THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, June 6, 2023
The Standing Senate Committee on National Finance met with videoconference this day at 9:01 a.m. [ET] to examine the subject matter of all of Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: I wish to welcome all senators as well as the viewers across the country who are watching us on sencanada.ca.
[Translation]
My name is Percy Mockler, I am a senator from New Brunswick and chair of the Senate Committee on National Finance.
I would now like to ask my colleagues to introduce themselves.
Senator Gignac: Clément Gignac, senator from Quebec.
Senator Moncion: Lucie Moncion from Ontario.
[English]
Senator Duncan: Good morning, Pat Duncan from the Yukon.
Senator Pate: Kim Pate. I live here in the unceded, unsurrendered territory of the Algonquin Anishinaabeg.
Senator Smith: Larry Smith, Quebec.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
The Chair: Thank you, honourable senators. Today, we continue our study of the subject matter of Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023.
[Translation]
Today we are pleased to welcome two senior officials from the Treasury Board of Canada Secretariat: Monia Lahaie, Assistant Comptroller General, Financial Management Sector, and Nicole Thomas, Executive Director, Costing, Charging and Transfer Payments.
[English]
Welcome to both of you. Again, thank you for accepting our invitation to meet the senators so that you may share information and answer questions.
I understand that Monia Lahaie will be making brief remarks. The floor is yours.
[Translation]
Monia Lahaie, Assistant Comptroller General, Financial Management Sector, Treasury Board of Canada Secretariat: Thank you very much, Mr. Chair.
Good morning. My name is Monia Lahaie, and I am the Assistant Comptroller General of the Financial Management Sector of the Treasury Board of Canada Secretariat.
I’m joined today by Nicole Thomas, Executive Director of the Costing, Charging and Transfer Payments Sector, who is responsible for this file.
Thank you for inviting us to speak to you with respect to proposed amendments to the Service Fees Act included in Part 4, Division 12 of Bill C-47.
I will proceed to provide you with background information on the Service Fees Act and highlight key components of the proposed amendments, after which we will be happy to answer any questions you may have.
Canadians and businesses benefit from a broad range of Government of Canada services for which fees are charged.
The Service Fees Act defines a fee as an amount payable for the provision of a service, the use of a facility, the conferral of a right or privilege or a product.
Examples of these different types of fees include: fees for services such as passport fees; fees for a facility, such as the use of a government laboratory; fees for products, such as marine navigation charts; fees for rights and privileges, which mainly include authorization to use publicly owned or managed resources, such as a licence to fish commercially or a licence to operate a business on federal property.
When fees are collected from fee payers, they are treated as revenue by the Government of Canada. Total consolidated revenue of $15.5 billion in service fees was reported by departments within the latest President of the Treasury Board Fees Report for the 2021-22 fiscal year. Revenue from service fees remains relatively consistent from year to year at an average of about $6.1 billion, with the exception of revenues from the cyclical nature of Canada’s spectrum auctions by Innovation, Science and Economic Development Canada, which generated $9 billion in revenue and resulted in almost tripling total revenue from fees in 2021–22. Otherwise, the total revenue from fees remains consistent with recent years, with the lowest at $5.6 billion in 2020-21 due to the pandemic.
[English]
The Service Fees Act initially received Royal Assent in June 2017. As a result, the government modernized the way fees are charged to businesses and individuals. The new reporting system included greater departmental accountability and information for fee payers, thus further demonstrating the government’s commitment to open and transparent fee management. Adopting this system has enabled departments to improve service efficiency while strengthening oversight for better reporting to Parliament.
The Service Fees Act also included provisions for the establishment of regulations respecting low-materiality fees, which came into force in May 2019. These regulations enable departments to administer low-materiality fees in a more cost-effective way.
More specifically, the Service Fees Act introduced a streamlined approach for departments to update their fee regimes; a requirement to have service standards and reporting against these standards along with a policy made publicly available to remit fees to fee payers when standards are not met; an automatic annual fee adjustment by the consumer price index, or CPI, to ensure that fees keep pace with inflation as many fees previously had no mechanism to keep pace with the increased cost of delivering services; and annual detailed reporting to Parliament for increased transparency.
The reporting framework set out in the act requires that all departments and agencies that charge fees prepare an annual report for Parliament and Canadians that provides details on the number and types of fees charged and the total fee revenues along with details on fee adjustments, service standards and total remissions. As a result, federal departments reporting under the act have been providing more information, which means more transparency on government business than ever. In addition, the President of the Treasury Board is also required to provide, and has since been publishing, an annual fees report that consolidates information and provides highlights from the tabled departmental fees reports. It contains links to department reports, bringing this information together in one location to provide an overview of the government-wide external fee regime.
As departments have continued to implement the requirements, lessons learned have surfaced and feedback has been provided on opportunities to improve, some of which relates to the interpretation of certain provisions and others relate to how certain administrative processes have been impacted to support compliance with the act.
The proposed changes being discussed today will support more cost-effective administration of departmental fee regimes and increased transparency, oversight and accountability in the delivery of services to Canadians, which includes reducing duplication of requirements covered in other laws or regulatory processes such as reporting of fees for access to information, clarifying existing requirements and introducing flexibilities to better manage fee regimes. Some of these flexibilities include choosing the date for annual adjustments for inflation; only having to apply the annual adjustment to fees when the percentage changes more than 1%; excluding fees from requiring annual adjustments for inflation if they are fixed in a manner that already takes inflation into account; rounding down fees once adjusted; and improving administration of the low-materiality fees regulations while improving transparency.
