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Proceedings of the Standing Senate Committee on
National Finance

Issue 10 - Evidence

OTTAWA, Wednesday, May 16, 2001

The Standing Senate Committee on National Finance, to which was referred Bill S-23, An Act to amend the Customs Act and to make related amendments to other Acts, met this day at 5:54 p.m. to give consideration to the bill.

Senator Lowell Murray (Chairman) in the Chair.


The Chairman: We have before us Bill S-23, An Act to amend the Customs Act and to make related amendments to other Acts.

Honourable senators will recall that yesterday we heard from, among others, the Canadian Bar Association, which expressed various reservations on certain aspects of the bill, and in particular, subclause 59(4). They asked for one or another of the draft amendments that they put forward.

It was the view of the committee, having heard that, that we should have another meeting with officials from CCRA, Canada Customs and Revenue Agency. Our old friend, Mr. Lefebvre, is here, I believe for the third time, to help us with this.

Before you leave, Mr. Lefebvre, I will read into the record another letter that was passed to me by Senator Angus. I have not asked the clerk to distribute it because it is in only one language. I will read it into the record. I believe a copy has been sent to you so that you can give us your comments on it. This is from the Canadian Courier Association. According to Senator Angus, they too were seeking the opportunity to appear, but we had not heard from them before this, nor was their name, on the original list, supplied to us by Senator Angus. I will read it into the record and ask for your comments, and the committee will decide where it wants to go after that.


Mr. Lefebvre, Assistant Commissioner, Customs Branch, Canada Customs and Revenue Agency: Mr. Chairman, I am grateful for the opportunity to address the Committee, after the presentation made by representatives of the Canadian Bar Association.


In their presentation, the Canadian Bar Association objected to subclause 59(4), and used as its argument current deficiencies they believe exist with regard to the opening of import mail. I will address the association's comments from three perspectives.

The first is operational process. They commented that our operational process was flawed. I believe that it would be useful to outline the current process that we follow in discharging our responsibilities with respect to import mail.

Our agency plays a fundamental role in preventing inadmissible goods from entering the country. It also works with other government agencies to prevent inadmissible people from entering the country and in combating organized crime and terrorism. The CCRA fulfills the same role for goods entering Canada through international mail. We frequently intercept contraband in the postal and courier streams, as well as regulated, controlled or prohibited goods.

Customs officers do have the authority to open international mail packages to verify their contents when they have reasonable grounds for suspecting that they contain tariffable goods or regulated, controlled or prohibited goods. This authority exists to ensure that proper duties and taxes are paid and that the entry of goods into Canada conforms to federal law.

The major proportion of international mail material is not opened by the CCRA at all. Typically, if the weight, size and physical characteristics of the item suggest it contains only correspondence, it is released immediately to Canada Post for delivery. Last year, for example, customs mail centres received 350 million pieces of international mail, and customs opened and examined 770,000 of those.

Based on the risk indicators and an examination, customs officers determine whether goods should be detained, referred to an appropriate government agency for potential noncompliance with federal law, or seized.

Unless related to the specific offence, customs officers are instructed not to read or photocopy mail. The customs enforcement manual gives instructions on the procedures for postal processing. More specifically, part 4, chapter 3, paragraph 5 of the manual, including the note that is part of paragraph 5, reads as follows:

5. It should be noted that the customs officer must have reasonable grounds to suspect that the mail item has "goods" before he or she can open the mail item. If there is no reason to suspect there are goods contained within the item, then the item cannot be opened.

In order to be the least intrusive possible, I note that we use X-rays extensively to determine whether there are goods in the package or the envelope.

A note that is part of the same paragraph 5 reads:

It must be emphasized that under no circumstances are customs officers to read any correspondence contained in the mail item. However, the definition of correspondence does not apply to invoices, packing slips or sales receipts.

These comments go directly to some of the assertions that were made by the representatives of the bar.

I would like also to bring to your attention that in March of this year, the Privacy Commissioner conducted a thorough investigation of how we process mail. In his report, he stated that he found no evidence of illegality or impropriety. The activities in question are being carried out lawfully, and I quote: officials of the CCRA on behalf of Citizenship and Immigration Canada under the authority of Acts of Parliament, in good faith, and for the legitimate public policy purpose of seeking to intercept fraudulent documents.

I would add that the commissioner also looked at the overall processing of mail. The investigation was not limited to what we do with immigration documents. I have left with the clerk a copy of the press release issued by the Privacy Commissioner, containing the conclusions of his investigation.

The bar also asserted that what we propose is contrary to the Charter. We beg to differ. Indeed, we assert the contrary.

Bill S-23 proposes to amend the Customs Act to provide for the examination of mail being exported from Canada. The association questioned the standard of reasonable grounds as a basis for the authority to examine the mail, and suggested that this standard is not in accordance with the Charter. The standard for examining imported mail for goods is suspicion on reasonable grounds. This same standard is proposed for the examination of export mail. This standard has been approved in Charter challenges by the highest courts in the customs context. In the seminal case of Simmons v. The Queen, the Supreme Court said as follows:

People do not expect to be able to cross international borders free from scrutiny. It is commonly accepted that sovereign states have the right to control both who and what enters their boundaries. For the general welfare of the nation, the state is expected to perform this role. Without the ability to establish that all persons who seek to cross its borders and their goods are legally entitled to enter the country, the state would be precluded from performing this crucially important function. Consequently, travelers seeking to cross national boundaries fully expect to be subject to a screening process.

This approach has also been taken in other court cases.

Therefore, we are confident that these standards are appropriate with regard to land borders. I believe the principle is the same under the Charter, it would apply to mail and would be supported by courts if a Charter challenge were launched.

The Chairman: Honourable senators, you will also have received this afternoon, from the clerk, an exchange of correspondence between the Privacy Commissioner, Mr. Radwanski, and the Minister of Citizenship and Immigration, the Honourable Elinor Caplan. That material was sent to us by the Canadian Bar Association because it was referred to at our meeting yesterday.

We will now deal with the matter you have addressed, Mr. Lefebvre. I wish to flag to you that before you go, I will want to hear your views on the Canadian Courier Association's position.

Senator Banks: I am asking this question for instruction. The existing act and the proposed new bill both use as the criteria under which mail can be opened by your officers: mail over 30 grams for which there is reasonable grounds to suspect that it may contain goods.

Four good-sized pieces of letterhead folded into a normal-sized envelope weigh more than 30 grams. I assume that there is the means at hand for these officers to X-ray mail to find out whether there is anything hard in there, or a computer chip, which would show up in an X-ray, or a piece of microfilm, which I think would show up. These officers can also feel the envelope without opening it to determine whether or not there is something hard inside.

Can you describe to me what kind of goods might be contained in those four pieces of paper?

To get more specific, do you regard documents as goods?

Mr. Lefebvre: The word in the act is "tariffable goods." Anything of value whatsoever, including a false immigration document, is a tariffable good.

Senator Banks: A false document would be a tariffable good. What other kind of document would be a tariffable good?

Mr. Lefebvre: We can open something that is a tariffable good or any good that is prohibited, controlled or regulated.

Senator Banks: Does it read that way in subclause 59(4)?

Mr. Lefebvre: We can look at that.

