Proceedings of the Standing Senate Committee on
National Finance
Issue 3 - Evidence - December 3, 2013
OTTAWA, Tuesday, December 3, 2013
The Standing Senate Committee on National Finance met this day at 2:17 p.m. to study the subject matter of Bill C- 4, A second Act to implement certain provisions of the budget, tabled in Parliament on March 21, 2013 and other measures.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable senators, this afternoon, we are continuing our study of the subject matter of Bill C-4, A second Act to implement certain provisions of the budget, tabled in Parliament on March 21, 2013 and other measures.
[English]
Honourable senators will know that there were six other committees, in addition to National Finance, reviewing the subject matter of Bill C-4. That was so that we could all get through this bill in a timely fashion.
Once Bill C-4 arrives at this committee, which we anticipate will be next Tuesday or Wednesday, we will be required to do a clause-by-clause consideration of the entire bill, not just the clauses that we've studied. For that reason, we felt it necessary to understand those portions of the bill that we did not study ourselves and that were studied by other committees.
That's why we have asked the chair and deputy chair, where possible, to come before us and explain to us what they studied as part of this Bill C-4. The first committee I'm very pleased to welcome is the Standing Senate Committee on Foreign Affairs and International Trade. I'm very pleased to welcome Senator Andreychuk, who is the chair of that committee. We will be discussing the subject matter of those elements contained, honourable senators, in Part 3 of Bill C-4, Division 4, which can be found at page 175, and Part 16, which can be found on page 224.
I would ask honourable senators to give us a bit of an overview of just what took place in your committee, why these sections are here, what the government hopes to achieve, and any comments that you might have in that regard.
Senator Andreychuk, you have the floor.
The Honourable Senator A. Raynell Andreychuk, Chair, Standing Senate Committee on Foreign Affairs and International Trade: Thank you, Senator Day. I should say that Senator Downe, Deputy Chair of the Foreign Affairs Committee, has declined to come. He was away for a period of time when we were studying this. I'm taking it as a vote of confidence that he's left it in my hands. Perhaps he will read the transcript after, I'm not sure.
Our task was rather simple in some ways. First, we looked at Division 4 of Part 3, which was part of a study that we did before. The passport division has been moved from the Department of Foreign Affairs and International Trade to Citizenship and Immigration Canada. When we studied the increase in rates for passports, and I've forgotten which month that was, it was brought to our attention that the passport division was going to move from DFAIT over to CIC. Their rationale at the time was that they would be completely modernizing and putting in a new IT system for CIC and that having the passport there would be more efficient and would take into account the new technologies, et cetera. We were alerted to that at the time. We heard from witnesses before our committee — the stakeholders who had been involved in the passport review about the increase in fees — who spoke to whether they had any problems with the passport division being moved. While they had problems, it wasn't about the move.
When Bill C-4 bill came to us for pre-study, we took into account all the evidence from witnesses that we had heard during the previous study. Basically, our conclusion on this was that we had no objections to it being moved. The government wanting to consolidate and create a new technology for immigration and passports, et cetera, made sense.
However, our concern was that they said there would be cost efficiencies, but they don't have the costing yet. They've indicated that they will provide us with a letter of what they believe the costs might be, but we have not received that letter yet. We have some concerns that the passport system was set up on a cost-recovery basis, and we're not sure whether this will accomplish it. What we've been told always is that IT services will have cost benefit. They rarely come about because the technologies generally become more expensive rather than less.
Our committee said that while it approves Division 4 without amendment, it signals concern that the IT services may be more costly and may not live within the cost-recovery basis. We are waiting for a letter and we will monitor that. If we get the letter in time, we will pass it on to this committee.
The Chair: Thank you. That would be good.
Senator Andreychuk: In Division 16, we have the proposed expression of interest system. A very innovative and interesting idea to move into the Immigration and Refugee Protection Act is the proposed expression of interest application system. Basically, it is to match the skills of those who are applying against the need we have for skills in Canada. That was explained by DFAIT. The system is already in place in Australia and New Zealand. We had the ability by video conference, although it failed us twice, to hear from New Zealand government officials. This innovative idea would respond to the needs that our economy has highlighted and what businesses want, I believe. It would also be helpful for immigrants in that they wouldn't go on a long list and have to wait to be ferreted out for their high skills. This is probably not a program for lesser skilled applicants to Canada. It would remove those who have an expression of interest to create a special, standalone system.
We heard about it, the idea seemed good and we approved it, again without comment. However, our problem was that the idea and the theory of an expression of interest system, like the one tested in Australia and New Zealand, is a good idea, but the details could really scuttle this program. Most of those details are ministerial directives and regulations. We have no idea how that will come about. We were told that the program would be in place by January 2015 and that, between now and then, there would be consultations with stakeholders out of which the regulations and directives would be put in place.
The theory is good, but whether it would work in practice for Canada depends very much on those consultations. Therefore, the committee underscored that substantive consultations need to be done and that the comments need to be taken into account.
The other fear, even in our discussions, was that the government should spend some time when they introduce this program to state clearly to the Canadian public and to the applicants that this would be a standalone program and would not supplant any existing program. We understand that it would in no way have an effect on existing applications. It's merely that the expression of interest would be put aside.
Interestingly, we were told that in New Zealand the program pays for itself. Those who want to apply through the expression of interest system would pay to get on a list. When removed from the list for the purposes of being streamed, then of course there would be another cost to their applications. This would address highly skilled workers who want to invest in a pretty decent future, whether they do it in Canada. The overall comment made was that this would be a good way for Canada to compete with highly skilled workers in demand by our competitors in Australia, New Zealand, Europe, and wherever else. This program would create a pool of highly skilled people. In principle, we thought it would be a good idea, but whether it works would depend on the effectiveness of the implementation.
The other comment that the committee did not put in the report but asked me to bring to this committee is that we believe the proposed immigration legislation should be handled separately and not as part of an omnibus bill because it is a sensitive area, hits new immigrants or prospective new people coming to Canada, and it's part of the workforce. Therefore, it would be better for publicity, knowledge and understanding to have any bill containing proposed immigration legislation as a standalone bill.
The Chair: That was very helpful. Honourable senators will know that Division 16 is at pages 224-229.
Senator Buth: Thank you, Senator Andreychuk, for being here. I want to confirm that nothing jumped out at you in terms of the changes in any of the clauses that you would comment on.
Senator Andreychuk: Only proposed section 10.4, where there is a problem with privacy. We have said that in these consultations coming up, there should be consultations with the Privacy Commission to ensure that the risks of violating individual privacy rights are diminished.
When you put forth an expression of interest, you put your information out, and we wanted to be sure that it be handled with sensitivity. That was something that both our New Zealand colleagues and other officials indicated.
As I say, we could not comment, nor do we have the expertise to say how they should draft the directives and the regulations and all that. But that one came up from the Canadian Bar Association, from the Immigration Section — that they were required about that, and wanted us to signal that area.
Senator Buth: Thank you.
Senator Andreychuk: And I should say one other thing that we were told. On all of these systems, particularly with passports, when you're talking about cost recovery, when you create a system that's going to be electronic, they said once you phrase the questions, when you have to adapt and change, it is extremely costly and difficult. And that's where the New Zealand costs went up. So they're just warning us on the electronics.
Senator Buth: In terms of any changes that might be coming in the future?
Senator Andreychuk: When you have a questionnaire and —
Senator Buth: And you want to make changes to it.
Senator Andreychuk: — it becomes extremely costly and difficult to change. I'm not expert as to why that is, but they certainly underscored that.