No new funding is being requested to implement these adjustments, and fees will continue to be set under the minister, the Governor-in-Council or the responsible authority after consultation with interested stakeholders and the public. Collectively, the amendments support a more cost-effective delivery of services for Canadians while also supporting continued transparency, oversight and accountability.
We would be happy to cover any point in more detail and respond to any questions you may have. Thank you.
[Translation]
The Chair: Thank you very much, Ms. Lahaie.
[English]
Now, honourable senators, we will do a first round. The allocation will be five minutes each, and then we will consider going to a second round.
Senator Marshall: Thank you for your opening remarks. Could you give us some idea as to how many fees there are in government? I did read the fees report, but I didn’t get a handle on it. I would say there must be hundreds or thousands of fees. Is there an actual number? Does somebody have a number?
Ms. Lahaie: Yes, we do.
Nicole Thomas, Executive Director, Costing, Charging and Transfer Payments, Treasury Board of Canada Secretariat: Yes, we do. Within the precedents of a Treasury Board fees report for the 2021-22 fiscal year, there were 38,741 fees reported for which departments had the authority to charge.
Senator Marshall: You mentioned in your opening remarks the fee increases. Do all the fees automatically increase each fiscal year? You mentioned 1% in your opening remarks. What percentage increase is going to be attached to those fees? Can you tell us how the increases work?
Ms. Lahaie: Thank you for the question. My colleague Ms. Thomas will provide you this information.
Ms. Thomas: Within the Service Fees Act, there is a provision that fees get adjusted annually. It’s calculated on the 12-month percentage change in April for all items of the CPI for Canada.
Senator Marshall: What percentage is that? You’re saying all the fees, the 38,000 fees, will all increase by?
Ms. Thomas: Not the full 38,000. Part of the administration of the Service Fees Act includes the Low-materiality Fees Regulations. By the very nature of those fees, it was determined that CPI would not apply to those fees — largely, those set under $51.
Senator Marshall: What is the CPI increase that’s going to be applied to the larger fees with the larger amounts? What percentage is being used?
Ms. Thomas: The most recent CPI was published in May 2023 and it was published at 4.4%.
Senator Marshall: So all fees over a certain dollar amount are going to go up by 4.4%. What about the fees that are of a lesser amount? How much will they increase?
Ms. Thomas: Those that are considered low-materiality fees per the regulations will remain at their current rates.
Senator Marshall: Can you attach a dollar figure to the increase of 4.4% on the fees that are a large amount? How much extra revenue is the government going to take in? You mentioned in your opening remarks how much revenue the government received last year. How much extra will they collect as a result of the increase of 4.4%?
Ms. Lahaie: Rough calculation — we haven’t done that particular calculation — it was $5.6 billion last year. Let’s say the average is $6.1 billion for which these fees would apply. We may have to exclude the low-materiality fees from that, and then apply the rate to that total.
Ms. Thomas: I would add that within that $6.1 billion are fees set by contract, which are also not subject to the annual adjustment. Only a subset of the fees set by act, regulation or fees notice would be subject to that CPI adjustment.
Departmental fee reports provide details on each fee that they have the authority to charge. There is a line item that says what the current fee is and what the adjusted fee will be.
Senator Marshall: But the government is going to pick up some extra revenues now as a result of the 4.4% fee increase. We have a budget book. Where do I find in the budget book the incremental fees that you’re going to collect? I’d like to know the amount and where it’s provided for in the budget book.
Could you obtain that number, confirm the extra revenue that the increase is going to provide to the government and send it to the clerk? I’d like to know what the figure is and where exactly it is in the budget book. There are quite a few numbers in the budget book for which I couldn’t understand the source.
Ms. Thomas: I would like to add one element that makes it a bit difficult. One of the reasons why the focus is on departments indicating what the new rate is going to be is that for those that are tied to volumes, we certainly don’t have that level of detail about what the projected volumes are for each of the individual fees that are being charged. The transparency within the Service Fees Act is focused on making sure that fee payers know what the increase will be. Currently, we don’t collect data from departments on projected revenues.
Senator Marshall: I would think that if the government is increasing fees — you’re saying the fees are $15 billion in total. Some of those fees are split into two categories: those that will get an increase and those that won’t. For an increase of 4.4%, millions of dollars are involved. I would expect that someone in the government must know how much extra revenue is going to come in as a result of that increase. That’s what I’d like to know.
Ms. Lahaie: My understanding is that the Department of Finance will be here tomorrow, so that could be a question for them.
Senator Marshall: But Treasury Board is responsible for the overall financial management of the government, so they should know. Thank you.
The Chair: Ms. Lahaie, do we have an agreement that you could provide the information?
Ms. Lahaie: Yes.
The Chair: Thank you.
[Translation]
Senator Moncion: These are questions of clarification. You mentioned the consumer price index, or CPI, over a 12-month period. You said that in May, it was 4.4%. Was that just for May or was it an average for the last 12 months?
Ms. Thomas: That was the average, April to April.