Senator Banks: I apologize for not bringing a copy, but I do not think it reads that way. It reads the way you first indicated, which is a good, if I am not mistaken. Subclause 59(4) reads:

at any time up to the time of exportation, may examine any mail that is to be exported and, subject to this section, open or cause to be opened any such mail that the officer suspects on reasonable grounds contains any goods the exportation of which is prohibited, controlled or regulated under any Act of Parliament, and take samples of anything contained in such mail in reasonable amounts;

All of the descriptive words apply to the word "goods." It does not say "prohibited documents." It does not say anything about anything other than goods. I am curious to know, by way of instruction, what kind of goods, tariffable or otherwise, could be contained on four pieces of paper folded inside an envelope.

Mr. Lefebvre: Mary Anne McMahon, a lawyer with our department, will address this issue.

Ms Mary Anne McMahon, Senior Counsel, Legal Services, Canada Customs and Revenue Agency: I would say, senator, that for the purposes of the Customs Act, "goods" is specifically defined to include documents. An amendment was made to the Customs Act to enable customs officers to work specifically in an immigration context when measures to control the importation of immigration-related documents were put into the Immigration Act.

Senator Banks: Does that act supersede, control or apply specifically to this bill?

Ms McMahon: That act controls the importation of documents, and because documents are included in "goods," it fits into our definition, which allows customs officers to examine mail to determine whether there are documents, the importation of which is controlled under another act. That is because the definition of "goods" includes documents that are controlled under another act.

Senator Banks: I am not a lawyer, Ms McMahon, but would it not be a good idea if this bill were to say "goods as defined in another act?"

Ms McMahon: It is defined right in the Customs Act to include any document.

Senator Banks: In this act?

Ms McMahon: In our Customs Act, yes. This is an amendment to the Customs Act.

Senator Banks: Documents are goods?

Ms McMahon: Yes.

Senator Kinsella: What is the definition of "mail" in the interpretation section?

Ms McMahon: "Mail" is defined in the Canada Post Corporation Act. We defer to that act.

Senator Kinsella: Does that definition include all courier mail?

Ms McMahon: If I recall correctly, that act includes material that is mailable. The Canada Post Corporation Act sets out a regime. The concept of courier goods is confusing these days because Canada Post itself is involved in expedited mail delivery services, which some would say are similar to courier services.

Senator Kinsella: Is the definition sufficiently generic that it does cover the carriage of parcels by whatever agency? There are all kinds of people delivering packages nowadays.

Ms McMahon: No, it is not. For example, a distinction is made in the Customs Act between mail within the meaning of the Canada Post Corporation Act that is transported by Canada Post Corporation, and goods imported into the country by courier.

Senator Kinsella: Could you describe what happens at ports of entry when expedited packages, of whatever size, arrive in Canada from Federal Express, Purolator, or the many others in the business of sending packages? I have a sense of what happens with postal packages, but I am not sure about courier packages.

Mr. Lefebvre: If we are suspicious, we currently have the power to examine and search them. The Canada Post Act imposes restrictions on the opening of mail. The provisions in the Customs Act that we are talking about override the restriction in the Canada Post Act, and bring items that come into Canada through Canada Post to the same level of examination as any other item through any other mode. That is the purpose.

Senator Banks: I have not seen this supposed statement, Mr. Lefebvre, but we heard yesterday from the bar association that the minister, among others, has said that "random checks" of mail occur. Would you please comment on that for the record?

Mr. Lefebvre: The first step, when a parcel comes in on the conveyor belt, is that the officer must have reason to believe that there are goods in there. The second step is, the officer looks at the indicators for that particular week or month to see if it is higher risk or lower risk. The low-risk items are not opened and the higher-risk ones are. That is the applicable procedure.


Senator Ferretti Barth: A bill is often drafted to correct a deficiency or some other concern. What are the main differences between the previous act and the proposed one? What do you basically intend to do with this bill?

When a new bill is drafted, its purpose is to amend or improve things. So what are we talking about here? We already have a CCRA Act and now this bill. Is the purpose to amend the Act or to improve it? Why did you draft a new act?

Mr. Lefebvre: First, this bill allows us to harmonize collection provisions with the corresponding provisions of the Income Tax Act and other Acts in order to streamline our work at the Agency and also to harmonize the private sector, the lawyers, others who deal with collection and indeed all measures that apply to collection. When this bill is enacted, we will basically have the same provisions for collection of amounts owing under any of the applicable acts, which will simplify things for everyone.

The bill also contains some minor technical amendments. The main purpose of the amendments is to allow us to put in place radically new ways of processing persons and goods entering Canada by air, land or water. As for goods, self-assessment of duties is going to change in a very significant way how we process goods at customs and will allow a transition from a transactional mode of operation to a mode based on pre-approved importers. These new procedures were essentially suggested by and negotiated with the private sector during the past two years. The same thing will happen with passengers. With these amendments, we will be able to fundamentally change the way we clear travellers at the border by granting pre-approval when we know who they are. This will expedite movement of travellers and will allow the Agency to use its resources to identify travellers with a higher risk.

Senator Ferretti Barth: I have a question about mail. With free trade and globalization, the volume of mail will undoubtedly increase. You mentioned that only 770,000 parcels out of 350 million were opened and examined. The figure I had was 30 million.

Will mail opened by customs inspectors searching for illegal goods or information be placed in a plastic envelope, as often happens when envelopes are torn? Is the addressee entitled to know why his or her mail was opened?

Mr. Lefebvre: You noted that I mentioned two figures for opened parcels. What I said the last time is that we receive about 350 million pieces of mail annually. More than 320 million of these items are examined in bulk. These are essentially huge containers filled with letters only. We allow Canada Post to process the letters. We examine 30 million remaining items which include goods, but with primary sorting, we only open less than one million items.

We examined 25 to 30 million pieces of mail, but we only opened less than one million items because of primary sorting. With the application of risk indicators, more than 29 million of these items were not opened. But we did examine them to determine where they came from and we assessed them using other factors.

As to the second part of your question concerning whether the addressee knows if we have opened a parcel, the answer is yes. According to our procedures, adhesive tape is applied to the parcel indicating that it was opened by customs or a note to that effect is inserted in the package. Of course, the parcel is carefully sealed. All damaged parcels that were opened by customs were not necessarily damaged by customs. There are other players in the process.

Do we inform the addressee of the reason why the parcel was opened? The answer is no. We simply indicate that we exercised our right to open a package entering Canada. There was evidence suggesting that the parcel may contain prohibited items but, once we have checked it, we simply indicate that it was opened by customs.

Senator Ferretti Barth: I would rather talk about mail, not parcels. Let's say I receive a letter which was opened by the Customs Agency with no explanation. I am a citizen and I have privacy rights. How can you open my mail and not say anything? I have no way of finding out why you opened my mail. Are there people who react to these procedures? Do they simply say: "Well, it's the government, it's the customs agency that opened it?" There must be a reaction. This is not fair. If I receive for my birthday a greeting card which was opened and placed in a plastic bag with no explanation, I would want to know the reason. The customs agency would say there was a reasonable ground. An envelope containing a greeting card weighs less than 30 grams. What are those reasonable grounds that justify opening our mail?

Mr. Lefebvre: There is a huge volume of mail. We do not open letters weighing less than 30 grams. But if we have reasonable grounds or if we suspect that a parcel or envelope should be opened, we rely on risk indicators that are constantly updated to choose the parcels and envelopes to be opened. We cannot publicise these indicators and they do change frequently. Moreover, as I mentioned earlier, the right to privacy at the border is not the same as it is inside our borders. This is a necessary evil because we have to protect Canadians against harmful objects that may be imported.

