Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 17 - Evidence for December 1, 2010
OTTAWA, Thursday December 1, 2010
The Standing Committee on Legal and Constitutional Affairs met this day at 4:35 p.m. to study Bill S-12, a third Act to harmonize Federal law with the civil law of Quebec and to amend certain Acts in order to ensure that each language version takes into account the common law and the civil law.
Senator Joan Fraser: (Chair) in the chair.
[Translation]
The Chair: Welcome to this meeting of the Senate Legal and Constitutional Affairs Committee. We are beginning our study of Bill S-12, a third Act to harmonize Federal law with the civil law of Quebec and to amend certain Acts in order to ensure that each language version takes into account the common law and the civil law.
[English]
In other words, it is a technical bill but an important one. We are privileged to have with us, as our first witness, the Honourable Robert Nicholson, Minister of Justice and Attorney General of Canada. He is accompanied by Mr. John Mark Keyes, Chief Legislative Counsel at the Department of Justice Canada.
Mr. Minister, welcome back to the committee. It is always a pleasure to have you with us.
Colleagues, we have only half an hour with the minister.
Robert Nicholson, P.C., M.P., Minister of Justice and Attorney General of Canada: That is true, although my colleagues from the department will be here to answer any other technical questions you have.
As you say, this is the third act to harmonize federal law with the civil law and to amend certain acts in order to ensure that each language version takes into account the common law and the civil law.
[Translation]
This is the third harmonization Bill. It seeks to amend 12 statutes, including the Canada Business Corporations Act, the Canada Cooperatives Act and the Expropriation Act.
[English]
Canada is a rich and diverse country with a unique legal landscape. A history of Canadian federal law benefits not only from the advantage of bilingualism but also from "bijuralism,'' which is the coexistence of two of the world's leading legal traditions, the civil law and the common law.
This bill is part of the Department of Justice Canada's ongoing harmonization program. Harmonization involves reviewing federal legislation to ensure that federal statutes and regulations that touch upon provincial and territorial private law or use its concepts are compatible with both the common law and Quebec civil law. This is an ambitious undertaking, involving the revision of the entire federal statute book, as well as new statutes and regulations.
Senators, I would suggest the harmonization amendments contained in this bill are terminological and non- controversial in nature and do not alter Parliament's legislated intent.
While federal legislation enacted since 1867 has generally included common law concepts and terminology, this has not always been the case for civil law. The harmonization program is intended to address this gap by amending federal law to ensure its compatibility with both legal systems.
The view of our government is clear: Harmonization is essential to provide all Canadians with equal access to the law.
It therefore responds to the need to ensure that four legal audiences — francophones governed by civil law, anglophones governed by civil law, anglophones governed by the common law and francophones governed by the common law — are able to read in the official language of their choice federal statutes and regulations that use terminology that respects the concepts, rules and institutions relevant to the legal system that applies to them.
There are, of course, other legal systems that interact with our federal law, notably international law. However, the purpose of this bill is to address the civil and common law systems.
This program of harmonization was established in the Department of Justice following the coming into force of the Civil Code of Québec in 1994. The civil code, which replaced the Civil Code of Lower Canada of 1866, had a significant impact on the application of federal statutes and regulations that refer to provincial private law. Harmonization of federal legislation with the civil law was undertaken to facilitate the application of federal legislation in that province.
Officials in my department first identified the legislative provisions that had a high potential of creating difficulties in their application because of interpretation problems related to bijuralism. In the case of Bill S-12, the Expropriation Act, the Canada Business Corporations Act and the almost identical Canadian Cooperatives Act were identified as priorities for harmonization. The other nine statutes proposed to be amended by this bill were chosen to continue the harmonization of statutes falling under Industry Canada's responsibility.
Once harmonization solutions for these statutes had been developed, discussions were undertaken with responsible departments in respect of the proposed amendments. Subsequently, my department held consultations with parties that would be affected by the proposed changes. It sought comments on a series of proposals related to the Canada Business Corporations Act and the Expropriation Act.
These proposals were included in a consultation document posted on the Internet by the Department of Justice. This document was also sent by mail to more than 350 parties, including provincial and territorial justice ministers and deputy ministers, Supreme Court of Canada judges, chief justices of federal courts and provincial courts, law societies, law professors and law practitioners. As for the other nine statutes affected by this bill, these amendments are similar to those made in the first two harmonization bills. The comments received during these consultations, I should tell you, were very positive.
I would like to provide the committee with a couple of examples from Bill S-12 to give you a bit of a glimpse of the amendments proposed in this bill. I would remind honourable senators that each harmonization change is explained in the clause-by-clause analysis binder that was provided to you and to each member of the committee prior to my appearance.
My first example is taken from clause 2 of the bill. In clause 2, it is proposed to amend subsection 8(2) of the Boards of Trade Act by adding the words "ou biens réels'' in the French version and the words "or immovable'' in the English version. These changes will ensure that this provision is understood by those four legal audiences I mentioned.
