as follows: Companies or individuals that wish to be registered, or companies that wish to have a temporary worker or visitor exempt from registration, must apply directly to the minister. Registration will authorize the registered company's directors, officers and employees to access controlled goods, provided they are screened by the company.
If the application is approved, it will be up to the company to ensure ongoing compliance with the new regulations and to establish a compliance system that can be inspected. Companies will also be required to submit reports to the Department of Public Works and Government Services and to submit to periodic inspections by my department.
As minister, I will have the power to deny, suspend, amend, or revoke registrations and exemptions on the basis of a security assessment. I will also have the authority to request necessary information from applicants for registration or exemption.
The bottom line, honourable senators, is that when this bill becomes law, the transfer of controlled goods in Canada may occur only between registered persons and certain individuals or classes of individuals who may be exempt from registration. For example, U.S. visitors who are already registered with the U.S. government could be exempted.
[Translation]
As I was just saying, Bill S-25 adds a new Part 3 to the Defence Production Act which makes provision for appropriate punishment, including terms of imprisonment, for persons and companies contravening the legislation.
Pursuant to the new Part 3, all minor offences are punishable on summary conviction and persons found guilty are liable to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 12 months, or to both. Persons guilty of more serious offences will be liable, on summary conviction, to a fine not exceeding $100,000, to imprisonment for a term not exceeding 10 years, or to both. In cases where a person is found guilty of an indictable offence, the maximum fine is $2 million and imprisonment for 10 years. If an offence is committed or continued on more than one day, the person who commits the offence is liable to be convicted for a separate offence for each day on which the offence is committed or continued.
I want to stress that Part 3 of the amended Defence Production Act will provide for punishment not only for offences under the new registration system, but also for violations of the existing legislative provisions. We took this opportunity to tighten up the provisions respecting the punishment to be provided for under Part 1 of the Act, to ensure compliance with modern-day standards.
[English]
Honourable senators, the registration system that will be created by Bill S-25 is part of a broader arrangement under discussion between Canada and the U.S. to strengthen defence trade controls. It should pave the way for a meaningful Canadian ITAR exemption.
These amendments will also enable the expansion of my department's industrial security regime to cover all transfers of controlled goods and technology within Canada. As you know, my department is already working with the Department of Foreign Affairs and International Trade to harmonize Canada's domestic control of certain controlled goods.
I firmly believe the controlled goods registration program will not burden industry with undue costs or regulations. This is a necessary regime to ensure national security in North America. We know that about 70 per cent of the $18.5 billion in sales by the aerospace and defence industries in 1999 went to export markets, primarily the United States. While companies will have to absorb the administrative costs of complying with the amended Defence Production Act, these costs will be minimal, given the economic benefits that will result.
[Translation]
Some critics have argued that the bill is proof of our bowing to U.S. pressures. In point of fact, both Canada and the United States stand to benefit from the establishment of a clear North American zone with a view to preventing the illicit transfer of controlled goods and technologies. Both countries stand to benefit economically from maintaining in North America a strong, integrated industrial defence base, one that enables us to acquit ourselves of our defence and security responsibilities.
I am certain that you will agree with me that the strengthening and development of Canada's industrial security system is a laudable objective. Bill S-25 is an important step in the process of good government. It will confirm our partnership with the United States in the defence field and help to restore the preferential trade relations that have always existed between our two countries. This bill deserves the committee's backing.
Mr. Chairman, the government will be bringing in minor amendments during the clause by clause study stage of the bill. My associates and I would be happy to answer any questions at this time.
[English]
Senator Kelleher: I will say at the outset, I have no objection to this bill in principle. I had to deal with this matter in my previous incarnation as Solicitor General. The Americans had threatened to withdraw the benefits for Canada under this defence sharing agreement because of their concerns about perceived espionage emanating from the Russian embassy. As a result of those concerns, we declared a number of people persona non grata. The Russians retaliated and cleaned out our embassy in Moscow. We were eventually able to satisfy the Americans on this. Their sensitivity on this agreement is not new.
Our chairman received a letter from the Canadian Defence Industry Association dated September 26, 2000. Have you a copy of that?
Mr. Gagliano: Yes, I have.