Senator Moncion: You use May, but you say it goes into effect in April.
Ms. Thomas: This is for April and is made public in May.
Senator Moncion: Now, are the 12 months calculated from April 1 to March 31?
Ms. Thomas: Yes.
Senator Moncion: Do you give 90 days’ notice for increases? The reason I ask is that in the financial institution world, any rate increase must be accompanied by at least 90 days’ notice. Do you have such a standard in government or at Treasury Board?
Ms. Thomas: Thank you for the question. This is not required by the Service Fees Act. However, all departments know what the increases will be in April 2024. This gives them the opportunity to make updates to the fee notices on their websites.
Senator Moncion: How many days before is it done?
Ms. Thomas: They know today. The increases will take effect after April 1, 2024.
Senator Moncion: Do the fees you’re setting only come into effect next year?
Ms. Thomas: No. There is a delay following the release of the CPI, and then to give departments a chance to provide the necessary notices and make the changes internally. It’s a period of a minimum of nine months.
Senator Moncion: You make the adjustment based on the consumer price index every year, so the fees always arrive a year later; I see.
Now, you mentioned an average of $6.1 billion in fees received from contracts. Is my understanding correct?
Ms. Thomas: Yes.
Senator Moncion: You mentioned contractually set fees. Regarding how you operate in terms of contracts, do you have any agreements? When are adjustments made?
Ms. Thomas: I want to make sure I understand the question; are you talking about CPI adjustments?
Senator Moncion: Yes.
Ms. Thomas: Yes; this does not apply to fees set by contract.
Senator Moncion: So these are fixed costs.
Ms. Thomas: Fees are negotiated between the responsible minister and the fee payer.
Senator Moncion: All right.
Ms. Thomas: They are up to date with today’s fees.
Senator Moncion: In financial institutions, a percentage of the grant or loan amount is charged. This is not an amount that is necessarily adjusted in line with the consumer price index. Is it a percentage established by contractual agreement?
Ms. Lahaie: It’s according to effort and there will be recovery of actual costs. If salaries have increased and salary costs are included, they will include current salary inflation as part of the contract cost. It’s always up to date with the most recent actual costs.
Senator Moncion: That’s because you shouldn’t mix the two. There really are costs for studying the file and then all the accounting costs associated with setting up a contract. These are two different things. So, in the $6.1 billion, I’m sure you’re not calculating the increases that are associated with salaries; you’re really calculating the base amount that’s charged for setting up a contract.
Ms. Lahaie: Just to clarify, in the $6.1 billion, it’s a combination of two types of fees. There’s $3.1 billion in contract fees, which are specific agreements between the parties, and there’s $2.3 billion in the latest report, which consist of service and product fees, and that’s where CPI inflation applies more directly.
Senator Gignac: Welcome to our witnesses. You mentioned a lot of numbers at the beginning and I’m not sure I followed correctly. You were talking about $15.5 billion and I didn’t quite understand. Now you’re talking about a second figure of $6.1 billion, which you’ve broken down into contract fees of $3.1 billion and service and product fees of $2.3 billion. Ms. Lahaie, could you repeat the figures you gave us in your opening remarks?
Ms. Lahaie: Of course. These figures come from the president’s report which was published at the end of March this year. There’s a total of $15.5 billion in fees, of which $9 billion comes from auction fees for Innovation, Science and Economic Development Canada’s spectrum management system. The remaining $6.1 billion is an average. That’s why it can get confusing. Last year it was $6.5 billion, but on average it’s $6.1 billion for the rest of the revenues, an amount that is divided between contract fees and service and product fees.
Senator Gignac: Perfect, thank you for the clarification. Have guidelines been established for the departments? When it comes to establishing fees, are they based on cost price and people pay 100% of the costs? How does this work? Is the setting of fees left to the discretion of each department?
Ms. Thomas: Thank you for the question. In terms of the fee‑setting process, each department that wants to introduce new fees makes a fee proposal. In that fee proposal, we would see a description of the activity or service that the proposed fee would address; we would then see a rationale explaining the reasons and factors for the pricing, for example, whether it’s a private benefit or a comparison with other jurisdictions. Service standards would also be shown; this would have an impact on the amount of fees charged. There would be an impact assessment and the total associated direct and indirect costs of delivering the activity or service, as well as the expected annual revenues. All of this information would be taken into consideration to establish the fees.
Senator Gignac: Over the past year, the government has taken several measures to help the most disadvantaged. Is there any latitude possible, whether in terms of access to parks or taking into account the user’s socio-economic profile?
We know that some provinces apply exemptions with a certain proof of fee exemption. Is this something that exists, or is it not as sophisticated at the federal level?
Ms. Lahaie: It is the minister’s responsibility to propose such adjustments and to obtain the necessary approvals to do so. In the case of the Service Fees Act, we apply the rules we’ve just defined, but if the minister wants to propose something like that, that remains his decision.
Senator Gignac: In conclusion, for this first round, you said that this will increase transparency, but I liked Senator Moncion’s comment that in the financial sector, where I’ve worked, you have to send advance notice. Here, however, there’s no requirement to give notice to the user, which leaves it up to each department to give notice. Can you explain how the amendments will bring more transparency?
