OTTAWA, Thursday, June 9, 2016
The Standing Senate Committee on Legal and Constitutional Affairs, to which were referred Bill S-1001, An Act to authorize La Capitale Financial Security Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec; and Bill S-217, An Act to amend the Criminal Code (detention in custody), met this day at 10:31 a.m. to give consideration to the bills.
Senator Bob Runciman (Chair) in the chair.
[English]
The Chair: Good morning and welcome, colleagues and invited guests of the general public who are following today's proceedings of the Standing Senate Committee on Legal and Constitutional Affairs. Today we start off our hearings with a study of Bill S-1001, An Act to authorize La Capitale Financial Security Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec.
Appearing before us from La Capitale Financial Group is Pierre Marc Bellavance, Vice President, Legal Affairs and Corporate Secretary; and Julie Noël de Tilly, lawyer and Corporate Secretary Coordinator.
Thank you for being here. I believe you have an opening statement, Mr. Bellavance. The floor is yours, sir.
[Translation]
Pierre Marc Bellavance, Vice President, Legal Affairs and Corporate Secretary, La Capitale Financial Group Inc.: Thank you for inviting us to participate in the work of the Standing Senate Committee on Legal and Constitutional Affairs. This is a first for me and my colleague here with me. I wanted to thank you right away.
I would also like to thank the Honourable Senator Dennis Dawson, who has agreed to sponsor our private bill, and stress that he handled this matter very effectively. I would also like to thank Senator Claude Carignan, who will take over the matter.
Furthermore, let me point out that we contacted Liberal MP Joël Lightbound who agreed to sponsor our bill in the House of Commons so that we can meet our deadline.
Let me provide a brief explanation about the petitioner, La Capitale Financial Security, or CFSIA, which asks the committee members to recommend that Bill S-1001, An Act to authorize La Capitale Financial Security Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec, be adopted.
This is not a controversial bill. It is simply a private, purely administrative bill asking that a private corporation be allowed to apply to change its federally chartered corporate status to that of a provincial insurance company, as if it had been incorporated under the laws of Quebec.
I will now let my colleague tell you about the history of this company, which we are asking to be continued under Quebec law.
Julie Noël de Tilly, Lawyer and Corporate Secretary Coordinator, La Capitale Financial Group Inc.: Good morning. The company was incorporated on January 1, 1993, under section 22 of the Insurance Companies Act. It was originally known as Penncorp Life Insurance Company. Its name was changed to La Capitale Financial Security Insurance Company in 2014. Its principal place of business is in Mississauga, Ontario.
In 2006, the company was bought by La Capitale Civil Service Insurer Inc. Both companies are now part of La Capitale Financial Group. La Capitale has two divisions: the personal insurance division and the property and casualty insurance division. It comprises six insurance companies, five of which are incorporated under Quebec law.
Through its personal insurance subsidiaries, La Capitale is the 10th largest insurance company in Canada. As of December 31, 2015, La Capitale's assets under management totaled $5.8 billion. Premiums for personal insurance and financial services were in the order of $1 billion, while those for property and casualty insurance were $880 million. La Capitale has 2,699 employees serving one million Canadians.
The company has undergone all the required prerequisites for the introduction of the bill, as mentioned by the Honourable Senator Dennis Dawson during debate at the second reading of Bill S-1001. This includes the publication of a notice, as required, in the Canada Gazette, the Ontario Gazette and the Financial Post. In addition, we had the petition certified by the Senate's examiner of petitions. It was passed at first reading on May 12, 2016, and at second reading on May 19, 2016.
It is also important to note that the Office of the Superintendent of Financial Institutions, the corporation's current regulator, and the Autorité des marchés financiers in Quebec, which will be the corporation's new regulator, are not opposed to this request. Both entities have actually sent us letters confirming their support for the measure; we can provide you with copies of the letters if you wish to look at them.
We should also point out that this bill does not set a precedent. Since 1994, there have been five previous ones, all of which required a private bill. The first is Industrial Alliance Pacific Insurance and Financial Services, which was continued under the laws of Quebec in 2012. In addition, the Industrial Alliance Pacific General Insurance Corporation was continued under the laws of Quebec in 2011, and the Imperial Life Assurance Company of Canada was continued in 2011 as well. In 2011, the Certas Direct Insurance Company was also continued under Quebec law and, lastly we have the General Security Insurance Company of Canada, which was continued under the laws of Quebec in 1994.
Mr. Bellavance: I would add that the parliamentary debates on the previous bills that my colleague just mentioned are clearly in favour of a proposed amendment to the federal Insurance Companies Act, as that act does not provide for continuance under provincial law. That is why we are here today with a private bill.
In parliamentary debates, especially in the case of Bill S-1002, there was discussion about senators working on other types of bills rather than a simple housekeeping private bill.
The comments expressed in Bill S-1002 are quite eloquent in this regard, and the goal of the discussions we have had with Senator Dawson was to allow us to go one step further in our efforts, by communicating with certain associations, including the Canadian Life and Health Insurance Association (CLHIA) and the Insurance Bureau of Canada (IBC), regarding general insurance, and asking them to propose an amendment to the Insurance Companies Act, in order to avoid the private bill process.
Those steps were taken, and we received letters addressed to Senator Dawson. I received copies, which will be forwarded to the Minister of Finance of Canada.
[English]
The Chair: Thank you both. We will begin questions.
Senator Baker: Thank you, witnesses. I'll ask my question of Mr. Bellavance, who's not a newcomer to litigation — Senator Carignan as well — in this particular area of the law in Quebec.
Mr. Bellavance, you referenced changing the Insurance Companies Act of Canada to allow for a procedure whereby you could do what you're attempting to do here today with a private member's bill.
As we understand it, you would have to change section 39 of the Insurance Companies Act of Canada. The first portion of section 39 lists procedures whereby you can get a certificate of continuance or letters patent under various acts of the Government of Canada, or you could seek the permission of the minister.
You are prevented in law from what you're doing now by, I think, subsection 5 of the act. Is that correct?
Mr. Bellavance: Yes.
Senator Baker: Doing what you want to do now restricts you to certain conditions, a list of five or six acts and five or six ways that you can do what you're doing now, and you must stay within those particular sections of the early part of section 39.
How can we then change the law so that you can do what you're requesting to do now without having to come to the Senate of Canada and the House of Commons of Canada to facilitate this move? I am sure nobody around this table disagrees with what you're trying to do, so how could we bring an amendment to the Insurance Companies Act of Canada to accomplish what you want to accomplish in the future?
[Translation]
Mr. Bellavance: Senator, if I understood your question, yes, our request is related to the wording of section 39. As paragraphs 39(1)(a) to (e) do not apply to us, we need to refer to subsection 39(5), and we have no choice but to go through a private bill for our corporation to be continued. In the case of the previous five that my colleague mentioned, they had to proceed in the same way, with private bills.
The amendment itself would probably grant this continuance power directly to the Minister of Finance, who is responsible for the act as such, much like in Quebec. This would spare companies from having to apply to the Senate and would make it possible to address matters of continuance through the federal Minister of Finance. This is an amendment that could very well be put forward and that would be acceptable under the federal Insurance Companies Act.
[English]
Senator Baker: It could be easily done, couldn't it? I think 39(1)(c) says you would go to a minister of the Crown. You go to the Minister of Corporate Affairs or something like that. Is that correct?
What you're seeking, then, is an additional subparagraph that says, "with the permission of the Minister of Finance,'' because there's already a section in the act that says with "the Minister" prior to it; is that correct?
[Translation]
Mr. Bellavance: Paragraph 39(1)(c) deals with the Canada Cooperatives Act or certificate of continuance or amalgamation as a cooperative. Under this act, reference is made to the Canada Cooperatives Act. An amendment could be made to paragraph 39(1)(c); it could be there, but there must be an amendment.
[English]
Senator Baker: For a continuance as a body corporate?
Mr. Bellavance: Yes.
Senator Baker: Thank you.
[Translation]
Mr. Bellavance: Does that answer your question?
[English]
Senator Baker: Yes, it does.
It is a simple amendment which would reduce demands on everybody's time, and it certainly is legitimate.
[Translation]
Senator McIntyre: Thank you for joining us today and for your presentation. I understand that this is a private bill. La Capitale Financial Group wants to be regulated by a provincial government. That said, do any federal regulatory bodies, such as the Office of the Superintendent of Financial Institutions, and the Autorité des marchés financiers in Quebec, need to approve this change? In addition, do shareholders have to approve it? Finally, will insurance policy holders be affected by this change?
