Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce

Issue 8 - Evidence

The Standing Senate Committee on Banking, Trade and Commerce, to which was referred Bill S-11, to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence, and Bill S-17, to amend the Patent Act, met this day at 3:50 p.m. to give consideration to the bills.

Senator E. Leo Kolber (Chairman) in the Chair.

The Chairman: Senators, we will start with Bill S-11, to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other acts in consequence thereof.

We have only one witness, Mr. Duff Conacher, Coordinator, Corporate Responsibility Coalition.

Please proceed.

Mr. Duff Conacher, Coordinator, Corporation Responsability Coalition: It is always a pleasure to appear before the Standing Senate Committee on Banking, Trade and Commerce. I am especially happy to appear again on what was Bill S-19 and is now Bill S-11, because it deals one of Canada's most important laws, a law that sets out the basic rules for federally incorporated corporations and is also leading legislation for corporate law across the country. More than 155,000 corporations are incorporated under the Canada Business Corporations Act, including half of the Financial Post's top 500 corporations in Canada.

You have before you the letter we sent to the committee last week, and I spoke on our various corporate responsibility measures when I appeared before you last May 3. I will, therefore, just quickly summarize the measures we are pushing for. Before I do that, I will set out for you the two very important themes that we are advocating.

First, we view corporate law as a spiderweb in Canada currently, a spiderweb that is strong enough to catch the weak but too weak to catch the strong. As a result, many corporations can act irresponsibly with little or no accountability to Canadians, to their workers, to the communities in which they operate, to their customers and, in some cases, to the communities in which they operate overseas. Our main objective is to have the spiderweb strengthened so that it is strong enough to catch not only the small corporations but the large ones as well.

We believe in a level playing field. We want you to level the playing field at a higher level so that corporate irresponsibility does not go unnoticed, untracked, and certainly not unpunished. To do so, we believe that you need to do much more than what has been done in Bill S-11. Since it was Bill S-19, some of the barriers to shareholders putting forward proposals to other shareholders have been removed. Other barriers remain, and we think those should be removed.

In addition, we believe that some fundamental changes are needed in terms of stakeholder rights and responsibilities of corporations to stakeholders. The major change that we are seeking is to add a requirement to the CBCA that corporate directors take into account stakeholder interests when making decisions and account publicly for how they do so.

On this point, Industry Canada consulted with various stakeholders in July, 1998 and through the rest of that year. Unfortunately, that consultation was essentially a failure to consult with Canadians in any meaningful way. Industry Canada sent a letter to about 1,900 entities about the issue of corporate directors and executives taking into account stakeholders when making decisions and in corporate activities. Only 41 citizen groups were included in the list of 1,900. I have the full list here as provided to us by Industry Canada. At the same time, over 1,700 corporations, corporate associations and corporate lawyers were consulted. That is completely invalid and undemocratic public consultation. On the basis of only 68 responses out of 1,900 letters that were sent, Industry Canada decided not to enact the measure requiring corporations to take stakeholders into account.

Of those 68 responses, 29 were from corporations, eight were from corporate associations, 15 were from corporate lawyers, and only four were from citizen groups. That is further evidence of how undemocratic that consultation was.

The federal government has refused and failed completely to consult with Canadians. It has ignored their concerns about irresponsible corporations while at the same time, in Bill S-11, has bowed to a powerful corporate lobby coalition that includes Alcan, BCE, Imperial Oil, Nova Corporation, Northern Telecom, TransAlta Corporation, and large corporate law firms.

We are asking that if do you not amend the bill you at least send a strong message to Industry Minister Brian Tobin that meaningful public consultation has not taken place on these issues of corporate responsibility. That consultation must take place and Bill S-11 must be amended to raise the standard of corporate citizenship and responsibility in Canada.

I will briefly summarize the other measures we are seeking. We would like a requirement for more detailed disclosure of the record of corporation on compliance with many laws; whistle blower protection for all corporate employees in order that they can blow the whistle and report corporate wrongdoing without fear of retaliation; the right for stakeholders to initiate a review of a corporation's overall activities; increased penalties for corporate wrongdoing, including changing the Criminal Code standard for holding a corporation accountable for the activities of employees at work; and a requirement for corporations to help create a nation-wide shareholders' association for individual shareholders by requiring corporations to send a one-page flier to their shareholders inviting them to join the shareholder association. That would involve no cost to the government or to the corporations covered by the CBCA, yet it would give Canadians an opportunity to band together and form a watchdog group that could help individual shareholders protect themselves when corporations ignore their concerns. It would also help to ensure that the decision making and considerations of corporations would be broadened to include stakeholders.