Ms. Lahaie: As soon as fees are approved, they are published. There are public consultations and then it’s published in the Canada Gazette. Fees are never changed without approval in this way, at all levels of governance. Then, annual fees are announced in the president’s annual report, which indicates that fees will increase the following year. So it’s no surprise to anyone what the consumer price index is, it’s in the law.
In the case of new fees, when there’s a change made for reasons other than inflation, it has to go through a consultation process. If it’s the application of the law that regularly leads to an increase in the annual rate, that’s separate and announced well in advance, too.
Senator Gignac: Thank you.
[English]
Senator Smith: The changes to the Service Fees Act are the government’s attempt at reducing the cost of government services that Canadians access. I’m trying to understand the major objective. Can you tell us about how the legislation will streamline administrative processes?
Ms. Thomas: Certainly. Thank you for the question. I can give a couple of examples.
One of them is with respect to the application of the CPI, which we’ve been speaking about. A couple of years ago, the annual adjustment found itself at a reduction of 0.2%. We received a lot of questions from departments about any latitude that might be afforded to not undertake a widespread process for a reduction of 0.2%.
One of the proposed amendments is to institute a threshold of 1% so that if the adjustment in any given year finds itself under 1%, we would defer the application and implementation of that for the following year when the combined adjustment is more than 1%. As you can imagine, across 38,000 fees — not all of which would be applicable for the CPI — it is a large undertaking on the part of departments.
One of the other changes we’re looking for is to adjust the process and seek delegation of the President of the Treasury Board to make changes to the schedules within the Low-materiality Fees Regulations.
A great example of that is that currently within schedule 2, there’s a reference to fees within the Port Wardens Tariff. That tariff was repealed, but as a result of the process to make changes to the schedules of the regulations, that’s not yet been reflected in the schedules. In order to have more timely adjustments of those schedules, we’re seeking the authority of the president to make those changes. However, with that authority and delegation would come a requirement for the president to report within the annual fees report all changes that were brought within that delegation so that the adjustments could be made in a timely manner and there would be full transparency of where those decisions are being made and taken.
Senator Smith: I’m trying to understand. Will these changes save money for the government or will they reduce costs for Canadians? Is there an overall global objective? What is it?
Ms. Thomas: It’s twofold.
It’s about making sure that the processes that have been required by the Service Fees Act don’t unnecessarily increase the cost to government to deliver on those services to be compliant with the Service Fees Act, and therefore not passing on additional unnecessary costs to the fee payer.
Senator Smith: How do costs of accessing government services differ from region to region? I’m trying to understand if there is a regional implication to how the fee structure works or services work.
Ms. Thomas: The Service Fees Act are for fees set at the federal level. Depending on how the legislation is written, that governs whether or not there are separate and distinct fees that might be charged in different areas within Canada or if it would be the same fee across the board.
Senator Smith: Will there be any negative impact in terms of remote regions? Would they end up seeing cuts in service because of some of the changes or alterations that are done?
Ms. Lahaie: No.
Senator Smith: I tell you what, that’s the furthest I have ever gotten in the weeds.
Senator Pate: Thank you to our witnesses for being here. As you mentioned, in the President of the Treasury Board’s fees report, it indicates that there were 38,741 fees set by the act. It also indicates that 6,411 fees were under review. I’m curious, does this refer to the consultation and parliamentary review process set out in the Service Fees Act or to other reviews? That’s the first part of my question.
Then, in particular, I’m curious about how the consumer price index impacts the fulsome reviews over time, and the regional question is an interesting one. I’m also interested in whether they are still fit for purpose, especially for low-income people who may be seeking access to services. Have there been assessments of the ability of people to pay for these fees particularly given the recent media reporting about one in four Canadians not being able to cover an unexpected expense of $500, which creates a real risk of those who are most marginalized not having access to the same government services as those who are more privileged?
Ms. Thomas: Thank you for the question. If I may, I’ll start with the first piece about fees under review. One of the elements introduced with the Service Fees Act in 2017 and our corresponding Treasury Board directive on charging special financial authorities is a requirement for departments to have a plan in place to periodically review activities for which fees are charged.
Prior to the implementation of the Service Fees Act, there wasn’t a lot of rigour in that regard, so departments are now required to initiate reviews on a periodic basis. We don’t prescribe the frequency of those reviews. We leave them the discretion to align with their business cycles and how they see fit. But they do report to the Treasury Board Secretariat annually with respect to how many are under review, and this year, there was 6,411, as you mentioned.
The CPI impacts aren’t part of that process. And again prior to the implementation of the Service Fees Act, there was no mechanism embedded in for fees to keep pace with inflation, so a fee could have been in place for 20 years and had never been adjusted for the cost to deliver that service. The Service Fees Act was instrumental in ensuring from its implementation in 2017 that fees would continue to keep pace with the cost of delivering those services to Canadians. That process happens as separate and distinct from the reviews that we require.
Senator Pate: I didn’t see any reference in the materials, the legislation or the regulations to the ability to pay in terms of statutory requirements. Is there anything in there that I have missed?
Ms. Thomas: Ability to —
Senator Pate: People who would be seeking the services?
Ms. Thomas: In response to the previous question, when we talked about the fee proposals, that would be part of the considerations that a responsible minister might take as part of their consultations and when they are looking to either institute a new fee or amend an existing fee, they would look at various items, including impacts to their stakeholders.