Senator Ferretti Barth: Let me make an assumption. The right to privacy is recognized inside the nation but not at its borders. Thus customs are assumed to be in a neutral zone, wherein the government can apply this act.

Mr. Lefebvre: Your argument is not wrong.


Senator Finnerty: What percentage of the 770,000 items of mail that are opened are found to be unacceptable? Would a half or a quarter contain something illegal?

Mr. Lefebvre: We intercept through the mail a fairly large number of prohibited, regulated or controlled items. There are quite a few instances where people who have not properly declared what is in a package must pay duties and taxes. Recently, we have stepped up our alert on foot-and-mouth disease on meat coming through the mail. We were surprised, when we started opening all packages from certain countries, at the number of times we found meat or cheese.

Senator Banks: Ms Caplan, in her letter to Mr. Radwanski, wrote:

Since 1995, CIC officers working in concert with Customs inspectors have identified and seized more than 4,000 contraband items from mail and courier shipments.

Senator Cools: What is Senator Banks reading from?

Senator Kinsella: I would like to have some explication from the witnesses of the administrative monetary penalty system. How does that apply under the present regime?

The Chairman: There is a letter on exactly that issue that I was going to read, at least the substantive parts, to the witness, so that he might reply. He has a copy of the letter already.

I would like to see if there is anything further on 59(4), on the privacy and Charter issue raised by the bar yesterday.

Senator Tunney: I want to ask if you get requests from the RCMP about suspicious mail, not involving packages, but information that might be critical to an investigation that they are doing. If so, would you, on proof of warrant, deliver it to them rather than retain custody of it yourself?

I have another question. Would it not be reasonable to suppose that if I have no criminal intent, I would be much more inclined to use the mail, whereas if I did have criminal intent, I would find an alternate delivery method or route?

Are you not dealing with the less suspicious, and perhaps missing the more suspicious delivery methods?

Mr. Lefebvre: To answer the second part of your question first, the purpose of the amendments is to bring postal items to the same level as other modes of transportation. People who, as you mention, may have bad intentions would probably use the mode of transportation where the legal regime gives them more protection. If we give customs officers a lesser right to inspect mail, people who do want to export documents illegally would use that mode of transport because it would be protected by law from scrutiny.

To give you a short answer to your first question, information we receive from law enforcement agencies such as the RCMP, Immigration, or any other department or police force - and very often it will be foreign information from U.S. Customs, Immigration and others - will help us target high-risk items. An investigation, as well as any other information, will help us with a list of indicators of high-risk items.

Senator Tunney: You would deliver mail to the RCMP on request to further their investigation or to confirm their suspicions?

Mr. Lefebvre: If a product that we seize at the border is illegal and deserves to be investigated, such as contraband, it could lead to the proper law enforcement agency using that information to start or to further an investigation.

Senator Kinsella: Are there categories of mail that you will not open? For example, have you ever opened diplomatic mail?

Mr. Lefebvre: No, we do not open diplomatic mail.

Senator Kinsella: Under what category in the act do you place diplomatic mail, even if you have great suspicion that mail going to a given embassy might contain serious contraband?

Mr. Lefebvre: We do not open diplomats' mail. However, despite diplomatic immunity and all their privileges, diplomats have no right to import prohibited goods into the country. For instance, if we had a detector dog indication on a diplomatic bag, there is a protocol to follow, but the bag will not be allowed into the country unless the embassy officials satisfy us that there are no drugs.

Diplomats have no right to import drugs into the country. We have no right to open their mail. There is a bit of a compromise there. However, if we have reason to believe that they are importing something prohibited into the country, we have the right to detain the item and ask them to either return it, or satisfy us that there is no prohibited good involved.

Senator Kinsella: What about packages coming from Canadian missions overseas or, more particularly, provincial trade offices? Some provinces have official offices outside Canada. Is the correspondence from a provincial trade office, for example, to a company or an individual in Canada categorized as privileged as well?

Mr. Lefebvre: To the best of my knowledge, there is a privilege only for foreign diplomats. Returning Canadian diplomats or people engaged in trade missions abroad do not have any special privileges at customs.

Senator Kinsella: Has your agency examined packages addressed to a parliamentarian, or is that a matter of privilege?

Mr. Lefebvre: It is not privileged. Certainly we have read in the papers, from time to time, that ministers are not immune.

Senator Kinsella: Therefore, a Canadian citizen or landed immigrant outside Canada, running into an immigration or citizenship problem and wishing to write to his or her member of Parliament, could have that correspondence examined by customs, or by you acting on behalf of Immigration Canada. It would not be considered privileged?

Mr. Lefebvre: It is not privileged, but if it is not a falsified document, I cannot think of any example where we would detain such correspondence.

Senator Kinsella: My point is, are mail communications from citizens to their member of Parliament free from examination by an agent of the administration of government?

Mr. Lefebvre: There are two parts to the answer. First, if the correspondence is less than 30 grams, by law, we will not open it. Second, if it is only slightly more than 30 grams, in practice it is unlikely that we will look at it. We do not look at letters unless there is a strong indication that we should do so. Third, I do not believe that we have ever seized correspondence per se.

Senator Kinsella: Is it not true that one of the current concerns of Immigration Canada is the passage of false immigration documents, and therefore it is asking your agency to intervene?

Many thousands, perhaps hundreds of thousands, of Canadian citizens or landed immigrants who leave Canada for business or travel, and encounter whatever difficulty, need to correspond with their member of Parliament. Correspondence may come from a country from which, based on your experience, you are intercepting a great many forged travel documents. I think Canadians would consider it reasonable for you to watch for correspondence from a given country from which you have intercepted many false documents. When the correspondence is addressed to a member of Parliament - and it may be as thick a document as Bill S-23 - my concern is with the privileges of Parliament and whether or not they are a figment of the imagination of parliamentarians. We have privileged communications with people in penitentiaries.

Mr. Lefebvre: The Canadian Bar Association mentioned yesterday the question of privileges for lawyers. We do not know whether a particular package is going to a member of Parliament or a lawyer.

Senator Kinsella: It would be addressed to the parliamentary precincts, to John Doe or Jane Doe, member of Parliament, Parliament Hill.

Mr. Lefebvre: Again, it may be that the address would be the Parliament, but it is often difficult for us to ascertain whether the recipient will be one person or another. If the bulk of the envelope or the package is such, and other indicators lead us to believe we should look at it, we probably will open it after X-raying it. If we find fraudulent immigration documents, as you said, we would simply refer it to Immigration. If we find nothing of the sort, we would write "Opened by Customs," and send it on.

Senator Kinsella: You have seen the letter from Mr. Radwanski?

Mr. Lefebvre: Yes.

Senator Kinsella: That letter was circulated to members of this committee. Are there parts of what he is saying with which you agree, or do you simply disagree with everything?

Mr. Lefebvre: I agree with the part where he says that we are acting legally, in good faith and without any impropriety. However, he recommended at the end that when we suspect that there are some fraudulent immigration documents in a package or mail item, that we refer the item to Immigration unopened and that they obtain a search warrant to open that package. Given the nature of our business, we do not believe that it would be practical to proceed in that fashion.

Senator Kinsella: Mr. Trister, who appeared before this committee, stated in response to a question from Senator Finnerty:

The Privacy Commissioner suggested to the Minister of Citizenship and Immigration that she obtain a warrant before opening these packages. The minister replied, "We open so many of them that if we had to obtain warrants we would grind to a halt."