Senator Kelleher: In the last paragraph, they say that the Canadian exemption will be largely reinstated if there is evidence that three major issues are being addressed: the tightening up of our own export controls, the harmonization of the Canadian export controls list with its American counterpart, and the implementation of a registration system.
You have dealt with some of those in your remarks. Are all three matters being addressed? Are we in active discussions with the Americans to try to resolve those three issues?
Mr. Gagliano: I will ask Mr. Fried to respond to your question.
Mr. Jonathan Fried, Assistant Deputy Minister, Trade and Economic Policy, Department of Foreign Affairs and International Trade: Honourable senators, we are indeed in active discussions with U.S. authorities, as we have been throughout the year. Indeed, all three elements will come into place with the passage of this proposed legislation.
The harmonization of the Canadian export controls list with that of the United States would be done by regulation under existing ministerial authority in the Export and Import Permits Act. Thus, no new legislation would be required.
Similarly, that would result in a tightening of controls from our border outward, again under the authority of the Export and Import Permits Act. The third element identified by the Canadian Defence Industry Association, namely, the registration system, would be addressed by Bill S-25.
Senator Kelleher: Assuming that we are successful in achieving this end, do you think that this will probably lead to Canada's reinstatement?
Mr. Fried: Indeed, our discussions with the United States suggest that harmonization works both ways. The United States itself, concurrent with our promulgation of regulations to update our list of controlled items, would similarly issue new regulations under the authority of the State Department, and under the ITAR, to reinstate the Canadian exemption. In fact it will be updated in some areas in a manner that would go further toward keeping the border open than they have to date.
Pursuant to Minister Axworthy's conversations with Ms Albright, most recently in June, when they issued a joint statement on this issue, it is the hope and intent of both Canada and the United States that the United States will move along with us during the fourth quarter of this year. Therefore, we do expect the U.S. to act quite promptly upon our completing our pieces of the puzzle.
Senator Kelleher: Mr. Minister, in the last paragraph on page 4 of your presentation to us you boldly state:
I firmly believe the Controlled Goods Registration Program will not burden industry with undue costs or regulations.
Have you a ballpark figure on the cost?
Mr. Gagliano: I will ask Mr. Hachey to provide some figures.
Mr. Dell Hachey, Director, Canadian and International Industrial Security Directorate, Supply Operations Services Branch, Department of Public Works and Government Services: The actual cost of running the program will be $2.5 million to $3 million annually.
The cost to industry will be quite minor because a large percentage of the companies which do have controlled goods are already in our classified industrial security program. Thus, a number of their employees have already been screened by government.
Under this program, however, a company will have to designate an official to ensure that controlled goods are properly controlled internally. That will be the main cost.
Senator Kelleher: Does the Access to Information Act apply to the provisions of this bill and to the Defence Production Act as a whole?
Mr. Fried: Yes, it does. However, so too do the protections for commercially confidential information, and there is the possibility of applying coverage for national security purposes.
Senator Forrestall: Minister, I would like to follow up on Senator Kelleher's line of questioning. As you are aware, all regulations made under the Defence Production Act up to this point must be published in the Canada Gazette. The authority for that, of course, is in subsection 34(1). Under subsection 34(2) there is a requirement that the regulations be subjected to committee review. Clause 4 of Bill S-25 would amend section 34 to apply only to the first part; thus the regulations made under the new clauses are not subject to publication or parliamentary review. Can you tell us why regulations made under the new provisions are excluded from this process?
Mr. Gagliano: I will ask my officials to respond.
Mr. John Clifford, Legal Counsel, Trade Law Division, Justice Canada, Department of Foreign Affairs and International Trade: Clause 34 is an amendment to an existing provision in the Defence Production Act. It is a consequential amendment because of the reordering of the sections. It is an existing provision which is confined to regulations made under Part 1. Thus it preserves the status quo for regulations made pursuant to Part 1.
The existing section 34 reads:
Every regulation, as defined in the Statutory Instruments Act, made under authority of this Act shall be published in the Canada Gazette within 30 days after it is made.
The consequential amendment, in reordering the act into parts, requires that the notion of the "part" be introduced into the existing section.
The effect of that on the regulation-making authority under the bill under consideration is that the Part 2 regulations would be published in the ordinary way, and not in accordance with clause 34. Regulations made under clause 34 would be in connection with Part 1 only. Thus we would not be changing the existing situation under the act.