In its current form, this provision only addresses the common law audience in the English version and the civil law audience in the French version. The concept of "immovable'' must be added in the English version to address the anglophone civil law audience. Similarly, the concept of "ou biens réels'' must be added in the French version to address the francophone common law audience. This solution was adopted in previous acts and is now a common drafting practice in situations where these concepts are used.
My second example is taken from clause 13(4), where it is proposed to amend paragraph (c) of the definition "associate'' in subsection 2(1) of the English version of the Canada Business Corporations Act or by adding the words "or succession'' after the word "estate.''
This change purports to adapt the current provision that uses only common law terminology, i.e., the concept of "estate'', in the English version, so that it clearly applies to the civil law audience. For this purpose, the concept of "succession'' is added in the English version as it is the civil law equivalent of "estate.'' I hope you are following all this. In this case, the French version of the provision does not need to be amended since the term "succession'' is appropriate for both the civil and common law in French. Here again, this solution was adopted in previous harmonization acts and is now again a common practice.
In conclusion, I would remind honourable senators that harmonization not only improves the application of federal legislation in Quebec, but it also increases the effectiveness of the courts and the public administration responsible for the application of the law by making Parliament's intention clearer and by reducing problems in interpreting federal legislation in both systems.
The Chair: Minister, you have come to the right place if you want people to be interested in all this.
Mr. Nicholson: This is good.
The Chair: I remind colleagues that we have 20 minutes left with the minister.
Senator Wallace: Minister, as you pointed out, this is the third harmonization process that your department has been through. Does this harmonization process, the process of it or the approach, differ in any way from the previous two? Obviously the acts affected are different, but is the process or approach different in any way?
Mr. Nicholson: You always learn from when you first get started at something like that, but basically it is the same process. It is an ongoing process. The department is continuing to look at other pieces of legislation. This by no means will be the last harmonization bill that you will see.
Senator Wallace: Is it correct to say this third harmonization impacts only the province of Quebec? It has no impact on any other province or territory of Canada?
Mr. Nicholson: Again, it makes it easier for whatever audience is looking at these statutes. It is exact in both systems of law and exact in both official languages. For instance, if you are a solicitor in Ontario and you are doing business in Quebec, and vice versa back and forth, there will hopefully be a complete understanding of the laws and the nuances as it relates to private law.
Senator Wallace: But this process would impact only the laws of the province of Quebec?
Mr. Nicholson: Again, it is a better understanding of federal law, but it is in response, for the most part, to the civil code of Quebec that was enacted in 1994.
The Chair: If I might make a quick supplementary point, Senator Wallace: I believe I recall on an earlier harmonization bill hearing from francophone jurists not from Quebec that this was extremely important to them, because they have to deal with the common law, and the French version of federal law was couched in civil law terminology. To them, this was very important stuff.
Mr. Nicholson: Regardless of the audience, the statutes will be clearer with this legislation.
Senator Joyal: Mr. Minister, I am a great admirer of the capacity of the Department of Justice in doing this kind of work. In 1994, 300 statutes were identified as being the object of further harmonization down the road. How many of those statutes have been harmonized today after three initiatives?
Mr. Nicholson: I will turn this over to Mr. Keyes.
John Mark Keyes, Chief Legislative Counsel, Department of Justice Canada: Yes, you are correct. When we began this exercise, there were 300. Over the course of the next few years, Parliament enacted more statutes. By the time we started a systematic revision of all new legislation in 2002, we were up to about 350 statutes to be harmonized. At the moment, we are about midway through that process. We have done about 46 per cent of those that were required to be harmonized.
Senator Joyal: In other words, since 2001 and the first bill of harmonization until today, including Bill S-12, we would have done, in a span of ten years, about 47 per cent. Could we expect that it would take another ten years to complete the whole exercise?
The Chair: Senator Joyal, if this is a question that the minister will leave for Mr. Keyes, I will come back to you afterwards, because our time with minister himself is very limited, but Mr. Keyes will stay with us.
Mr. Nicholson: I am not putting a deadline on it. I asked the staff if they are continuing to work on that aspect and why they identified this particular legislation. They said that they generally identify the most risky legislation. There is legislation that is seldom used or looked at and with which the potential problems are very minor. They look at the most risky pieces.
As well, legislation drafted today is drafted in both official languages and harmonized with old bills, so that the problem does not exist with new legislation.
Senator Joyal: The process of drafting new bills of course recovers the terminology already in place and uses that new terminology in new legislation tabled in Parliament. We are not creating a backlog with new legislation.
Mr. Nicholson: No.
Senator Joyal: We are addressing only the old statutes.
[Translation]
Senator Carignan: The minister has just answered the question that I wanted to ask on the rationale used in selecting the acts to be amended in the bill.
The Chair: If I am not mistaken, that question has already been answered.
[English]
The Chair: Does the minister want to provide a further comment?
Mr. Nicholson: There are statutes at the provincial level that are similar to the Canada Business Corporations Act, for example. That is a compelling reason to ensure that federal legislation that governs corporations lines up with provincial legislation. This is one of the driving forces. The provisions of this bill are important to businesses across this country, so it makes sense to address these acts, as opposed to some other act that is rarely used or has few potential risks.