Mr. Bellavance: Let me answer your first question about the regulators. Yes, regulators must also give their approval, and we have received approval from the Autorité des marchés financiers to welcome this corporation in Quebec under provincial law. We have a copy of the letter, if the members want to see it. My colleague mentioned it earlier.
This morning, we received a letter from the OSFI, which is not opposed to this bill and has approved it. It was very important for us to ensure that both regulators are comfortable with this initiative and that they approve the continuance in Quebec.
You mentioned shareholders. If you are interested, we have brought a complete organization chart of La Capitale group. It includes several entities, namely six insurance companies, five of which are already regulated under Quebec law by the Autorité des marchés financiers. Only one is not, the one being discussed right now in today's bill.
The shareholder is a company, Canada Inc., which owns 100 per cent of the shares of La Capitale Financial Security. This company belongs to one of our main insurance companies, La Capitale Civil Service Insurer, which is our big insurance company in Quebec. It is therefore part of the system. We have the authorization of the sole shareholder I mentioned, Canada Inc., for the continuance, and we have it on our record.
To answer your second question, the sole shareholder is in complete agreement with our approach. It is important to understand that La Capitale has been a mutual company since 1940. I'm not sure whether you are familiar with its history. Quebec public servants started the company initially. It is still a mutual corporation. People in the mutual company, at the top of the pyramid, are aware of and agree with our approach. La Capitale Financial Group is just above that, and we work together. Everyone agrees, in addition to the shareholder.
Senator McIntyre: Finally, what about the policy holders?
Mr. Bellavance: The last answer has to do with the policy holders. In this company, there are no participating policy holders. There are no participating policy accounts at La Capitale Financial Security. The core business of this entity is the life, accident and health insurance policy. However, there are no participating policy accounts. So there is no impact on policy holders, which is important.
Senator Jaffer: Thank you for being here today. I would also like to extend a big thank you to Senator Dawson and Senator Carignan for their work.
I have two questions for you.
[English]
Would the stakeholders have to approve the change or will they be affected in any way?
[Translation]
Mr. Bellavance: Shareholders?
Senator Jaffer: Yes.
Mr. Bellavance: It's sort of the same question that Senator —
[English]
Senator Jaffer: No, stakeholders.
[Translation]
Mr. Bellavance: They do not have to approve the continuance at all. There is no impact or negative change for them.
Senator Jaffer: Is it the same for the insurance policy?
Mr. Bellavance: It is the same thing. It has no impact on the product. The fact that changes are made or that the company is continued under Quebec law has no impact on the insurance policy previously issued to the policy holders. There is no impact on that.
Senator Boisvenu: Welcome to the Senate. How does this bill benefit your company in business terms?
Mr. Bellavance: On the business front, the benefits for us are clearly the following: having a sole regulator allows us to limit some internal costs. Let me tell you right away that there is no impact on the employees who are in Mississauga, no job losses or employment-related issues. As for us, our internal costs will go down, given that right now we need to forward documents to two regulators at the same time. This will have a positive impact on our internal business plan.
Senator Boisvenu: When you say two regulators, do you mean at the federal and provincial levels?
Mr. Bellavance: Yes, because there is the Autorité des marchés financiers.
Senator Boisvenu: So you do double the work?
Mr. Bellavance: That is correct, and that is what we wish to avoid. This will give us more flexibility in terms of investments. Let me explain why. The Autorité des marchés financiers applies its investment rules under the Quebec's Act respecting insurance. The federal act has other rules, which are a little more complex. This will simplify our task, given that our investment policies, which are adopted by the boards of directors, are heavily monitored by the Autorité des marchés financiers and the OSFI. So this will make investments easier. Internally, this will result in savings, especially in terms of regulatory compliance, risk management and monitoring groups.
Senator Boisvenu: In principle, you will be working with the Quebec government as a regulator.
Mr. Bellavance: Yes.
Senator Boisvenu: Would the reverse have been possible?
Mr. Bellavance: Yes, if we had decided to amend all the laws, which are very complex. La Capitale Civil Service Insurer, our first insurance company, was created by a private act. So we would have some work to do. It's not impossible, but —
Senator Boisvenu: The easiest way is —
Mr. Bellavance: You are probably not aware, but we used the same approach with Unica Insurance, our other Ontario subsidiary, incorporated under the Ontario Insurance Act. Two years ago, we continued operating the company at the provincial level, in Quebec. No debate took place because the Ontario legislation allowed us to carry out activities in Quebec administratively. We did that to bring it back to Quebec. We are taking the second step by bringing the last company to Quebec.
One day, it may be possible for us to merge this company that we want to bring to Quebec, just like another of our Quebec insurance companies. At that point we would achieve considerable savings. All these steps would probably be good for our organizational structure. It is a plan that we are looking at, because it could be very advantageous for us in a business sense.
Senator Boisvenu: Will there be any impact on customer service, given that the company will be doing business in Quebec?
Mr. Bellavance: No, there will be no change in the range of services. You have to really understand that the provinces are responsible for the range of products. What we want to obtain, the continuance, that is, is really administrative in nature. It has nothing to do with the products we offer.
[English]
Senator Joyal: I would ask the Clerk of the Committee to note that I won't take part in this debate because I want to avoid any appearance of a conflict of interest. I have no direct interest in La Capitale, but it might be seen that I might have an interest in another insurance company. I will want to abstain, and I ask the clerk to note that in the minutes of the meeting.
Senator Fraser: Chair, on the same general topic, I am not a formal member of the committee, but I am present today. I'm not participating in the debate because of a possible perception of a conflict of interest.
The Chair: Noted.
[Translation]
Senator Dagenais: My thanks to our witnesses. When I was the supervisor of insurance companies for the Association des policières et policiers provinciaux du Québec, I had to present a private bill to the National Assembly to make sure that we were in compliance with certain rules of the Autorité des marchés financiers. So I completely understand the goal of your private bill.
My questions will be brief. Historically, a good number of insurance companies saw the light of day in Quebec. Are there other companies that already have the status you are asking for?
Mr. Bellavance: If I understand your question correctly, you are asking if other companies could make a similar request?
Senator Dagenais: Or companies that have already done so.
Mr. Bellavance: Requests like this have happened five times before. My colleague mentioned them in her presentation. Industrial Alliance has made two requests and Desjardins has made three, as far as we can determine the precedents. There were five such cases, in 2004, 2011 and 2012. After that, I do not know if other companies might make a request in years to come.
Senator Dagenais: Is the Autorité des marchés financiers stricter?
Mr. Bellavance: No, it's about the same. We get on very well, both with the OSFI and the AMF. There is no difference.
[English]
The Chair: You talked about another arm of your business that was incorporated in Ontario and moving into Quebec. Now you're hoping to do the same thing and ultimately perhaps merge.
Your principal location is in Mississauga, Ontario. Is there some component of the Ontario legislation that makes it less attractive than in Quebec? As an Ontario-based company, why the move to Quebec versus incorporation in Ontario?
[Translation]
Mr. Bellavance: You mentioned Unica. The context there was that — as I understand the matter — the Ontario regulator preferred to see fewer and fewer insurance companies under its purview, likely for staffing or efficiency reasons. I believe that the provincial government in Ontario did not want to have to regulate a lot of insurance companies, in order to save money, and the AMF was ready to accept the entity. That is the background with Unica: the Ontario government wanted it to be regulated by the provincial regulator in Quebec. All that happened at the same time as our desire to bring this company back to Quebec.
[English]
The Chair: That's interesting, to say the least.
[Translation]
Mr. Bellavance: But there were no particular advantages. The Ontario regulator was still doing its job.
[English]
The Chair: Is there anything further on this?
Is it agreed that the committee proceed to clause-by-clause consideration of Bill S-1001, An Act to authorize La Capitale Financial Security Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec?
Hon. Senators: Agreed.
The Chair: Carried.
Shall the title stand postponed?
Hon. Senators: Agreed.
The Chair: Carried.
Shall the preamble stand postponed?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 1 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 2 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall the preamble carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall the title carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall the bill carry?
Hon. Senators: Agreed.
The Chair: Carried.
Is it agreed that I report this bill to the Senate?
Hon. Senators: Agreed.
The Chair: Carried.
Thank you, witnesses.
Senator Carignan: Will it be tabled this afternoon?
The Chair: Yes. It's all ready to go.
We'll now continue with our consideration of Bill S-225, An Act to amend the Controlled Drugs and Substances Act (substances used in the production of fentanyl). Senator White is the sponsor of the legislation.