Senator Buth: Did you talk to officials from New Zealand and Australia?
Senator Andreychuk: Yes, New Zealand.
Senator Buth: And is the system working for them?
Senator Andreychuk: They believe it's a good program, but as they say, the system became more costly. They think it's meeting its objectives, and the objectives are similar to ours. So that was what we were told.
The Chair: Thank you, Senator Andreychuk. Senator Buth is asking you — I guess this is not the same issue as what she was asking, but I think it's in the latter division. Senator Buth was on page 227, but on page 228, I'm presuming that this new section 91 — that's just at the top of 228 — is —
Senator Andreychuk: I don't think I have page 228.
The Chair: Page 228, clause 292 or section 91 of the immigration legislation.
Senator Andreychuk: Yes.
The Chair: It deals with the idea that no person shall advise a person. We have read a lot that has been written with respect to less-than-scrupulous advisers and people trying to make money and make a business out of advising others.
I presume that this clause is directed to that — to try to avoid that. Is that something new in the legislation?
Senator Andreychuk: No. My understanding, if I recall the answers to those questions, is that there will still be fraud, because it's hard to eliminate it. Nothing in this legislation, we were told, accelerates or diminishes that. It's just that you'll have to be vigilant in this program.
We asked whether applicants were entitled to have consultants or lawyers, and we were told they did; that it doesn't vary from the rest of the immigration provisions. So you would still have these people, and the government will still have to be vigilant about advisers or unscrupulous people who might be assisting or taking advantage of now a new program.
The Chair: So this clause only appears here for the expression-of-interest aspect, which is something new, but has also existed previously for other immigration —
Senator Andreychuk: Yes. Certainly that was our understanding.
The Chair: Thank you. That's helpful.
The second point is: I'm wondering if you consulted with the Privacy Commissioner in relation to the privacy issue, which you had a discussion with Senator Buth about?
Senator Andreychuk: No, we didn't because of the time frame we had. We ran as quickly as we could to deliver the report by last Thursday, and that's why we signalled it. Nor did we think we would be the right people to embark on any study of what are ``effective protections.''
But what we're suggesting is that the government should do it, because they say that so much of this program is going to be, as I say, not in the legislation; it is in the detail. We just signalled that's one they should do.
The Chair: Did you get any indication from them that —
Senator Andreychuk: Yes, they are undertaking that there will be full and adequate consultations; that they had earmarked the relevant people.
The Chair: Did you take from that that they would be consulting with the Privacy Commissioner?
Senator Andreychuk: I'm not sure whether we took that. I can't speak for the group. All I know is that the group put it in here as a signal to the government to do so.
The Chair: Thank you.
Senator Callbeck: Just a brief question. And thank you for your overview. The committee agrees with passing over the passport services to immigration services. Were there any witnesses before you who expressed concerns about this and, if so, what were the concerns?
Senator Andreychuk: We did not hear from any witnesses this time around on expression of concern, but our greatest study of it was earlier, and the stakeholders were not concerned about the change. They're more concerned about the efficiency of the system and, at that time, the difference between five-year passports and ten-year passports.
Please don't ask me when it was, but in a previous study there was some concern whether the stakeholders were on board. I remember the discussion. But when we did our study, this time in Foreign Affairs — before we did this budget study — the previous one — we were assured that the government had done a proper consultation. Because, previous to that, there was real feedback that they had not.
So I think they took great pains to reach out to everyone, and they did. I could not tell you all the people who had appeared at that time. It's part of our transcript and evidence, but I remember the snowbirds. It was not a question of where it is but it's how you apply, how easy is it to get it, are there waiting lists, what are the costs — rather than where it's housed.
Senator Callbeck: Thank you.
The Chair: Thank you, Senator Callbeck, and that's all of the honourable senators that I have on my list.
Senator Andreychuk, thank you very much for coming and helping us out in understanding these particular clauses.
Semator Andreychuk: I hope it's been helpful.
The Chair: It has been. Thank you.
We are now pleased to welcome the chair and deputy chair of the Standing Senate Committee on Social Affairs, Science and Technology. Senator Ogilvie is chair and Senator Eggleton is deputy chair. We will be dealing with the subject matter of those elements contained in Part 3 of Bill C-4, Divisions 5, 10 and 11. Division 5 can be found at page 176, colleagues; Division 10 at page 216; and Division 11 at page 217.
Senator Ogilvie and Senator Eggleton, thank you for being here and helping us out with these clauses. We will be expected to do a clause-by-clause consideration of the clauses that you studied, so we need your help in determining what we should do. You have the floor.
The Honourable Senator Kelvin Kenneth Ogilvie, Chair, Standing Senate Committee on Social Affairs, Science and Technology: Thank you, chair. You are aware that we are dealing, as you indicated, with three divisions of the bill: Divisions 5, 10 and 11. I think I should say at the outset that the report that you have before you in terms of observations was unanimously agreed to by members of the committee, and it's fair to say the committee was solidly of a mind with regard to the observations brought forward to you.
I would like to start off by saying that we wanted to express our disappointment — I think that's careful wording — that the two ministers we requested did not see fit to appear, for whatever reasons, and we were not very happy about that. Nevertheless, we believe that we have had the chance to review the divisions, and we are confident of our unanimous report to you with regard to observations.
With regard to Division 5, your committee felt that the proposed changes do appear to strengthen the overall procedures and process that are in use. And the idea of written reports at all stages struck us as being a wise one, and we felt that it would contribute to better understanding of at least the process of review should more than one stage occur.
I should say some members were a bit concerned about the change in the definition of ``danger.'' That was a concern that some members put forward so, overall, our committee felt it would be wise to deal with that to ensure the change in definition didn't have consequential impact. In fact, some argued it would make the process clearer and easier for both employees and employers to deal with and we felt it would be wise to request that the changes to the Labour Code be evaluated at the end of the year and to give some sort of indication as to how the changes with regard to definition were working out.
With regard to Division 10, the National Research Council Act, you have our summary there. We felt that it did clarify issues. We clearly identified what the changes were intended to do and the committee wishes to express its hope that the various diversities of views with regard to the issues that the National Research Council deals with are fully represented in the ongoing board composition and the way in which matters are handled by the NRC.
With regard to Division 11, the Veterans Review and Appeal Board, our committee shared concerns raised by some of the witnesses that there is a real backlog at the present time with regard to requests for reconsideration. We heard that the board is moving to deal with this backlog and feels that by early in the new year it will have it cleared up and we certainly hope that will be the case, but we expressed some concern about whether that will occur. And we were pleased to note that in one of the areas of the three stages in which an appeal can be dealt with, the stage of review, that the board has developed service standards with regard to that and we would hope they would extend that to the other two levels of the process of appeal.
We commend their attempts to use new technology, such as video conferencing and teleconferencing where those are available, but we do wish to insist that these not be used in any way to put undue pressure on veterans — some of whom may not be totally familiar with these technologies — and that declining the use of such technologies not in any way lead to a delay in the hearing of their particular cases.
And finally, I would say that the committee was concerned to hear the testimony and to see the documentation that even though the board has been authorized to have 29 members, up until now it has been operating with less than that, often less than 25. The witnesses indicated that they feel that a full complement of 25 will allow them to handle their cases adequately and your committee wanted to express its desire to see that the board operates with a full complement at all times, if possible. There are mechanisms that allow the appointment of temporary members to the board to ensure that. The board itself can't appoint those. It has to request their appointment but mechanisms exist to do that. It should be possible for the board to have a full complement on an ongoing basis, but we feel it is important with these changes that the board has a full complement.