Senator Pate: Are there other examples you could point to where fees have been waived or reduced fees have been provided for or adjusted down to accommodate low-income folks?
Ms. Thomas: I don’t know that I have specific examples for low income. But in the President of the Treasury Board fees report last year, one of the elements that has to be reported are when remissions are provided to fee payers. Examples within Immigration, Refugees and Citizenship Canada that were listed were remission orders as an example, and one of them informs in relation to the British Columbia forest fires for issuance of passports. They also noted remission orders for the replacement of travel documents in certain instances. Any information of that nature is first reported in departmental fee reports, and then we also consolidate that information in the President of the Treasury Board’s annual fee report.
Senator Pate: One of the areas where fees were reduced in the past year was the Parole Board of Canada and the application for pardons. It had been increased and was subject to the consumer price index. It would now fall under the $51, so it would not be subject to it.
But in the application fee, there was no discussion of the hidden fees. I was interested in the notion of junk fees. I never heard that term before reading some of this material.
Is there any consideration given to the fees that are involved in pardon application or record suspension that involve record checks, travel to get court done and other kinds of documents, legal fees. They can go as high as several thousand dollars, so the fee looks like it’s $50 for a record suspension, but the actual cost can often be in excess of several thousand dollars. Is any of that taken into account in terms of the reviewing of these structures, the hidden fees?
Ms. Thomas: Again, the Service Fees Act really provides that framework and ensures the transparency and the oversight, and a common regime in process is adhered to by individual organizations. However, the authority to set those fees and the structure of those fees would remain with the responsible ministers. However, it would follow the due process, as Ms. Lahaie mentioned, have appropriate consultations and allow for comment.
Senator Duncan: I would like to follow up on Senator Smith’s focus on regional interests. You have mentioned consultation must be undertaken by the departments. Consultation means vastly different things to different folks. Is there a consultation protocol in place for departments when they are discussing these fees? For example, in discussing fees for parks, is there a requirement for the Department of Environment to speak with their provincial counterparts? Does that apply across the board in terms of consultation?
Ms. Thomas: I can start and perhaps you can add in Ms. Lahaie. There are different ways that fees are fixed. They could be fees fixed by regulation. In that case, the consultation would happen through the Canada Gazette process. They would be listed there, and comments will come in through that.
They could also be set by enabling legislation, in which case that act may provide requirements for consultation and the nature of those consultations that would be in a particular piece of legislation.
The vast majority of fees and how they are fixed already provide for consultation. But to ensure that there is some form of consultation taking place, the Service Fees Act also has provisions within sections 10 to 15 that would ensure that if consultation isn’t captured elsewhere, then the Service Fees Act would then kick in and those provisions for consultation or parliamentary review would apply to the process of those fees.
Senator Duncan: I hear references to consultation, but I don’t hear it spelled out that the department “shall” — not “may” but “shall” — consult with provincial or territorial counterparts on specific fees. The Canada Gazette is that form of consultation.
Following up on that, is there any sort of tracking? I apologize if this is contained in the material and I have missed it. Is there any sort of tracking on fees not paid, delinquency on fees? For some, you wouldn’t gain access to a service, but for others, some people find ways around paying their campground fee, for example, or their entrance to a park or something like that. Is there any sort of tracking of foregone revenue?
Ms. Lahaie: In the report, you will find the revenue that has been charged and what has been remitted. If it’s not paid, it would be in our public accounts as accounts receivable. If it’s written off, that would end up through that regular accounting process.
Senator Duncan: With close scrutiny of the budget documents, the public accounts are going to show accounts receivable fees? Is that what you’re saying? Or would it be by department?
Ms. Lahaie: In the Public Accounts, each department has their accounts receivable. We have the roll-up in the Public Accounts of Canada. Each department has their financial statements with their own accounts receivable broken down.
Senator Duncan: Right. That includes fees, then?
Ms. Lahaie: Yes.
Senator Duncan: Thank you.
Senator Marshall: I have the fees report for Public Services and Procurement Canada. Is that just part of the picture or is that the fees report that you’re talking about?
Ms. Lahaie: It could be part of the picture. That would be for Public Services and Procurement Canada, their own fees that they are responsible for.
Senator Marshall: So you’re saying in one category of fees, there is going to be an increase of 4.4%. Then there is another category of fees that the 4.4% doesn’t apply to.
What kind of increases are permitted? If they don’t fall into the 4.4% category, can they increase fees? Looking at the fees for Public Services and Procurement Canada, there are increases of more than 4.4%. Is it left up to the departments to increase the fees for whatever amount they want? Or is this something that has to go to Treasury Board?
Ms. Thomas: I can speak a little bit about that. The requirements in the Service Fees Act for that annual adjustment for inflation do not apply in certain circumstances where an organization may already have an escalator for inflation within their own enabling legislation, in which case the service fees annual adjustment wouldn’t kick in.
In their departmental fees reports, when departments talk about any upcoming annual adjustments, they will determine what the authority is for that adjustment. Then they will also provide you the updated fee amount. You should be able to follow —
Senator Marshall: Is there a ceiling on the amount that they can increase the fees by? I’m looking at some fees in that department where it’s certainly more than the 4.4%. Who controls the cost of the fees? Is that left up to the department? It is.