Senator Forrestall: My reading of it was fairly clear. I thought there was a purpose in excluding the requirement. If I have misread it, then I apologize for taking up the time of the committee with it. I do not want to get into a lengthy discussion here.
If the witness from the Justice Department is satisfied that in fact it does not preclude the review and publication, then that is fine. That is the answer and I simply misread it. However, I am not certain that I misread it at all. It was fairly clear.
Mr. Clifford: Sir, the regulations to be made under the new Part 2 would have to be published in the ordinary way which, as I understand the current federal regulatory policy, is in the Canada Gazette, Part I, to allow for comment and consultation, and to take the views of affected parties into consideration in a revision of proposed regulations. That would then be followed by publication of the final regulations in Canada Gazette, Part II.
Senator Forrestall: The amendment is such that it applies only to Part 1. Can we assume, then, that regulations made subsequently -- and this is the main question -- will be published? Will they be subject to parliamentary review and comment?
Mr. Clifford: In the ordinary way, as required by the Statutory Instruments Act, yes, senator. The regulation-making authority under Part 2 of the bill in front of this committee would not be affected by the amendment to subsection 34(1). That is because section 34 applies only to regulations made under Part 1; it does not apply to regulations that would be made under the authority of this amending bill.
The Chairman: Over the preceding 10 to 12 months, and I am sure for a long time, all proposed legislation that has come before this committee leaves an enormous amount of material to be done by regulation. There is a parliamentary committee that reviews regulations. The attitude of this committee is that some of the material that comes here is extremely technical, and the parliamentary committee that reviews regulations, which is composed of both senators and members of the House of Commons, may not be properly equipped to study those regulations. They may or may not be equipped; I do not know.
We have been asking for some undertaking from the minister on each of these pieces of proposed legislation. We have asked that, after regulations have been promulgated, this committee be given a copy for review. It would not be for the purpose of hearings, as we do not want to get into that. If something sticks out like a sore thumb, we would like to know about it. In passing this bill, we are sort of writing a blank cheque. If you want to do the entire thing by regulation, you will have two sentences here in the bill, and the rest by regulation. I do not suggest that is your intention. However, as watchdogs, it has to be our intention to at least have some kind of an oversight.
We would ask the minister to undertake to at least deposit the regulations with us once a year. We have asked other ministers the same thing and they have agreed.
Mr. Gagliano: I have no problem with that request. However, Mr. Fried would like to add some comments.
Mr. Fried: If I may provide some context as to why Part 1 alone comes before this committee, or why these regulations are tabled in Parliament as opposed to the rest of the proposed legislation, if you go back in time to the original, core objectives of the Defence Production Act, it did directly involve major contracts, government spending, and specific commercial transactions with firms.
My understanding of the legislative history is that that was sufficiently important to require parliamentary scrutiny, even at the regulatory level.
The ordinary process of regulation-making, where the minister is acting solely within the discretion which Parliament has granted to him, and which is reflected in Part 2, is not of such an extraordinary nature that the regulations would have to be processed through Parliament. As my Department of Justice colleague said, it would follow the ordinary regulatory policy of government that does allow for scrutiny, as the chairman has noted, and certain quality controls.
Thus, limiting the parliamentary dimension of regulation-making to Part 1 has an historical anchor in the commercial contract dimensions of the Part 1 authority, as opposed to the new, Part 2 authority. I hope that provides some clarification.
Senator Forrestall: I cannot say that it does, but I have one other question and time is of the essence.
Minister, most Canadian laws that grant powers of inspection also require that where the inspector believes that the object of the inspection is relevant, that belief must be on "reasonable grounds." Some examples would be the Employment Equity Act, the Fisheries Act, and the Firearms Act. Could I ask why Bill S-25 does not impose this requirement in paragraph 42(2)(b)?
Mr. Gagliano: Senator, we will be making an amendment replacing the line with "the inspector believes on reasonable grounds." The amendment should cover your concern.
Senator Forrestall: That covers a proposed amendment of mine. That is fine. That is all I have, except to say that unless my other concern is covered by an amendment, I will have at least one other.