Senator White, the floor is yours.
Hon. Vernon White, sponsor of the bill: Thank you very much, Mr. Chair. Honourable senators, this bill is aimed at tackling a question that is of serious concern to the police, public health authorities and communities in Canada — the problem of fentanyl. Fentanyl is considerably more toxic than other opioids and extremely lethal. Even small quantities can and have resulted in overdoses and overdose deaths. In fact, hundreds of people of have died in this country just this year from overdose related to fentanyl. It's particularly deadly to opioid users. People can die and have died with their first use.
We heard from some witnesses last week, in particular Dr. Christenson, who runs the health clinic on Alberta's Blood Reserve, where they had more than 12 deaths in the last year; and Dr. Karen Woodall, a toxicologist who spoke specifically about what she is seeing at the Ontario Centre of Forensic Sciences, and we can see the impact. As well, we have heard the evidence of Marie Agioritis, the mom of a 19-year-old who died from taking only half a fake oxycodone pill that ended up being fentanyl. We have heard from people who have seen the impact of illegal and illicit fentanyl in Canada.
Bill S-225, if passed, would amend Part 1 of Schedule VI of the Controlled Drugs and Substances Act, CDSA, by adding certain substances used in the production of fentanyl so they would be regulated as Class A precursors.
The items propionyl chloride, phenethyl-piperidone, aniline and 4-piperidone are the substances we're speaking of. The precursors would be identified as chemicals or ingredients frequently diverted from legitimate activities to the illegal manufacture of drugs. Under the Precursor Control Regulations, individuals or corporations wishing to produce, package, provide or sell, import or export Class A precursors must apply for a licence. Other requirements are in place under the regulatory regime.
In essence, this bill would make it more difficult for illegal and illicit drug manufacturers, drug dealers and organized crime in Canada to actually access the ingredients to make street fentanyl, which is being made across this country today and is causing, and I would argue has caused, many deaths.
It's the beginning of some of the work that the Senate and Parliament need to do in attacking some of the illicit drug trade, but it's an important beginning.
Thank you, Mr. Chair, and I'll take any questions.
Senator Baker: I congratulate Senator White for introducing this bill. Of course, looking at the history of the Controlled Drugs and Substances Act, I can't see any reason why this would not pass in both legislative bodies.
You say it will be under Part 1 of Schedule VI as a Class A precursor. As I recall, substances under Schedule VI are not controlled drugs. They are not what we define under the Controlled Drugs and Substances Act as "controlled drugs.'' They would be if they were in combination with a controlled drug, meaning a drug that is under Schedules I to V inclusive. Those are your controlled drugs; and VI, under Class A, would be substances that are used in everyday activities, either to be consumed or used in a household and so on.
I'm wondering if we could have an expert, and I don't know but maybe you know. Each one of these four substances, I cannot pronounce or even guess at pronouncing in French. I'm always concerned, when you have a new entry as a Class A precursor.
You look at the Class A precursors, and when you go into a drugstore and get an over-the-counter drug for a cold, it could contain a Class A precursor. Or for somebody who buys cleaning equipment for a home, it could contain a Class A precursor.
Senator, are we imposing upon the Canadian public a whole new procedure, here and now, whereby they have to get licences just to sell a particular thing that you buy now in a grocery store? What is going to be the impact on the Canadian consumer in the legitimate use of these substances? I wonder if you could answer that question.
Senator White: Thank you very much for the question, Senator Baker. So we're clear, we're not actually asking that the precursors be identified and listed as a controlled drug. What we're asking is that the ingredients be listed and registered so that a licence is required to purchase those ingredients. In fact, fentanyl, I believe, is a controlled drug under Schedule I of the CDSA.
Senator Baker: It is. That's Schedule I.
Senator White: It's already listed, not unlike in the last couple of weeks, where the Government of Canada has listed W-18 as a controlled drug.
The challenge we're having now is not that fentanyl is being sold and purchased illegally through pharmacies or over the counter. The problem we have is that people are bringing in the ingredients, often from China. In fact, last week I was on a website and was able to get all the way to completing an order and filling out a form for the Government of Canada to order some of the ingredients. That's how far I got within 10 minutes of sitting in this committee.
What we're really trying to do is limit access and accessibility of the ingredients to those who have legitimate purposes, not unlike we did with crystal methamphetamine a couple of years ago and ephedrine and pseudoephedrine. Now if people have a legitimate purpose and cause to have those items, they can do that. They would have to obtain a licence and they would have to apply, then they would receive that licence and they could legitimately have them.
We heard from Dr. Christenson last week that when we did this with crystal methamphetamine, better known as "ice'' in some locations, we saw a dramatic reduction in the use of illegal crystal methamphetamine. It means that when one drug use goes down, another goes up. Our battle is supply and demand: try to reduce the supply and deal with the demand of addictions and addicts. It gives us an opportunity to focus on addicts at that point in time.
Senator Baker: Mr. Chairman, my key question — and I think you understand it — is: What of the legitimate use of these drugs? This goes into a listing in Class A, which is in everyday use in some substances. Where, in the regulations or the act, does it exclude the legitimate use of these precursors? Are we imposing upon every grocery store or everybody who produces a mixture — I don't know if Health Canada officials here understand what I mean by a "mixture.'' They're nodding their heads that they do.
A mixture is a special section of the regulations. I am concerned that when we add things to Class A, that we are making illegal something that's perfectly legal today.
I can understand you saying, "Yes, you take this precursor and this precursor and this precursor from Class A to create something that is a controlled drug.'' I can understand that. But in using a Class A precursor legitimately, what new impositions will this place on the Canadian public? Maybe the experts can tell me. Where is the exception under the regulations?
Senator White: To be clear, this doesn't make it illegal. This means you actually have to have a licence to purchase, import, export and deliver. It doesn't mean it's unlawful to have it. It means you must have a legitimate purpose and a licence to have it. Possessing fentanyl is not a crime. It's illegal if you possess fentanyl outside of the regulations.
Senator Baker: It's not fentanyl we're talking about.
Senator White: No. We're talking about the precursors, and it's still not illegal. If passed, it would not be unlawful to possess this if you have a legitimate purpose and a licence to do so.
Senator Baker: If you have a legitimate purpose.
Senator White: That's correct.
Senator McIntyre: First of all, thank you, Senator White, for sponsoring this bill.
Last April, superstar Prince was found dead and, according to the medical examiner, he died of a fentanyl overdose. I note that under U.S. federal law, illegally distributing fentanyl to someone who then dies from it is punishable by a mandatory minimum sentence of 20 years. Under Minnesota law, the same actions can result in third-degree murder charges and up to 25 years in prison.
Does your bill call for a mandatory minimum sentence?
Senator White: Today that's probably above my pay grade. I'd have to give some thought to whether or not possessing the precursors would require mandatory sentencing. My goal in this legislation is really to try to impact the supply of the ingredients to produce illegal and illicit fentanyl, like they have done in the United States.
Just so we're clear, the United States have an immediate opportunity to take a precursor and put it on a temporary listing, like they did in 2006 after the massive number of deaths that they had from illegal fentanyl. I don't know that I've given enough thought to whether or not we need a separate criminal offence, outside of what we have. I think the criminal offences we have for illegal possession are already sufficient. I haven't given it any thought. I apologize, senator.
Senator McIntyre: You don't have to apologize. Thank you.
Senator Joyal: Senator White, with regard to the question that you were asked by Senator Baker, it would be helpful if you could tell us in what kind of final product fentanyl might be used as an ingredient outside its illegal use as a drug. In other words, what is the product's legitimate importance in the chemical industry?
Senator White: Thank you very much for the question, senator. The one ingredient that has been identified to me by a number of people that has a legitimate and regular use is aniline. It's used in the manufacture of plastics, and in particular those that are petroleum based.
Although it is listed in the United States as one of the precursors, it's the only one of the four that has been identified to me as having a legitimate and regular use, and that anyone has raised a concern about having it as a listed precursor.
Senator Joyal: Could you give us an idea of the importance of the products made legitimately with this precursor?
Senator White: My understanding is any plastics that include petroleum products. I would take it that is a lot of products. It has raised the possibility, as a result, that we may at some point — probably during clause-by-clause — have a discussion around removing that.
Senator Joyal: Is it right to say those industries already have a licence to use other products and other chemicals that might be also seen as drugs under Class A of the Controlled Drugs and Substances Act?
Senator White: That's possible, but to be fair I'm not sure.