Senator Angus: Minister, I am a civil lawyer from Quebec. I am confused. I have always understood that the French and the English are supposed to be direct translations, one of the other. Is that your understanding of statutory drafting?
Mr. Nicholson: They are, but we have to encompass the concepts as they exist in both systems of law. They are supposed to be perfect. No one does it better in this world than we do.
Senator Angus: You used clause 2 as an example. I think that it is just a case of priority.
In the middle of clause 2(2) it says, in English:
. . . the name and style specified in the certificate are a body corporate, with power to acquire, sell and convey any real property or immovable. . .
In French it reads:
. . . dénomination et raison mentionnées dans le certificat, constitués en personne morale, ayant le pouvoir d'acheter, de vendre et d'aliéner les immeubles ou biens réels. . .
In the French, "real property'' or "bien réels'' is after "immovable,'' but in English it is before. Is there a reason for that or is that a mistake?
Mr. Nicholson: You will see both concepts sometimes. They are not exactly the same in the civil and the common law. In order to ensure it is exact, sometimes both terms are applied. You might see, in the English version, "mortgage'' and "hypothèque,'' but in French "hypothèque'' also includes the common law concept, so it depends.
Senator Angus: My point is that it is not an exact translation, because "bien réels'' is after "immovable'' in the French, but in the English "real property'' is before "immovable.'' I have found that in five places so far and I have only been at it for 20 minutes.
Mr. Nicholson: My time is limited, but I do want you to get an answer from Mr. Keyes.
Mr. Keyes: In drafting legislation, the idea is that each is equivalent in terms of its meaning, not necessarily in terms of the order in which the ideas occur. Our drafting convention is that in the English version, if we have what is called a "doublet,'' which is a common law term and a civil law term, in English, we will put the common law term first and the civil law term second, and it is the reverse in the French.
Senator Angus: That makes sense.
Mr. Keyes: The civil law term is first in the French version and the common law is second. It is a drafting style. One has to go before the other and in this way we think we achieve a certain equality of order.
Senator Angus: The mystery is cleared up. Thank you.
The Chair: Minister, you said that no one in the world does this better. It is nice to know that this is one of the wonderful and unique characteristics of this country. Do we help other bijural countries? There are some that have, I think, roughly comparable streams of legislation to get together.
Mr. Nicholson: It is interesting that you should ask that, because I raised this question with the department. When we talk about bijural jurisdictions, someone usually refers me to the laws of Louisiana. The Americans do not have quite the same challenges as we have in the sense that federal law does not impact on the state law.
Sometimes these are referred to as "Scots clauses.'' When the United Kingdom drafts according to the English common law, they put in a "Scots clause'' in recognition of the fact that the Scots have a version of the civil law as well.
I spoke with the High Commissioner of Malaysia. While they have the English common law, they have Islamic and other types of law as well. They tell me that our expertise is most helpful in drafting international conventions that have to incorporate more than one system of law. Apparently we have a particular expertise in that and it is difficult to name jurisdictions that have two official languages and two systems of law, the civil and the common law.
That being said, I am told that Canadians are very adept at putting together international treaties and conventions.
The Chair: That is terrific. Is this an export industry of which we can be proud?
Mr. Nicholson: I am not sure we are making any money on it, madam chair, but it is one way that Canada contributes to the international community.
The Chair: I think we will be able to liberate you at the time originally scheduled, minister. If Mr. Keyes will stay on, we will be grateful for that.
As always, you have been very helpful to us in our work.
Mr. Nicholson: Thank you.
The Chair: Colleagues, there are also in the room, from Justice Canada, two other officials who can come forward, if necessary. They are Mr. Luc Gagne, General Counsel and Director, Legislative Bijuralism Team (Revision Initiatives); and Mr. Marc Cuerrier, Senior General Counsel, Legislative Revision Services Group.
Welcome, gentlemen.
Senator Baker: Could we ask the witnesses to give us a general overview of the bill?
Mr. Keyes: I will begin at a fairly high level, to give you a sense of what is in the bill. The bulk of the harmonization involves three acts: The Canada Business Corporations Act; the Canada Cooperatives Act, which is similar to the Canada Business Corporations Act; and the Expropriation Act.
The revisions to the other nine are much less extensive. They are essentially relatively minor changes that are similar to the changes that have already been made in the previous bills. The other nine are also a collection of statutes that are the responsibility of Industry Canada. That is the other reason for congregating them together; we could work with that department to put them together as a package.
Senator Baker: Is there some duplication here where you are correcting the same matter in various pieces of legislation?
Mr. Keyes: Many of the changes are the same change. It is the same problem and issue that arises in many instances.
Senator Baker: Mr. Keyes, in answer to a question from Senator Joyal at the beginning of this proceeding, you suggested there was a plan to try to bring everything in order over a period of time. How far can you go in predicting what needs to be done? Is it not a rather movable thing; is it not rather continuous to such a point where you would have to schedule regularly over a period of time changes that will be necessary because of case law?