How long does it take to get a warrant?

Mr. Lefebvre: It can be a demanding task to obtain warrants, but also, as I mentioned, it depends on the level of privacy you want to accord the item and the threshold that you must meet before a warrant is granted. As I said, we are currently applying the standards approved by the Supreme Court, which are a lower threshold than police forces or law enforcement officers need to demonstrate before they can get a warrant in the domestic situation. We are applying a number of indicators that vary constantly, and we are meeting the standard imposed on us by the law. If you were to impose a higher standard, or the use of warrants, it might bring the whole conveyor belt to a halt.

Senator Kinsella: My assumption is that we receive a great deal of our consumable food products, groceries, in Canada by mail. What are some of the irritants, from your perspective, with which the importers of groceries are faced that may relate to this bill?

Mr. Lefebvre: I do not understand your question.

Senator Kinsella: It is my understanding that the grocery association has an interest in the bill, and I was trying to anticipate what they might say to us and whether they have a response from the department.

Mr. Lefebvre: I think I understand the question. Correct me if I am wrong. We want to put legislation in place to approve what we call "CSA," custom self-assessment. Once we come to know an importer and have a protocol with them whereby they certify what they will import, and they have the security systems in place, we will be satisfied that they are trustworthy and low risk. We allow them to import into the country without checking the transaction, whether it is in a truck or other container.

We control the goods that do not need a second check by other departments. At present, when foodstuff comes into the country, we must alert the Canadian Food Inspection Agency, and they are authorizing those shipment by shipment. We want to launch this in October. It is a big, bold exercise.

Senator Kinsella: This is the Customs Self Assessment Program?

Mr. Lefebvre: Yes. The law will be applicable as soon as you pass it. We will be able to implement that new self-assessment starting at the end of October. The importers who approach us and meet the standards to satisfy us that they are trustworthy will be able to use that program immediately. We at customs control the acceptance.

People who are in the business of importing animals, plants, foodstuffs, or other goods that are subject to permits or authorization from other departments, will need to negotiate with those other departments to satisfy them that they are trustworthy and present no risk. When this framework is in place, it will authorize us at customs, at ports of entry, to allow them entry as well as people with just widgets.

Senator Banks: Are there any circumstances in which you or anyone you know of would open internal mail; that is mail sent from one location in Canada to another?

Mr. Lefebvre: Internal mail does not come to us.

Senator Cools: He is from Customs. We would need to talk to Canada Post.

The Chairman: Honourable senators, without reading every word of it into the record, let me give you the sense of a letter given to me by Senator Angus that he received from a Mr. Phil Cahley of the Canadian Courier Association. This concerns the Administrative Monetary Penalty System, otherwise known as AMPS. The letter, dated May 15, 2001, states:

Our association's original support of AMPS was based on the concept of corrective approaches followed by imposition of monetary penalties based on intent that seek compliance through graduated responses. What we have ended up with is a very severe enforcement program.

Throughout the creation of AMPS the corrective nature of the regime has been highlighted. It is our view as well as from opinions expressed by legal counsel specializing in Customs and trade law that the penalty amounts currently set are punitive in nature and has the potential to negatively impact the Canadian trading community.

The principals of a penalty system should be based on intent. There is a significant difference between intentional negligence with the intent to defraud, and negligence due to human or system error. A totally different corrective structure should exist defining different consequences and corrective measures for intentional and non-intentional errors and omissions.

Further along in the letter it states:

...our original proposal of "volumetrics" becomes critical. AMPS places small and large entities under the same compliance onus without taking volumes into consideration and will further exacerbate the level playing field you are striving to create. Volumetrics should apply to all traders. The lack of consideration of this proposal due to the CCRA scarcity of systems resources will be a decision hazardous to Canadian traders.

Still further in the letter it states:

Statistical data plays a crucial role with trade but penalties relating to precise data on the nature and technical description of imported goods is troublesome. The definition of "due diligence" to include items included in The Gazette relating to proper classification of goods is a further concern. It is not appropriate to subject a trader, perhaps a relatively small business, to onerous fines ranging from $1,000 to $25,000, for what may be clerical errors by other parties of which they have little control.

AMPS are monetary penalties that, unlike fines, may be assessed by government officers against a business or person without a trial or without a judicial process or a finding of guilt. The real intent of any program to improve compliance must be based on co-operation and corrective feedback. Penalties should only apply in cases of obvious attempts to defraud or mislead the government.

An additional concern relating to AMPS is with the application of the program and the unbridled discretion that customs officers may have in imposing penalties. You have given assurances that a degree of standardization in the application of the system will be adopted as well as development of a fairness policy to govern application of the new procedures. However, the draft wording, as it currently exists, provides a dangerous amount of discretion to front line customs officers.

I will stop there, honourable senators, because I think that pretty well states their case.

Mr. Lefebvre: Mr. Chairman, as I mentioned yesterday, the AMPS will cover all types of infractions under the Customs Act in a very graduated, tailored way. Presently, we have a regime of seizures and forfeitures that often are too big of a stick for the infraction that has been committed. Also, we do have some monetary penalties, but not for all the infractions; they are just partial. We have had some experience in administering limited monetary penalties.

The goal of the new regime, which was discussed extensively with the industry, is compliance. It is not punitive; it is not to raise revenue. One assertion here is that it should only apply when there is an obvious intent on the part of the importer to defraud. We cannot accept that. Brokers are in the business of advising on imports and presenting accurate documents to customs. If we were to accept that penalties would be payable only when there is an obvious intent to defraud, I think it is quite obvious that importers and brokers would not exercise the diligence that, as professionals in the field, they are expected to exercise. They would not make the required investments in systems and people to properly meet their legal obligations.

On the other hand, the penalty system is still under development. Further consultation and adjustment will take place over time. We want a series of penalties that will be an incentive for increased compliance. We are convinced that compliance will greatly increase as a result. We have seen proof in the past that when you apply the proper incentive, compliance goes up quickly because people adjust their systems.

The Chairman: What do you do if there is an obvious intent to defraud? Surely you call the cops, do you not?

Mr. Lefebvre: Yes indeed. We do have an investigation arm, but they are not called upon when things are simply, through lack of proper diligence, incorrectly classified, undervalued, or perhaps in some cases, even non-reported. When we do not see obvious intent to defraud, we do not refer it to the investigation arm for full investigation and prosecution if appropriate.

The Chairman: What happens if you do see an intent to defraud?

Mr. Lefebvre: Then it becomes part of an investigation and possible prosecution.

The Chairman: That being said, if there is no intent to defraud and yet you impose a large penalty - and according to this letter you can impose a penalty of up to $25,000 on a client, large or small - what recourse does the client have by way of appeal from this administrative decision?

Mr. Lefebvre: There are three levels of appeal. They can immediately inform us that in their view, we have made a mistake. It used to be that if we made a mistake that even we recognized, we had to force them through an appeal process to correct that mistake. Now, if they tell us within 30 days that in their view, we made a mistake, we look at it, and if we agree with them, the penalties are waived immediately. Second, if we do not agree with them, and we think that the penalty should stand, then there is an appeal to the minister, and we have a separate, independent branch to conduct an objective review of the situation. They will accept the representations if they believe they are justified. Third, people can go to court, and we have, in the past, extended the delays that are permitted for the appeal process to take place.