Senator Joyal: My reasoning is that if they have already petitioned the authority to get a licence, it's one more licence. It's not something that would add a burden on them to the point of making their activities more cumbersome or costly.
Senator White: I do know, senator, that of the four, by itself it doesn't have the same level of potency to develop the illicit drug fentanyl, as things like piperidone, in particular, and propionyl chloride have, according to the chemists we were dealing with.
Senator Joyal: You mentioned in your remarks that it's one of the ingredients used by organized crime or on the black market to make damaging and powerful drugs. Are there other chemicals, in your opinion and on the basis of your experience, that should be considered in a similar manner and that government or Health Canada should be concerned with regulating?
Senator White: There are. As I'm sure the committee knows, I was dealing closely with the Canadian Association of Chiefs of Police, as well as the Alberta Association of Chiefs of Police. They've been spectacular when it comes to this. The issue around W-18 — which I know the federal government just identified and listed as illegal under controlled drugs in the last couple of weeks — the precursors for W-18 have also been brought forward. Because I had not introduced them in this bill in first or second reading, I have not added them to this bill, although there may be a discussion in the Senate about an amendment to the bill, because W-18 is spreading across the country.
I've had emails from drug treatment authorities in Nova Scotia already about W-18 arriving there — 100 times stronger than fentanyl, 1,000 times stronger than many other opioids that we already have on the street. It's not an opioid, by the way, but it is a killer and is killing people today again. That's why I said this is just the beginning.
The second part to this, though, is that I think the Canadian government and all of us need to recognize that we need a process that's easier than this to get to the endgame. We've had hundreds of people die, and in June we're sitting here having a discussion about whether or not we should list precursors.
The DEA, I think it's under the FDA in the U.S., has the ability to immediately apply for a temporary listing, which immediately slows down the supply issue, as they did in 2006, and then go through a process of making it a permanent listing.
I think that today we need to actually have a process by which we have an immediate application for a 90-day, 180- day or 365-day process by which the rest of us can then do our job to make it a permanent listing. Those are the two pieces that concern me.
I will be having discussions with senators between now and third reading in the Senate about whether or not we start another bill on W-18 precursors or whether or not we think we have agreement on an acceptance and identification of those precursors from W-18.
Senator Joyal: The representatives of the health department are here, so maybe we should approach them in our questioning —
Senator White: That's a great idea.
Senator Joyal: — on the basis of killing two birds with one stone, if the animal protection society would allow me to use that expression.
Senator White: For today.
Senator Joyal: For today. That would be helpful. If we feel, as a committee, that that might be something we should do, we could recommend it at third reading and make sure it is considered by the whole chamber.
Senator White: I agree, senator.
As a secondary, if I may, Mr. Chair, we heard from Staff Sergeant Klassen and Deputy Chief Daroux about things like pill presses. If we're going to have a discussion about what more we need to do in Canada, a national drug strategy is not just about managing the drug issues on the street; I think it is about impacting on illicit drugs.
The fact that people are buying $10,000 pill presses and having them delivered to their home in Airdrie, Alberta, I think there needs to be a regulatory regime put around the legitimacy of people who can afford to buy a $10,000 pill press and what they actually expect to be doing with it. It's one thing if it's a veterinarian.
[Translation]
Senator Dagenais: I would like to congratulate the senator for sponsoring this bill. As you mentioned, we are talking about hundreds of deaths each year. Prohibiting this drug is one thing, but detecting it is just as important.
Do you know whether the Canada Border Services Agency and even Canada Post could lend a hand so that we can find out exactly who is buying this drug and who is receiving these products? We know that prohibiting a drug is often what whets the users' appetites. Should not the danger from these products, which is sometimes lethal, be the subject of a much greater awareness campaign?
[English]
Senator White: Thank you very much for the question, Senator Dagenais. I think we should be focusing awareness on this. The amount of media that's been put on fentanyl in the last five months has focused specifically on the word "fentanyl,'' almost unfair to the real pharmacological fentanyl drug that's out there. Realistically, we're not talking about that primarily; we're talking about this illegal, illicit poison that's being manufactured in people's basements.
I'm not sure that Canadians fully understand that. I think CBSA has an understanding, but until we give them the tool to make it illegal to bring in the ingredients, I'm not sure they're anything less than having their hands tied as well.
Senator Jaffer: Thank you, Senator White, for the work you're doing on this issue and the leadership you're showing. Especially coming from B.C., it's certainly very much appreciated.
Further to the discussion we've had this morning, from what I understand there are four chemical compounds in fentanyl. In your second reading speech you dealt with law enforcement, Justice and Health officials to make certain that you weren't missing any ingredients. We had a little bit of a discussion before my question this morning on the ingredients.
One of the ingredients is aniline, which I understand is also used to manufacture polypropylene and plastic. With the discussion we've had this morning, would this impact on the industries, would they be covered by permit so that it's not a problem, or should we have an amendment?
Senator White: If I may, senator. Thanks for the question. Not unlike what Senator Baker stated, the vast majority of manufacturing companies out there are probably in a permanent purchasing already if they're into this type of chemical manufacturing. It absolutely would require them to purchase one more permit or licence. I think that's the reality. We've had over 300 deaths in Canada so far this year. If they have to buy a permit, I'm okay with that, actually.
Senator Jaffer: Already this discussion has also taken place, but one of the things in studying this bill, people I spoke to, especially in Vancouver, were saying fentanyl is not as bad as W-18. You take out fentanyl, and then W-18 is even worse. I don't accept that, but I'm just telling you that. They say fentanyl will just be replaced by W-18. What do you say to people like that?
Senator White: I say that, to be fair, they're right. We had bath salts two years ago. We had crystal methamphetamine before that. I've had a question put to me about whether this is the new war on drugs. I believe we're in a continuous battle against drugs.
I think that when we deal with drugs, we have to focus on those two issues: supply and demand. Demand is about addictions, addicts, treatment, immediate treatment, and having a national drug strategy that focuses on that. Legislatively, we have an opportunity to target that supply piece, and that is about taking ingredients away so that illegal and illicit manufacturers don't have the opportunity, or at least limit their opportunity, to put W-18, fentanyl — and W-15 was before that, and there will be a W-19 and something after that. I think it's going to take us continuously targeting these areas.
Criminals have no boundaries, and we do. That's the reality. But I think we do need to target those supply chains.
Senator Jaffer: At our last meeting we had such a compelling emotional argument by a mother. I know health officials are sitting here. We started with bath salts, and it's only getting worse. There is a big piece around this on education, especially around the schools and on TV.
With this legislation, do you not agree that we would have to have a lot of public education? If we remember the words of the mother, it was that the children — and especially the second child — went through this sort of innocently, or semi-innocently, and it just gets worse.
Senator White: I absolutely agree. In Ottawa we're lucky enough to have a program called s.t.e.p. — support, treatment, education, prevention — where we've raised millions of dollars to put a treatment counsellor in every high school in the city, 57 high schools — the only city in the country. They've had tremendous success around educating young people who, once they understand the potential impact, for the most part will make the right decisions for them, the ones they can live with.
In 32 years of policing, I've never met somebody who wanted to be a drug addict, living in a ditch, prostituting themselves, yet I've known thousands of those people. It's because we probably haven't given them the education and, afterwards, when they slip, the opportunity for treatment.
Senator Jaffer: Have you had discussions with health officials or the Minister of Health, Ms. Philpott, about a national educational campaign to go with this?
Senator White: I have not, but I will.
[Translation]
Senator Boisvenu: The world of organized crime very quickly adapts to any legislation that prevents it from selling products. The legislative process that we have to follow in order to impose constraints on it is very cumbersome. I do not understand why we absolutely have to come up with an act each time we want to prohibit a product.
In a previous life, when I was working in the environment ministry in Quebec, the minister had the authority to prohibit things by regulation, which avoided the constant need to amend legislation in the National Assembly. That way of doing things was much speedier, to the extent that, in 45 days, a regulation was published and the dangerous substance itself was prohibited.
In this process, why don't we take a route other than amending legislation? Why would we not give the authority to either the Minister of Health or the Minister of Public Safety to prohibit these substances by regulation, since we know that these substances are the precursors with which a lethal drug is made?
Senator White: Thank you for your question, Senator Boisvenu. It is very important to fully understand the situation in Canada, as compared to other countries.
[English]
As an example, in the United States the DEA has the ability to apply for an immediate listing of precursors and chemicals, temporary, so exactly what you're concerned about now.