Mr. Keyes: You are right. This kind of work will never end. Harmonization has to be considered in drafting new legislation.
However, the process of correcting the existing statute law is a finite process. We narrowed it down to about 350 statutes that require harmonization. That number is no longer increasing because each new piece of legislation the government puts forward is harmonized.
Also, in some cases, we are putting forward new legislation that is replacing some of those old statutes. In that context, as well, we are accomplishing harmonization. A good example of that is the Not-for-Profit Corporations Act enacted a little while ago. It replaced the old Canada Corporations Act, which had never been harmonized. In so doing, we crossed off another act from that list of 350.
Senator Baker: In June of last year, there was a decision by the Supreme Court of Canada in Caisse populaire Desjardins de l'Est de Drummond v. Canada, 2009. Paragraph 45 says:
In s. 224(1.3) ITA, the word "interest'' in English is rendered as "droit'' or right in French.
Then I look at one of the sections you are amending under this piece of legislation. Clause 7 affects the Business Development Bank of Canada Act, and you are adding the words ". . .in Quebec, a right in a security. . . .'' Prior to that is the word "interest.'' It then says:
(1) The Bank may
(b) surrender the security, security interest or right in the security. . . .
Therefore, you are now addressing that as it pertains to the Business Development Bank of Canada Act, whereas last year the Supreme Court of Canada was addressing the same problem in the Income Tax Act as it related to a problem with the Quebec civil law.
There is no other way of doing it, I suppose. You are doing it piecemeal and you are addressing what is one act and which needs to be corrected in another act. I suppose there is no other way of doing it.
Mr. Keyes: You cannot do everything at once. We try to prioritize and if there is a high risk in another area, then we will move to that area.
I will ask Mr. Cuerrier to respond to that because he knows a lot more than I do about the income tax amendments.
Marc Cuerrier, Senior General Counsel, Legislative Revision Services Group, Department of Justice Canada: We have been proceeding with these bills by bunching together statutes that relate to corporate law, the principal statute in this bill being the Canada Business Corporations Act. We are not in a position at this stage to make horizontal changes across all statutes. We would rather deal with a bunch of statutes that are related to a principal statute. We have adjusted and we have provided proposals with respect to related statutes, and the theme here is corporate law.
Senator Baker: I asked Mr. Keyes a question: When the matter arises in the future, would there be any reason for a court to make reference to the changes that are herein contained in this legislation to perhaps suggest a comparable interpretation to the subject under adjudication, such as the Bank Act, which is not addressed in this legislation?
Mr. Keyes: Are you asking about a situation where a provision has not been harmonized?
Senator Baker: Yes, but its applicability to what you are doing in this act and other acts and the subject matter are the same.
Mr. Keyes: It is certainly something we would advance in arguments that we made on the matter: The laws have to apply to both systems. Although we have a harmonization program in progress, it is not completed yet. In a way, we are saying to the courts: "You still have to approach some of these provisions the way you used to before the harmonization program came about. You have to interpret that provision without the benefit of the revision that harmonization would bring.''
Senator Joyal: I have a supplementary question. I would like to come back to the overall perspective of harmonization. The new civil code was adopted in 1994, as my colleague, Senator Angus, mentioned. Now we are in 2010, which is 16 years later.
In that period, we have had three harmonization acts. This is third one. You said in an earlier answer that you have defined priorities with regard to the 350 statutes that need to be harmonized. I agree with that logical approach, but I would like to get some idea of what is in the mill now. Once this bill is adopted by Parliament, what is your next priority? Where are we going down the road for the remaining 150 or so statutes that need to be harmonized?
I am not talking about the new bills, the new statutes. We understand they are settled in terms of terminology and a drafting capacity that takes into account the two legal systems. I am trying to understand the length of time that will be needed to digest those other 150 or so statutes and how you have divided that work in terms of groups of bills. Can we expect that in another maybe 10 years, if everything goes well and you have the money each year from Parliament and all the contingencies that we understand, we will have completed the catch-up with those 150 statutes. I do not know if I have been clear enough in my question.
Mr. Keyes: You have been very clear. Mr. Cuerrier is probably in the best position to give you a sense of how we have organized our program for the remaining statutes.
Mr. Cuerrier: What my colleague mentioned before is relevant to this answer. We have identified that there were 350 statutes that remain to be harmonized and there are, by the way, 2,400 regulations as well that need to be harmonized. Let us not forget we are working with bills and regulations at the same time.
First, we have from the start made sure that we were not adding to the number of bills and regulations that we need to harmonize. Therefore, we have divided our resources into two teams. One team follows the new legislation that is brought forward and passed to ensure there is no further build-up. The other team is working with different departments and on different legislation. As I indicated before, we have done a risk analysis in order to identify which legislation should come first. On the basis of that analysis, this particular bill was prepared. For future bills, we have identified that in as much as they relate to corporate law and the Canada Business Corporations Act, some candidates, such as the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, the Trust and Loan Companies Act and the Bills of Exchange Act were interesting candidates in as much as the same terminology applied to them. It would be logical to include those in the next harmonization bill.