The Honourable Senator Art Eggleton, P.C., Deputy Chair, Standing Senate Committee on Social Affairs, Science and Technology: I think the chair has covered it quite well but I want to add a couple of other comments. In our observations, we not only expressed disappointment with ministers not appearing but also disappointment in how these issues were brought forward in this way in an omnibus bill.
These kinds of things really deserve their own legislation and we also said they were not the product of a consultative process. We noted in this one involving the Canada Labour Code, Division 5, where they talk about the definition of the word ``danger,'' that this and the process presently in place was arrived at after considerable consultation with labour organizations, employers and government back in 2000. And yet this particular one, by the admission of everyone who came to the committee, had no consultation whatsoever.
So we've expressed our disappointment with respect to the lack of consultation as well.
When it comes to that word ``danger,'' as the chair correctly pointed out, some members are concerned about the change and I'm one of the some.
I think the narrowing of the definition left a lot of concern about it not being given the kind of attention that it needs, that the system that was in place was working fine. There was no consultation that would lead anyone to believe that there needed to be a change in it. There was the case given, as is pointed out in the testimony from the department, that in 80 per cent of the cases they got involved with, there was proven to be no danger. But they did admit when they came to the committee that in much of the work they did in looking at the issue of danger they found other things that were unsafe or procedures that were not what they should be. They didn't give us a number. PSAC suggested it was about half. We don't know about the numbers but the department suggested that in spite of this 80 per cent where they didn't find danger, they did find things that were quite useful. So we're concerned about the change in procedure here as well.
I will skip over the National Research Council. I think we were quite happy to see the chair and the president separated in their position. That's a normal thing that's done with boards nowadays. We didn't see any problem in the change in the reduction of the size of the membership.
But in the Veterans Review and Appeal Board Act, as the chair mentioned, we strongly recommend, as we said in our last paragraph, that the full complement be established and maintained at 25. We're now going from a legislative 29 down to a 25. The only problem is that 29 has got us 22 because that's the current number, the current complement. That's not adequate to serve the needs of our veterans and so we're saying, and the government is saying, it needs to be 25. If 29 gets you 22, what does 25 get you? Can we be sure it will get us 25? We said we strongly recommend that be the case.
On the matter of video conferencing or teleconferencing, we heard from the Legion representatives that they were concerned that a lot of veterans didn't like it because they would rather be face to face with people, that a more personal relationship would work better.
But there is also the concern from the committee that people not be pressured into doing the video conferencing or teleconferencing because it's more convenient, it's easy, you don't have to travel and so forth. We don't want our vets to be offered a situation where you can speed it up and do it a lot faster if you do it by video conferencing. If they're not totally comfortable with that, they shouldn't have to do that.
I am adding those remarks in addition to the remarks of the chair.
The Chair: Thank you, that is helpful.
Senator Callbeck: I wanted to ask about the Veterans Affairs Board. You talk about the backlog and the reconsideration, in that I think you said the board assured you that these cases were going to be cleared up some time in the first part of the new year. But I look here at your paper and it says that they resolved only eight of the 200 cases in the last year. So if that's the case and if you are reducing the board, how will this be cleared up?
Senator Ogilvie: We raised that question with the officials, and they felt that it was really a question of them getting around to dealing with this. The same question arises: Why has that not occurred? I got the impression from what I heard them saying that they are putting on what in some cases you would say is a push to get these resolved. I think we raised the concern about this because it hasn't happened yet, and I think there is a reasonable question as to whether those will be cleared up.
Senator Eggleton: Can I just add to that? I didn't hear anybody who thought that 25 was the wrong number. The problem is that they are not even there yet. They have a complement of 29, but they only have 22. They need to get it up to 25. I think the feeling was if they got it up to that. That's why we strongly recommended that a full complement be in place at all times, not a smaller number than what is allowed for, because the backlog will continue. The backlog is essentially in the reconsideration end of things, but that can take over a year for some of these people. That's terrible.
Senator Callbeck: So has 22 been the norm for the last two years?
Senator Ogilvie: We were informed that that's what they have been operating with for some while, and, as Senator Eggleton said, we feel strongly that they need to get to 25 and be consistent there. We did hear, as Senator Eggleton has just informed you, that, if they are at 25, they believe that things will operate efficiently, but we think it's important to insist that they be at 25 within reasonable circumstances.
Senator Callbeck: Thank you.
The Chair: Under the National Research Council Act, Division 10, we have a reduction in the number of members of council from 18 to 10. Was that based on some empirical research that said that this would be the optimum number? Who came up with 10?
Senator Ogilvie: I think, chair, that part of the issue is the efficiency of operation, and I think the NRC has been looking at its operation for over three years in terms of reorganization. The NRC is structured in such a way as to have the various divisions of the NRC reporting in an organized way to it, including its granting areas, and I believe they feel that a board of 10 will effectively handle that. Personally I think they are quite right in that, provided they have the right members. In any board's operation, it's always having the right people on it, but 10 seems to me to be a reasonable number. It wasn't an issue of great concern.
The Chair: Can I take it then that you heard that this was a recommendation from someone on the National Research Council, ``Well, let's try 10 as an optimum number?''
Senator Ogilvie: I believe that this is totally in concert with what the NRC is looking at.
The Chair: Did you hear evidence on that?
Senator Eggleton: They said it themselves. I do not know where it originated, but I suspect it probably did with them because they seemed to think that they could have a better dialogue and a better consideration of issues before them if they had a smaller number. They said that.
The Chair: The Veterans Review and Appeal Board is also reducing the numbers, and we just had a discussion on that. Is the 25 a number that was recommended, or, again, do you suspect that they've decided they can live with this?
Senator Ogilvie: The evidence presented to us was that, upon analysis of their workload, they concluded that if they had 25 members, they could handle the workload in a timely fashion because, over the last considerable period of time, they have operated with less than that, anywhere from 24 down to the 22 that it currently has. They were consistent in the argument that they believed that 25 would be adequate for them to do their job in a reasonable period of time.
The Chair: Thank you. It's good to know that some analysis was done on this, and I think you said somewhere that their workload was going down. That surprises me with all the veterans coming back and getting older who had been in Afghanistan. That was a major mission, and we are reading a lot about the difficulties of veterans from Afghanistan. Yet, their workload at the Veterans Review and Appeal Board is going down. Is that the evidence that you got?
Senator Ogilvie: That's the evidence that was reported to us. In fact, committee members questioned them quite a bit on that. They were consistent in their view of what the actual workload is and has been over the last few years. The questions were raised about what will happen as the veterans who have returned from these other theatres age and so on. Obviously, no one can look into the crystal ball there, and so the answers that we got were based on their actual experience as opposed to any significant crystal ball gazing.
Senator Eggleton: Let me add that we were, I think, very concerned about the fact that some people were waiting a long period of time on some of these appeals — the reconsiderations. We indicated — and we say so in our recommendations and hope you would do the same — that they cannot allow that to happen. They have to deal with that backlog. These people put their lives on the line, and we owe them this opportunity to have this appeal heard in a timely fashion and in person if that's the way they want it. So that's what we've clearly said here. We want the assurance that they will not be pressured, and we strongly recommend that there be a full complement, which is more than they have now. So we think that, on that basis, it is probably workable.
Senator Ogilvie: Just to clarify, chair, the question that you asked me and I answered was slightly different than the additional information that Senator Eggleton has given. I agree entirely with what he said. With regard to the reconsiderations, I mentioned that at the outset when I summarized the report for you. We believe that they have to address that. They indicated that, with the complement of 25 and a determined push to deal with it, they can handle that. What we can simply do is tell you what testimony we heard with regard to the questions we raised on the matter.