I would request that you send a message to Industry Minister Brian Tobin and the House of Commons Industry Committee as they review Bill S-11, telling them that if they will not amend the bill at least to take into account that the public has not been consulted on this very important bill, that the public should be consulted, if only to fulfil responsibilities under new draft guidelines currently before the Treasury Board concerning citizen engagement. The government should have a very high standard for engaging citizens on all issues of significance. The government has not followed these guidelines in Bill S-11, and that is unacceptable.

Senator Tkachuk: Who is Democracy Watch? Do you have a board of directors? Are you a non-profit organization? Who funds you?

Mr. Conacher: As I mentioned in my opening, it is always a pleasure to answer these questions before the Standing Senate Committee on Banking, Trade and Commerce. They seem to be consistently asked. In future submissions, I may include past transcripts so that you can refer to them and we can skip this question.

Senator Tkachuk: Things change.

Mr. Conacher: I hope that when corporate directors appear before this committee you ask them similar questions about how representative they are of their corporations and their share holders.

Senator Tkachuk: We do.

Mr. Conacher: Especially on policy questions, as I know that corporate directors never go to their shareholders on issues of policy.

Senator Tkachuk: I am not being argumentative, Mr. Conacher. I just want you to state for the record who you represent and who funds you.

Mr. Conacher: We are funded by individuals across Canada. There are about 1,000 members of Democracy Watch itself. Today, I am representing the nation-wide Corporate Responsibil ity Coalition, which is made up of 32 citizen groups with membership of over 2 million Canadians from seven provinces and the Northwest Territories.

Senator Tkachuk: Give me a couple of examples of larger ones.

Mr. Conacher: The Sierra Club of Canada and the Canadian Labour Congress are members, as is a coalition from British Columbia called End Legislative Poverty.

I believe you do have the full list. It was sent to you with this submission.

Senator Tkachuk: What response has your submission received from members of the House of Commons, the people who are actually voted in by Canadians?

Mr. Conacher: Former Industry Minister John Manley refused to meet with us. Current Industry Minister Brian Tobin has failed to date, after over a month in this portfolio, to respond to our request for a meeting. We have not appeared before the Industry Committee on these issues because Bill S-11 was introduced in the Senate, as was Bill S-19. We will appear before the Industry Committee when the bill goes on to the House. I can let you know then what their response is to these proposals.

The Chairman: Thank you, Mr. Conacher.

Mr. Conacher: I look forward to seeing your report and the amended bill as it moves on to the House.

The Chairman: Senators, is it agreed that we proceed to clause-by-clause consideration of Bill S-11?

Hon. Senators: Agreed.

The Chairman: Is it the intention of any honourable senator to propose an amendment?

Senator Kirby: I have some amendments to move.

The Chairman: We will come to those.

Shall the title stand postponed?

Hon. Senators: Agreed.

The Chairman: Carried. Shall clauses 1 to 41 carry?

Hon. Senators: Agreed.

The Chairman: Carried. Shall clause 42 carry?

Senator Kirby: I understand from the Clerk of the Committee that all these amendments, which came from the department, have been circulated to all members. They are technical in nature.

I move the amendment in relation to clause 42, which is on page 23 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Senators, shall clauses 43 to 54 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 55 carry?

Senator Kirby: I move the amendment to clause 55 on page 38 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Yes.

The Chairman: Shall clauses 56 to 58 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 59 carry?

Senator Kirby: I move the amendment to clause 59 on pages 42 and 43 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 60 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 61 carry?

Senator Kirby: I move the amendment to clause 61 on page 44 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 62 to 67 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 68 carry?

Senator Kirby: I move the amendment to clause 68 on page 48 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 69 to 96 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 97 carry?

Senator Kirby: I move the amendment to clause 97 on pages 58 and 59 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 98 to 99 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 100 carry?

Senator Kirby: I move the amendment to clause 100, which is on page 63 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 101 carry?

Hon. Senators: Agreed.

The Chairman: Clause 102 carry?

Senator Kirby: I move the amendment to clause 102, which is on pages 64 and 65 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 103 to 147 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 148 carry?

Senator Kirby: I move the amendment to clause 148 on page 93 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators:Agreed.