We also have identified the Financial Administration Act. We are also working on a group of 50 statutes related to pensions, and also the Companies' Creditors Arrangement Act.
We are trying to bunch the legislation so as to be most efficient and as fast as possible in terms of addressing this huge number of bills and regulations.
We do not have a time frame as such. The reason why we are not trying to set up a time frame is that much of this harmonization work depends on how legislation is evolving. If some of the existing bills that are listed to be harmonized get reformed or changed, we will catch them at the new legislation stage.
There is another factor that is important. For example, in this bill, we have worked on the concept of beneficial ownership. That concept, as you know, is used in several pieces of corporate legislation — for example, la Loi sur les valeurs mobilières. It is also used across several bills in Quebec statutory law and Quebec civil law. Until recently, I think 2009, changes were being made to this concept of beneficial ownership.
Therefore, sometimes we have to sit back and see how Quebec addresses a problem, rather than move forward and have to change it after, because Quebec has adopted another position, another avenue, another strategy vis-à-vis certain problems.
In as much as the work that we do is related to both the evolution of the statute book, federally, and the evolution of provincial legislation, it is difficult to set a precise time frame for the completion of this work.
Senator Joyal: You just mentioned two sets of interests, one related to financial institutions generally. You mentioned the Bank Act and other financial institutions that might go under that umbrella. Then you mentioned another set of interests relating to pensions that would be in that bunch of 150 statutes.
How many of those clusters of interests have you identified, once you have completed those two you have just mentioned?
Mr. Cuerrier: We do have a plan and we have projected into the future, I guess up to a fourth, a fifth and a sixth bill. We are proceeding based on a plan that would provide for three other harmonization bills. Again, these are plans, and plans are made to be changed. Thus far, we have been able to follow this plan. The legislation that I referred to a moment ago could be part of a fourth harmonization bill.
I will turn to my colleague.
[Translation]
Luc Gagné, General Counsel and Manager, Legislative Bijuralism Team (Revision Initiatives), Department of Justice Canada: There is also a further variable to add to the equation. We work in lockstep with the departments responsible for the various acts. The Department of Justice cannot simply order other departments to harmonize their legislation by next year. It is always a collaborative process.
For instance, as my colleague, Mr. Cuerrier mentioned, we did some work on the Bank Act and other associated statutes. This initiative was undertaken two or three years ago. However, when we were in a position to approach the client department, they were not ready. They told us that the Bank Act and associated legislation would undergo comprehensive review in the next two or three years. They asked us to hold off, saying that harmonization amendments would be part of the review process.
This is yet another harmonization mechanism. Sometimes client departments are in the process of reopening their legislation and during our discussions with them they tell us that they are prepared to make amendments and ask us for our input.
This situation arose in relation to Bill S-6 and the First Nations Land Management Act a couple of years ago. We had been working on the file for some time but had never succeeded in bringing ourselves into step with the client department. However, at one point the stars aligned and the department was ready. We opted to proceed through Department of Indian and Northern Affairs sponsored amending legislation.
The same situation arose recently with the National Capital Act, which is now at report stage in the House of Commons. A comprehensive overhaul of the act is proposed. This is the result of several years of work that was never completed. There was a hiatus. Once again the stars aligned. The department indicated that it was now ready. As a result, we integrated our harmonization amendments into a bill to overhaul the statute.
[English]
Senator Joyal: I am on a supplementary question, I know, and that is why I need to be disciplined. I have some follow-up questions because I think the witnesses have touched on an important element of understanding what they are doing.
The Chair: It will be wonderful when you get your chance to pose a main question and pursue the matter. Senator Carignan.
[Translation]
Senator Carignan: It goes without saying that this is a very technical bill. Are you able to identify for us any substantive amendments or those that could be interpreted as such? In other words, I recognize that the bill is designed to reconcile and standardize concepts within the legislation without necessarily amending the substance. This is a difficult undertaking. We are currently doing this ourselves with Senator Fraser. The committee is reviewing the English and French versions of the Senate rules. From time to time, we come across specific sections where our review could potentially change the original intent. We have to make a choice. We have decided that wherever we consider we are amending the substance, we should inform Senators.
Now, if we apply that logic to the issue we are considering today, are there any specific areas of the bill that, in your expert opinion, are substantive amendments? If there are, what type of changes are we talking about?
My second question relates to the example of a Supreme Court ruling that Senator Baker gave us earlier. Are there any substantive amendments due to court decisions identifying problem areas?
Mr. Gagné: As far as your initial question on substantive amendments is concerned, we do not believe there are any in this Bill. The reason I say that is very simple. If our review of legislation reveals an issue that can only be resolved through a substantive amendment, we quite simply do not make that change. We report to the client and advise them to amend their own legislation. This would be done through department-sponsored amending legislation. We adhere to a very strict interpretation of our mandate. We only make harmonization-related amendments that do not affect Parliament's intent. We are always careful never to make substantive amendments.
I agree with you that this is sometimes difficult to achieve. However, whenever there is the potential for altering substance, we do not take any chances. We avoid making the change.