Senator Kroft: Minister, I ask this question in the context of proposed legislation that has come before us in the past year. A common element has been the gathering of information about individual Canadian citizens. To some extent, we understand that this is an inevitable consequence of modern society and we need to accept that. However, we also need to maintain a constant state of vigilance as to how this is managed, the extent of it, and what the protections are.
What increase would you expect in information-gathering about individual Canadians as a result of this proposed legislation? Could you provide some comfort about efforts to limit any excesses in this area and to ensure the protection of that information? What specific role may be played by the Privacy Commissioner?
Mr. Gagliano: That question allows me to express my own concern. I can assure honourable senators that, prior to drafting this proposed legislation, cabinet colleagues and I were seriously concerned to ensure the protection of information, the right to privacy, and so on.
I will make the commitment, as minister responsible, that this bill must definitely ensure that we are careful and diligent in entering into this type of work. We might hurt the innocent.
On the other hand, modern technology can often create new problems that must be faced. Therefore, after long and careful consideration, we had to move to this type of proposed legislation to protect the Canadian interest, industry, and security.
I am well aware of the legacy that rests in this bill. However, we must proceed with it to ensure that measures will be taken to protect the information in a proper manner.
Senator Kroft: Specifically on the Privacy Act, does the Privacy Commissioner have access?
Mr. Fried: Yes.
[Translation]
Senator Poulin: Mr. Gagliano, you talked about major repercussions for Canada's industrial sector. Could you give us some idea of the actual consequences of this initiative? How many industries will be affected and what kind of yearly figures are we talking about?
Ms Billings: Last year, for example, the aerospace industry accounted for nearly 100,000 jobs and for over $17 billion. Defence is a very important industry. We do not know exactly how much is at stake overall, but judging from the discussions we have had, this industry is very important to the Canadian economy.
Senator Bacon: Mr. Gagliano, you stated on page 5 of your presentation that according to some nay sayers, this bill is proof that we are bowing to U.S. pressure, even though both Canada and the United States stand to benefit from the establishment of a clear North American zone. Could you elaborate further on this statement? When you say that both countries stand to benefit from an economic standpoint and that we are not caving in, do you mean to say that both sides reap equal benefits, or that the split will be 50-50, or 60-40?
Mr. Gagliano: As a result of these changes, our Canadian industry will be in a position where it can continue to do business and seize the opportunities that present themselves. Earlier, we threw out some figures. I am not certain whether the benefits will be split evenly between the two countries, that is 50-50, but our industries definitely do play a very important role and this bill ensure that they will continue to be players.
All North American defence industries are linked in a crucial way. If the United States and Canada can continue to work together, these industries will experience growth. Growth is a part of this industry. This sector is responsible for the emergence of many technologies. Therefore, we definitely have a strong industry and it certainly stands to benefit even more from this legislation.
Senator Bacon: Are any particular regions in Canada targeted more by development?
Mr. Gagliano: I would have to say Ontario and Quebec.
Ms Billings: All provinces are.
Mr. Gagliano: All regions are, of course, but these two provinces more particularly. The high tech sector accounts for 85,000 jobs across Canada.
[English]
The Chairman: Is it agreed, honourable senators, that the committee move to clause by clause?
Mr. Gagliano: If I may just respond to the previous statement by Senator Forrestall. As minister, I have no problem on the surface with the amendment. However, the Department of Justice has some technical questions. I do not wish to lose any time, but perhaps when we get to clause-by-clause consideration of the bill, that can be addressed.
The Chairman: Let us address that when we get to clause by clause consideration of the bill.
Mr. Gagliano: There should be some discussion as to exactly what that means. I am a lawyer and I have no problem with that, but sometimes that does not mean that I understand the full impact.
The Chairman: I am now proposing that we proceed to clause-by-clause consideration of the bill.
Senator Forrestall: If I may beg your indulgence and make one other technical point with respect to the bill that may be covered, which will get rid of me.
The numbering of the clauses suggests that there are a total of 46, plus a schedule. Clause 7 of the bill indicates that the schedule will be added after clause 47. This may be a simple error in numbering. However, if not, where is clause 47?
Mr. Gagliano: That is an error and it will be changed.
The Chairman: Let me point out that we have eight clauses to review. Clauses 5 and 7 have amendments. Senator Forrestall has proposed two amendments, one of which is now redundant. Shall we proceed?