The Chairman: Shall clauses 149 to 152 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 153 carry?

Senator Kirby: I move the amendment to clause 153 on page 97 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 154 carry?

Senator Kirby: I move the amendment to clause 154 on page 97 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 155 to 160 carry?

Hon. Senators: Agreed.

Senator Kirby: I move new clause 160.1, which would be on page 98 of the bill.

Senator Meighen: I have no particular objection. I take the assurance at face value that these are technical amendments. However, there is a bit of an explanation given in the annex in the letter to you, Mr. Chairman. Could that form part of the record?

The Chairman: Certainly.

Senator Meighen: So the document that I have here entitled "Secret" will form part of our record.

The Chairman: Certainly.

(For text of document see appendix p. 8:37)

The Chairman: Shall clause 160.1 carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 161 to 184 carry?

Hon. Senators: Agreed.

Senator Kirby: I move new clause 184.1, which would be on page 108 of the bill.

The Chairman: Shall new clause 184.1 carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 185 to 192 carry?

Hon. Senators: Agreed.

Senator Kirby: I move new clause 192.1, which would be on page 116 of the bill.

The Chairman: Shall new clause 192.1 carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 193 to 205 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 206 carry?

Senator Kirby: I move the amendment to clause 206, which is on pages 119 and 120 of the bill.

The Chairman: Shall the amendment carry?

Hon. Senators: Agreed.

The Chairman: Shall the clause as amended carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 207 to 230 carry?

Hon. Senators: Agreed.

Senator Kirby: I move new clauses 230.1, 230.2, 230.3 and 230.4, which would be on page 136 of the bill.

The Chairman: Shall new clauses 230.1 to 230.4 carry?

Hon. Senators: Agreed.

The Chairman: Shall the schedule carry?

Hon. Senators: Agreed.

The Chairman: Shall the title carry?

Senator Kirby: Officials from the Department of Justice phoned me earlier this afternoon to say that the last two words of the title, those being "in consequence," need to be dropped. The title would read "An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other acts."I so move.

Senator Tkachuk: Why is that?

Senator Kirby: I have not the foggiest notion. Justice Department lawyers phoned and said those words should be taken out.

Senator Tkachuk: Did not they write it in the first place?

The Chairman: Is it agreed, honourable senators?

Hon. Senators: Agreed.

The Chairman: Carried.

Is it agreed, honourable senators, that the law clerk and parliamentary counsel be authorized to renumber the clauses and cross references thereto, accordingly, as a consequence to the amendments adopted today?

Hon. Senators: Agreed.

The Chairman: Shall the bill carry?

Hon. Senators: Agreed.

Senator Tkachuk: On division.

The Chairman: Shall I report the bill?

Hon. Senators: Agreed.

The Chairman: I ask Senator Tkachuk to report it on behalf of the committee.

Moving to Bill S-17, to amend the Patent Act, my deputy chairman and I have agreed that we will proceed to clause-by- clause consideration and then deal with the observations.

Is it agreed that we proceed to clause-by-clause study?

Hon. Senators: Agreed.

The Chairman: Is it the intention of any honourable senator to propose an amendment?

Senator Lynch-Staunton: Not at this stage.

The Chairman: Shall the title stand postponed?

Hon. Senators: Agreed.

The Chairman: Shall clause 1 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 2 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 3 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 4 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 5 carry?

Hon. Senators: Agreed.

The Chairman: Shall the title carry?

Hon. Senators: Agreed.

The Chairman: Shall I report the bill?

Would you report the two bills tomorrow, Senator Tkachuk?

Senator Tkachuk: We have to deal with the observations first.

The Chairman: My mistake. Let us deal with the observa tions.

Senator Lynch-Staunton: Our observations were circulated to all members in the hope that, if observations were to be included in the report, they would be those of the entire committee and not just some members. I think we have reached that stage.

The observations that have been agreed to are not as strong as we would have liked. However, that which is in the final version is the thrust of the problem, and that is the interpretation and dispute over the notice of compliance. I will not get into all the arguments that were given here last week and before.

I wish to draw to the attention of colleagues that the problem of this specific aspect of the regulations was studied by a House committee as a requirement of Bill C-91, which required that after four years it be reviewed by a committee of the House. I should like to read to members here an extract of the report of that committee to illustrate that this question of contradictory interpretations of regulations and the confusion over them is not new.