The Chairman: As far as you are aware, has there ever been a Charter case on the basis of natural justice, due process and all that sort of thing?

Mr. Lefebvre: No, not that we are aware.

Senator Cools: I wish to ask a supplementary question on this point of the $25,000 fine. That is obviously the maximum penalty. Could you describe for us an example that springs to mind of a case and a set of circumstances where the maximum penalty of $25,000 would be applied?

Mr. Lefebvre: There were two points that I wanted to cover because of the letter and the statements made therein.

They say we should make a distinction between large and small importers. The reference here is to volume. If an importer brings in identical items repeatedly, or in the same shipment with multiple misclassifications, will there be multiple penalties?

We are addressing that concern and Mr. Warren can speak to that. We will talk to the industry. Our goal is not to be absurd; our goal is compliance. The penalty system will apply, if need be, by shipment as opposed to by item, to ensure that it is tailored to the infraction.

Another point raised in the letter is the amount of discretion being granted. I just refer to my comments of yesterday. We aim for consistency in everything we do, including applying and waiving penalties. Our officers will have fairly detailed guidelines and proper training to apply the regime properly.

Senator Cools: It would be helpful to the committee to have an example, as well as some reassurance that these substantial powers will not be abused or exercised poorly.

Mr. Earle Warren, Director General, Major Projects Design and Development Directorate, Customs Branch, Canada Customs and Revenue Agency: There are several aspects to your question. First, the maximum penalty is $25,000. The vast majority of infractions do not attract that level of penalty. Penalties gradually increase if the offence is repeated. That is a key factor. After a warning, after a small penalty, which can be challenged if it is seen as unfair, and after repeated non-compliance, the penalty goes up. In this graduated scenario, a high penalty is assessed only for a significant offence following warnings and smaller penalties.

Senator Banks: If $25,000 is the largest penalty, what is the smallest?

Mr. Warren: The penalty for late accounting is $25.

Senator Banks: Can I be assessed $25 for a typographical error? The purpose for assessing that penalty would be to impress upon me not to do it again? Is that the objective that Mr. Lefebvre was talking about?

Mr. Warren: We have warnings in all scenarios. It depends on whether the alleged typographical error occurred in an area of critical information. If so, warnings and a penalty could occur. For a simple typographical error, an officer's discretion should be used.

Senator Kinsella: Honourable senators, perhaps our witnesses can help us in this regard. Where in this bill is the authority for this AMPS being granted? Is it in clause 62? It is important that we look at that because that clause does not say very much. Do you have the clause there?

The Chairman: That is found at page 74.

Senator Kinsella: Effectively, this is a "Henry VIII" type of bill. We do not know what power we are giving. It will all be done by regulation. The chairman's due process questions are fundamental to our whole system.

Is it your understanding that some draft regulations are in the works? Have any regulations been drafted?

Mr. Lefebvre: Yes, we are working on it. The actual tables of proposed penalties were tabled with a wide array of clients and stakeholders more than a year ago. Different iterations have been circulated with the industry. We have the support of most, but there are always some questions. The regulations are being drafted.

The Chairman: The witnesses testified the other day that all the regulations will be pre-published during the summer. A consultation will take place before they are promulgated.

Senator Kinsella: My concern is that we will, by regulation, effectively give authority to customs officers to decide whether there was intent to circumvent the rules and whether a clerical error was really an intent to beat the system. After that decision has been made, then the officer makes a second decision. Was the importer just being forgetful? Was he really trying to beat the system or not? The officer may say, "We will let you go through, but it will cost you $1,000." The same situation may arise in the neighbouring customs office, but the officer there decides, "I do not like the colour of your hair, so here is a $15,000 penalty."

A whole series of judgments are being made. The customs officer is acting as the prosecutor and as the judge who can decide the level of penalty. I am not comforted by a range between $25 and $25,000, and that is not simply because I would get the higher penalty because I am not pleasant looking or whatever. Can you give us some assurance on this one? This is a serious issue.

Mr. Lefebvre: We should not over-emphasize the discretion of the customs officers. Most infractions under the Customs Act are either there or they are not there. If you have a certain amount of time to do your accounting and you do not do it, then the penalty is there. The amount for that sort of infraction is set and you must pay. If you do not report something, again the amount is set. The discretion is more at the margins, where the circumstances are not run-of-the-mill lateness or non-reporting or misclassification.

The discretion of customs officers is within a framework of fairly precise guidelines. Our goal - and we have been very candid with business about this - is to have a level of penalties that is more than the cost of doing business. We have situations right now where the penalties are fixed by statute, and because it is much cheaper to pay the penalty than to comply, companies will fail to report. They will pay the prescribed penalty for not reporting and move on. We have not been able to adjust quickly because it is in the statute and takes a long time to change.

By putting it into regulations, with due pre-publication and consultation, we will be able to achieve our goal of having a set of penalties tailored to the infraction.

The Chairman: Honourable senators, we have had four meetings on this bill. You have heard what you have heard and read what you have read. The question is: Is there anything more that you want this committee to do on this bill, or do you wish to proceed to clause-by-clause study tonight?

Senator Kinsella: I think we should hear from the Canadian Courier Association on this. I do not think we need to have the officials back. They have given their view of this bill. As has been stated here, there has been consultation with the industry. That first paragraph that you read, Mr. Chairman, seems to indicate that they did not get what they thought they were getting. I think we should have one more meeting to which we should invite the Canadian Courier Association. Perhaps there are others from whom we should hear.

Senator Banks: First, I would like to thank the witnesses for their candour and for being so forthright. I think that perhaps the objections of the courier association were all based on the premise that the assessments ought to apply only to those persons or entities who have demonstrably set out to commit fraud. I was satisfied with the answer given by Mr. Lefebvre. He said we also must apply punitive assessments for the purpose of assuring compliance with the new system. That would be my view.

Therefore, I am not in favour of asking them to come back. The question has been answered to my satisfaction.

The Chairman: They have not been here, but they have written a letter, most of which I have read into the record.

Senator Cools: I would just like to say that the concerns of the Canadian Courier Association have been placed before the committee. I think they are pretty well articulated in their letter, which has been placed on the record.

I would also like to say, too, for the sake of the record, that I think that Senator Angus has already brought those concerns forward in a very able way. Therefore, I think the concerns of the courier association have been canvassed and have been considered by the committee. To a large extent, I think they have been addressed.

If this request had been put before us a few days ago, perhaps we might have heard them tonight. I have no doubt that we could have sat for another hour or so to hear them. If they were here, I would say that we wcould have heard them now.

Undoubtedly, their concerns have been put before us, which is what they wanted. I suggest, Mr. Chairman, if these gentlemen do not feel any great need to respond more, in particular to the concerns raised by the Canadian Courier Association, perhaps we should move ahead to clause-by-clause consideration of the bill.

The Chairman: Honourable senators, we have a difference of opinion. Are there other views? Is there a motion to bring it to a head?

Senator Kinsella: Let's have a discussion about it.

The assumption is that we have heard all of the views of the Canadian Courier Association. They may have other things that they wish to underscore. I do not know what the rush is. I was also advised that the sales and commodities tax section of the Canadian Bar Association, which has another perspective than the one the CBA representatives, spoke of at the previous meeting, would bring witnesses before the committee.