This is why some acts, when you read them, appear to contain specific bijuralism-related inconsistencies. Where harmonization has not been achieved, it is because we interpreted this as requiring a substantive change. We thus elected not to make the change. We made this point for the first and second harmonization bills. Check the transcripts. It is there in black and white. We maintain that position for this bill.
Senator Carignan: Am I therefore to understand that if there appear to be contradictions between the French and English versions of the Business Development Bank of Canada Act, which is not covered by this bill, this is because you believed that any attempt to rectify them would represent a substantive change? Therefore, you decided to leave it alone, right?
Mr. Gagné: That is right. It is not our mandate to correct errors covered by the Statute Amendment Act, for example. There is a different program for that. Sometimes, we are faced with very old legislation requiring a total overhaul. The Statute Revision Commission was recently reconvened after a hiatus of several years. We often come across, almost on a daily basis in fact, ideal candidates for this type of review. The regulation or the act is referred to the Commission Secretariat, which ultimately contacts the department.
We are required to make decisions on a daily basis. We play the role of legal advisor. We advise some clients to make the amendments through the harmonization program and others to use a different process.
Mr. Keyes: I would just like to add one point here. We endeavour, in the drafting process, to ensure that both versions of re-enacted provisions match. The drafting process is designed to ensure that each provision is equivalent. As a result, we believe that there is provision equivalency in this bill.
Any disparities in the basic provisions that are identified are resolved when the act is re-enacted. Two versions of an act that are not equivalent may not be re-enacted.
Senator Joyal: I would like to pick up again on the work planning process. If I understand correctly, you group together pieces of legislation relating to an area for which you have already developed terminology and legal-concept capacity. Harmonization requires an understanding of legal concepts and properly adapted terminology. What are the main hurdles you face in the harmonization process?
Mr. Cuerrier: Senator, I would like answer that one. Harmonization is a bit like translation from one language to another, except that we are translating from one legal system to another. There are words for which a perfect equivalent does not exist in the other language. There are concepts that are slightly different. They are organized, structured or presented in a slightly different way in one system compared to the other. For instance, the concept of ownership in common law and civil law is quite different. It is based on different historical and theoretical rules.
This phenomenon makes it quite difficult to predict the outcome of the planning process. We have, nevertheless, identified the challenge as being the difference between « propriété » and beneficial ownership. The question now is how to resolve the issue.
For example, there is also the difference between ownership rights and ownership per se. The latter corresponds to asset acquisition in both the civil law and the common law. Senator Baker referred earlier to the Income Tax Act. The Income Tax Act contains a good number of rules stemming from private law. Among these is beneficial ownership, which pertains to specific ownership or ownership rights. The concept of ownership is in itself hugely problematic.
This is one of the major issues that we have yet to analyse across all legislation. There are other areas that we have not as yet dealt with either. For example, in the area of banking, the Bank Act and legislation governing other financial institutions require attention. We have to integrate the new concepts that have been built into the Canada Business Corporations Act. There will need to be a specific review of banks and financial institutions governed by federal legislation.
Senator Joyal: Therefore, the first obstacle you face is a scientific one, in so far as you have to identify the type of legal vocabulary to be used in the harmonization process, i.e. matching two texts of identical legal weight.
Apart from that, what other institutional obstacles do you encounter?
Mr. Cuerrier: As my colleague said earlier, it is sometimes difficult to distinguish a terminology issue from a substance issue. This is another obstacle that requires us, in attempting to find an equivalent to the common law term, to consult the client department on the potential substantive impact of using specific terms.
For example, the concept of mandatary is systematically tacked on to the concept of agency. The concept of agency is wide-ranging in common law. The concept of mandatary is also widely used in the civil law. There are however subtleties of meaning between a mandatary, legal representative or personal representative. Any attempt to calibrate the equivalent term to reflect the intent of the legislator sometimes requires a great deal of time and the involvement of the client department to determine the legislative intent. Raising equivalency problems enables departments to identify specific deficiencies in the statutory policy underpinning the existing text.
Indeed, this often requires a more in-depth review looking at issues beyond terminology. In these situations the client department will undertake a more in-depth study of the specific issues raised in the harmonization process.
Senator Joyal: Do you face push back from some department or agency administrations on the review process. Do you get the cooperation you require to develop a text like the one we are studying today?
Mr. Cuerrier: I do experience roadblocks, but they are not caused by the administration itself. Often it is due to the fact that the administration has a heavy legislative agenda. Take the Bank Act for example. We have been told that although harmonization would be useful, it is not the appropriate time. We have been advised, for legislative policy reasons, to wait until the 5-year comprehensive provision review.
Personally, I have not experienced much push back from departments. On occasion, departments balk at the solutions. They tend to want to maintain text certainty, keep existing terminology and use civil law vocabulary. This leads to duplication, which as you are aware, is also a way of bringing about harmonization.
On occasion, departments express their discomfort with the solution choices. I do not know whether my colleague Mr. Gagné would like to add anything in the wake of his personal experience with Bill 3.