We're a couple of years into a huge chemical outbreak of fentanyl that's causing hundreds of deaths in the country, and we're sitting here today in the legislative process for about six weeks on a private member's bill. Giving the opportunity for Canada's equivalent of the Drug Enforcement Administration, the RCMP, to go directly to the minister and ask for a temporary permit would be exactly where we need to get to.
We will need legislative change to do that, but I would suggest that's exactly what we need to do. We need a piece of legislation that allows the RCMP to apply for that, receive a temporary and then go through a legislative process for permanent listing. I think that would help those agencies and communities deal with some of this more quickly.
It was just last week sitting in here when I was online walking through the process of ordering the exact chemicals I'm hoping to list from a company in China. I could pick the language I spoke, by the way. English Canada and French Canada were both listed. They would explain to me the CBSA issues that I would have to deal with. Not that it's illegal, by the way. They're just explaining to me what I have to do when it arrives.
[Translation]
Senator Boisvenu: At that point, it would be interesting at third reading for you to make a recommendation encouraging the government to amend the empowering legislation, either in the Department of Public Safety or the Department of Health, in order to give the minister that authority.
[English]
Senator White: That's correct, and I am pleased to see the actions of the minister in relation to W-18 very recently. I hope the discussions we're having through this piece of legislation will generate interest around both a national drug strategy that deals with some of these issues, but secondly that it will actually get us to a point where we have a fast- track process to list these chemicals.
We're not talking about impacting negatively on most manufacturing. We're talking about temporary listing that allows those legitimate organizations access and the others not. Thank you for the question.
Senator Fraser: I have sort of the same question.
Senator White: But in English.
Senator Fraser: As I understand it, the CBSA allows for Schedules I to VIII to be amended by regulation. So why are we having to do this by legislation, which is not the neatest, cleanest, least cumbersome way to affect most change?
Senator White: That's a great question, to be honest, to ask of the authorities if they appear back here. Realistically I think that is the way this could be done. I was excited two weeks ago when I saw the press release done that W-18 was now listed under the CDSA, but it did not talk about the listing of the precursors. So there was that opportunity, but it wasn't taken. Maybe the interest we generate with this piece of legislation will generate that immediacy as well.
Senator Fraser: There are two elements to that. One is the immediate, temporary thing that you're talking about, which sounds very interesting. But the other is just the fundamental question about legislation versus regulation.
Senator White: Agreed.
Senator Fraser: But you don't have an instant answer to that?
Senator White: No.
Senator Fraser: Did you decide to bring in this bill just because you thought nothing was happening?
Senator White: I decided to bring in this bill because nothing was happening.
Senator Fraser: Okay. Thank you.
Senator Lankin: Thank you, and I appreciate both your work on this, but also the sensibilities you bring from your past in law enforcement and your approach of talking about both the supply and the demand and the need for a national drug strategy and the need for focus on harm reduction and other measures to work with people who are suffering from addictions.
I support what you're trying to do. There are some questions that I have that I would like us to find a way to get the answer to, and I don't know exactly how to do that here and whether that can be done through the research branch. It seems to me the question of if there is a regulatory power — and we might awaken the interest in using that by your bill, and I have no problem in doing that — we should know that. We should not appear naive to what the actual powers of the legislation and regulation already are.
If there are parts of industry or other legitimate users of these precursors who will encounter some kind of a licensing requirement, and that might be just fine, I would want to know who and what the impacts would be so that we are aware of that and are not naive to the impact of the bill as we go forward. Others have spoken about some things, and there may be a couple of other things to add.
Would you support, Senator White, if we asked for some work to be done and provided to us in support of passing the bill, but passing the bill with full awareness about what these impacts may be so we can speak to them knowledgeably and/or include them in the information that we send to the house and in the plea to the minister to take action if they actually have the regulatory power in their hands now?
Senator White: Thanks for the question, senator. I appreciate it. First of all, listing these does not exclude legitimate users of the ingredients from accessing them. It just causes them to go through a process and hopefully excludes illegitimate or illegal users.
One process by which we could raise the awareness is by attaching an observation to the bill if we push it forward. My only concern about delay is it is the middle of June and my goal is to have this bill passed sooner than later, primarily because I do think we can impact quickly. I support any observation that identifies to the government the importance of some of the things that you've identified, including supply and demand, harm reduction and treatment, et cetera, as well.
Senator Lankin: If I may, perhaps you can enlighten me in terms of the procedures, Mr. Chair. Is there a way through parliamentary research to ask the question of what regulatory powers already exist under this legislation?
Senator Fraser: We have this brief from the library already.
Senator Lankin: Sorry, Senator Fraser. If so, in the point you raised, and that's what I'm responding to, that there is the regulatory power, might we not speak to that with some knowledge and conviction?
It seems like there were some questions around the table. I don't have a sense that we have full confidence in what that would produce. If we could have that information so that when we speak at third reading in favour of this it could be included as part of the observation that we are passing this legislation but we believe you have the power already, please proceed. Perhaps there is a way of understanding a bit of research about what the legitimate uses of these precursors are and who the industries are.
Quite frankly, I agree with you that if it is about saving lives, then licensing is not onerous, I do not believe, but I actually don't know that. Again, I think that would be a useful piece of information for us to have to speak to so we're speaking with full knowledge.
This is not to delay this. I support your goal of trying to get this done before June.
Senator White: If I may, Mr. Chair, I think the Health officials on the next panel will be able to answer the first question around the regulatory process.
The Chair: Yes, officials are coming up on the next panel. If there are any lingering questions, certainly we can ask the research team to provide those for us.
Senator Baker: I will now defer if Health Canada is coming next.
Senator White, just as an aside, I wouldn't take out any of these identified substances, if I were you. I would support you in keeping them in.
Senator White: Thanks, Senator Baker.
Senator Baker: That is because I believe that we have, under the Precursor Control Regulations, exemption sections. There are exemption sections there, because I remember putting them there on a committee. It's just that I don't know how far they go. I believe, in the back of my mind, that you're covered here under these four, but I want to be certain.
Senator White: Understood, senator.
Senator Baker: I would support you in leaving them in. As the senator pointed out a few moments ago, I'd like to get from Health Canada exactly what the situation is.
Senator White: Thank you, senator.
Senator Joyal: Senator White, as much as you deserve praise from all the members of this committee, what is surprising to me is that the Government of Canada spends millions of dollars on a drug strategy, organized crime control and whatnot, yet nobody would make the simple gesture as the one you proposed unless a senator or a member of Parliament takes the initiative.
Who's responsible to check the market and see that emerging products represent suddenly something that we have to intervene immediately? If you were not there, it seems that nobody would care about this.
That seems to me to be, in a country where we have a so-called drug strategy — s.t.e.p., the provinces and whatnot, with all its implications, that the simple initiative of listing a product that is used to make a drug that is killing hundreds of people — doesn't seem to ring a bell anywhere in the system. There's something wrong there. There are lapses, to say the least, in the system that somebody should be able to answer. We will hear witnesses from Health Canada, but there is no doubt that we must, in our observation to the Senate and to the other place, attract the attention of the government to this, because it seems to me that it needs to be addressed directly, front and centre of your initiative. As much as I'm supportive —
Senator White: No, I understand.
Senator Joyal: — this is the one thing we have to do if we are responsible legislators.
Senator White: If I may, Mr. Chair: To be fair, I think we're all responsible. Any one of us knows we have a responsibility to bring something forward. There needs to be a cleaning up of our national drug strategy going forward that focuses on those areas that I talk about, including trying to impact on supply before it becomes a three-year problem.
The Chair: Thank you, senator. Very much appreciated.
I will ask Senator White to take his normal seat and ask the Health Canada officials to come forward so we can continue discussion with respect to Bill S-225.
I'll introduce the officials appearing before us, and then we will move directly to questions. We have Kirsten Mattison, Director, Office of Drug Policy, Controlled Substances Directorate; Norma Won, Legal Counsel; Jacqueline Gonçalves, Director General, Controlled Substances Directorate. Thank you all for being here.
If you have an opening statement, please proceed.
[Translation]
Jacqueline Gonçalves, Director General, Controlled Substances Directorate, Health Canada: Honourable senators, thank you for the invitation to appear before the Standing Committee on Legal and Constitutional Affairs to answer any questions committee members may have relating to Bill S-225.
[English]
Canadians are now the world's second-highest consumers of opioids per capita, and reports of opioid-related deaths and abuse are increasing. Health Canada takes this opioid crisis very seriously.
Opioid misuse is a complex issue, involving both legal prescription drugs and illicit street drugs, both of which can be dangerous when misused.