The committee has heard from many witnesses regarding the Notice of Compliance (NOC) regulations. We believe that these regulations are the heart of the debate and we have attempted to address the contention regarding them. In a specific round-table, the committee heard testimony from legal counsel from both the generics and the brand name industries. Options were discussed and the merits of each model were debated. The committee heard testimony from both sides suggesting that the system, in its present form, is problematic and has resulted in excessive litigation.

The committee concluded with the following statement:

With the complexities of these issues, the Committee recommends that the government re-visit the regulatory regime associated with Bill C-91, given the concerns that have been raised by the stakeholders.

In effect, the debate we have had here in the last two or three weeks is the continuation of a debate that has been going on for years. I hope that these observations will alert the government to the fact that there is a problem. It is not a question of our taking sides for one side or the other. Certainly, I am not. Our purpose in bringing these observations is to get the government to revisit the regulations and tailor them in such a fashion that this contro versy - which leads to excessive statements on both sides about how one is abusing them or the other is overusing them - can be reduced, if not eliminated.

Mr. Chairman, I noticed that at the time the committee wrote its report the stay period was 30 months. Since then, it was reduced to 24 months. Is there anyone here from Industry Canada who can explain how that change was made?

Mr. Rob Sutherland-Brown, Senior Counsel, Commercial Law Division, Industry Canada: The period was initially 30 months, and that was modelled on the same period in the same scheme in the United States. It was identified as being the time necessary to resolve allegations of infringement and non-infringement. It was envisioned by the regulations that in a summary proceeding 30 months would be enough time in which to resolve that issue. It was also designed to reflect the amount of time that a new drug submission or an abbreviated new drug submission would be before the Minister of Health seeking approval for a second-entry medicine.

During the review period, there was much evidence that the performance of the Therapeutic Products Programme at Health Canada had improved dramatically. Its average time decreased from 36 months to between 20 and 24 months. Some applications took more time to process, some took less. However, it seemed like 24 months would be more a reasonable reflection of the experience in the drug approval process.

Senator Lynch-Staunton: When was the 24 months deter mined?

Mr. Sutherland-Brown: There were amendments to the regulations in March, 1998.

Senator Lynch-Staunton: So it was quite recent.

Mr. Sutherland-Brown: Yes.

Senator Lynch-Staunton: Do you have enough experience yet to suggest that it could be reduced even more?

Mr. Sutherland-Brown: I understand that Health Canada has been working on further improving its delivery times and that the average time is now somewhat less than that. I do not know whether they have released their performance statistics over the last year. I know they are preparing them for the end of the fiscal year.

Senator Lynch-Staunton: Have you had a chance to see these observations, or a draft of them?

Mr. Sutherland-Brown: I saw an earlier draft.

Senator Lynch-Staunton: Are you satisfied -

Mr. Sutherland-Brown: I am in a very awkward position.

Senator Lynch-Staunton: I know you are, but are you satisfied with the accuracy of the statement of the situation? I am not asking you to comment on the observations.

Mr. Sutherland-Brown: I think it is probably a fair comment, sir. As I testified the other day, both sides try to extract maximum advantage out of the regulations, and that creates problems.

Senator Lynch-Staunton: I appreciate that. Thank you again.

Senator Oliver: Mr. Chairman, you said that you had received a draft from Senator Lynch-Staunton and that you had prepared your own draft based upon what you could live with. I notice that one of the things you took out was the last sentence in Senator Lynch-Staunton's draft, which said:

In addition, the Committee recommends any future proposed changes to regulations made under the Patent Act be laid before both Houses of Parliament before they come into force.

That is pretty common in a wide variety of statutes. The request is frequently made and often honoured. Why in the world would you not agree with that and why was it taken out?

The Chairman: Any place the word "recommendation" was used we took it out, because we were told that that causes too many problems.

Senator Oliver: What can be wrong with having those laid before this committee so that we can review them? It is done in many statutes. It is very commonplace.

Senator Furey: There is nothing to stop the committee from reviewing the regulations in any event. It does not have to be in the legislation.

Senator Oliver: It says here, "before they come into force." That seems to be innocuous. It is in the public interest. I cannot imagine why it would be taken out.

Senator Kroft: What is the distinction between the regulations in the form they would be in if this request were complied with and the regulations as gazetted in advance? Are they not the same?

Senator Oliver: Not at all.

Senator Kroft: They are gazetted in advance. That is the purpose of gazetting them.