Mr. Gagné: Sometimes it is necessary to sensitize departments to issues stemming from the bijural system and to raise awareness of our program, which has been around for several years now. Not all departments have come into contact with us. There are some departments that we have yet to approach.
It goes without saying that legal experts with bijural experience are few and far between. The majority of government lawyers are unijural, i.e. they were trained in either the common law or the civil law. The reality is that the majority of work is usually done using one system.
The Department of Justice Canada is spread evenly across the country. In British Columbia, it operates in a common-law setting while in Quebec, the civil law predominates. In our dealings with the department, we contact the central legal services branch. Only quite rarely are our counterparts either trained in or sensitized to both systems. Consequently, we have to educate them.
Initial contacts are very important as a way of explaining why our involvement is crucial. I would not say that this is something that causes huge or insurmountable delays but it does require a certain amount of effort.
Mr. Keyes: There is no lack of will within the Government to harmonize. The new bill review process is a case in point. Each bill and regulation is systematically reviewed for harmonization purposes. Client department co-operation is tangible. As a result, the revision of previously unreviewed legislation is really an issue, as Mr. Cuerrier has said, of legislative priorities and the realities of the legislative processes. We have to look for opportunities to promote the harmonization process and this is what we are doing on an on-going basis. This is why this type of omnibus bill is not the only way of moving the harmonization initiative forward. This can also be achieved through the review of new bills and regulations.
Senator Joyal: Mr Keyes, you mentioned a figure of 2,400 regulations. Proportionally speaking, — and I am not looking for an exact figure here — how many of these 2,400 regulations have been harmonized up to now?
Mr. Keyes: Seventy-three per cent have been harmonized. Twenty-seven percent of existing regulations are awaiting attention.
Senator Joyal: Have you had more success with regulations than with statutes then?
Mr. Keyes: Yes, we have because on an annual basis, there are more regulations than bills.
Mr. Gagné: I would just like to point out one thing. The majority of bijuralism-related problems are found in acts. Regulations often use the same terminology found in the enabling legislation. This is why it is easier to deal with regulations.
I would like to provide you with a few figures. We have successfully closed 1,700 files. These were regulations that did not require harmonization. This gives us a final tally of approximately 73 per cent. Regulations requiring harmonization have been completed.
Nevertheless, we do have several regulations on our docket still requiring harmonization. We are awaiting amendments to enabling legislation.
Senator Joyal: To the main Act?
Mr. Gagné: That is right. Once the third harmonization bill is passed, draft regulations will follow. They are already being drafted. All that is required after that is to amend the relevant enabling legislation.
Mr. Cuerrier: The fact that we are only dealing with the third Bill now does not reflect all the work that has been done behind the scenes. This is only the third bill in terms of amendments tabled but the harmonization process has already been applied to many regulations and even acts. Some have been harmonized while others required no action.
A more accurate picture of the harmonization initiative and progress would include legislation and regulations, which have been read, analysed and deemed to be free of bijuralism-related challenges. This is why the figures we have provided you paint a more accurate picture of the initiative.
Senator Joyal: This gives us an idea of the scale of the remaining work to be done across government. On what did you base your decision to prioritize, for example, financial institutions? Was it because these statutes or acts might be required to be ready for use more quickly?
The Bank Act is an extremely important piece of legislation in Canada given that financial institutions are a federal jurisdiction. Did you take into account the reaction of the sectors affected by these statutes in determining your harmonization priorities?
Mr. Cuerrier: Indeed we did. The issue identification process is based above all else on a study of case law, texts and legal literature in various areas. These sources often provide a wealth of indicators enabling us to identify where the various problems lie.
The review of legal literature and case law also enables us to identify the most relevant areas to be dealt with first.
Senator Joyal: Have the Quebec government or the Quebec Bar lobbied on the priorities you should focus on?
Mr. Cuerrier: No, not to my knowledge.
The Chair: We will be hearing from representatives of these entities in the next few days.
Senator Joyal: Fine. Thank you.
[English]
Senator Baker: Before asking my question, I have an observation. The second edition of an excellent book was published in August of this year. It is called Executive Legislation and is by John Mark Keyes.
I nearly got to the section that deals with words, but I got bogged down in the section that deals with ignorance of the law and was not able to make it to the chapter on words.
I recommend this as a Christmas present to anyone who is really interested in this topic.
As I was listening to you, Mr. Keyes, I was thinking that some members of this committee who also sit on the Banking, Trade and Commerce Committee wonder when there will be harmonization with the PPSA legislation in the provinces. Of course, that is another subject, and I will leave that to another day.
I want to congratulate you, Mr. Keyes, on this excellent book.
Mr. Keyes: Thank you very much, senator.
The Chair: I also will make an observation or two before putting my question.
First, this clause-by-clause briefing book is the best I remember ever seeing. Congratulations to those who prepared it. It is fantastic. It is very user-friendly as well as very complete, which is terrific.
Next, as you can tell, we are just beginning to plunge into the thickets of this bill, so we may have to ask you to come back. Hold yourselves prepared for that, just in case.