The Chair: Exactly, and that's what we are asking. You have given us a very extensive report that you filed in the Senate that will also be very helpful. Senator Smith, the deputy chair of the committee, wishes to pose some questions.
Senator L. Smith: I will read the document here and I have a question after I read it. On page 5:
This concern is based on a finding in a recent report by the Veterans Ombudsman that found that a large proportion of Board decisions that were reviewed by Federal Court were ruled to have resulted from errors in law or fact or because principles of procedural fairness had not been observed.
Is it a case of having more board members — 25 board members — or a case of having better board members? Is there an issue of the quality of the board members, and was that discussed at all during your hearings?
Senator Ogilvie: We did not discuss the requirements for being appointed as a board member or their qualifications in any detail. The issue was dealt with at a different level.
Senator Eggleton: The only thing that came up in that regard was a concern of too many lawyers. There are not really a lot of lawyers on there, but I think even the Veterans Ombudsman said that lawyers will have a tendency to look at it in a more legalistic fashion, whereas the purpose behind review boards is to really help the veteran as much as possible. It's not an adversarial situation, but, when we asked staff how many lawyers were on the board, there really aren't that many at all.
Senator Ogilvie: In actual fact, the issue of the qualifications came up in a completely different line of questioning, and they described the backgrounds that many of the board members have. It covers quite a range of issues that would be relevant to being on this board, but we did not examine that issue in any detail.
Senator L. Smith: Thank you.
The Chair: Senator Ogilvie and Senator Eggleton, thank you very much for being here. We've exhausted our comments. You've explained it well, and thank you again for your extensive report. That will be very helpful to us when we do our clause-by-clause consideration of the bill.
We'll go now to the Standing Senate Committee on Energy, the Environment and Natural Resources. We are pleased to welcome the Chair and Deputy Chair of the Standing Senate Committee on Energy, the Environment and Natural Resources: Senator Neufeld was a former member and deputy chair of this committee for a period of time, and we trained him so well, he's off doing another committee; and Senator Mitchell, whom we haven't had in to train yet.
We will be dealing with the subject matter of those elements contained in Part 3 of the bill, Division 7, which can be found at page 210; and Division 14, which can be found at page 219.
I call on Senator Neufeld to give us an overview of what the committee looked into.
The Honourable Senator Richard Neufeld, Chair, Standing Senate Committee on Energy, the Environment and Natural Resources: Thank you, Mr. Chair. We are both happy to be here to give you a brief report on our meetings.
The committee held two meetings and heard from seven witnesses across the range of stakeholders. We also received a written submission and a communication from the Government of British Columbia. In our first meeting on November 19, we examined Division 7, which seeks to give the federal government the power to divest its holdings of the Dominion Coal Blocks. It may be helpful to know that the Dominion Coal Blocks consist of two parcels of federal Crown land totaling 20,000 hectares located in the Kootenay region of British Columbia. The Government of Canada acquired these lands from the province in 1905 in exchange for a subsidy used for the construction of the Crowsnest Pass railway. In 2009, the government began a systematic review of corporate assets to ensure both good governance and value for taxpayers. The Corporate Asset Management Review also examines opportunities for transferring assets to the private sector with the objective of stimulating further economic activity.
As a result of this process, the government is considering a sale of portions of the Dominion Coal Blocks. The intention of this act is to allow the government to initiate an open and competitive sales process that will maximize benefits to taxpayers. It is important to note that a specified part of the Dominion Coal Blocks that overlaps the Flathead River Watershed is excluded from any potential sale. This is an effort to protect this section from future development. To give a little context, in 2011 British Columbia enacted the Flathead River Watershed Area Conservation Act, which bans mining and energy activity on those lands.
The Minister of Natural Resources Canada has been authorized to lead the consultation process with First Nations, who may be affected by the divestiture of the Dominion Coal Blocks. These consultations have been taking place since March of this year, most notably with the Ktunaxa First Nation, whose traditional territory includes the Dominion Coal Blocks.
Discussions are ongoing as they attempt to identify impacts of the disposition, as well as to develop measures to minimize those impacts. It is the intent of the government to secure the support of the First Nation before proceeding. An NRCan official assured the committee that they expect to reach an agreement.
In testimony, representatives of the Departments of Finance Canada and Natural Resources Canada indicated that they received no objections concerning the proposed disposition. Communication with the Government of British Columbia and the Minister of Energy expressed no objections to the proposed divestiture of the Dominion Coal Blocks. Similarly, a representative of an organization called Wildsight also expressed support for the intentions of Division 7, provided the Elk River and species at risk are protected.
In the second meeting on this bill, the committee examined Part 3, Division 14, which simply proposes to repeal the Mackenzie Gas Projects Impact Act and replace it with the Mackenzie gas projects impact fund act. These provisions will preserve the structure and criteria of the fund as well as a commitment to allocate $500 million to the fund.
What changes is that the fund would be administered by a portfolio of government, rather than by a Crown corporation that has been established notionally only. The Governor-in-Council will designate the minister responsible for the proposed Mackenzie gas project impacts fund act. It might be helpful to note that the original fund and Crown corporation were established in 2006 in anticipation that the project would go ahead. Officials explained to the committee that at the time there was no alternative to administer this fund should it be needed.
Now, however, there will be alternatives. Chief among them is the Canadian Northern Economic Development Agency or CanNor, which was created in 2009 with a mandate to provide economic development funding and projects in the North. It is important to emphasize that the funds will not be active until the Mackenzie gas project becomes a reality. As the project is not a reality, neither the Crown corporation nor the fund are currently active. This decision as to whether the project will proceed is the responsibility of the project's proponents.
This project has been talked about and reviewed since the 1970s. However, as a result of failing commodity prices, little progress has been made so far. The committee heard from officials at CanNor, from the Government of the Northwest Territories; and received a written submission from the Inuvialuit Regional Corporation. CanNor officials told the committee that they would be well positioned to administer the funds should the Governor-in-Council decide to have them do so. In particular, they sited their extensive network of strong relationships and expertise in the region among the strengths that CanNor could offer.
I should say from the start that the Government of the Northwest Territories is committed to the Mackenzie gas project and is keen to see it move forward. Their witness stated explicitly that the Government of the Northwest Territories has no concerns with the proposed changes. In fact, the official told us that the renewed focus on the Mackenzie gas project's impact fund was welcomed.
It was their view that by moving responsibly for a fund from a Crown corporation to the portfolio of a single minister, the funds could be made available more readily. The official said that initiatives like this fund essentially mean that projects can move forward while any potential challenge or setback can be properly and efficiently addressed. He added that the Government of the Northwest Territories would fully support any minister or department administering the fund.
In a written submission to the Energy Committee, the Inuvialuit Regional Corporation, IRC, explained that historically the most pressing objective of Aboriginal groups in relation to the Mackenzie Valley project was to reduce the social and cultural impacts and increase employment and economic opportunities. The IRC confirmed that they strongly support the Mackenzie gas project's impacts fund to assist the Inuvialuit in participating effectively to benefit from resource development within the Inuvialuit settlement region.
Honourable senators, I will leave it at that. That gives a rather comprehensive summary of what we heard, both from those who will be overseeing the aspects of Bill C-4 as well as those most impacted by the changes being proposed.
Senator Mitchell, do you have anything that you would like to add?
The Honourable Senator Grant Mitchell, Deputy Chair, Standing Senate Committee on Energy, the Environment and Natural Resources: It may come as a surprise to some of my colleagues, but I don't.