I raised the issue of the grocers. All I know is that there are three communities that have another perspective. Since the committee has done all this work, I think it would be a shame not to spend another hour on this and try to hear from the Canadian Courier Association, the sales and commodities tax section of the CBA and the Canadian grocers association.

Senator Banks: Mr. Chairman, if I were the president of the Canadian Courier Association writing to a committee of the Senate, I would ensure that my letter addressed all of my concerns. If I were the president of the Canadian Bar Association, I would ensure that when I appeared before a Senate committee, I raised all my concerns. Therefore, I think we have properly heard them.

Senator Angus has carefully pointed out the grocery questions. I think we have dealt with those. Personally, I have been satisfied with the answers. I did not hear any concerns from the Canadian Courier Association other than those based on the premise that the penalties and assessments ought to be large only when there is evidence of intent to defraud. Again, I am satisfied that that is not the case.

The Chairman: Honourable senators, of course I am in the hands of the committee. If the committee decides to have another meeting on this bill, I will be here and I will be on time. However, let me state a few things for the record, all of which are perhaps known to the two members of the steering committee, Senator Finnerty and Senator Banks.

First, let me say that the bill has been in the public domain since March 22. I believe that was the date of first reading. The bill received second reading and reference to this committee on May 3. That was a Thursday. The day after that, we consulted primarily with Senator Angus's office, which gave us a list of witnesses.

The clerk began to call some of these prospective witnesses. I say "some" because I consulted with them and with Senator Angus's office as to priorities. There seemed to be some overlap among the suggested witnesses. Anyway, we made the calls. The clerk talked to the Canadian bar, and to the grocery manufacturers or distributors, whatever the organization is. They either declined to appear or could not. They have become the Food and Consumer Product Manufacturers. We simply have not heard back from them. They said they would call back but did not. We tried the Canadian Institute of Chartered Accountants. My recollection there is that the clerk had two conversations with them. At the end of the day, they simply declined to appear.

The commodity tax section has, as Senator Kinsella properly pointed out, quite a different perspective. The clauses of the bill that might concern them are not the same clauses that the vice-president and president of the Canadian Bar addressed yesterday. I asked the president of the Canadian Bar, and I am sure she will not mind me repeating this, "What about the commodity tax section? Where are they, and why are they not here?" Her answer was that they simply do not have time to come. They could not be here last week, and they could not be here this week, and they have decided that they will make their appearance, if they are ready, before the House of Commons committee when the bill goes to the Commons. When I reminded her that the bill had been in the public domain since March 22, she quite properly pointed out that these are all volunteers who have their practices and other things to do.

That is the current situation. We did give it the old college try in terms of getting other witnesses. Again, I am in the hands of the committee. There are some that you can still invite if you wish.

Senator Cools: Mr. Chairman, I move that we proceed to clause-by-clause consideration.

The Chairman: Do you want to discuss the motion?

Senator Cools: I am open to debate.

Senator Banks: I will second the motion.

The Chairman: Senator Kinsella, did you have anything to add?

Senator Kinsella: No. I made my point, and my honourable colleagues have made their points. I am ready for the question.

Senator Cools: In support of the motion, I especially have been very diligent that this bill not be rushed and that people be properly heard. I think we have done that.

The Chairman: We have heard the motion. All those in favour of the motion please say "yea."

Some Hon. Senators: Yea.

The Chairman: All those opposed?

Senator Kinsella: Nay.

The Chairman: Carried. The motion was to proceed to clause-by-clause study. There are proposed government amendments to this bill, and I will ask the officials to remain here. I think Senator Setlakwe will propose the amendments. However, the question is, how to proceed? I think I know where the amendments are coming. Unless there other amendments, I would group the clauses to arrive quickly at those in respect of which amendments will be proposed.

Honourable senators, is it agreed to stand on the title?

Hon. Senators: Agreed.

The Chairman: Honourable senators, shall clauses 1 to 10 carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 11 carry?

Senator Setlakwe: I move:

That Bill S-23, in Clause 11, be amended by adding after line 32 on page 6 the following:
"11.2 (1) The Minister may designate an area as a customs controlled area for the purposes of this section and sections 11.3 to 11.5 and 99.2 and 99.3.

(2) The Minister may amend, cancel or reinstate at any time a designation made under this section.

11.3 No owner or operator of a facility where a customs controlled area is located shall grant or allow to be granted access to the customs controlled area to any person unless the person

(a) has been authorized by the Minister in accordance with regulations made under section 11.5; or

(b) is a prescribed person or a member of a prescribed class of persons.

11.4 (1) Subject to subsection (2), every person leaving a customs controlled area, other than for the purpose of boarding a flight with a destination outside Canada, shall

(a) present himself or herself in the prescribed manner to an officer and identify himself or herself;

(b) report in the prescribed manner and make available to the officer any goods that he or she has acquired through any means while in the customs controlled area; and

(c) answer truthfully any questions asked by an officer in the performance of his or her duties under this or any other Act of Parliament.

(2) Subsection (1) does not apply to

(a) persons who are required to present themselves under section 11 or report goods under section 12; or

(b) prescribed persons or members of prescribed classes of persons in prescribed circumstances.

11.5 The Governor in Council may make regulations

(a) respecting the authorization of persons under paragraph 11.3(a);

(b) prescribing persons or classes of persons who may be granted access under paragraph 11.3(b);

(c) respecting the circumstances in which an authorization under paragraph 11.3(a) may be amended, suspended, renewed, cancelled or reinstated;

(d) respecting the manner in which a person must present himself or herself under paragraph 11.4(1)(a) and report goods under paragraph 11.4(1)(b); and

(e) prescribing for the purposes of paragraph 11.4(2)(b) persons or classes of persons who are exempt from the requirements imposed by subsection 11.4(1) and the circumstances in which they are exempted."

The Chairman: This is one of 11 amendments that will be proposed. It is one of two that might be regarded as more substantive. Are there any comments or questions?

Senator Cools: This is not really a question. Senator Setlakwe's amendment is adding subclause 11.2, but we have not yet voted on 11.1. We must not overlook that, Mr. Chairman.

The Chairman: I will put the amendment and have a vote on it, and then I will put clause 11 as amended. It is not necessary to separate out subclause 11.1.

Are there further questions or comments from honourable senators? Is there anything the officials need to say? Senator Setlakwe moves that Bill S-23, in clause 11, be amended by adding after line 32 on page 6 the following -

Hon. Senators: Dispense.

The Chairman: Is it the pleasure of honourable senators to adopt said motion?

Hon. Senators: Agreed.

The Chairman: The motion is carried.

Shall clause 11 as amended carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clauses 12 to 16 carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 17 carry?

Senator Setlakwe: I move:

That Bill S-23, in Clause 17, be amended by replacing, in the French version, line 33 on page 8, with the following:

"et qui doit faire la"


The Chairman: Is it agreed to adopt the motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 17 as amended carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clauses 18 to 57 carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 58 carry?

Senator Setlakwe: I move:

That Bill S-23, in Clause 58, be amended by:
(a) by replacing, in the French version, lines 16 and 17 on page 34, with the following:


"(13) Les renseignements qui ne peuvent être communiqués en raison du paragraphe (11) ne peuvent, à";


(b) by replacing line 24 with the following:


"ve ou réglementaire ou la règle de pratique exigeant la communica-";


(c) by replacing line 31 with the following:


"à une disposition législative ou réglementaire ou la règle de pratique"


The Chairman: It is your pleasure, honourable senators, to adopt the said motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Senator Setlakwe: Mr. Chairman, I move:

That Bill S-23, in Clause 58, be amended by replacing, in the French version, line 6 on page 44, with the following:

"la décision de cette cour ou, en cas de"


Senator Kinsella: Is that just an error, Senator Setlakwe? Is it that the word "juridiction" is not a good translation of the English word "court" and therefore you are putting in "court"?