Treasury Board provides an oversight function within government because you’re responsible for the financial area. Are there any audits or reviews carried out on service fees or is this basically left up to the departments themselves as to what they charge with regard to the fees? What sort of monitoring is done by Treasury Board? I notice there is a directive on the government website with regard to charging fees. Who oversees all of this? Who is responsible?
Ms. Thomas: We do ensure that the provisions of the Service Fees Act are implemented uniformly. We are also responsible for the Treasury Board directive on charging special financial authorities. We set that framework and what information must be included in the departmental fees reports to ensure that full transparency on all of those elements are included therein. However, as I mentioned, in the event of activities that are prescribed within their own legislation or another legislation, they would be responsible for ensuring they adhere to those provisions.
Senator Marshall: And there would be no oversight provided by Treasury Board in that instance?
Ms. Lahaie: If it’s through the regulatory process, there would be, but that’s a separate process from the service fees per se.
Senator Marshall: Is that something the Treasury Board is involved with or is that something that the departments do when some other office is providing oversight?
Ms. Lahaie: There is definitely a role for the system to understand the minister responsible for their own regulation. They work with Treasury Board as well to determine how that would function. That’s under their own regulations, yes.
Senator Marshall: There’s some sort of oversight, but not a strong oversight. That’s what it sounds like.
Ms. Lahaie: Yes, there is strong oversight.
Senator Marshall: Thank you.
[Translation]
Senator Moncion: My question is about fees. I was surprised to hear Senator Pate talk about the number of fees that exist. There are more than 38,000, and more than 6,000 have been verified. Out of curiosity, I checked with the Department of Immigration, Refugees and Citizenship to see how it works. Now I understand how you can end up with 38,000 fees, because it’s all listed on there.
I’d like to know how you do it. You’ve explained it, but I’d like to understand it a little better. For example, if I take Immigration, Refugees and Citizenship Canada, for an application for permanent residence, the Right of Permanent Residence Fee is $1,085. This includes processing fees and the Right of Permanent Residence Fee. Then there are other fees that vary if you include or exclude a spouse.
How do you review all these fees and make adjustments afterwards? You mentioned the consumer price index. How is this integrated?
Ms. Thomas: Indeed, we use the departmental reports. We receive a spreadsheet for each of the departments, with each of the fees they have invoiced. We keep an inventory of all these expenses for the purpose of producing our annual report for the President of the Treasury Board. We confirm the data provided and check whether the charges are of minor importance. We confirm whether annual adjustments to these expenses should be made. A review is conducted to ensure that all elements of the Fees for Service Act are properly applied in the fee database.
Senator Moncion: Not all the expenses of all sectors of all departments are adjusted on an annual basis.
Ms. Thomas: No, not at all.
Senator Moncion: All right. If I look at Immigration, Refugees and Citizenship Canada, the last adjustment was in April 2022. It must be a tedious and time-consuming exercise. You make adjustments, then this data is entered into the computer systems. Then people do analyses and have to justify it all.
Senator Gignac: My follow-up questions have already been asked. So I’ll pass.
[English]
Senator Smith: During the consultation process in respect to changes to fees, can affected stakeholders challenge increases if they believe the increases are not reasonable?
Ms. Lahaie: Yes, there is a process for complaints or to have a discussion raised with the committee.
Senator Smith: Who do they raise the concerns with?
Ms. Lahaie: It’s part of the Canada Gazette consultations with the department. If there is a challenge, they can always set up a panel to have the conversation and then make a decision.
Senator Smith: In your estimation, is there someone tracking that to have sort of a list so you can see what your success ratio is? Because with 38,700 fees, there have to be some areas where some of the departments will challenge the increase. How do you monitor, record and evaluate that?
Ms. Lahaie: If it was something they have paid and have a complaint about, it’s through the remissions. If not, it’s through the consultation process. The communications team in the department who are doing the consultations would have that information. We don’t have that information at the Treasury Board Secretariat.
Senator Smith: I just wondered whether it’s an issue or not. Is it something that happens?
Ms. Lahaie: That’s a good question. I would have to consult with the departments. I don’t have that information.
Senator Loffreda: Good morning, witnesses. Welcome to our committee.
You discussed stakeholders. Beyond publishing proposed fee increases in the Canada Gazette, how else do departments inform relevant stakeholders of these changes? It is important to inform them of the changes and hear them out. I always say that listening is so important. How proactive are various departments in reaching out to concerned parties through other means?
Ms. Thomas: I can speak to the annual increases that are required under the Service Fees Act. As we have shared, departments are required to provide information to Canadians and parliamentarians through their annual fees reports with respect to every fee, the proposed adjustments and when those will take effect.
In addition, departments often have the same information on their website — a fees notice that they would update with the most recent menu prices for the activities and services they offer and their corresponding fees.
Ms. Lahaie: I would say that it varies between departments in terms of their approach depending on their stakeholders and the level of complexity or sensitivity of the fees they are looking at. There is not a one-size-fits-all approach to this.
Senator Loffreda: The stakeholders are prioritized and communication is always present, according to what you have seen and what you have conveyed this morning?
Ms. Lahaie: Yes.