Senator Neufeld: I've trained him well.
The Chair: We have had the opportunity to review your report, which you filed in the Senate. It came automatically to this committee. We thank you for doing that as it's helpful. As we indicated earlier, this committee is charged with the responsibility of clause-by-clause consideration of Bill C-4, and that's why we're asking your committee, which studied the clauses in divisions 7 and 14, to help us understand what's there.
Senator Buth: Thank you for coming here to explain these two divisions. Regarding Division 7, Dominion Coal Blocks, you make the comment that Flathead Watershed is not included in the parcels. If this passes, it would give the government the right essentially to sell the parcels. Is that included, then, in subclause 239(b), where it goes on to say ``Parcel Identifier,'' and then it says ``except Part included in Plan 6844''? Is that the exclusion of the Flathead watershed?
Senator Neufeld: We were under the impression that the question was asked that approximately a third — those boundaries still have to be identified so they come exact, but it's about a third of the 20,000 hectares that goes into the part that the B.C. government had actually asked to be set aside.
Senator Buth: But there wasn't any indication given specifically where the Flathead was in these parcels?
Senator Neufeld: No.
Senator Buth: Just the commitment. Thank you very much.
The Chair: Senator Neufeld, when you were talking about the particular coal land and the Flathead River watershed that Senator Buth just mentioned, you indicated fairly positively that things were moving along and that there were no objections that had been filed. Yet you also pointed out that there are ongoing discussions with a First Nations group and that this is their traditional territory. Presumably, they would have objected until there was a settlement, I would think.
Senator Neufeld: We heard no objections, chair. There will obviously — as I said, there are negotiations ongoing and have been for quite a while with the Ktunaxa, and we have been led to believe that those are relatively good negotiations. Obviously, in any negotiation, they are not going to agree with everything, but we can't insert ourselves into the middle of a negotiation, either. That's what we heard from the witnesses.
The Chair: So no objections other than the ongoing discussions with the First Nations group; is that correct?
Senator Mitchell: I can add that we're encouraged by the commitment on the part of the department that they would be directly involved in those negotiations with the Aboriginal peoples.
The Chair: Thank you.
In relation to the Mackenzie Gas Project Impacts Fund, is this a notional $500 million?
Senator Neufeld: Yes.
The Chair: So it's still in the Consolidated Revenue Fund and will only be taken out from the Consolidated Revenue Fund when the minister determines that the project is a go and they need some funds?
Senator Neufeld: Yes.
The Chair: Presumably, that would come back to Parliament at that time, under some estimates; in some manner, we would have the opportunity to look at this again?
Senator Neufeld: I would assume that would happen. It's notionally set up so that people understand that there is $500 million there in a fund when, in fact, the companies that are part of the consortium to build a pipeline actually commit to building the pipeline, which they haven't done yet. I think they have till the end of this year — the end of this month — to make some formal commitment. If they don't, they may get an extension. We don't know that. But it has to be a firm commitment with actual construction to start taking place within two years hence.
So that would come back, I'm sure, through the finance organization in some form.
The Chair: Sometimes we hear of funds actually being set aside and administered, and therefore some interest can grow on those. In this instance, I'm assuming it's just a nominal fund; it's a commitment by the government — $500 million — but it's not a pot of money that's being invested by this particular group.
Senator Neufeld: That's correct, chair.
The Chair: That was my assumption, as well.
Senator Callbeck: Just to follow up on the questions the chair asked. On the Dominion Coal Blocks, negotiations that are going on with the first ministers — I believe in your opening comments you mentioned that the government officials said that they expect to reach an agreement. Is there any idea of the time frame here?
Senator Neufeld: No. We wouldn't be party to any of that information. All we are told is that those negotiations have been ongoing, I think, since last March — somewhere in there — and will continue. And the commitment was that nothing would happen until they got some kind of a negotiated settlement with the First Nations.
Senator Callbeck: Thank you.
Senator Neufeld: You should maybe know that the First Nations in that part of British Columbia are very proactive. They're doing very well and have progressed a lot in all kinds of development in that part of the province.
The Chair: So coming from that region you have every reason to be optimistic that something can be worked out?
Senator Neufeld: It's a long way from my region; that's the southeast and I come from the northeast. But I have had discussions with different governments over the Dominion Coal Blocks in my past life as Minister of Energy, I can assure you of that.
The Chair: Senator Neufeld, it's good to have you here and we appreciate you and Senator Mitchell coming to help us out with this. And thank you for your report, which has been made public and available to all honourable senators.
Senator Neufeld: Thank you very much. We appreciate it.
Senator Mitchell: Thank you.
The Chair: We will now proceed to the Standing Senate Committee on Banking, Trade and Commerce. Senator Gerstein is the chair of the Standing Committee on Banking, Trade and Commerce and is a former deputy chair of this committee.
Senator Gerstein, thank you for helping us with this. Your committee did quite a bit of work on this, I see, dealing with the subject matter, honourable senators, of the elements contained in Part 3 of Bill C-4, Division 2, which can be found at page 172; Division 3 on page 173; Division 9 at page 216; and Division 13 at page 218.
The Honourable Senator Irving Gerstein, Chair, Standing Senate Committee on Banking, Trade and Commerce: Thank you very much, Mr. Chair. It's a pleasure to appear before the committee and colleagues. The Banking Committee, as you so rightly pointed out, was referred four divisions of Bill C-4; namely, Divisions 2, 3, 9 and 13 of Part 3. The committee held three meetings, starting with officials from the Department of Finance and the Conflict of Interest Commissioner on November 21, followed by the Institute of Governance of Private and Public Organizations on November 27, and we concluded with the Canadian Bankers Association on November 28.
It's interesting to note that we also invited numerous federal agencies, as well as representatives of the financial and legal sectors and that so many, I might add, declined our invitation, feeling that they had nothing to contribute.
I would like to start by giving an overview of each of the four divisions. Division 2 includes two amendments updating the various conflict of interest provisions contained in the numerous financial administrative statutes. The first amendment removes the blanket provision prohibiting agents of either the federal or provincial Crown, as well as both federal and provincial public servants, from sitting on the board of directors of federally regulated financial institutions. The second amendment removes the requirement for certain officials to notify the Minister of Finance when borrowing from federally regulated financial institutions.
Division 3 permits federally regulated financial institutions from indirectly acquiring foreign financial institutions without ministerial approval.
Division 9 enables the Minister of Finance to permit Crown corporations to pledge cash and securities as collateral when trading in over-the-counter derivatives, or OTCs.
Division 13 amendments the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to clarify, first, that nothing in the act requires the disclosure of information that is protected by solicitor-client privilege; and, second, that evidence of non-compliance by a reporting entity can only be used against that reporting entity in cases of non- compliance and not other offences under the act.
Our report, which was tabled in the Senate on Thursday, November 28, 2013, presents both a summary of each division and outlines the evidence heard by the Banking Committee.
Of the four divisions referred to the committee, Divisions 3 and 9 did not generate much debate, if any. However, some senators raised concerns about Divisions 2 and 13.
With regard to Division 2, some senators were concerned about the removal of the blanket provision prohibiting federal and provincial Crown agents or employees from sitting on the boards of federally regulated financial institutions. Senators felt that the removal of the prohibition could lead to conflicts of interest by those Crown agents or public servants sitting on the board. However, both the officials from the Department of Finance and the Canadian Bankers Association offered assurances that, in their view, existing conflict of interest laws, policies and guidelines were sufficient in guarding against conflict of interest.