There's no simple solution to the problem of opioid misuse in Canada. Taking steps to address the associated health, safety and security challenges requires a collaborative, compassionate and comprehensive approach. This includes elements that address enforcement, prevention, treatment and harm reduction based on a strong foundation of evidence.
Bill S-225 would provide law enforcement with an additional tool to take action against the illicit production of fentanyl in Canada.
[Translation]
Fentanyl is an opioid of particular concern. Between 2009 and 2014, there were at least 655 deaths in Canada where fentanyl was determined to be the primary cause or contributing cause.
[English]
Illicit fentanyl is increasingly being smuggled into the country or produced in clandestine labs here in Canada. From 2011 to 2015, Health Canada's Drug Analysis Service helped law enforcement dismantle eight clandestine labs producing fentanyl in British Columbia, Alberta and Quebec.
Bill S-225 seeks to amend the Controlled Drugs and Substances Act, the CDSA, to list substances used in the production of fentanyl under Part 1 of Schedule VI of the act to define them as Class A precursors. This would make the unauthorized import, export and possession for the purposes of export of these substances prohibited under the CDSA, with a penalty of up to 10 years imprisonment. Once controlled, legitimate activities, such as research, are still possible; however, researchers will no longer be able to import or export these substances directly and will be required to buy or obtain the precursors from a licensed or authorized dealer.
[Translation]
The addition of a controlled substance or precursor to a schedule under the Controlled Drugs and Substances Act is typically done through an order in council, but it can also be done through a legislative process, as Bill S-225 proposes. In order to determine whether to schedule a precursor, Health Canada would generally consider a number of factors, such as the legitimate industrial or scientific use of the precursor as well as the importance of the precursor in producing a controlled substance.
[English]
My colleagues and I welcome the opportunity to answer any questions you may have. Thank you.
The Chair: We'll begin those questions with Senator Baker.
Senator Baker: Thank you to the witnesses. Welcome back to the committee; you were here before when we were examining a subject around how drugs are made in prisons. One of our chief considerations was the use of different drugs, mashing them together and creating something that's a controlled drug in prisons.
This is a very complex area of law we're talking about here today. Quite simply, a "controlled drug'' is defined as a drug as identified in Schedules I to V; that's correct, isn't it? Then Schedule VI is where these drugs are going in Class A. Class A is where you have drugs that are sometimes used for legitimate purposes: You find them in cleaning equipment, in stores, on store shelves and so on. They're classified as an "A'' because there's an exemption for their use in the regulations. I can remember when we passed an exemption.
Section 4, 5 or 6 is the exemption section. Which one is it? Look at 5. Let me just continue — section 5; am I right?
Kirsten Mattison, Director, Office of Drug Policy, Controlled Substances Directorate, Health Canada: So there's a series of exemptions.
Senator Baker: Yes, but section 5 is an exemption.
Ms. Mattison: Yes, it is. That's the preparations and mixtures that we discussed last time.
Senator Baker: You see? There we saved the public from having imposed on them an illegal activity if that substance in Class A is used for legitimate purposes as part of a pill or a mixture of this sort of thing, right?
I'm thinking that Senator White is proposing in his bill that the aniline would perhaps be excluded. The exemption would be provided under section 5, which means somebody who sells for the purpose of selling a mixture if it is in certain amounts.
I'm thinking that exemption is there and covers everything that's in the regulations. If you abide by that exemption, that covers you from having to apply for licences and apply for this and apply for that because it's in a legitimate amount that's used in our society. Am I right or wrong in that?
Ms. Mattison: That's correct.
Senator Baker: Thank you.
Ms. Mattison: That portion of the regulations would come into effect when the precursors were listed in the schedule to the regulations.
Senator Baker: In A.
Ms. Mattison: This bill will list the precursors to the act, and then a subsequent regulatory amendment would also be required to list the precursors in the regulations.
Senator Baker: Yes.
Ms. Mattison: Once that listing is made, there can be a number assigned. That number is variable, depending on the substance. That number would be assessed based on what uses industry would typically require, what volumes would typically be sold, and then what potentially a clandestine, illicit, illegal lab might want to import. You try to make a distinction so that the sale you didn't want would be not exempt but the legitimate retail sale, for example, could be allowed under the number that's set. There are lots of different numbers listed depending on the substance.
Senator Baker: Yes, but it exempts you, under the provisions of the regulations, from having to apply. We were concerned that you're imposing upon an industry a new requirement to get a licence for this and that when it's being used for a legitimate purpose. That exemption section applies to the rest of the requirements under the regulations, doesn't it?
Ms. Mattison: Yes.
Senator Baker: It says "exempt under the regulations.'' Isn't that what the first line is?
Ms. Mattison: Yes. It says "paragraph 6(1)(b) does not apply if.'' Essentially, yes.
Senator Baker: Thank you.
[Translation]
Senator Boisvenu: Welcome, ladies. The 2016 report by Professor Bugden, of the University of Manitoba, tells us that about 50 per cent of the prescriptions written by physicians for fentanyl come with risks. So, in 50 per cent of the cases, there is a possibility of overdosing.
From 2009 to 2014, 650 people died. How many of those deaths are in fact due to medical errors or to improper use of that drug, as opposed to its "recreational'' use by people who get it illegally?
How many deaths are due to each factor?
[English]
Ms. Mattison: Unfortunately, the methodology for gathering those numbers is toxicology data from coroners' reports. The way the data are currently collected, we don't have the ability to distinguish between somebody who obtained a prescription legitimately and somebody who didn't.
[Translation]
Senator Boisvenu: So you do not have the statistics.
My other question will be more difficult. You are responsible for public health in Canada. From 2009 to 2014, 650 people died. Can you explain to me why a bill to prohibit those substances was not introduced until 2016? How is it that Health Canada did not react earlier? Your role is to protect Canadians, but it required a senator to take the initiative to introduce a bill to prohibit these substances. It seems to me that a red light should have gone on in your office. Do you not agree with me?
Ms. Gonçalves:You make a very good point. Certainly, we look at the effects of a number of substances. The regulatory processes associated with the orders in council that allow us to control substances require scientific data.
Senator Boisvenu: But, madam, 650 people have lost their lives, and you are telling me that it's all about the process, all about the regulations?
[English]
Ms. Mattison: I would say it's a question also of looking at the whole picture.
[Translation]
Senator Boisvenu: That is not my question. Why are you not looking at the way you go about things? Why are you not looking at your regulations? Six hundred and fifty people have died.
[English]
Senator McIntyre: It's obvious, in listening to those presentations, that we need effective drug strategies. That's where the focus has to be, and that's where the focus should remain.
Could you elaborate a bit on what Health Canada is doing with regard to prevention, education, intervention treatment and enforcement? I understand that each element is necessary and there are challenges out there. Please elaborate on that.
Ms. Mattison: Certainly. Under the current system, the Government of Canada takes action in prevention, treatment and enforcement.
For example, there's a treatment plan under the existing national strategy. Essentially, there's funding to improve treatment systems, to provide drug treatment services to First Nations and Inuit, to support treatment programs for youth in the justice system and to provide support for drug treatment courts, which offer an alternative to traditional justice for non-violent offenders who have committed crimes motivated by addictions. Most recently, funding has been provided to support research into new treatment models.
Since 2007, the health portfolio spending has been approximately $970 million. In this current fiscal year, there's approximately $100 million allocated for treatment services from the health portfolio.
Senator McIntyre: Obviously, from what I hear, there are challenges associated with the illicit sale of fentanyl, similar to other drugs. That said, would you say that the death rate, addictive qualities and potential for profit far exceed anything that we've seen before?
Ms. Mattison: I would say that certainly there are factors associated with the current situation we see with fentanyl that make it very challenging. We've spoken already about the extremely high potency of the drug, so shipments can be smaller than would be associated with other substances. Illicit synthesis operations can be similarly smaller, so they're potentially easier to hide.
There's an association with legitimate use and these illegal products. We have seen examples where counterfeit tablets are produced, so drug users may not know what they're taking when they ingest a substance, which can increase the risks to them. Certainly there are some very concerning factors.
Senator McIntyre: Bill S-225, Senator White's bill, will be very helpful, then?
Ms. Mattison: This bill certainly addresses an important component to reduce supply, absolutely.
Senator Batters: This is kind of a supplementary to Senator Boisvenu's question, because I had the exact same extreme concern when you started to speak about this.