The Chairman: We can review them once they are gazetted. It is not a fait accompli. The whole purpose is for us to look at them and have a hearing on them.

Senator Lynch-Staunton: Gazetting is simply an indication to the limited public that reads the Gazette that these are open for observations or recommendations, which is not as strong as stating that they should be before the Parliament of Canada before they are gazetted and then sent for gazetting. Once they are gazetted, they may as well be considered done.

I do not want to quibble, but we have found reports from Senate committees as recently as two years ago that have recommendations. They are standard. I am glad that Senator Oliver picked up on that. This committee could help a lot by looking at amended regulations, as I hope they will be, before the government approves them. There is no point in getting them after they are passed.

Senator Tkachuk: Can we not use another word besides "recommend," if that bothers the government for some reason?

Senator Oliver: "Strongly urges" or "suggests."

Senator Lynch-Staunton: "Suggests" is not very strong. I think that "recommends" is quite appropriate. The minister gets a recommendation from a Senate committee that has studied this bill and believes that it would improve the system if he or she did what is being recommended - that is, review the regulations with a view to narrowing the gap between the two competing parties, eliminate the rancour, and not give one side or the other an advantage.

The original draft that we sent to members said "the committee strongly recommends that the minister," et cetera.

The Chairman: We will not put in "strongly recommends" because we are told we cannot.

Senator Lynch-Staunton: You can put in anything you want.

Senator Tkachuk: Who says we cannot?

The Chairman: I propose that we add as a last clause, the following: "In addition, the Committee suggests any future proposed changes to regulations made under the Patent Act be laid before both Houses of Parliament before they come into force."

Senator Oliver: You are just taking out the word "recom mends"?

The Chairman: Yes, and replacing it with "suggests." That is what Senator Angus suggested and we are happy to comply. Is that acceptable?

Senator Lynch-Staunton: A recommendation is stronger than a suggestion.

The Chairman: That is as far as I can go.

Senator Lynch-Staunton: Why do you say "I can," Mr. Chairman? I do not know why you have to decide.

The Chairman: I mean our side.

Senator Lynch-Staunton: I do not dare speak for my side. I admire you for having the right to speak for your side. I thought you were chairman and did not have a side.

Senator Angus: Would you accept "strongly urges"?

The Chairman: We would accept "suggests."

Senator Oliver: We should like the observations to read: "In addition, the Committee strongly recommends any future pro posed changes to regulations made under the Patent Act be laid before both Houses of Parliament before they come into force."

The Chairman: Gentlemen, if you want to agree to "suggests," that is fine. If not, we will do it on division.

Senator Angus: Could you explain the problem with the word "recommend," and who is saying that we cannot use it? Is there some legal reason?

The Chairman: That is what we have been told, yes.

Senator Angus: Why do you not tell us?

The Chairman: It is top secret.

Senator Lynch-Staunton: Let us not trivialize this.

Senator Kroft: It is ridiculous.

Senator Angus: It is ridiculous to say that it is top secret.

You said that you will not include the word "recommendation," yet you will not give us a reason, which is what has provoked this debate.

The Chairman: I am telling you what I know I can deliver and what I cannot.

Senator Lynch-Staunton: Mr. Chairman, we are all in this together. This is not your report; this is the committee's report. If the committee unanimously agrees that it should make a recommendation to the minister, it is perfectly appropriate that it do so. We are not ordering him to do so or not commanding him to do so; we are recommending and urging him to do so. At the same time, once the regulations are in a new form, we recommend or urge that they be tabled. He does not have to follow our advice, but by using those words he knows that we feel very strongly. To simply say that we suggest is a passive recommendation.

Senator Angus: He will accept "demand," "urge" or any word other than "recommend."

Senator Lynch-Staunton: "Demand" is a bit stronger.

Senator Oliver: We are only asking to do something that we think is in the public interest. We are doing something to try to help the people of Canada.

The Chairman: We are willing to go along with it except for the word "recommends."

Senator Kroft: What text are you working from?

Senator Tkachuk: He wants to add to that.

Senator Oliver: The last sentence should read as follows: "In addition, the Committee strongly recommends any future pro posed changes to regulations made under the Patent Act be laid before both Houses of Parliament before they come into force."

Senator Kroft: What is your intention; what should happen when it is laid before both Houses of Parliament?

Senator Oliver: It is like legislation that is laid before the Standing Senate Committee on Banking, Trade and Commerce. We analyze it.