When asked under what circumstances a Crown agent or public servant may sit on the board of a financial institution, the officials from Finance gave two examples, provided that there was no conflict of interest. First, a public servant who is a member of the board of their local provincially regulated credit union, if that credit union were to become incorporated federally, would not be able to continue sitting on the board under the current law. Second, a member of the board of a financial institution could not be asked to sit on the board of a Crown corporation and vice versa, thereby restricting the pool of qualified applicants.
The officials also indicated that these changes were in line with public statements by the Office of the Superintendent of Financial Institutions expressing a need for the boards of financial institutions to be composed of people with greater financial expertise.
On Division 13 and the changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the Banking Committee was interested because, as you may know, the committee had recently undertaken an exhaustive review of Canada's anti-money laundering and terrorist financing regime which we filed in the Senate last spring.
The committee was told about proposed changes to the act or the government's response to ongoing litigation in British Columbia with regard to the protection of solicitor-client privilege. The Federation of Law Societies submitted a brief indicating that they still had concerns regarding the application of the act to lawyers and asked that Parliament respect the decision of the B.C. Court of Appeal which held that the law should not apply to lawyers.
In conclusion, colleagues, I again note that we had only two outside of government witnesses. The others that were invited, with the exception of the Federation of Law Societies which provided a written brief, did not provide any opinion on the legislation and did not attend because they felt they had nothing to add.
Thank you very much.
The Chair: Thank you very much, Senator Gerstein. I would like you to expand a little bit on some honourable senators who were concerned about this change that allows agents of the Crown and federal and provincial employees to sit as directors on boards of federally regulated financial institutions.
I've heard from a number of sources that there is a concern here. Did you hear any evidence with respect to remuneration that the particular someone — who is a public servant on a board, receiving a fee for sitting on that particular financial institution's board — receives in addition to the salary that the individual is receiving as a public servant?
Senator Gerstein: Mr. Chair, that's a very good question you've raised and that was raised at the committee. But we heard from the Canadian Bankers Association and from the department that there is such an enormous amount of existing conflict of interest laws today, guidelines and policies, and that each situation would be reviewed on a case-by- case basis. There is a Conflict of Interest Act that applies to public office-holders and others designated by the Governor-in-Council, such as members of the board of Crown corporations. There is the Values and Ethics Code for the public service itself. Each individual institution has conflict of interest policies which are drafted with approval from the Office of the Superintendent of Financial Institutions. On balance, and I must say that — I will not say surprisingly — the Canadian Bankers Association was absolutely clear that they had no difficulty with this.
The Chair: That's very helpful for us. You did make mention of the Office of the Superintendent of Financial Institutions. If I use the acronym a lot of people might not know what we're talking about here. She indicated that there was a need, and you just mentioned that, for financial expertise.
Senator Gerstein: That's absolutely right.
The Chair: Was it her suggestion that this was the place for her to address public servants serving on the boards of financial institutions?
Senator Gerstein: I'm glad you're raising this because regretfully OSFI did not appear before us. They were invited to appear before us and it might be helpful to the committee to hear. Those we did ask to come and opine on what is put in this act are: the Office of Superintendent of Financial Institutions, OSFI; the Financial Consumer Agency of Canada; FINTRAC; Mouvement Desjardins; Credit Union Central of Canada; Canadian Life and Health Insurance Association; CIRANO, the Center for Interuniversity Research and Analysis of Organizations; the Canadian Bar Association; the Barreau du Québec. All were invited and all indicated that they did not have an issue with anything that was appearing in the BIA.
Senator Callbeck: I'm wondering, did you have any witnesses that expressed concern about this?
Senator Gerstein: About the issue of —
Senator Callbeck: About a public servant serving on the board of a financial institution.
Senator Gerstein: Basically, we did not.
The Chair: I'm a little concerned about the wording in your report regarding Division 9, which permits Crown corporations designated by the minister to pledge cash and securities as collateral when engaging in over-the-counter derivatives. Most of us are very nervous about derivatives and over-the-counter trading in derivatives by government departments and Crown corporations. Did you get into any discussion on that?
Senator Gerstein: As I indicated to you, Mr. Chair, this was one of the divisions that there was basically not a question raised about. It's subject to the approval of the Minister of Finance on a situation-by-situation basis, and the fact was it was recognized that this is just the way it's moving forward. There were no questions raised about it.
The Chair: I've been aware of Crown corporations wanting to pledge land and assets in order to expand, like port authorities and that kind of situation, but to engage in over-the-counter derivative trading, that one surprised me.
Senator Gerstein: As you know, this is an area that is now becoming more formalized. It's cash and securities and that is the direction it's going.
The Chair: Did you get any indication as to what corporations were designated to trade and pledge securities to trade in derivatives?
Senator Gerstein: I would have to get back to you on that.
The Chair: If you could, there is an indication here that they would be designated and it may be that none has been designated. We might get an idea of just who this is or what Crown corporations, if we saw the list.
Senator Gerstein: I would be happy to, chair.
The Chair: Seeing no other honourable senators who wish to engage in discussion, Senator Gerstein, thank you very much for being here. Thank you for your report. That will be helpful and we will be reviewing it carefully.
We have two committees left. First we'll deal with Standing Senate Committee on Legal and Constitutional Affairs and then the Standing Senate Committee on Transport and Communications.
From the Standing Senate Committee on Legal and Constitutional Affairs, we are very pleased to welcome another former member of our committee, Senator Runciman, who is chair of that committee, and Senator Baker, who is deputy chair. They will be discussing the subject matter of the elements contained in Division 19 of Part 3, which can be found at page 307 in the English version.
The Honourable Senator Bob Runciman, Chair, Standing Senate Committee on Legal and Constitutional Affairs: Thank you, Mr. Chair. I'm here today, as you pointed out, as chair of the Standing Senate Committee on Legal and Constitutional Affairs, accompanied by my good friend Senator Baker, deputy chair of the committee.
On November 5, our committee received an order of reference to study the subject matter of some elements of Bill C-4, the budget implementation bill. Specifically, the Senate requested the committee examine the provisions related to the Supreme Court Act that are contained in Division 19, Part 3 of the bill — not the kind of matter Finance would normally be considering.
Our job was to conduct public hearings and report our findings to the Senate by November 29 so that both the Senate and your committee could consider the evidence and comments we gathered.
Our committee held two meetings, heard from the Honourable Peter MacKay, Minister of Justice and Attorney General of Canada; former Justice of the Supreme Court of Canada, Michel Bastarache; and three law professors, Benoît Pelletier, Paul Daly and Carissima Mathen. We also received submissions from the Government of Quebec and from law professor Adam Dodek. We have copies of all the briefs and submissions, as well as the unrevised transcripts of our two meetings for the committee's consideration.
The Canadian Bar Association, le Barreau du Québec and former Supreme Court Justice Ian Binnie were invited but declined our invitation to appear during the public hearings.
Clauses 471 and 472 of Bill C-4 add two new sections to the Supreme Court Act in order to clarify the eligibility criteria for Supreme Court justices. In effect, the new provisions indicate, for greater certainty, that a person is required to have been an advocate of at least 10 years standing at the bar of a province in order to be appointed to the Supreme Court, but that person does not have to be a member of the relevant bar at the time of the appointment.
Some of the testimony that we heard from witnesses touched on the interpretation, the nature and purposes of sections 5 and 6 of the Supreme Court Act; the appointment of a member of the Federal Court or the Federal Court of Appeal to one of Quebec's three seats on the Supreme Court of Canada; the impact of clauses 471 and 472 of Bill C- 4, which proposed to clarify the Supreme Court Act; the question of whether a constitutional amendment is needed to make such changes; the nature of the declaratory provisions, such as what we're dealing with here; and the implications of the Government of Canada's reference of the subject matter to the Supreme Court of Canada.