Ms. Mattison, I have your position listed here as Director, Office of Drug Policy, Controlled Substances Directorate; Ms. Gonçalves, you are listed as Director General, Controlled Substances Directorate; and Ms. Won, you are Legal Counsel.
Did any of you recommend to your superiors, to your department, to the government — and thankfully Senator White has provided this bill — that this important step be taken to curb the use of this terrible scourge on Canadian society? It has been known for quite some time that this has been a terrible scourge.
Ms. Gonçalves: As I started to explain before, I think we do monitor these substances and the use of these substances very closely, and we work with law enforcement to identify them.
On the question of timing in terms of actually moving forward with proposals to deal with the precursor issue and the use of fentanyl itself, we were actively studying and reviewing the options to actually deal with it.
In terms of timing, I think Senator White proceeded more quickly than we were able to, but we were definitely looking at this issue in detail.
Senator Batters: "Looking at this issue,'' but this has been in the news for quite some time already. I just watched a "Law & Order'' episode about it — a fairly old repeat — where they talked about the scourge of fentanyl.
Yes, obviously you're studying all these different types of drugs at that are so quickly modifying and becoming more and more dangerous now with the brand-new drug that's been talked about in the news lately, but did any of you personally recommend that this needed to be done — not just studying it, but "let's move''?
Ms. Gonçalves: Yes, we were in the process of doing that.
Senator Batters: Senator White's bill is quite recent. It was only introduced in the chamber in the last couple of months, I think. You were taking steps before that, other than studying?
Ms. Mattison: I can speak to that. Our directorate looks and makes recommendations for all of the schedules under the Controlled Drugs and Substances Act. We have an internal structure where our scientists do environmental scanning, look for problems and build evidence, and then bring them and discuss them as a group to set priorities. Those recommendations move through the system.
This is where we can say we're often studying a variety of substances and their precursors, and it's a question of gathering all the data, meeting our criteria for having a robust evidence base and moving it through the system. There's an ongoing process.
Senator Batters: Given the length of time that it's taken to move on this, would you suggest that perhaps that system, which sounds quite bureaucratic, needs to be flattened out?
Ms. Mattison: I can provide a couple of examples where there has been a heightened degree of attention and pressure and items have moved faster.
For example, a few years ago we added the bath salts to the schedules, and most recently we moved to schedule W- 18 and added it as a controlled substance. Those are two examples where the system can work quickly when there's an urgent public health and safety need. In this case, these substances were following more of the regular process.
Senator Batters: With that many deaths?
[Translation]
Senator Dagenais: My question will be very simple. If you can answer, great. This drug is killing a lot of people. What could be done to move the matter along more quickly so that lives can be saved? Do we need a bill or the direct involvement of the minister?
[English]
Ms. Mattison: We're very aware of the situation with the increasing number of deaths from opioids in Canada. Making a change to the laws will have an impact that addresses the supply side, which allows law enforcement to press charges, in this case, before drugs are even produced — if this bill becomes law — when the precursors are scheduled.
There are a lot of other interventions. We've heard people speak to education, other prevention efforts and treatment. Our minister has recently tasked the department with looking at all possible options and what our levers are federally to address this opioid crisis.
We're doing that. We're very committed to that work, and we're committed to working with our partners across the country to help advance that.
[Translation]
Senator Dagenais: I certainly want to trust the system and I do not want to rush to a value judgment. However, for some time, I have been noticing that, in some areas, we tend to do a lot of analysis, conduct a lot of studies and hold a lot of committee meetings. You cannot be against due process, of course, but the fact remains that, sometimes, it holds issues back rather than moving them forward. We have to find more productive ways to try to get to a result that will save lives. Legislation is all very well, but this is not just about legislation; it is about saving the lives of the Canadians who, unfortunately, are using these drugs, and a lot of others.
[English]
Ms. Mattison: I can cite recent actions that have been taken: the multi-year approvals that were issued for supervised consumption sites at two centres in the Vancouver area, the federal move to make the overdose reversing drug naloxone available without a prescription and the recent addition of W-18 to Schedule I of the Controlled Drugs and Substances Act. I can say we are very committed to identifying more of those actions that can be taken and offering them to our minister as possibilities for federal intervention.
Senator White: Ms. Mattison, when listing W-18 under CDSA, was there a discussion around listing the precursors at that time?
Ms. Mattison: Yes. I'm going to be careful, because, unfortunately, I've brought my fentanyl precursor notes and not my W-18 notes.
Senator White: You can have mine if you like.
Ms. Mattison: I'll just scope my responses to what I'm certain of.
Senator White: Please.
Ms. Mattison: The W-18 precursor discussion was very interesting. The W series of compounds are interrelated and W-18 is in fact synthesized from W-15. A number of the W-18 precursors are psychoactive, we call it, so they could be abused in their own right and not just as ingredient molecules.
There's a group of those that is already controlled. The way our chemists designed the W-18 listing, we have the ability under the Controlled Drugs and Substances Act to write class listings to add things like chemical words — salts, derivatives, isomers — that capture a bit more than one molecule. That was done when we drafted the W-18 entry.
Some of those precursors are controlled.
Senator White: Listed as controlled drugs.
Ms. Mattison: Yes.
Senator Joyal: Welcome and thank you for your information, but it makes me lose my appetite. It doesn't seem that the department is connected with the police forces in the country. Each service in each province has a drug squad and police service. They are in the field, and they investigate. They are called when somebody dies and so on. They are the real people; they are the front-line people in touch with the impacts of those illegal drugs. The evolving drugs, as we were told, when one is more or less under control another one appears.
It seems to me that the system doesn't work in sync with what's going on in the market. As much as I commend you for W-18, in fact the initiative of Senator White should have been one of the same kinds of precursors that should have drawn your attention.
You've convinced me that you have the connection with the police forces to act swiftly and issue a temporary ban on one drug if you feel that, in your analysis, does not produce the results, or that you have not measured the impact for the private sector that legitimately might use it. It seems to me the system is so heavy. It's the perception; I might be unfair, and I don't want to be unfair to you.
It seems that the system doesn't work in sync with those who are in the field, like Senator White and his former colleagues, and Senator Dagenais, to be able to answer, when you see the dead piling up. How many dead bodies do you need before you declare a state of emergency? I think we have a steep slope to mount if we want to try to convince the average citizen that the system is efficient.
We are certainly concerned with providing support, but we are more concerned about having a system at the forefront of drug use and the drug market in the future. It seems we will always be lagging behind organized crime, which will be always be able to find a substitute somewhere with all those chemicals, to come forward with something else.
I hope Senator White stays in the Senate a long time, because we can rely on him to do that. The system should have its own logic to operate on a more efficient basis than this perception suggests.
The Chair: Is there a question, senator?
Senator Joyal: Yes. What is your link with police forces in the drug field?
Ms. Gonçalves: Thank you for the question.
Essentially, our direct link to law enforcement and what they're experiencing on the ground happens through Health Canada's drug analysis labs and the service they provide to law enforcement to essentially analyze the samples that they detect when they are in the field. That information is then passed to us for analysis and determination as to what's happening in the field and what tools we can use from a regulatory perspective to actually find the right way or right tool to deal with the emergence of a particular substance.
In the case of fentanyl, what we've seen over the last few years, between 2009 and 2014 —
The Chair: I'm going to interrupt. We're pushing the clock here. You were asked a specific question, I believe, with respect to policing. I'm going to encourage witnesses to be as concise and respond directly to the questions because, as I said, we're pushing the clock here and we have two other matters to deal with.
Ms. Gonçalves: Essentially, the answer to your question is we have a direct link through the drug analysis service and we're certainly in direct contact with the RCMP about what's happening and what they're seeing in the field.
The Chair: Again, I ask visiting senators, as well, to be concise with their questions.
Senator Lankin: As concise as possible. You know who you're talking to.
Thank you very much. I have two questions. In the number of deaths that you cited due to fentanyl, were you talking about the category of prescribed fentanyl and street-produced fentanyl combined?
Ms. Mattison: Yes.
Senator Lankin: I want to be supportive of the department and the work that is done, because the 600 deaths that people are talking about and that have been piling up, many of them are due, in fact, to legal, prescribed fentanyl and the accidental overdosing, purposeful overdosing and/or illegal trade in legal, prescribed drugs. I do not believe it is a fair comment to say that there hasn't been quick action. There have been a number of actions on fentanyl, and I won't go on.
I think the issue of now looking at the emergence of street-produced and the precursors is the next step, and I commend what's been done and I understand that you were, in fact, looking at that.