My question goes back to Senator Wallace's question of the minister at the very beginning of the meeting about whether this bill or portions of it would apply only in Quebec. My attention was caught almost arbitrarily by clause 142, which amends paragraph 26(10)(c) of the Expropriation Act. I know even less about expropriation than I do about the Income Tax Act.
I was baffled by the reference in English to "a security interest or real security'' and in French to "sûreté,'' so I went to page 289 of my wonderful briefing book, where there is a long and learned explanation of the difficulties that arose there, and it tells me — and there it is in the bill — that it is specified in the introduction to subsection 26(10) that the designation "real security'' is applicable only in Quebec, because of the various difficulties.
After that long preamble, how often does that kind of thing come up in this bill? Is this an almost unique occurrence or has it come up much more often than I had expected it to? Are there classes of subjects where it has come up? In other words, what should we be looking for as we go through?
Mr. Cuerrier: If I understand your question correctly, as was pointed out earlier by the minister, there are two types of changes contemplated in this bill. The first type would be changes or adaptations made to federal legislation so that it applies more easily in the province of Quebec, in keeping with Quebec civil law.
The other type of changes are changes to the French common law.
The Chair: That is not my question. Do you have the bill before you?
Mr. Cuerrier: Yes.
The Chair: On line 25 of page 61 you will see the words:
. . . in this subsection called a "security interest'' or, in Quebec, a "real security''. . .
In this case, the drafters clearly found themselves having to say, "Here is a phrase that applies only in Quebec.'' How often did that happen as this bill was being drafted? Are there many such instances in the bill?
Mr. Cuerrier: First, this provision talks about real security. This is a definition or an interpretation provision, and it contemplates only the application of those securities in the civil law environment in the province of Quebec.
Mr. Keyes: It is a relatively rare occurrence that we have to have this kind of a doublet. It is usually done to be absolutely certain that the reader knows that this is only a civil law concept.
The Chair: That answers my core question as to whether it is rare or frequent.
Mr. Keyes: It is rare.
The Chair: The object was obviously to make it as rare as possible.
Mr. Keyes: That is right.
The Chair: Off the top of your head, would there be half a dozen instances like that in a bill like this? I am asking only for an order of magnitude, not for a precise statistical answer.
Mr. Keyes: Less than half a dozen times in this bill.
The Chair: Mr. Cuerrier, I am sorry. I think the problem is that you know too much and you cannot cope with someone who does not know as much.
Mr. Cuerrier: I was thinking that you were referring to the Quebec clause approach.
The Chair: No. We are trying to devise legislative texts that can be used everywhere, but sometimes there will be these little difficulties.
Senator Angus: Have you ever heard the expression "common law''?
[Translation]
The Chair: In common law.
Senator Joyal: Yes, of course, in common law.
The Chair: Common law in French.
Senator Joyal: This is the way common law is translated in French.
[English]
I have one last question. The number of transport statutes under federal administration is huge. When can we expect a harmonization bill on those statutes?
Mr. Cuerrier: To my knowledge, as yet there are no plans with respect to transport. However, we have harmonized several new regulations and acts in relation to the transport domain.
I stand to be corrected. Mr. Gagné might want to add something here.
[Translation]
Mr. Gagné: Over the past few months, we have read through all the remaining legislation in order to determine the work required. We have either already read, or will be reading over the coming months, all Department of Transport legislation, including that covered in our original mandate. We are in the process of drafting a list of bijuralism-related challenges. We intend to apply the criteria presented to you by my colleagues to identify the topics we will be working on over the coming months and years. Transport is, in fact, part of our mandate.
Perhaps you have already thought about specific issues you would like us to examine?
Senator Joyal: I will send them to you. I do not want to get into great detail here but I have in the past experienced problems interpreting very old federal statutes dating back to Confederation. At that time, our legal context was completely different. This was the reason for my question. I would imagine that there would be a significant amount of legislation of this type to review.
Mr. Gagné: There are several regulations, for example, that apply to rail lines that have since been removed or dismantled. There are a significant number of Acts and regulations that are ripe for comprehensive revision extending beyond bijuralism-related contradictions. This is a common problem. Some legislation is so old as to require special attention. In these cases, we contact the applicable departments to determine whether the legislation is still in force. I am referring here to legislation and regulations dating back to the last consolidation process and that were never amended. As a result, we take steps to determine their legal validity early in the process.
Senator Joyal: Generally speaking, there are at least thirty or so laws enacted prior to Confederation that remain on our statutes today. We will eventually have to work them into modern legislation or revise their interpretation. They will also have to be adapted to our two legal traditions.
Mr. Gagné: These are issues that we identify in the scope of our work and wherever necessary, we contact our colleagues at the Statute Revision Commission.
Senator Joyal: Do you transfer the file over to them?
Mr. Gagné: We develop the appropriate process together. Our mandate is limited to harmonization. Where we identify "other'' issues in the legislation, it is a sign that revision is required.
The Chair: Unfortunately, we will have to invite you to appear before us again at another time. You have provided us with precious insight for the start of our study. Thank you.
(The committee adjourned.)