The committee considered the evidence presented to us and reported these findings to the Senate on November 28. As I mentioned, we brought copies of the report and we will be happy to answer your questions.
I know Senator Baker has a few brief comments to add as well.
The Honourable Senator George Baker, Deputy Chair, Standing Senate Committee on Legal and Constitutional Affairs: Thank you, chair.
Briefly, Mr. Chair and members of the committee, as you know, this concerns the appointment of Justice Nadon to the Supreme Court of Canada. The procedure that was followed was the normal procedure whereby the government consulted with the Government of Quebec, the Chief Justice of the Court of Appeal of Quebec, the Chief Justice of the Supreme Court of Quebec, le Barreau du Québec, the Canadian Bar Association, and others, and came up with seven names, which were referred to a parliamentary committee.
Seven names were referred to the parliamentary committee composed of five MPs, from the government side, from the Liberals and the NDP, and they whittled that down to three. Then the Prime Minister made his selection from the three, knowing that perhaps there would be difficulty with it. The government sought an opinion from Justice Binnie, former justice of the Supreme Court of Canada; Justice Charron and a constitutional expert as well. They recommended that, yes, the appointment could be made.
Still recognizing that perhaps there could be difficulty, the government decided to make a reference to the Supreme Court of Canada, which is to be heard on January 15, and inserted this into your bill.
Now, Mr. Chair, in the first piece of paper that we received from one of the many witnesses who did not appear before the committee, Professor Adam Dodek, he pointed out in great detail that here you have a section in this bill that stands all by itself, right at the end of the bill, after all the other sections and after coming into force. Each section of your bill that you have here today, every 40 or 50 pages of it, says ``coming into force.'' And then at 470 it says, ``The previous sections come into force at a date to be fixed.'' And then standing all alone, like an orphan, is this submission that we're dealing with here today, with no coming into force provision at all — nothing. It stands all by itself. He said that, ``This is against the parliamentary rules of the Commonwealth. This is against Erskine May.'' And, as you know, our rules and the rules of the House of Commons, when we are wondering what applies and there is a problem we go to Beauchesne and then from Beauchesne we go to Erskine May, in the British house. There's a rule in Erskine May that says this is unparliamentary. You can't have a foreign subject matter in a budget bill. The Senate can't vote, as the professor pointed out, or amend a budget bill, so he was proclaiming that this is unparliamentary. But as all members of the Senate realize, we have our own traditions and we have our own procedures that we've followed over the years and a foreign matter in a budget bill is not, in fact, strange to our procedures.
That's basically what I wanted to point out. One further thing: We asked the Government of Quebec to appear. They did not, but, as the chair pointed out, they produced a one-page letter in which they said that they would be appearing before the Supreme Court of Canada and they would be claiming that the entire matter is unconstitutional. Unconstitutional, we presume, because of section 41 of the Constitution Act, which says that if you have a change in the makeup — and I'm searching for the exact word — of the Supreme Court of Canada, then that is a constitutional question which then demands unanimity. It demands a resolution of the House of Commons, the Senate and all provinces agreeing. I presume that's what their argument would be. The word is ``composition;'' it just came to me — namely, section 41(d) of the Constitution Act, if there's a change in the composition of the Supreme Court of Canada. So is this a change in the composition of the Supreme Court of Canada? They didn't appear, but they sent that one- page argument, which, according to the evidence that we heard, really does not hold up to scrutiny.
The Chair: Thank you very much. Senator Baker, when was this debate going on? That is, the particular process that you have described to us, the nine names and then it was down to three, and then the appointment being made. In what period of time did that take place?
Senator Baker: This matter you have before you appeared six months after the budget was presented to the House of Commons.
The Chair: You're anticipating my question.
Senator Baker: Exactly. It occurred six months after. Therefore, by necessity, it has to be an orphan at the end of the legislation with no coming into force date. But some people would argue that if it is a declaratory provision, as Senator Smith would know, a declaratory provision is not supposed to change the law. It's not an amendment. Therefore, that is one of the reasons why the Government of Quebec argument may fail.
The Chair: Senator Runciman made the point during his presentation that this is not the type of thing we would normally be dealing with at the Finance Committee. We're glad we had another committee that was prepared to look into it, but that begs the point that this is a budget implementation act that we're dealing with here, and this issue came up after the budget.
Senator Baker: Yes, but I am sure the chair will agree with me that the minister made an excellent argument for including this. In fact, all of his arguments, I must admit — chair, would you agree — were excellent arguments. He just said ``Yes, it's extraordinary, but these are extraordinary times.'' When have you ever had the Supreme Court of Canada examining the Supreme Court of Canada?
The Chair: Did you ask him if this was impossible to have in a separate piece of legislation dealing with this extraordinary matter rather than putting it into a Budget Implementation Act?
Senator Runciman: No. I think it's a time-sensitive issue with the court operating with less than full body power. That is the concern. Justice Nadon has recused himself awaiting not only the passage of legislation but also, I believe, the judgment of the court itself.
The Chair: Yes. That was the other question about it being time sensitive. You know you'll get it through faster if you put it in something that is confidence legislation.
Enough said on that, but what is the impact of the reference to the Supreme Court at the same time as this is being passed by the Parliament?
Senator Runciman: Well, that was certainly an issue raised; Senator Baker actually raised it. That's a good question. I know that even the former Justice Bastarache commented on it being highly unusual. He couldn't recall a similar situation in his experience, but I think the minister responded with respect to the fact that, again, this is a clarification. These are declaratory provisions, but I think they want to ensure there is a high degree of comfort with respect to the way they are proceeding.
Senator Baker: All the witnesses took the position, except the minister, that this was extraordinary — to have this measure before the Senate and the House of Commons. But a question asked of the Supreme Court as to whether or not this is legal, what we're doing — having a declaratory provision — and Justice Bastarache said that he could not recall this ever happening before, as the chair pointed out. He couldn't remember.
Well, I have a memory that goes back further than his. I'm older than him, and I can recall. In 1976, I must admit this, Mr. Chair, we did exactly the same thing. I didn't mention this in the committee, on television, but we did exactly the same thing with the Anti-Inflation Act. In 1976 I was a member of Parliament. We passed it, and two months later we referred it to the Supreme Court of Canada to find out if it was legal what we did. I have to admit that, in all honesty.
The Chair: Can we distinguish that by the fact that it was passed and then the reference took place after?
Senator Baker: We can only distinguish it by the fact it was an urgent matter, and inflation was standing at 10 per cent.
Senator Buth: I actually watched the proceedings on CPAC, so just a short question: Did your committee propose any changes? Or what was the final decision of your committee?
Senator Runciman: No, there was unanimity. We had a very thorough discussion and raised all the concerns that were brought to our attention. And I think there was a pretty significant comfort level with the report of the committee.
Senator Buth: Thank you very much.
Senator Baker: I think there was. There were three witnesses who said we shouldn't be doing this, and four witnesses who said we should be doing this. But in the end, I think, senators, there was a realization, after listening to all the arguments, to say that somebody in the Federal Court would not qualify to be one of the three Quebec judges just doesn't hold up to scrutiny.