Mr. Stephen Barry, Counsel, Legal Services, Canada Customs and Revenue Agency: That is correct, Senator Kinsella.

The Chairman: Is it the pleasure of the committee to adopt the motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 58 as amended carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 59 carry?

Senator Setlakwe: I move:

That Bill S-23, in Clause 59, be amended by replacing lines 41 and 42 on page 65 with the following:
"in accordance with article RE 601 of the Letter Post Regulations of the Universal Postal convention".

The Chairman: Is it the pleasure of the committee to adopt the motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 59 as amended carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 60 carry?

Senator Setlakwe: I move:

That Bill S-23 be amended in clause 60, on page 66, by replacing, in the French version, line 12 with the following:

"(b) examiner les marchandises qu'elle a impor-".


The Chairman: Is it the pleasure of the committee to adopt the motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Senator Setlakwe: I move:

That Bill S-23 be amended in clause 60, on page 66, by adding after line 66 the following:
"99.2 (1) An officer may search any person leaving a customs controlled area, other than a prescribed person or a member of a prescribed class of persons who may be searched under subsection (2), if the officer suspects on reasonable grounds that the person has secreted on or about their person anything in respect of which this Act or the regulations have been or might be contravened, anything that would afford evidence with respect to a contravention of this Act or the regulations or any goods the importation or exportation of which is prohibited, controlled or regulated under this or any other Act of Parliament.

(2) An officer may, in accordance with the regulations, search any prescribed person or member of a prescribed class of persons leaving a customs controlled area.

(3) An officer who is about to search a person under this section shall, on the request of the person, immediately take that person before the senior officer at the place where the search is to be conducted.

(4) A senior officer before whom a person is taken by an officer shall, if the senior officer agrees with the officer that under subsection (1) or (2), as the case may be, the person may be searched, direct that the person be searched or, if the senior officer does not so agree, discharge the person.

(5) No person may be searched by an officer who is not of the same sex and, if there is no officer of the same sex at the place at which the search is to be conducted, an officer may authorize any suitable person of the same sex to conduct the search.

99.3 (1) An officer may, in accordance with the regulations and without individualized suspicion, conduct a non-intrusive examination of goods in the custody or possession of a person leaving a customs controlled area.

(2) An officer may examine any goods in the custody or possession of a person leaving a customs controlled area and open or cause to be opened any baggage, package or container and take samples of the goods in reasonable amounts, if the officer suspects on reasonable grounds that this Act or any other Act of Parliament administered or enforced by the officer or any regulations made under it have been or might be contravened in respect of the goods.

(3) An officer may, at any time, open or cause to be opened, inspect and detain any baggage, package or container found abandoned in a customs controlled area.

99.4 The Governor in Council may make regulations.

(a) prescribing persons or classes of persons who may be searched under subsection 99.2(2).

(b) respecting, for the purposes of subsection 99.2(2), the circumstances and manner in which searches are to be conducted and the types of searches that may be conducted; and

(c) respecting, for the purposes of subsection 99.3(1), the manner in which examinations are to be conducted and the machines, instruments, devices or other apparatuses or classes of machines, instruments, devices or apparatuses that may be used to conduct examinations."

The Chairman: Mr. Lefebvre, I know that you explained the purposes of these amendments on the second day that you appeared before the committee. Perhaps I missed something; however, looking at this one, it occurs to me that these are rather substantial amendments to be coming as an afterthought. What is the background to this amendment?

Mr. Lefebvre: The totality of the amendments is, first, to authorize us to create restricted areas where arriving travellers and baggage may be. Once we have established those restricted areas, we need the authority to approve people to have access to those areas.

Second, as I mentioned the other day, our powers are now limited to arriving travellers. If departing travellers turn around and decide to leave the same areas, we would like to have the same powers as with respect to arriving travellers.

Finally, when employees who have access to restricted areas leave the same areas, since they may have been in contact with arriving travellers who have not yet been through the examination agencies, and subject to some prescribed Charter limitations, we would also have the authority to ask them to go through customs, to answer questions truthfully and, in some circumstances, to examine those people further.

The Chairman: I appreciate the substance of the amendments, Mr. Lefebvre. I am intrigued by the fact that they are coming forward now. Something as substantive as this could not have been an oversight on the part of the drafters or of the department.

Mr. Lefebvre: Mr. Chairman, as I mentioned the other day, the Preclearance Act, which was approved fairly recently, and even more recently, the agreement under the Preclearance Act that was concluded with the United States, caused some airports, especially those such as Toronto which are in the process of building, to look at areas where there will be traffic flows. They approached the government requesting that we authorize reverse in-transit, which creates the necessity to have those restricted areas, because then there can be a mix of departing travellers with arriving travellers. We needed to extend our powers to apply to departing travellers who turn around. The difference being that heretofore, arriving travellers were by themselves until they went to customs. Now, because of developments in the movement of people at airports, these new powers are a necessity.

The Chairman: Now that you mention it, I do recall your explanation.

Mr. Lefebvre: This bill is not approving any of those new processes. It is still subject to discussion with all the agencies involved to ensure that the risks are manageable. It gives us the legal framework to move ahead and accommodate new ways of moving people at airports.

The Chairman: Was this one of the issues that concerned the airport authorities? They had indicated an interest in appearing. When you flagged those amendments the other day, they indicated that they were then satisfied and did not feel it was necessary to appear.

Mr. Lefebvre: That is correct.

Senator Cools: Just to underscore what Senator Murray was saying, it is somewhat unusual to be introducing substantive amendments at this stage and in this way. I just wished to underscore that and to let that be known for the record. I think we should go ahead and adopt them as proposed by Senator Setlakwe, as long as we recognize that how we are proceeding is somewhat unusual.

The Chairman: It is moved by the Honourable Senator Setlakwe:

That Bill S-23 be amended in clause 60, by adding after line 16 on page 66, by adding after -

Shall I dispense?

Hon. Senators: Dispense.

The Chairman: Is it the pleasure of the committee to adopt the said motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 60, as amended, carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 61 carry?

Senator Setlakwe: Honourable senators, I would like to move:

That Bill S-23 be amended in clause 61, on page 69, in the English version,

(a) by replacing lines 5 and 6 with the following:

"investigate an alleged offence under any Act of Parliament or of the legislature of a province subject to".

(b) by replacing lines 10 and 11 with the following:

"respect of the alleged offence may be taken, if that official believes on reasonable grounds".

(c) by replacing line 13 with the following:

"offence and will be used in the".

(d) by replacing line 15 with the following:

"offence, solely for those purposes;"; and

(e) by replacing lines 30 and 31 with the following:

"(ii) a person whom that official has reasonable grounds to believe may have committed an".

Senator Banks: Mr. Chairman, I am late, and I am not commenting on this. I have just noticed in the previous one a terrible piece of grammar, and I do not know if you need to be concerned about that. It is the amendment to clause 60.

Senator Cools: It has been adopted.

The Chairman: A grammatical point is always in order.