Mr. Gagliano: If I may I be excused?
The Chairman: Thank you for being here and we will carry on.
Mr. Fried: Similarly, Mr. Chairman, you will be better served by having legal counsel at the table rather than a policy official at this stage of your proceedings, so I too shall stand aside.
The Chairman: Is it agreed, honourable senators, that the title stand postponed?
Hon. Senators: Agreed.
The Chairman: Carried.
Is it agreed that clause 1 carry, honourable senators?
Hon. Senators: Agreed.
The Chairman: Carried.
Is it agreed that clause 2 carry, honourable senators?
Hon. Senators: Agreed.
The Chairman: Carried.
Is it agreed that clause 3 carry, honourable senators?
Hon. Senators: Agreed.
The Chairman: Carried.
Is it agreed that clause 4 carry, honourable senators?
Hon. Senators: Agreed.
The Chairman: Carried.
Clause 5. It is moved by Senator Rompkey:
That Bill S-25 be amended in clause 5, on page 2, by replacing, in the English version, before line 1, the title "REGULATION OF CONTROLLED GOODS" with the following:
"REGULATION OF ACCESS TO CONTROLLED GOODS".
Senator Rompkey: We learned from the French version, which is more accurate.
The Chairman: Is that agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: Carried.
Clause 5. It is moved by Senator Rompkey:
That Bill S-25 be amended in clause 5, on page 2, by replacing line 13, with the following:
"registration under 39 or 39.1, knowingly ex-".
Senator Rompkey: That is simply a result, Mr. Chairman, of amending clause 39 and subclause 39(1), which will come later.
The Chairman: Is that agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: Carried.
Clause 5. It is moved by Senator Rompkey:
That Bill S-25 be amended in clause 5, on page 3, by
(a) replacing lines 21 to 23, with the following:
"39. Individuals of a class prescribed by regulation are exempt from registration.
39.1(1) The Minister may, in accordance with the regulations, exempt an individual from registration"; and
(b) replacing lines 33 to 35 with the following:
"(4) If an exemption is granted, the Minister shall furnish, in accordance with the regulations, a certificate of".
Senator Forrestall: Is that a process amendment?
Senator Rompkey: It is just wording. The previous wording was not entirely clear.
The Chairman: Is that agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: Carried.
It is moved by Senator Rompkey:
That Bill S-25 be amended in clause 5, page 4:
(a) by replacing, in the English version, line 26 with the following:
"inspection or copying any document that"; and
(b) by replacing line 27 with the following:
"the inspector believes, on reasonable grounds, contains any in-"
Do you wish to explain that, Senator Rompkey?
Senator Rompkey: I would defer to the officials at this point, Mr. Chairman.
Ms Billings: We will ask our legal staff to explain some of the issues.
The Chairman: Actually, this is Senator Forrestall's amendment.
Senator Rompkey: I was about to say I did not have it in front of me.
The Chairman: It is Senator Forrestall's amendment, with which I believe the government is in agreement; however, I am not sure of that.
Senator Forrestall: I might be in agreement with the government; that might be the simpler way of doing it. Not having put it forward, I do not have to withdraw it. That is the amendment I was speaking about with the minister.
The Chairman: I think maybe they gave me the wrong one; I do not know. Is it the same one the government proposed? Is there any comment on this proposed amendment?
Mr. Clifford: Mr. Chairman, with respect to the first proposed amendment related to inspection or copying of any document?
The Chairman: You are going backwards. We have passed that.
Mr. Clifford: That is passed; sorry, I missed that. I gather the second item on the same page, Mr. Chairman, is the one to which you are directing my attention; is that correct?
The Chairman: The amendment under discussion begins by replacing the English version in line 26.
Mr. Clifford: We have no objection to that, Mr. Chairman.
With respect to the second item on that page...
The Chairman: "The inspector believes on reasonable grounds."
Mr. Clifford: Mr. Chairman, the bill has been designed to provide for administrative inspection. By introducing the words "on reasonable grounds," the standard is raised considerably. The inspector would then require reasonable grounds to look at materials in the files of a registered company.
It suggests that a criminal investigation is being undertaken in connection with that exercise. This is not the intent of the bill. In fact the bill does not provide for criminal searches. In the event that there is an allegation of a criminal offence, inspectors and other officials would have to follow the provisions of the Criminal Code and obtain a search warrant. There is no provision for a criminal search in this bill. That would be handled through the Criminal Code.