First of all, as far as the Province of Quebec is concerned, three witnesses pointed out that the position of the Government of Quebec has changed from its historical position: In 1971 with the Victoria Charter and in 1987 with the Meech Laker Charter. Their position was, with René Lévesque proposing in between that point, that a Quebec judge on the Supreme Court of Canada — one of the three — the qualifications were that they would have been a member of the bar, an advocate for 10 years, or a member of a court appointed by Quebec or a member of a court under an act of Parliament. In 1971 and 1987, those were the provisions. That was the position of Mr. Lévesque's government.
Now all of sudden it has changed; that you cannot have a judge of the Federal Court.
Just one further point on this: We had pointed out to us by three professors the fact that the Federal Courts Act says that 10 of the 30 judges in the Federal Court must be from Quebec, and that of the Federal Court of Appeal, five of the 11 judges must be from the Province of Quebec. And they are selected under the Federal Courts Act from either the Court of Appeal of Quebec, the Superior Court of Quebec, or as a solicitor-barrister of the Province of Quebec.
Therefore, the concern of the civil code not being adequately ingrained in a judge representing Quebec just doesn't hold water, because these people would have litigated these matters and would have sat in judgment of these matters during their tenure with the Federal Court.
So it just didn't make any sense that you would exclude those people from those being selected.
Senator Callbeck: I have one question that I'm not clear on. What happens if we pass this legislation, Bill C-4, and then the Supreme Court comes back and answers no those two questions?
Senator Baker: What happens is, as Justice Bastarache, I think, pointed out to us, he said, ``Look, if the Supreme Court of Canada decides no, this can't be done. . .'' — in other words, the appointment of Mr. Nadon does not stand, then he said, ``. . . it goes to the second question before the Supreme Court of Canada: Is this possible to do what we're doing here? Is this constitutional?'' And then the Supreme Court of Canada will have to decide what constitutes the composition of the Supreme Court of Canada. Is it the numbers or their actual makeup and what their previous professions were and whether or not they would qualify?
So he left it open at the end that the Supreme Court of Canada, if they say ``yes, of course,'' then they do not have to deal with this question, but if they say ``no,'' then it will come down to a question of determining whether it's constitutional.
Senator Runciman: I get Bastarache and Pelletier mixed up — they said the same thing — but I think it was Bastarache who indicated that he felt the clarification was unnecessary and probably created a few problems and raised some questions that, unfortunately, we're now dealing with. But it was his view of the world that this was not necessary at the outset.
The Chair: Senator Runciman, Senator Baker, I read through your report as we were going along here, and I kept looking for some concluding remarks that said, ``We believe you should pass these sections.'' And that's what Senator Buth was asking.
May I take it from Senator Runciman's comment that your recommendation is that, when we do the clause by clause, we should vote in favour of these particular clauses?
Senator Runciman: Yes, indeed, Mr. Chair.
The Chair: Thank you very much. We appreciate your help and we'll do our very best to deal with this as we go along.
Next and final is the Transport Committee. We apologize, Senator Dawson, for keeping you waiting. We have your report and we understand that your deputy chair was not at the hearings.
The Honourable Senator Dennis Dawson, Chair, Standing Senate Committee on Transport and Communications: He was not at the hearing on this particular issue.
The Chair: But he has been invited. I want honourable colleagues to know that he had been invited.
So could you help us? This is Part 3, Division 8, page 212.
We'll all just get to that page and we will ask you to tell us about what's there.
Senator Dawson: To quote Senator Baker, I will be brief. Anybody who has been in the house when he says that knows we're good for half an hour.
[Translation]
It won't be my case since you lobbied me very hard to be here. I'll be brief. There are two paragraphs. They deal with the issue of federally regulated bridges to be amalgamated so there are fewer agencies that manage the bridges. The four bridges in question, I will read from my notes, are:
[English]
The Federal Bridge Corporation Limited, the Seaway International Bridge Corporation, St. Mary's River Bridge Company, as well as the Crown corporation called the Blue Water Bridge Authority, all of these authorities are now going to be under one main authority.
The only witnesses we had — and we had no other requests — were from Transport Canada, the Director, Portfolio Policy and Governance, Crown Corporations Governance. The only subject of any interest was the question of exceptions: Why do we not have the bridge to Detroit? Why do we not have the Champlain Bridge or the Jacques Cartier Bridge? As far as the bridge from Detroit is concerned, it's being built and will be an international bridge. It's not based on the same model as these Crown corporations. As for the Jacques Cartier Bridge and the Champlain Bridge, they are both intraprovincial, and they have a different status.
If and when we have a new authority for the building of the new Champlain Bridge, it might come back to the Transport Committee.
That was the only question of any interest by part of the committee.
The Chair: What was the driving force for amalgamating?
Senator Dawson: Economies of scale. They are all very small organizations that all do the same thing. So having an accountant and legal services for each one was not very practical.
The Chair: And a board of directors?
Senator Dawson: They don't have that much activity to start with, so it is economies of scale. If jobs were lost, they were lost through attrition, with very little economic impact. Like our colleagues who have been here before, it's always surprising that a non-budget issue would be in a budget implementation bill. We found that it probably could have been of more interest to have a full transportation review act that would be debated, and probably the people of Montreal would be interested in coming to talk about the Champlain Bridge and whether it should be built faster. They didn't have to ask. It's happening anyway. That was the only contentious part of the debate that was held in committee.
The Chair: Did you get any indication from Transport Canada that this issue has been around for a while?
Senator Dawson: Yes, they had tried, in the past, to do de-amalgamation and then to have it authorized. Having been chair of the committee for a few years, I know that the Department of Transport is not always very quick in its actions. That's putting it mildly.
The Chair: The way to get this through in a hurry is to put it in a budget implementation bill.
Senator Dawson: It is like all of the other things in there that don't have anything to do with the budget. We are guilty of having done it ourselves in the past. I know that was the approach taken by the government. Pretty soon we will only have one bill, and we will be able to debate that over a month and have a shorter session.
The Chair: Honourable senators, any questions of Senator Dawson? I lobbied him very hard to be here because I know that your deputy chair was not in attendance during the hearings on this particular issue.
Senator Buth: Why does the federal government own bridges?
Senator Dawson: In some cases, it's the international side of it, the fact that they cross from one country to the other. All of these cross the St. Lawrence, so one or the other side. The other reason is that, for political expediency, every once in a while, the government decides that building a bridge would make it look popular. It's like the Champlain and Jacques Cartier bridges. If you are going to get into a debate about tolls, if you have five bridges going to the Island of Montreal and two of them have cost recovery tolls and the other ones don't, it's not a very consistent way of operating urban transportation, but it's not the first time federal-provincial conflicts create anomalies.
Senator Buth: Nor will it be the last.
The Chair: Senator Dawson, thank you very much for being here. We apologize for being a wee bit late.
Colleagues, that concludes our work on Bill C-4 and the various divisions, and, when I bring the gavel down, the next step will be to get the report and wait for the bill to come.
I indicated that we may be sitting Monday night, but I now understand that's not the case. Next week, we will receive the bills on Tuesday — the supply bill and Bill C-4 — and then we will start running them through next Tuesday. In the meantime — and that will be all in the chamber — we will back Tuesday morning doing our report.
Thank you very much for that, Library of Parliament. We will do a report, and then, Thursday, we may have to get permission to meet for about a half hour to do clause-by-clause consideration of Bill C-4.
Senator Eaton: And we will be in the chamber Friday?
The Chair: We will be sitting Friday morning. The rules provide that, when we sit on Friday, we sit at nine in the morning, so I would anticipate that we will be doing Bill C-4 and possibly, depending on what happens, the final stages of the supply bill. They will all be at the final stages.
(The committee adjourned.)