Senator Banks: In the middle of the second page, English, it states:

- if the officer suspects on reasonable grounds that this Act or any other Act of Parliament administered or enforced by the officer or any regulations made under it -

It ought to say "on reasonable grounds that this Act or any other Act of Parliamentor any regulations made under them which are administered or enforced by the officer".

The Chairman: Why not place a comma after the word "officer"?

Senator Banks: At the very least.

Senator Cools: Mr. Chairman, there is a concern here as to where we place that comma.

Senator Banks: Right now, it states "enforced by the officer or any regulations made under it"; "it" being the officer.

Ms McMahon: The words of the legislative drafters are often difficult to comprehend when you first read them. The way it is intended to work is that we are drawing a circle around the Customs Act, or any other acts that are administered by customs officers, and then any regulations made under those acts. That is the way it actually works.

Senator Banks: There should not be a comma, then?

Ms McMahon: No. I believe it is correct the way it is.

Senator Cools: The "it" is an act of Parliament?

Ms McMahon: That is right.

The Chairman: "- if the officer suspects on reasonable grounds that this Act or any other Act of Parliament administered or enforced by the officer or any regulations made under it -

Senator Cools: "If the officer suspects on reasonable grounds that this act or any other act of Parliament administered or enforced by the officer or any regulations made under it"; which would be this act, or any other act of Parliament.

Ms McMahon: It would definitely read better if you put in a couple of comas, but it does not change the legal substance.

The Chairman: That was Senator Banks' point and mine, to clean up the grammar. I was not suggesting that our solution would be implemented. Perhaps a typist might stop and throw in a comma.

Senator Cools: It is very clearly this act or another act.

The Chairman: You can put a comma after "it."

I have been distracted again.

Is it your pleasure, honourable senators, to adopt the said motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 61, as amended, carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clauses 62 to 67 carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 68 carry?

Senator Setlakwe: I would like to move:

That Bill S-23, in Clause 68, be amended by replacing lines 11 to 14 on page 78 with the following:
"section 110, cancel or reduce a penalty assessed under section 109.3 or an amount demanded under section 124 or refund an amount received under any of sections 117 to 119 within".

The Chairman: Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 68, as amended, carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clauses 69 to 76 carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 77 carry?

Senator Setlakwe: I move:

That Bill S-23 be amended in clause 77 by replacing lines 40 to 47 on page 85 and lines 1 to 9 on page 86 with the following:
"77. Section 141 of the Act is replaced by the following:

141. (1) The Commissioner, on application by a person whose interest in a conveyance detained under subsection 97.25(2) or in goods or a conveyance seized as forfeit under this Act has been determined under section 139 or ordered under section 139.1 or 140 to be unaffected by the seizure or detention, shall direct that

(a) in the case of goods or a conveyance the forfeiture of which has become final, the goods or conveyance, as the case may be, be given to the applicant; and

(b) in the case of a conveyance detained under subsection 97.25(2), the conveyance be given to the applicant.

(1.1) If goods or a conveyance that is to be given to the applicant has been sold or disposed of, an amount calculated on the basis of the interest of the applicant in the goods or conveyance at the time of the contravention or use, as determined under section 139 or ordered under section 139.1 or 140, shall be paid to the applicant.

(2) The total amount paid under subsection (1.1) in respect of goods or a conveyance shall, if the goods or conveyance was sold or otherwise disposed of under this Act, not exceed the proceeds of the sale or disposition, if any, less any costs incurred by Her Majesty in respect of the goods or conveyance, and if there are no proceeds of disposition, no payment shall be made pursuant to subsection (1.1)."

The Chairman: Mr. Lefebvre, is this substantive, or consequential upon other amendments we have made tonight?

Mr. Lefebvre: It is technical. It is a clause with respect to third parties. A person had to go to court if he lent his car to a friend and the friend used it for contraband. Now we have the authority to recognize an innocent third party and deal with the matter without forcing him to court. In the bill there was a provision whereby we overlooked people who might have liens on conveyances. It is a technical amendment.

The Chairman: Is it your pleasure, honourable senators, to adopt the said motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clause 77, as amended, carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clauses 78 to 87 carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Clause 88.

Senator Setlakwe: I would like to move:

That Bill S-23, in Clause 88, be amended by replacing line 34 on page 90 with the following:

"Taux déterminé, calculé sur les".


Senator Banks: The previous motion of this kind referred to "in the French version." Does this amendment need to say that?

Senator Cools: It should have said "in the French version."

The Chairman: These people are alert, even at this late hour. This was the case, Senator Banks, at page 90, where both the English and French are in French because the original provision of the bill was a correction to the French version. There you have it.

Senator Banks: Thank you.

The Chairman: Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall Clause 88, as amended, carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall clauses 89 to 112 carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Shall the title carry?

Hon. Senators: Agreed.

The Chairman: Carried.

Is it agreed that this bill, as amended, be adopted?

Hon. Senators: Agreed.

The Chairman: Carried.

Is it agreed that I report this bill as amended at the next sitting of the Senate?

Hon. Senators: Agreed.

The Chairman: Carried.

I thank the officials for their attendance tonight.

Honourable senators, there are several more things. I wish to mention a bit of a liberty I took today. We have a bill, one of the several government bills that will be coming to us in the next little while. It is Bill C-18, the equalization bill, the Federal-Provincial Fiscal Arrangements Act. It was introduced by Senator Rompkey yesterday, its second reading debate has begun, and assuming it passes that, it comes to this committee.

We have a provision in the annex to our rules that requires us, whenever there is a matter that touches upon provinces, to advise the provincial governments and to give them the opportunity to be heard. I refer to Appendix 1, Provincial Representations to Senate Committees: "It is recommended by the Standing Senate Committee on Rules and Orders that this be observed by committees as a general practice." Take my word for it; it means we must invite them to make written or verbal representations.

Because of the time questions which always seem to arise here, I have asked the clerk to call the provinces and flag the fact that this bill is now in the Senate, that it will probably come to this committee, and that if and when it does, they will receive a formal invitation, but in the meantime, they can prepare if they wish to have input.

Senator Rompkey has already told me that the Minister of Finance or the Provincial Treasurer for Newfoundland will be coming. I would not be surprised if someone from Nova Scotia came, because Premier Hamm has been promoting something called the "fairness campaign" toward fairly substantive changes in the equalization formula governing resource revenues and that sort of thing.

I do not know what urgency to attach to this, or any of the government bills that may come. Senator Finnerty will find out for us. We know that all bills are always priorities, but I want them to tell us which have the highest priority and we will proceed on that basis.

Senator Cools: That sounds good to me. Can we ensure that the correspondence received today is properly on the record?

The Chairman: What do you mean by "the record"?

Senator Cools: When I read the committee minutes in a few years, will I see, for example, mention of the news release from the Privacy Commissioner dated April 24, 2001? Have the documents all been properly recorded?

The Chairman: The important part of the letter from the Canadian Courier Association has been read into the record. It will be part of the verbatim transcript. We have the exchange of correspondence between Mr. Radwanski and Ms Caplan. We also have the press release or the statement from Mr. Radwanski about CCRA. Those will be part of our records, but it would not be normal to publish them as part of today's transcript.

Senator Cools: I was not proposing that we publish them, as long as there is reference to the dates and the proper titles.

The Chairman: They will be filed as exhibits. The clerk will make note of them in the minutes.

The committee adjourned.