Senator Loffreda: The government’s briefing binder claims that the changes will reduce operating costs for the federal administration. Do you have any idea what these savings might amount to? We talk about spending and about inflation. Let’s talk about savings this morning.
Ms. Thomas: What we’re trying to do with respect to the Service Fees Act is focus —
Senator Loffreda: It’s important to save. Canadians save. We save. Governments save, I hope. I want to hear it.
Ms. Lahaie: We don’t have an exact amount. If we reduce the burden and administration, these are the costs we pass on to the users of those services. By default, it will be reflected in the price that users will pay for those services. Reduction of the administration is our objective in order to ultimately provide these savings to Canadians.
Senator Loffreda: I have many questions. Thank you for being here and for bearing with me.
I appreciate that there are over 38,000 different fees contained in the Service Fees Act. Each department has the authority to review their respective fees. In light of the increasing cost of living and cost of doing business, have some departments considered a freeze on the fees?
Given that you didn’t give me a number on the cost savings, I would like to know whether some departments have considered a freeze on the fees. At the very least, are there any mechanisms in place to limit increases so that the parties are not subject to an excessive increase that they cannot absorb?
Ms. Lahaie: Our role at the Treasury Board Secretariat is to ensure that the act is put in place as per its intended approach. As we mentioned, over 6,000 fees are currently being reviewed by departments. That’s what we’re aware of. As part of those reviews, each minister will have an opportunity to consider that review and what amount is the fairest and most appropriate to be updating their fees by in this context.
Senator Loffreda: The government’s briefing binder mentions that departments must follow the appropriate process and consult with the public who will be affected before the fees amount is fixed. Can you speak to us about this engagement process? Are the results of each consultation publicly disclosed?
Ms. Thomas: We can speak to this broadly. Ministers have a variety of options available to them to set fees. One of those options would be to set fees through regulation, in which case they go through a formal process that includes publication and consultation through the gazetting process.
For fees that are set in a manner whereby consultation has not already been provided for, either through regulations or through their own act, the Service Fees Act also has provisions to ensure that appropriate consultations and parliamentary review take place when establishing those fees. For those that follow the process under the Service Fees Act, a mechanism is embedded that provides the opportunity to have complaints submitted and feedback considered.
Senator Pate: In terms of the fees that are subject to parliamentary review, I was interested to see that Parliament is deemed to have recommended any fee proposal that a parliamentary committee does not respond to within 20 sitting days. What proportion of fee proposals have received deemed recommendations?
Ms. Lahaie: That is a good question. I don’t have that information per se.
Ms. Thomas: May I ask the source of the information that you were reading from?
Senator Pate: It indicates — and you indicated — that it’s published in the Canada Gazette and that if the Senate or a parliamentary committee does not review that fee increase — which presumably happens most of the time — it’s deemed to be increased and accepted by Parliament.
I’m curious how often that happens. I’m newer to the Finance Committee than many other members, but I don’t recall us reviewing fees. It seems, though, that we have been deemed to accept them if we have not reviewed them. Is it rare that they’re actually reviewed or are there other committees I don’t know about that are reviewing these?
Ms. Lahaie: That’s a good question. They are consulted by Canadians and by the departments. The results of those are within the report that the department presents to Parliament. In terms of how many instances where they actually had discussions prior to those fees being approved and included in their annual report to Parliament, I don’t have that information.
Senator Pate: Is it possible to get that information? I’m curious how often they’re published in the Canada Gazette and then there is never any review.
Ms. Lahaie: I can find out that information.
Senator Pate: Thank you.
In Budget 2023, there is an announcement that government effectiveness reviews are to be led by the President of the Treasury Board.
On March 6, the Treasury Board Secretariat ruled that the Canadian Human Rights Commission had breached the no discrimination clause of a collective agreement, and the 2023 budget introduced a number of proposals to support Black employees, including $45.9 million over three years starting in 2023-24. With respect to those provisions, what specific mechanisms are in place to ensure that the Treasury Board itself is able to properly receive and address the complaints of anti-Black racism and other forms of discrimination? Can you provide us with details as to how the Treasury Board will be overseeing an anti-Black racism initiative when there are actually allegations of internal racism within the department as well?
Ms. Lahaie: Thank you for the question. Given that I’m from the Office of the Comptroller General, that would be a question for my colleagues in the Office of the Chief Human Resources Officer. I believe the minister has had the opportunity to discuss this item, and I believe they will be coming back for supplementary estimates in the near future. That might be an opportunity to ask the question. I don’t have that information personally.
Senator Pate: Is it possible to ask them to provide that to us in writing in advance?
Ms. Lahaie: I can ask.
Senator Pate: Thank you.
Senator Duncan: I will endeavour to be quick.
I’d just like to voice on the record my concern about the lack of clarity around consultation. I’ve heard you advise us that it’s spelled out in different acts and that fee increases are published in the Canada Gazette. It’s not clear to me that there is a government-wide protocol for what constitutes consultation.
I’m particularly concerned about this in terms of Parks Canada and Environment and Climate Change Canada. Parks Canada and national historic sites are in every province and territory. I’m curious as to what the standardization is with regard to fees across the country — if they’re the same everywhere — and if there have been consultations with provinces and territories or if it’s required. For example, the fee in a national park might be one thing and a territorial or provincial park fee might be another. Where is it spelled out that there has to be consultation to ensure that there is harmony between the provinces and territories or some degree of discussions? Those are particularly important to Canadians. We have been encouraging them to see their own country first and have made them aware that access is there in terms of fees and visiting.