I'm interested now, at this point in time, in whether or not you could proceed very quickly with a regulation and get this done in the next week — because regulations could be walked around cabinet; I know how it can be done — or do we have to go through the process of passing this bill?
Ms. Mattison: At our level, we have the ability to pull the written documentation together and to put that forward as a recommendation. That wouldn't be our decision.
Senator Lankin: Will you put it forward as a recommendation, after having been barraged by these questions and, essentially, subtly — or not so subtly — accused of not having moved fast enough? Is it an opportunity for you to go back and have that discussion and perhaps move this along?
Ms. Mattison: We could have a discussion internally, certainly.
Senator Fraser: I've been looking at the list of factors that have to be considered before a substance is scheduled, and they're not uncomplicated. They range from chemical and pharmacological similarity to other substances already regulated, all the way up to international requirements and trends in international control. These are not simple matters, so I can understand that in the normal, prudent administration of public business, it takes time.
I have two questions. First, how much time would it normally take, in the normal conduct of affairs, to get something from the beginning examination up to getting it on the schedule?
Second, when it was possible to move comparatively quickly on bath salts and W-18, how did that speed suddenly happen? What enabled that speed?
Ms. Mattison: Normally we say it takes in the ballpark of 18 to 24 months, so between 1 and 2 years. A couple of things can happen to speed it up. Obviously, we work in a bureaucracy and in a system with governance, so if our minister asks us to provide something quickly for her we certainly would.
As far as the Governor-in-Council consideration process, there's typically a consultation phase on an order and a regulatory change, a pre-publication period. That can be waived on a case-by-case basis if there's evidence. Then you would proceed to final regulation making without that pre-consultation.
Senator Fraser: The expedited or quick process would be how long?
Ms. Mattison: Those two examples I provided happened in approximately three-and-a-half months.
Senator White: Is there a temporary emergency process that someone could follow so that, if there's a problem on a Friday night, we could deal with it next Wednesday?
Ms. Mattison: Not the way the current legislation exists.
Senator White: Not like they have in the United States, which is temporary listing?
Ms. Mattison: That's correct.
Senator Jaffer: I understand that the BC Centre for Disease Control did a study on whether people who use the drugs are aware they're knowingly using fentanyl by filling out an anonymous questionnaire. The sample size of 242 surveys in the study revealed that around 29 per cent tested positive for fentanyl and 73 per cent of them didn't report using it. Does Health Canada have a plan to conduct a similar study where you can distinguish between the number of intentional and unintentional fentanyl users?
Ms. Mattison: I'll try to be brief.
Not at this time. Typically we would work with other organizations to get our data. We have a current project with the Canadian Institute for Health Information, CIHI, to improve the methodology for gathering that coroners' data we spoke of earlier and talk about national standards around how data is collected and coded so we can extract more information from it. We fund CIHI to do that work.
The Chair: Thank you, witnesses, for being here today and offering your testimony. It is much appreciated.
Members, as you may have noted from your agenda, steering recommended that at this time we proceed to clause- by-clause consideration of Bill S-225.
Is it agreed that the committee proceed to clause-by-clause consideration of Bill S-225, An Act to amend the Controlled Drugs and Substances Act (substances used in the production of fentanyl)?
Hon. Senators: Agreed.
The Chair: Carried.
Shall the title stand postponed?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 1 carry?
Senator Harder: Thank you very much, senators. I come here certainly not as an expert in this area, and I've benefited from the questions being asked. Obviously, the questions pose a broader set of public policy issues that are of concern to senators and ought to be a concern to all.
What I'm here to report, really, is in listening to Senator White's speech in the chamber I thought this was an issue that merited potential support from the government. I had meetings with the minister and, ultimately, in cabinet, and I'm here to indicate that the government supports this bill with amendments.
I'd like to speak to the amendments; and they're friendly amendments. I've had conversations with Senator White, who can speak for himself. Obviously, it's up to the committee and the senator, but I have tabled the amendments before you because the words are ones I will refer to by item, not by name.
First, the three amendments I propose would remove aniline from the bill. This has been part of the discussion today. This is a chemical that, as indicated, is widely used in industry, particularly the petrochemical industry. Without access to other substances being controlled, aniline cannot be used to produce fentanyl. It is not to detract from the objectives; it's to ensure that we are not imposing control on aniline that is not necessary to control fentanyl.
Second, it includes the salts of two of the listed substances. These are often added to scheduling entries to make sure that the most common forms of the chemicals are controlled.
Third, it adds three other precursors that can be used in fentanyl production to ensure that the list is comprehensive; and those are the referenced precursors 28, 29 and 30.
With the permission of the committee, I would propose these amendments to clause 1 to ensure comprehensiveness. I can indicate that the government will support this bill with these amendments.
The Chair: We have an amendment on the floor from Senator Harder. We'll open it for discussion.
Senator Jaffer: Senator Harder, thank you for your clarification. As you know, I asked the question on aniline. My concern is with plastics and the impact on our pharmaceutical industries. As I'm not aware, which one of these is aniline?
Senator Harder: I have removed aniline.
Senator Jaffer: Okay, that's fine.
Senator Batters: Senator Harder, given that you're here on behalf of the government and providing that helpful amendment to make this better, what did you think about the suggestion made earlier that the government act more quickly on this by regulatory provision rather than having to go through this more lengthy process of a bill? Would you recommend to the government that they proceed in the quickest way possible?
Senator Harder: Of course. I have never worked at Health Canada, so I can't come with any professional background. What I can share, and obviously the committee asked very good questions, is that it does suggest that there's a broader set of public policy issues other than simply the issue of fentanyl that ought to be addressed. I would encourage the committee to have those issues addressed at a more senior level of political and policy accountability — I'm not saying just the minister. Clearly the officials engaged in the day-to-day management of regulatory affairs don't have the responsibility to answer and provide options to consideration of a broader scope. I share the concerns on the issues raised. They're legitimate and ought to be pursued.
Senator Batters: Right now we have you here for political accountability, representing the government in the Senate. Could you answer my question about whether you would recommend, given what you heard today, that the federal government proceed on a regulatory basis to try to do this change to fentanyl to curb this terrible scourge in a regulatory framework? It's good if we can get this bill done as well, but perhaps there's a quicker way we can move on this.
Senator Harder: I thought I had answered it. I wouldn't want to necessarily agree to one route if a better route is something that is not yet before the committee or in our awareness. It ought to be pursued as an issue, absolutely; but I don't have a prescribed conclusion in my mind at this point.
Senator Baker: I'd like for this bill to be disposed of. I can now understand why the witnesses we had from Health Canada were a little hesitant in answering questions, because it's obvious that they've already been referenced and consulted as far as this is concerned.
Senator White will get 6 new precursors listed, where there were only 23 under Schedule VI, Class A, according to this. I'd like to hear from him to get his authority for me to agree with his amendment. If he agrees with it, then we can go with it quickly.
Senator White: I completely agree with this amendment. To be fair, we need to pursue greater issues as well. My only fear, after listening, is that the fast track is three weeks; but I think we can get this done in less than three weeks.
Senator Joyal: On the removal of aniline, do you share, Senator White, the comments made by Senator Harder?
Senator White: Yes, I do. I understand as well it doesn't have the ability to form a drug directly on its own. Yes, I do.
The Chair: We'll deal with the amendment.
All in favour of the amendment as put forward by Senator Harder?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 1 carry, as amended?
Hon. Senators: Agreed.
The Chair: Carried.
Shall the title carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall the bill carry?
Hon. Senators: Agreed.
The Chair: Carried.
Is it agreed that I report this bill, as amended, to the Senate?
Hon. Senators: Agreed.
The Chair: Carried.
Is there any member who wishes to append observations to the report?
Senator Jaffer: I do, chair. I would need the analysts' help, but I would like to propose two observations. One is to encourage that the minister, with this bill, move on a national educational campaign on the use of fentanyl. The second one is the issue of timelines.
The Chair: Are the analysts comfortable with that direction? How does the committee feel with respect to appending those observations? We'll get the wording fleshed out.
Hon. Senators: Agreed.
The Chair: Agreed.
We have one final item of business to deal with prior to wrapping up. Senator Jaffer is departing as deputy chair.
Senator Jaffer: I move that Senator Baker be deputy chair of the committee.
The Chair: It is moved by Senator Jaffer that the Honourable Senator Baker be deputy chair of this committee.
Is it your pleasure, committee members, to adopt the motion?
Hon. Senators: Agreed.
The Chair: Congratulations, Senator Baker; and thank you, Senator Jaffer, for your service.
(The committee adjourned.)