Senator Kroft: Yes, and then we put it to a vote.

Senator Oliver: We do not put every single thing to a vote. Much of our work does not come to a vote.

Senator Kroft: I am trying to understand what process is envisaged.

Senator Oliver: This committee has studied regulations before and has made recommendations on them in order to improve upon them in the best interests of all Canadians. It is pretty standard.

Senator Tkachuk: How do those regulation get to the committee?

Senator Oliver: They would be laid before the Senate and before the House of Commons.

Senator Wiebe: Would they be in the form of a bill?

Senator Oliver: No, as regulations.

Senator Kroft: In some legislation, it is stipulated that particular regulations have to be put before the committees of both Houses; however, if it is laid before the chamber that legislative body has to react to it in some way. I do not know what that reaction would entail.

Senator Lynch-Staunton: If it is a question of wording, it could read "tabled in the house and referred to the appropriate committee for study and report in 60 days." If that is the only problem, that could be reworded quickly. That is found in some legislation.

We are currently drafting laws of a general nature and leaving it up to very competent civil servants to flesh them out through regulations. Sometimes, however, the regulations do not reflect the intent of the legislators.

Senator Oliver: And they are often more powerful than the legislation.

Senator Furey: I believe that the thinking of the department is that the proposal being made now is with respect to something that is outside the scope of the bill we are dealing with. If we make recommendations as opposed to suggestions, we could run into procedural problems in the future.

Senator Angus: Such as?

Senator Furey: They may be totally out of order because they are outside the scope of that with which we are dealing.

Senator Lynch-Staunton: Clause 2 of the bill refers to subsections 55.2(2), (3) and (4), and those have to do with regulations. The bill that amends the Patent Act has direct reference to regulations. Therefore, it is quite in order to discuss the regulations. It reads:

The Governor in Council may make such regulations...

It is not inappropriate.

Senator Tkachuk: Let us take a little break to write up the amendment properly.

The Chairman: Do not come back with the word "recom mends" because I am informed that it could create difficulty.

Senator Lynch-Staunton: Could you give us a more expert opinion than the one you are reflecting? This committee itself has made observations and recommendations in reports in recent years.

The Chairman: I can only tell you that I have been warned not to use the word "recommends."

Senator Lynch-Staunton: I should like to have explanation.

The committee suspended.

The committee resumed.

The Chairman: The text reads as follows: "The Committee, therefore, suggests that the Minister, in a future review of the legislation and regulations in question, ensure that they do not provide any of the parties implicated in patent protection with an advantage unintended by Parliament. In addition, the Committee strongly urges that any future proposed changes to regulations made under the Patent Act be tabled in both Houses of Parliament and automatically referred to appropriate committees for study and report within 30 sitting days of their being referred to committee."

[Translation]

Senator Meighen: Is it possible to obtain the translation of this word?

Senator Poulin: We are wondering how this will be translated. We will ask the interpreters.

[English]

The Chairman: The clerk will have it translated into French.

Senator Meighen: It is done.

The Chairman: We are going to get Senators Hervieux- Payette and Poulin to check the French. Do you want someone on your side to check the French?

Senator Tkachuk: Yes, Senator Meighen will do it.

Senator Hervieux-Payette: I have the French. It is "exhorter."

The Chairman: Shall I report the bill with observations?

Hon. Senators: You shall.

The Chairman: I ask Deputy Chair Tkachuk to report the bill tomorrow in the Senate.

Senator Tkachuk: Mr. Chairman, I should like to get some legal advice about the use of the word "recommend," either in testimony or through legal counsel of the Senate so that we do not get into this situation again.

The Chairman: Yes. Can that wait until after the break?

Senator Tkachuk: Yes.

Mr. Denis Robert, Clerk of the Committee: If I may, rather than use legal counsel to the Senate, I would use the Clerk or the Deputy Clerk of the Senate, as this is not a legal matter. It is more of a procedural matter.

The Chairman: We will bring testimony. If you do not like it, we will get more testimony.

Senator Lynch-Staunton: I have here a copy of the report on Bill C-5, to amend the Bankruptcy and Insolvency Act, the twelfth report of the Standing Senate Committee on Banking, Trade and Commerce. The chairman was Senator Kirby and the deputy chairman was Senator Angus. On page 5, we see "Observations and Recommendations."

The Chairman: I understand that, but I am told that has been a mistake.

The committee adjourned.