The wording of the amendment suggests that the inspector is doing something other than an administrative inspection. It suggests that the inspector is investigating criminal allegations.
The Chairman: Are you saying that the words "reasonable grounds" suggest a criminal investigation?
Mr. Clifford: The words do have some significance in criminal law and one would normally see them in connection with criminal searches. The intent of using "administrative inspection" is to enable the inspector to look at the security systems in place and suggest helpful alternatives, which is the normal practice of inspectors in other regimes throughout the government. The intention is not to have the inspector conduct a criminal search.
If the inspector found something in the course of an ordinary administrative inspection that he believed was appropriate for criminal investigation, he would have to obtain a search warrant in the ordinary way. Thus he would have to withdraw from the premises, and then, on reasonable and probable grounds, present sufficient evidence to obtain a search warrant under the Criminal Code.
For these reasons, I submit that the words "on reasonable grounds" would suggest, inappropriately, that the inspector is engaged in a criminal search.
Senator Furey: Mr. Chairman, who can accompany an inspector and who has access to the inspector's findings?
Mr. Clifford: As provided for in subclause 42(3), when exercising any authority under this part, an inspector may be accompanied by any other person he chooses. However, it is not the intention of the inspector to collect information that would result in the creation of a personal information bank within the meaning of the Privacy Act.
Senator Furey: However, that does open it up to a fishing expedition, does it not?
Mr. Clifford: One could characterize an inspection in any number of ways. In this bill we have been careful to avoid characterizing an administrative inspection as a criminal search.
Senator Forrestall: Paragraph 44(e) reads:
...fail to comply with any reasonable request of an inspector or otherwise obstruct an inspector in the performance of the inspector's functions.
There is provision in the act for punishment, including fairly stiff fines. I do not understand why your department and the Department of Justice are apparently at loggerheads over this. I have no difficulty with it at all.
I am not really satisfied with the explanation. However, the amendment put forward by the department is virtually identical to the one that I have put forward. Unless someone can convince me that it would do an extreme disservice to the process, I am inclined to accept the department's view on this and support Senator Rompkey's amendment.
The Chairman: Which is Senator Rompkey's amendment?
Senator Forrestall: The one he just moved about replacing a line in the English version.
Senator Rompkey: That was not my amendment. However, regardless of who moved it, I do support part (a) but not part (b). I would support the following amendment:
That Bill S-25 be amended, in clause 5, page 4,
(a) by replacing, in the English version, line 26 with the following:
"inspection or copying any document that"
I would not, however, accept the proposed subclause (b), which includes "on reasonable grounds," because there is some difficulty with that.
Thus I would support (a) but not (b), and I hope that Senator Forrestall will agree.
Senator Forrestall: Yes.
The Chairman: Therefore, it is moved by Senator Forrestall:
That Bill S-25 be amended, in clause 5, page 4, by replacing, in the English version, line 26 with the following:
"inspection or copying any document that"
Is that agreed?
Hon. Senators: Agreed.
The Chairman: The motion is carried.
Senator Rompkey moved:
That Bill S-25 be amended in clause 5, on page 5, by replacing line 16 with the following:
"sections 39 and 39.1, including".
Is that agreed?
Hon. Senators: Agreed.
The Chairman: Shall clause 6 carry?
Senator Rompkey: Agreed.
The Chairman: Now we come to clause 7, which has an amendment.
It is moved by Senator Forrestall:
That Bill S-25 be amended in clause 7, on page 7, by replacing line 35, with the following:
"section 46, the schedule set out in the".
Is that agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: Carried.
The Chairman: Shall clause 8 carry?
Hon. Senators: Agreed.
The Chairman: Carried. Shall the schedule carry?
Hon. Senators: Agreed.
The Chairman: Carried. Shall the title carry?
Hon. Senators: Agreed.
The Chairman: Carried. Shall the bill carry?
Hon. Senators: Agreed.
The Chairman: Is it agreed that Senator Rompkey report the bill, with amendments, to the Senate?
Hon. Senators: Agreed.
The Chairman: Thank you all for your time.
The committee proceeded in camera