It’s more a comment than a question. I’m concerned about the lack of clarity and specificity around consultation and protocol with regard to these fees, particularly, as you have commented, since the goal is transparency and accountability to Canadians. I’m expressing that concern.
I’d like to specifically hear that there is federal-provincial-territorial consultation with regard to Environment and Climate Change Canada and our most visited attractions throughout the country and service provided to Canadians. It’s more an information statement than a question.
Ms. Lahaie: Thank you for that. There are consultation requirements in the Service Fees Act. We can certainly consider this as we will be updating our directives to see if there is an opportunity to provide better guidance to achieve some of that objective.
However, I would also suggest looking at the report from Parks Canada and Environment and Climate Change Canada. They may include more information about what their processes are. They have different rates at different parks in the country. You can find that information in that report, but we’re not personally involved in their process. You could probably find very helpful information in there and ask them for additional information.
Senator Duncan: So, again, you’ve said that consultation is individual. There is not one consultation protocol in the Government of Canada that says you will consult with the provinces and territories on these issues.
Ms. Lahaie: The act says this:
The responsible authority must consult interested persons and organizations on the fee proposal by
(a) making it accessible to the public;
(b) inviting interested persons and organizations to make representations on it, specifying a deadline for making those representations, providing information on the requirement of paragraph (c) and specifying the time limit for submitting a complaint under subsection 13(1); and
(c) replying to any representations made by interested persons and organizations within 30 days after the deadline specified under paragraph (b).
That’s what’s in the act. We can certainly look at what we put in our directive to help.
Senator Duncan: Thank you.
The Chair: Before going to Senator Loffreda for the last question, Senator Pate, did you have a question?
Senator Marshall: May I have an opportunity to speak too at some point?
The Chair: Yes.
Senator Pate: This is a brief intervention following up on Senator Duncan. In those directives, if it would be possible — especially given the focus on reconciliation — for the government to talk about the representation and consultation with Indigenous, First Nations, Métis and Inuit, that would be great.
Then I wanted to thank Ms. Grant from our office in response to your question of where that section was. I was quickly trying to go through it, but Ms. Grant got to it faster than me. The reference to deemed recommendations is in section 15(3) of the act. Thank you.
Senator Marshall: I just want to make sure we’re going to get the information with regard to how much extra revenue the government is going to receive in this fiscal year as a result of the fee increases. I find it very disappointing that the department is going forward with these fee increases when so many individuals and companies are struggling with inflation.
I would really like to know how much of a benefit this is going to be to the government. How much extra money are they going to get to spend? I’d like to have that number.
The Chair: Thank you. Ms. Lahaie, will you will take it under advisement and then send the written answer to the clerk, please?
Ms. Lahaie: I can find that information. I just want to mention that these are services where it’s benefiting certain individuals and not all Canadians. If we were not to increase the cost, then the rest of Canadians would have to pay for services that not everyone benefits from.
Senator Marshall: Right, but it’s still imposing additional charges on individuals and companies at a very difficult time when everybody is struggling with inflation. Of course, the government is looking at the CPI and saying, “Oh, it’s 4.4%, which is a little bit on the high side. We’re going to use that now, and we’re going to increase fees by the 4.4%.” So I would really like to know the extra revenues. I know the government is looking around for all sorts of additional revenues. I’d like to know. It’s not identified in the budget — at least, I can’t find it. I’d like to know what that dollar value is.
The Chair: Thank you, Ms. Lahaie.
Senator Loffreda: This has been a good session. I would like to thank the chair, my colleagues and yourselves for being here this morning.
As the sponsor of the bill, I would like to ask as a last question if there are any issues, concerns or pressing matters that were not raised this morning that we must take into consideration and that you would like to raise in analyzing this bill. Is there anything that we did not cover that you were expecting as a question? Is there anything about which you might leave here and say, “How come that did not come up?” Is there anything you would like to share with us that’s important that wasn’t covered?
Ms. Lahaie: Not that I can think of.
We are very proud of the improvements that will be included in this act in terms of continuing to increase transparency and accountability. I can’t think of anything in particular that we haven’t covered.
Senator Loffreda: Ms. Thomas?
Ms. Thomas: No, thank you for your time and your thoughtful questions.
Senator Loffreda: As usual, the chair and my colleagues have done a great job. What else can I say to conclude? The floor is yours, Mr. Chair.
The Chair: Thank you, honourable senators. I’d like to take this opportunity to thank the officials from the Treasury Board. You have been very informative. I will ask that when sending information to the questions that have to be answered, we have a time frame so by the end of this week and through the clerk.
I’d like to remind senators that tomorrow, Wednesday, June 7, at 3:30 p.m., we will complete the study of the subject matter of Bill C-47. We will be welcoming Minister Freeland along with senior officials from the Department of Finance.
Before we adjourn, honourable senators, I would like to thank the entire support team for this committee. To the people in front of the room as well as the people behind the scenes who are not visible, thank you for your hard work. This permits us to do our work as parliamentarians.
(The committee adjourned.)